1949-02-02

ROYAL CANADIAN AIR FORCE


Hon. Brooke Claxlon (Minister of National Defence):: Mr. Speaker, yesterday the hon. member for Nanaimo (Mr. Pearkes) asked me a question about Mingan, and I should like to answer it now.
Mingan is an emergency landing field on the north shore of the St. Lawrence. It was built in 1941 by United States forces with the consent of the Canadian authorities for Use in case of need by aircraft on flights from the United States, primarily on ferry operations. This field was included in the facilities built by the United States for which the United States was reimbursed in 1946. The field is used infrequently and almost exclusively as an emergency or alternative landing field by United States transport aircraft, supplying United States personnel. For this reason, by arrangement with the Canadian authorities the field has been under the care of a small detachment of United States personnel. It is understood that similar arrangements exist in other countries, including the United Kingdom.
The establishment at Mingan falls within the central air command, at the head of which is Air Vice Marshal Middleton.
Similar arrangements are still in effect at Chimo on Ungava bay, and Frobisher on Baffin island.
There are also, by arrangement, small detachments of Canadian personnel in the United States under the immediate command of Canadian officers.
These arrangements are in full accordance with the joint defence arrangements announced on February 12, 1947.
If and when the circumstances requiring the use of these United States planes should change, and if it should be decided to continue the operation of Mingan, that operation would be taken over by us. Arrangements looking to this have been under consideration.



DOMINION ELECTIONS ACT


Hon. C. G. Power (Quebec South) moved: for leave to introduce Bill No. 7 to amend the Dominion Elections Act, 1938, (election expenses).


Some hon. Members:: Explain.


Charles Gavan Power: During the session of 1939 a committee of this house was set up to deal with electoral matters. Its third report consisted of a draft bill to amend sections 62 and 63 of the Dominion Elections Act. The bill which is being presented today is an exact copy of that draft bill. May I say that after some consideration the report was adopted by the house in 1939.
The aim of the bill is to limit political expenditures at the constituency level, and to give wide publicity to contributions to campaign funds and to expenditures from campaign funds.
Motion agreed to and bill read the first time.



PROVISION FOR SINGLE TRANSFERABLE VOTE

[Stage Direction]
Mi. W. M. Benidickson (Kenora-Rainy River) moved for leave to introduce Bill No. 8, to amend the Dominion Elections Act (single transferable vote).
Some hon. Members:: Explain.


Mr. Benidickson:: Mr. Speaker, this amendment to the Dominion Elections Act is designed to permit the voter to indicate his order of preference when there are more than two candidates in an election. The bill is modeled closely upon a bill introduced in the house in 1924 and in 1925 by the then minister of justice, the late Ernest Lapointe.
A majority of seats now and in the future are likely to be contested by more than two candidates. The single transferable vote has been used in Manitoba and Alberta with considerable satisfaction for many years.
By the simple procedure of marking the ballot with figures instead of the blunderbuss X, the elector is permitted to exercise his or her franchise to the full, and the constituency

Cardinal Mindszenty
is assured of a member of parliament who goes to Ottawa with a clear and unassailable mandate from a majority of the voters.


Mr. MacNicol:: It does no such thing.
Motion agreed to and bill read the first time.



CRIMINAL CODE


Mr. E. D. Fulton (Kamloops) moved: for leave to introduce Bill No. 9, to amend the Criminal Code (portrayal of crimes).


Some hon. Members:: Explain.


Edmund Davie Fulton: Mr. Speaker, this bill is designed to amend the Criminal Code to cover magazines and periodicals commonly called crime comics, the publication of which is at the present time legal, but which, it is widely felt, tend to the lowering of morals and to inducing the commission of crimes by juveniles.
Section 207 of the Criminal Code provides, upon indictment, a penalty of two years for anyone who portrays obscene literature, obscene objects or drugs. The purpose is to amend the act by adding a fourth category which would cover the crime comics. Then if anyone distributes or sells such magazines, within the definition of the act, he will have committed an offence and will be subject to the penalty set out for the three categories I have mentioned.


Mr. Cruickshank:: That will work against your political propaganda.
Motion agreed to and bill read the first time.



CARDINAL MINDSZENTY


[Stage Direction]
On the orders of the day:
Mr. E. O. Bertrand (Prescott):: Mr. Speaker, I should like to ask a question of the Secretary of State for External Affairs. On December 29 last an Ottawa newspaper, Le Droit, made public the text of a telegram addressed by His Excellency Archbishop Vachon to the Prime Minister urging the Canadian government to protest to the government of Hungary against the arrest of Cardinal Mindszenty. Will the Secretary of State for External Affairs let the house know whether any action has been taken by the government in this connection?


Hon. L. B. Pearson (Secretary of State for External Affairs):: Mr. Speaker, the hon.
member was good enough to give me notice of his question, and I am now in a position

to reply. I hope my reply will be acceptable as an answer to a question put on the order paper by the hon. member for Pontiac (Mr. Caouette).
The arrest of Cardinal Mindszenty, announced by the Hungarian government on the 27th of December, has caused deep concern to all free and democratic nations. The Canadian government strongly condemns and deplores this further case of religious persecution by the communist government of Hungary, as it would any case of religious persecution in any country.
In a broadcast on New Year's day, the Prime Minister stated:
Providence will not abandon men of good will. We are fortunate to be living in a land where religion is respected by all, and the religious authorities have the fullest freedom. We are all apt to take such freedom for granted.
But the increasingly brutal persecutions of religious leaders in countries behind the iron curtain have shocked all civilized people.
Such examples remind us how precious is the personal and religious freedom which is our birthright.
The day after the news of Cardinal Minds-zenty's arrest was received, Canada, as a signatory of the treaty of peace with Hungary, took immediate steps to secure all the available information on the matter, with a view to taking any action under the peace treaty which might be effective in halting religious persecution in Hungary.
The value of a joint declaration with other signatories of the treaty of peace protesting the action of the Hungarian government in arresting Cardinal Mindszenty was examined. It was found, however, that such joint action was not possible, and indeed might have had an effect contrary to that which was desired.
In the circumstances, and acting for itself, the government, having no diplomatic representative in Budapest, instructed our ambassador in Washington to communicate with the Hungarian minister there as follows:
The Canadian government has learned that the head of the Catholic church in Hungary, Cardinal Mindszenty, has been arrested on charges of treason, espionage and illegal currency transactions, which, on the basis of the evidence submitted and in the light of Cardinal Mindszenty's previous record as a Hungarian patriot and fighter against oppression and tyranny, do not command respect.
That is diplomatic language for, "We don't believe them." The note goes on to say:
The Canadian government has also learned that the Senior Bishop of the Lutheran church in Hungary was arrested in September last on charges similar to those leveled at Cardinal Mindszenty and was sentenced to two years in prison; and that the Senior Bishop of the Calvinist church has been forced by persecution to flee from Hungary to Switzerland.
The Canadian government, therefore, wishes strongly to protest against a policy which, on the basis of information which we possess, appears designed to destroy religious freedom in Hungary,

and calls attention to the article of the peace treaty with Hungary, to which Canada is a party, and which provides that:
"Hungary shall take all measures necessary to secure to all persons under Hungarian jurisdiction, without distinction as to race, sex, language or religion, the enjoyment of human rights and of the fundamental freedoms, including freedom of expression, of press and publication, of religious worship, of political opinion, and of public meeting."
The Canadian ambassador delivered this protest to the Hungarian minister, who undertook to communicate it to his government. That is how the matter now stands.



SPEECH FROM THE THRONE


[Stage Direction]
The house resumed from Tuesday, February 1, consideration of the motion of Mr. D. F. Brown for an address to His Excellency the Governor General in reply to his speech at the opening of the session, and the amendment thereto of Mr. Drew, and the amendment to the amendment of Mr. Coldwell.
Mr. A. W. Stuart (Charlotte):: Mr. Speaker, when the house adjourned last evening I was speaking with regard to the conditions I had encountered during my visit overseas last August. For a short time today I should like to carry on and describe as best I can the conditions I found in Greece during the short visit I made to that country.
You will all remember that in October, 1940, that country was invaded by the Italians. The Greek people put up a gallant fight and drove the Italians back into Albania. Then their country was invaded by the Germans, who held the country under their control for about four years.
During the German occupation bridges, rolling stock, engines and everything connected with their railroads were destroyed, stolen or taken out of the country in some manner or other. The ports of the country were greatly damaged by the Germans, Italians and Albanians and after the country had been occupied by the Germans great damage was done by the British and United States air forces. Seventy-five per cent of the shipping of the country was lost, including freighters and passenger ships.
Seven thousand villages were burned and destroyed. The forests of the entire country were cut down for fuel or to be exported to Germany and other countries. Even the olive trees were cut down for that purpose. All the cattle, horses and farm machinery were stolen while the Germans occupied the country. During the occupation by the Germans and the Italians thousands of Greek men, women and children died of starvation, tuberculosis or from other causes. There is today very little equipment in the country to take care of their sick.
The Address-Mr. A. W. Stuart
Greece is a country of 7,500,000 population. Today 700,000 are refugees who have been driven from their homes. They are without a place to live in or without food to eat. Fourteen thousand children have been stolen by the guerrillas and are being taught communism. During my short stay there I saw in northern Greece thousands of people living in United States army tents without food, without clothing and without fuel. I remember seeing those people boiling chestnuts in nothing but water until they were soft enough to eat. Outside of a little bread they had no food at all. In one square mile I saw more starvation, suffering and grief than I saw in all the rest of Europe.
Clothing, bedding, shoes, food, particularly food for children, are all badly needed today. Building materials are greatly needed, particularly roofing materials. Many people could have some sort of shelter if they only had a roof that would keep out the weather. When I see the large surplus of potatoes in my own province of New Brunswick, when I realize the great production of canned fish on both the Atlantic and the Pacific coasts, when I know that farm products are in plentiful supply in Canada today, I wonder if we as Canadians and Christians cannot give some support to these people, who are directly fighting communism, if we could not share with them some of the wealth we have in this country of ours.
In my estimation the people of Greece are not fighting for Greece alone. They are blocking the gateway to the Mediterranean. They are the only barrier between communistic Russia and the Mediterranean and there is little doubt in my mind that Russia would like to have a hold in the Mediterranean, particularly close to the Suez canal. These people are blocking that gateway and, as I have said, they are living under horrible conditions.
If you could visit there you would realize that conditions are such that the country is ripe for communism. If you can get people hungry enough, if they are without shelter, without food, without clothing, you soon get them into a state where they will adopt any ideology. This is particularly dangerous since the communists are so active today in that country.
I have a high regard for those people. During my stay I had the privilege of meeting the King and Queen, who I believe are the only inspiration these people have today, the only encouragement they have to carry on. They are putting up a gallant battle against great difficulties. I think this country should help these unfortunate people to a greater extent than we are doing.
I am convinced that if the members of this House of Commons could see the conditions
164	HOUSE OF
The Address-Mr. Garson that exist in that country they would not hesitate for a minute to do everything in their power to help in every way they could. There were other Canadians and other members of the House of Commons in that delegation. I hope that those members will take part in this debate and substantiate the statements I have made as to conditions there.
We are blessed with plenty in this country, and I make one more appeal to the members of this House of Commons and to the people of Canada. Let us as a united country do everything we can to support these gallant people, who today are doing everything in their power to defend themselves and also, in my estimation, defending the people of this country at the same time.


Hon. Stuart S. Garson (Minister of Justice):: Mr. Speaker, it had not been my intention to take part in this debate but for the fact that the leader of the opposition (Mr. Drew) devoted nearly the whole of a two and a half hour speech to a presentation of his views on dominion-provincial relations, views which I regret to say I cannot but regard as being palpably incorrect and ill-informed in many important respects. We on this side of the house would be derelict in our duty if we allowed those views to go uncorrected. The leader of the opposition, for example, said:
Let me say without reservation that any such statement-
That is, any such statement that Premier Duplessis of Quebec and the premier of Ontario had prevented agreement at the dominion-provincial conference.
-is utterly false and wholly unrelated to the truth.
I join issue with that statement of the hon. gentleman. I say that no two persons contributed more than those two premiers to the failure of the 1945-46 conference to reach an agreement.
I not only say this but, sir, with your permission I now propose to prove it. While I thus join issue with the hon. gentleman, I wish to compliment him upon having been overwhelmingly eloquent and convincing when dealing at great length with those matters which no one disputes. Surely we all agree, for example, that for Canada a federal state is much superior to a unitary state, and indeed is the only possible state for this country. I think we agree likewise with my hon. friend's statement that-
For many long years it has been apparent that substantial changes were necessary to bring to its full efficiency and vigour the combined system of national government we describe as confederation.
Who, may I ask, in this assembly would not do everything to preserve and protect the Canadian federal system and constitution under which it operates? I myself am in favour of the greatest possible measure of


effective provincial autonomy. Indeed, my interest in dominion-provincial relations, when I served under the present hon. member for Neepawa (Mr. Bracken), was motivated, as his was at that time and I am sure is today, by a desire to make real and effective the provincial rights of my province, which, because of a lack of provincial revenues, were in many important respects wholly illusory.
Likewise, I am opposed to centralization of power in a dominion government as it was centralized under the Bennett government. This was not because Prime Minister Bennett desired that it should be centralized, but because under the conditions of that time several provinces lacked the revenues to exercise their provincial rights, and therefore had to go to Ottawa and submit to Ottawa's conditions, mostly reasonable, in order to secure from the Bennett government dominion funds with which to exercise their provincial rights. This is not provincial autonomy. It is provincial subjection to dominion control, and it exists under the financial plan of confederation.
I also believe in the protection of the rights of the minority for the most excellent reason that the population of my province is one of the most conspicuous minorities in the Dominion of Canada, and is likely always to remain so.
In all of these points of agreement between us, however, I refuse to take second place to my hon. friend, the leader of the opposition (Mr. Drew). Indeed, sir, I claim a prior place to him because while I, during the whole of my public life both in provincial politics and in federal politics, have always held these views, he is a more recent convert to them, as quotations, made so appropriately in this debate by the right hon. the Prime Minister (Mr. St. Laurent) and the leader of the C.C.F. party (Mr. Coldwell), so amply prove.
Let me now set out the points upon which I am in complete disagreement with the hon. gentleman. I disagree entirely with his interpretation of the history of Canada at the time of confederation. As he stated it to this house, it is in my opinion the very antithesis of the historical facts. I object, for example, to his assertion that the Canadian constitution was patterned after the United States constitution and inspired by the Federalist Papers, and that we adopted from that country a system of checks and balances. I suggest that the influence which United States federalism had upon the fathers of confederation in this country was in the direction exactly the opposite to that which he told this chamber that it was. The main circumstance which, in the great republic to the south of us, influenced the fathers of con-

federation was that at that time that great country was being torn to pieces in a civil war based upon the issue of states' rights. If there ever was a time when the United States constitution would make little appeal as a precedent to any nation like Canada, contemplating a federal system of its own, 1867 was the time. I suggest to my hon. friend, the leader of the opposition, that if he studies this matter somewhat more than he appears to have done so far he will get to know-he certainly does not appear to know now-that not only were the fathers of confederation, particularly those of his own Conservative party, anxious not to create substantial provincial rights in Canada, but they were in favour of an outright unitary state in Canada.
If he looks at page 229 of the confederation debates he will see the Hon. John A. Macdonald quoted to this effect, and at page 403 the Hon. John Rose, later Minister of Finance for Canada. On page 690 of Pope's "Memoirs of Sir John A. Macdonald", he will see Sir Charles Tupper's views on this subject. But, owing largely to the efforts of the Liberal leaders of that day, it was made apparent that Canada had to be created on a federal basis. The result of those deliberations was stated by Sir John A. Macdonald in his usual lucid and terse way in these words:
Therefore, we were forced to the conclusion that we must either abandon the idea of union altogether, or devise a system of union in which the separate provincial organizations would be in some degree preserved. So that those who were, like myself, in favour of legislative union-
That is, of an outright unitary state.
-were obliged to modify their views and accept the project of a federal union as the only scheme practicable, even for the maritime provinces.
This is from confederation debates, page 29. This same idea has been covered by one of the Liberal leaders, the Hon. George Brown, in these words-confederation debates, page 108:
There was but one choice open to us. Federal union or nothing. But in truth this scheme now before us has all the advantages of a legislative union and a federal one as well.
It was in consequence of these opinions that we had set up in Canada a federal state strongly centralized in many respects, with all of the residuary legislative powers left by our constitution with the dominion government. In no respect was it so completely centralized as in the financial plan of confederation, the very hub around which revolves nearly all of our problems of dominion-provincial relationship in 1949, as in all previous years. In this financial plan the utmost in centralization was deliberately provided for. The provinces were deliberately
The Address-Mr. Garson left with small revenues, which in some provinces were inadequate from the start, in order that the legal powers which they received under the constitution would be supported as little as possible by revenues wherewith to pay for exercising them. The idea was that after a short trial with that sort of federal system they would ultimately, in the language of Sir A. T. Galt, "at no distant day be enabled to do away with those artificial boundaries which separated one province from another, and come together as one united people"-without any provinces. The last three words are mine.


Mr. Smith (Calgary West):: That is obvious.


Stuart Sinclair Garson: It is noteworthy that the
leader of the opposition's Halifax speech, and all of his earlier speeches, are in keeping with this Conservative centralizing tradition, but he is slipping away from it since he became leader of His Majesty's opposition.
Let us look at the financial plan of confederation. It gave to the national government unlimited powers of taxation with which to take care of the cost of national matters, which even at confederation was very considerable. To the provinces the dominion government was to pay a subsidy. It was considered that this subsidy, together with the provinces' returns from their natural resources and other local revenues, would be sufficient to take care of the small cost of the simple machinery of provincial administration without imposing any provincial taxes at all. But against the chance that provincial taxes might be required, the provinces were given the power to impose unpopular direct taxes, such as income tax, corporation tax and death duties. At that time these unpopular taxes were not in use by any government; and the fact that the provinces could get the extra money they required only by the use of unpopular taxes was intended to make them prudent and economical. In a speech at Sherbrooke in 1864 the architect, the man chiefly responsible for this financial plan, Sir A. T. Galt, gave a full and clear statement of how it was to work. This is what he said, in part:
Now, one objection to confederation was made on the ground of expense and in order to meet this every effort had been made to reduce the cost of the local governments so that the local machinery should be as little costly as possible, for it would not do to affront the intelligence of the people and tell them we had devised an expensive kind of machinery to do a very insignificant amount of work.
Imagine telling that to any provincial treasurer, with the duties a provincial gov-

The Address-Mr. Garson ernment has to carry on in these days. Further on in that speech he said:
It was not intended to hold out any inducement to future extravagance to local governments but it was hoped that by the operation of natural causes, such a check would be put upon expenditures as would bring them down to the lowest point or at least prevent them from becoming lavish ... If they increased their expenses in proportion to their growth of population, they would be obliged to resort to direct taxation and he thought that they might trust the people themselves to keep a sharp watch over the local government lest they should resort to direct taxation.
Well, sir, how did this limited and static conception of provincial responsibility, as set out in this speech and written into our constitution, where it remains today, work out? It did not work. The proposed subsidies to New Brunswick and Nova Scotia were twice increased during the negotiations before confederation, and Nova Scotia ran into a heavy deficit immediately after confederation. From having heard him on previous occasions I imagine the leader of the opposition (Mr. Drew) may say, "Well, that is because the subsidy system does not work," but I would dispute such a statement. It was not due to a defect in the subsidies as such; it was due to the concept that the provinces had an insignificant amount of work to do and that the financial provision for that work could be correspondingly niggardly and inadequate.
In Manitoba our experience was somewhat more fortunate. With us this financial arrangement, it is true, with some modification, worked reasonably satisfactorily until 1911; but with us it broke down completely under the great changes brought about by the first world war. The reason for the breakdown is simple and obvious. The insignificant amount of work the local governments were required to do in 1867 had increased in cost many times. I believe that if you take the figures for dominion, provincial and municipal expenditures upon those matters which ordinarily come under provincial jurisdiction, such as education, health and so on, for the whole of Canada, the increase is about 1,200 per cent or twelve times between 1867 and 1937. Obviously revenues which had been provided for the needs of the provinces in 1867 were utterly and completely inadequate to meet the incomparably higher costs of the 1930's and 1940's.
Thus, sir, the leader of the opposition is palpably in error when he says that we followed the United States of America with its emphasis upon states' rights, and its checks and balances. On the contrary, some of our leading Canadian statesmen did not want a federal system at all. When reluctantly they were forced to accept one they made it as strongly centralized as they could, and in no respect more so than in the matter of its fin-


ancial provisions. The leader of the opposition, therefore, is under a complete misconception with regard to the Canadian constitution, which is the central point in all these discussions that have been taking place these last ten years. No matter how logical might be the reasoning he applied to the set of premises which is infesting his mind, how could he reach a sound conclusion when he began with such premises?
The fact is that in all these efforts that have been made by the majority of the provinces of Canada during the past ten years with the assistance of the dominion government, but with the minimum of help if not outright opposition from the provinces of Ontario and Quebec, they have been trying to cure this centralist financial plan by providing not one or two but all the provinces of Canada with adequate revenues to fully exercise their provincial rights.
For as long as this plan remains unchanged -t creates for the provinces a treasury problem which has varied in size and in intensity as between one province and another roughly in proportion to the taxable resources of the province. In the wealthy provinces, it is true, the problem has been almost completely obscured by their wealth, and thus it has not occurred to them as being a problem even in bad times. But in the less wealthy provinces this problem exists at all times, and is much more painfully apparent in bad times.
The problem is a simple one and can be stated in a short sentence. Under modern conditions the provinces do not have enough revenue, under this financial plan of confederation, to pay for the exercise of their provincial rights. Thus the rights the provinces possess at law, which are guaranteed under the constitution but for which they cannot pay, they do not possess in fact. In this way for most of the provinces of Canada, for all seven that signed this agreement, their provincial autonomy was impaired. However, it is not only provincial autonomy which is impaired. The dominion has no legal right to perform provincial functions, under our constitution; and the result is that if the provinces cannot pay to have them performed they remain unperformed, and the whole scheme of government under our constitution breaks down.
For these reasons it is difficult to understand those who argue that if the provinces enter into a tax agreement with the dominion government we are centralizing power in the dominion. Surely, sir, such an agreement does the exact opposite. It decentralizes political power in this country by increasing the effective rights of the provinces; and if the rights of the provinces are not effective, of what use are they to any province?

One of the key recommendations of the Rowell-Sirois commission, which was appointed to investigate and find a solution to this problem, was that income and corporation taxes and death duties should be imposed exclusively by the dominion government, and that in return for their loss the dominion government should make subsidy grants to the provincial treasuries and also relieve those treasuries of some of their current financial burdens. As we all know, an attempt was made in 1941 to secure agreement among the provinces to implement this report, but unfortunately this attempt was unsuccessful. Shortly afterward, however, the urgent need of maintaining war production in Canada necessitated the provinces and the dominion entering into the wartime tax suspension agreement. Under this agreement, the Sirois recommendation that the dominion government should be the only one in the income and corporation tax field was put into effect, upon the condition provided for in that agreement that the dominion government should make substantial grants to the provincial treasury.
These agreements, as their name would indicate, lasted for the duration of the war and one year thereafter. What, sir, was the experience of the provinces under these agreements? Were all the dire prophecies that were uttered by the premiers who walked out of the 1941 conference realized? No, sir, they were not. The experience of all the provincial treasuries, wealthy and not so wealthy, under this agreement was exceedingly favourable. All of them showed annual surpluses as long as the agreements lasted. The aggregate of these surpluses in some cases reached substantial figures. On ordinary account, those in the case of Ontario, for example, were $46,812,000; in the case of Quebec, $88,731,000. It could not be argued that, under these agreements, the wealthy treasuries were being prejudiced in any way.
Now, sir, this government realized that when the wartime tax suspension agreement ran out it would be disastrous for the majority of the provinces to return to the conditions which prevailed before the war. The dominion government, therefore, called the provinces together in a conference in August, 1945. The dominion made certain proposals to this conference, with the details of which I have no intention of detaining the members any longer than to point out, that if the provinces would continue to permit the dominion to have exclusive control over income and corporation taxes, as well as over death duties, then the dominion treasury would pay to the provincial treasuries substantially more money than had been paid under the wartime tax suspension agreement under which these treasuries had flourished so well.
The Address-Mr. Garson
In addition to that the dominion would bring in, for the benefit of the Canadian people, the most extensive program of social services that had ever been brought down by any Canadian government up until that time, as well as a public investment program which was to be worked out in collaboration with the provinces.
K. R. Wilson, one of the most competent financial journalists in this or any other country, made an estimate, I think the only estimate available, as to what it would cost the dominion to implement those proposals. He estimated it would cost no less than $600 million per year, which compares with the pre-war peak collections of $117 million per year which all the provinces obtained from income, corporation taxes, and death duties. It could not therefore be argued by any fair-minded person that this offer was in any sense an ungenerous one.
I have been told by a very well-known authority, whom I have no intention of quoting, Mr. Speaker, because it was a private conversation-this man was from Australia and an expert in his field-that this was a far more generous offer than the federal government had ever made to the states of that country.
This conference met in August, 1945, to consider these proposals. After five days the conference was adjourned, to meet again in January 1946. These negotiations which had been under way had produced at least one point of agreement upon which all the provinces and the dominion were unanimous, but which the hon. leader of the opposition, strangely enough, neglected to mention in this debate. One of his main arguments, as I have understood it, and I hope he will correct me if I am wrong, is that when the provinces sell or rent to the dominion their main tax field of direct taxation for an increased subsidy, however large, they lose their financial responsibility because they then lack any major provincial tax field in which such financial responsibility can be exercised. This is an argument with which I agree. In other words, the exercise of a financial responsibility is the balancing off on one hand by the treasury of the desire to be popular by providing more services for the people, against the desire to be popular by not imposing taxes upon the people. A tax field is required in which to exercise that responsibility.
If we stop at that point of my hon. friend's argument, as he did, it is not a bad argument. It is quite a good argument.


Mr. Drew:: Mr. Speaker, since the hon.
member has asked whether or not I agree, may I point out that, at no time during that
168	HOUSE OF
The Address-Mr. Garson
conference, did I use the term "sell", but used the term "rent", as he is well aware, because we were not prepared to give up our taxing powers. The same point was made by Premier Macdonald and Premier Manning, as well as by Premier Duplessis and myself.


Stuart Sinclair Garson: I entirely accept my hon.
friend's interjection because it has no bearing on the point I am making, whether it is sold or rented.
As I was saying, if we stopped at that point, as he did, this would be a good argument. With a singular lack of frankness the hon. gentleman at this point failed to tell the house that, to replace the field of direct income, corporation and death taxes, it was unanimously agreed that the dominion was to delegate to the provinces for the duration of the agreement the right to levy retail sales taxes within specified limits. In other words, one major tax field was to be replaced by another and the subsidies, at the same time, very substantially increased. I suggest, Mr. Speaker, this makes all the difference. For the sales tax is a productive field towards which, and away from state income taxes, there is a noticeable trend in the state governments of the United States within the past few years.
The negotiations were again resumed in the latter part of April and the early part of May, 1946. It was not until Monday, April 29, that the Ontario government, under the leadership of the hon. gentleman who was then Premier Drew, brought down its final counter proposal, the main feature of which was the Ontario formula for arriving at the rental which it would accept for the income and corporation tax fields. I do not have any hope in the world of being able to paraphrase this formula so I think I had better read it to the house. Certainly, it is a masterpiece of lucidity.
It reads this way:
In presenting this formula the Ontario government submits that until the balancing factors are determined by way of principle the basic figure cannot be settled with any arithmetical accuracy.
There would be a determined minimum per capita payment which, for convenience, can now be described as "X'\ The total annual rental to be paid by the dominion government to each province will be "X" dollars multiplied by the gross national production per capita for the year before the payment, divided by the gross national production per capita for the year 1941, multiplied by the population of the province for the year preceding the rental payment, or the minimum actual payment of "X" dollars multiplied by the population of the year preceding payment or of 1941 whichever is the


greater. This may be set out in the following algebraic form with the preceding year being referred to as 194y
G.N.P. per capita 194y


x 194y population
G.N.P. per capita 1941 subject to a minimum payment.
Or, in the alternative:
"X" x 194y population]
or	^whichever shall be greater
"X" x 1941 population]


Mr. Jackman:: Who helped you with your income tax form?


Stuart Sinclair Garson: I need not tell you, Mr. Speaker, that following this submission, the next few days were taken up with attempts to determine what the unknown X and Y were, and to ascertain what they \frould produce in money rental for these tax fields, and also in endeavouring to get some definite figure from the province of Quebec as to what it would consider an adequate rental.
When the Ontario formula had been clarified to the point where it was possible for the then Minister of Finance, the Right Hon. Mr. Ilsley, to make an estimate of the additional costs to the dominion government of the Ontario proposals, he did so. On May 3, he submitted his findings to the conference. He estimated that in the year 1947 the absolute minimum increased cost of the Ontario proposals would be $134 million over and above the cost of the dominion proposals, and then he added this rather significant sentence. I am certain that his figures have never been challenged, and if anyone wants to challenge them today I will take up the challenge with the figures I have here. He said:
This would mean that if the proposed tax transfers and subsidies suggested by the province of Ontario were accepted, they would total something like $50,000,000 more than all the provincial revenues, including the dominion subsidies, before the war.


George Alexander Drew: Mr. Speaker, when the hon. member says it was not challenged I feel sure that his memory must be failing, because it was challenged and these figures were described as nonsense.


Stuart Sinclair Garson: Yes, they were, and the reply of Mr. Ilsley was that if you could refute them it would be much better than calling them nonsense. I will say that my hon. friend, as he so often does, challenged them by calling them nonsense. That is not the way to challenge figures.


George Alexander Drew: They were Mr. Ilsley's figures.


Stuart Sinclair Garson: May I say that I would be delighted to take my seat now and have the hon. gentleman rise in his place and point to the time when he has ever challenged them by refutation and not by calling them nonsense.

In other words, sir, this hon. gentleman, who the other day descanted at great length about the iniquities ol the subsidies system and how it corrupted the governments which had received them, what a terrible thing it was, how it abused provincial rights, was talking about rights almost every one of which had been won by Sir Oliver Mowat in the courts against Sir John A. Macdonald at a time when the dominion government was paying large subsidies to the government of Ontario.
But this gentleman, who objects to the whole subsidized system as iniquitous, suggests that he is willing to make a deal with the dominion government for these tax fields provided the dominion will pay the provinces, not this small amount that would have corrupted anybody, but $50 million more than all provincial revenues from all sources before the war. This was on the morning of May 3, 1946.


An hon. Member:: But this is 1949.


Stuart Sinclair Garson: I am talking about the conference in 1946. The hon. member is three years behind.


Mr. Graydon:: The minister is ten years behind.


Stuart Sinclair Garson: The hon. gentleman replied to this disclosure by Mr. Ilsley-I do not want to get these hon. gentlemen mixed up. I am referring to the present leader of the opposition (Mr. Drew), the then Prime Minister of Canada.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order.


Stuart Sinclair Garson: Mr. Speaker, I must apologize for having referred to the hon. gentleman as the then Prime Minister of Canada. I was talking about the year 1946 and I think that is as close as he will ever get to being Prime Minister. I should have said the then premier of Ontario, to which I am sure he will take no exception. When Mr. Ilsley pointed out these facts, was he embarrassed by the size of his demands? No, he was not. He said that he and his colleagues had not been haggling about money and that they were not there as clamorous beggars asking for a handout. But, said he:
The government of Ontario has gone the very limit in making agreement possible, and when I say that it has gone the very limit I mean that it is prepared to make adjustments in detail, but not adjustments in principle or adjustments in regard to the net overriding amount which it receives.
It must get that much money. This quotation will be found at page 595 of the record of the proceedings. Therefore when my hon. friend goes about the country, and comes into 29087-12
The Address-Mr. Garson this chamber, and says that Ontario was very fairminded-"We never took a take-it-or-leave-it attitude"-may I say that he did not take a "take-it-or-leave-it attitude" as to details, but his ultimatum applied only to the principles-and to his money-the overriding amount of his money.
Well, sir, once the nature of the Ontario stand became apparent the conference was finished. There was no more eloquent proof of that fact than Premier Duplessis' empty seat when the conference resumed after lunch, and after these disclosures had been made in the morning.


George Alexander Drew: Let us keep the record straight. The hon. member is well aware that Quebec was represented at that conference until the last moment and that Mr. Duplessis had a representative there.


Stuart Sinclair Garson: I am not talking about Premier Duplessis' representative, I am talking about Premier Duplessis. May I say, Mr. Speaker, in fairness to Premier Duplessis, that throughout this matter he had preserved great courtesy. He had preserved a courteous reticence as to the amount of rental which Quebec would accept or, indeed, as to whether it would accept any at all. When he left he was courteous enough to leave behind a note which read as follows:
The prime minister of Quebec for reasons already stated many times at these meetings and owing to pressure of business has been obliged to leave for his office in Quebec city.
I do not blame him for leaving. Probably all of us would have been sensible had we left at that time. I suggest that Premier Duplessis knew perfectly well what the effect of the proposals of his collaborator, Premier Drew, would be upon the conference as soon as the unknown quantities in the Ontario formula became known.
It is on the basis of these facts that I submit to this house and to the Canadian people that the conference broke up because, after nine months of negotiations, Quebec would set no rental whatever and because Ontario demanded rentals which were $50 million more than the entire amount of all pre-war provincial revenues from all sources. It is in the face of these facts that the hon. member for Souris (Mr. Ross) has the impudence -I will say that, sir, if I may-to say that the Right Hon. Mr. Mackenzie King scuttled the conference.


Some hon. Members:: He did.


Mr. Ross (Souris):: Mr. Speaker, may I-


Mr. Speaker:: Order.


James Arthur Ross: I quoted the record last Monday on this matter.

The Address-Mr. Garson


Stuart Sinclair Garson: Now, if the hon. member will just contain himself.


Gordon Graydon: Mr. Speaker is up.


Mr. Speaker:: I do not like to interrupt
the minister, but he has exhausted his time.


Stuart Sinclair Garson: I hope there may be some
deductions for the interruptions.


An hon. Member:: You had five minutes
extra before.


Stuart Sinclair Garson: I think it is only fair to refer to, and to place on the record, the hon. member's own explanation as to how he arrived at the conclusion that the right hon. member for Glengarry (Mr. Mackenzie King) had scuttled the conference. This is what he placed on the record the other day when he spoke:
I was sitting in the gallery and had watched the little whispering campaign between the then prime minister and Mr. Ilsley. I do not think I am wrong when I say that the prime minister scuttled the conference.
Well, Mr. Speaker, a person sees two men whispering, and concludes that one of them scuttled the conference. But why pick on Mr. Mackenzie King? Why not Mr. Ilsley?


James Arthur Ross: I heard what he said.


Stuart Sinclair Garson: Or why not both of them? I
suppose it is to settle deep problems of this sort that the electors of Souris sent the hon. member here to represent them. And he settles this deep problem of ethical guilt after listening to this whispering campaign by a procedure of eeny, meeny, miny, mo-and picking the Prime Minister as the man who scuttled the conference.
I suggest that not all the letters the leader of the opposition (Mr. Drew) wrote to the Prime Minister before the conference started, nor the ones he has written since; nor the motions he moved, for adjournment or otherwise; nor the pious ejaculations that he has offered; nor his sanctimonious wishes for the success of the conference; nor his protestations about being a good Canadian, cover up these plain facts that an agreement is impossible if any province demands what the province of Ontario demanded in this particular case.


Mr. Merrill:: You have a surplus of $600
million.


Stuart Sinclair Garson: I should like, in conclusion, to call two witnesses in corroboration.


Harry Rutherford Jackman: Collaborationists?


Stuart Sinclair Garson: I said corroboration, not collaboration. We were not collaborationists; but we have corroboration.

The first of these is Professor J. A. Maxwell of Clark university in the United States, an outstanding authority on dominion-provincial fiscal relations. At page 15 of his paper on recent developments in dominion-provincial fiscal relations in Canada, he says:
On April 29, 1946, the conference re-assembled at Ottawa to consider revised proposals. After reviewing the two major concessions which the dominion government had made up to that time,-
Professor Maxwell goes on to say-
-it was then apparent that the key to agreement was in the hands of Ontario and Quebec. Except for minor qualifications, the seven other provinces would accept the revised proposals. The attitude of Quebec was enigmatic although the generalizations of Premier Duplessis were such as to connote the impossibility of agreement . . . Premier Drew was more specific in his demands for Ontario ... A rough reckoning indicated that acceptance of the Ontario proposals would add at least $134 million a year, possibly $234 million, beyond what the federal government had set as its maximum concession.
And listen to this:
On this rock the conference foundered on May 3. So large a difference, after negotiations extending over nine months, seemed impossible to bridge.
My next witness is Mr. K. J. Binns, economist to the government of Tasmania.


Some hon. Members:: Oh, oh.


George Alexander Drew: Far enough away from home this time.


Stuart Sinclair Garson: My hon. friend says he thinks that is far enough away from home, if I heard him correctly. Well, it is far enough away from home to produce a man who would certainly be divorced from partisan bias in matters concerning this country. And may I say this, that the state of Tasmania is so hopelessly-


Some hon. Members:: Oh, oh.


An hon. Member:: What do you know about it?


Stuart Sinclair Garson: -biased in favour of state rights, which would correspond to our provincial rights, that they elect one party in the provincial sphere, and elect the representatives of another party to the federal sphere, so that the state partisans may go to the federal government and watch that the federal government of that country does not injure their state rights.


Charles Cecil Ingersoll Merritt: A good idea.


James Arthur Ross: You did not have to go that far away to find that out.


Stuart Sinclair Garson: I did not realize I was such a humorist. Mr. Binns came here from half way across the world for no purpose other than to make a complete study of what we had done in this country to settle this difficult problem, one which is also a difficult problem

in the federal state of Australia. He came here to prepare a report for his government, in which he made a comparison between what we had done in Canada in this field, and what was being done in Australia.


Edmund Davie Fulton: Which authority did he consult?


Stuart Sinclair Garson: This is what he said:
The premiers' conference resumed on April 29, 1946, but owing to the uncompromising attitude of the premier of Ontario, Hon. G. A. Drew, and the impossible attitude of the premier of Quebec, Hon. M. L. Duplessis, who did no more than reiterate time and again that the British North America Act, 1867, was sacrosanct, the conference broke up.


An hon. Member:: Is that all he found out?


Stuart Sinclair Garson: That is all he found in connection with this matter. I suggest, however, that in the light of these considered, objective and judicial judgments of the conduct of the leader of the opposition, at a time when he was premier of Ontario, it might be advisable for him, the next time he protests so much about his innocence in this matter, to bring forward, if he can-and I challenge him to do so-some judgment of an equally objective character which holds him innocent of breaking up the conference.


Mr. E. B. McKay (Weyburn):: Mr. Speaker, on this occasion I should like to speak concerning several matters which affect Canada as a whole and which are of the utmost importance to the people of southern Saskatchewan. One of these matters, which is agitating the minds of farmers across this country, and particularly those of western Canada, is the price they will receive for their wheat during the next few years. They are gravely concerned about the possibility of the federal government being unable to negotiate a longterm agreement with Great Britain, our chief customer, after the current agreement comes to an end.
Another subject of considerable concern to the prairie farmer is the campaign which is now at its height against the Canadian wheat board and which may persuade the government of this country to discontinue the operations of that important body. I do not believe the discontinuance of the wheat board would be popular with most western farmers. They react most unfavourably to the suggestion that the Winnipeg grain exchange might again be permitted to trade in that important primary product, wheat, which in turn would mean that the Canadian wheat board would be replaced completely by the exchange.
Most western farmers, and I believe farmers all over Canada, are opposed to the return of a speculative market in wheat. They have a definite aversion to the Winnipeg grain exchange and this feeling of antag-29087-12J
The Address-Mr. McKay onism is not without some foundation. The farmers do not forget the fact that following the first world war the exchange opened for business in August, 1920, when the price of wheat was $2.75 per bushel, but after it had operated for a little over a year, by October, 1921, the price for the same grade was down to $1.11. They do not forget the low prices that prevailed in the thirties when the exchange was in full operation. According to the Rowell report, page 175, table three, the following prices were shown to have been paid in 1930 in Saskatchewan:
Price per bushel cents
Wheat	 47
Rye	 17
Oats	 15
Barley	 12
No one will deny that the world-wide depression which prevailed at that time certainly would have depressed the prices of primary products, but nevertheless most farmers are convinced that had the Canadian wheat board been still functioning at that time prices would never have been allowed to drop to these ridiculously low figures. I am satisfied that the western producer has accepted slightly lower prices for his grain in the past several years largely because of the prospect of having future prices stabilized and regulated through the wheat board and by means of long-term agreements so that there will be no return to the depressed prices of the thirties.
The western farmer knows full well that he has never received as high a price for his grain as has his American neighbour. This is largely due to the fact that 80 per cent of Canadian wheat is exported while only 20 per cent of the American production is exportable surplus in normal times. It has been possible for the United States to subsidize wheat exports in various ways and to maintain the price level of wheat on the domestic market, something which Canada with her much smaller population would have great difficulty in effecting.
It is obvious that, if the price level of wheat is to be maintained, long-term agreements are necessary. Because of this knowledge western farmers are interested in the fact that the united nations has set up a food and agriculture organization designed for the purpose of studying world-wide production, distribution and consumption of food. The primary objective of the nation members of the food and agriculture organization is to raise the levels of nutrition throughout the world, a most laudable objective. The attainment of the objective of giving every person enough food is dependent upon there

The Address-Mr. McKay being a satisfactory marketing and distribution agency for agricultural products, and the crux of the whole food problem is marketing.
It would be useless indeed to increase the production of food and it would be equally futile to establish high standards of nutrition unless methods were devised to move the food from the producer to the consumer at a price fair to the producer and also reasonably fair to the consumer. It will also be necessary to keep production throughout the world in equilibrium. It is the feeling of most members of that international body that when nutritional standards are raised everywhere overproduction of foodstuffs, particularly grains, is most unlikely. On the contrary, suggestions have even been made to increase the production by furnishing technical farming knowledge to those areas where such knowledge is lacking and thus make the industry more efficient.
Canada as a great exporter of agricultural products is a member of the food and agriculture organization. Farm organizations everywhere in the country approve of Canada's participation in the activities of that body. They have always been concerned with the depressing effects on the world market of the overproduction of farm products. It is now felt that if nutritional standards are maintained by the nations of the world and raised where they are substandard-in too many cases that is true-there is not the remotest possibility of overproduction of agricultural products.
The next difficulty to overcome is to provide stocks of food at reasonable prices to the consumer and at a price to the producer sufficient to encourage production but which at the same time would not be too burdensome upon any particular state. This will require long-range planning on the part of the international body, associated with other bodies which handle grain such as the Canadian wheat board. The retention of this board is essential to Canada's proper cooperation with international bodies concerned with the distribution of foodstuffs.
By international co-operation of the nation exporters of agricultural products a fair price can be guaranteed to the producer, production kept in equilibrium with food requirements, and at the same' time a price established for the consumer based upon his ability to pay. That can be accomplished only by full co-operation between the Canadian government and the united nations organization.


The first task of the world organization will be to set up a satisfactory marketing agency for the distribution of grain. But should the world organization fail to set up a satisfactory marketing agency, Canada will be obligated then to sell on any market available to her, and the historic market is the United Kingdom. It is an established fact that the United Kingdom is short of Canadian dollars because this country is not purchasing a sufficient quantity of British goods. May I suggest that the federal government explore the possibility of removing Canadian tariffs against British goods so that Great Britain will have sufficient exports to this country to enable her to obtain enough Canadian dollars to purchase Canadian wheat, and other products such as eggs, bacon, fruit and cheese. I do not think that we can hope to hold the British market if Great Britain is not provided with the wherewithal to purchase our primary products.
I would further suggest to the government that they explore the possibility of setting up a barter arrangement between Great Britain and Canada similar to those now in effect between the United Kingdom and Poland, and the United Kingdom and Yugoslavia.
The livelihood of most Canadians still depends on agriculture. It is therefore very essential to the well-being of our greatest industry that there be a free exchange of goods with countries, regardless of where they may be, which are willing to trade with us, and thus take the surpluses off our hands which we create frequently in primary products. It does not seem to me that there is any other reasonable way of guaranteeing a price for farm products, and certainly no other method of setting up a stabilized price on a sound economic basis. The C.C.F. supported the British trade agreement because it was sound economics. The agreement was affected, however, when price controls were still in effect in this country. Since that time price controls have been largely removed by the federal government. Because of the removal of those controls the farmer, particularly in the west, feels he has been double-crossed by the government. I think he is quite justified in feeling that way. A ceiling has been placed on the selling price of his chief product, wheat, but there is no limit to the price he must pay for consumer goods.
Why did the federal government remove price controls? Was it because of the pressure of public opinion? Certainly not. In January of last year sixty-six per cent of the people interviewed by the Canadian institute of public opinion expressed disapproval of the government's decontrol policy. That is two-thirds of the population. Therefore we must assume that the government was stam-

peded into the removal of price controls by the Canadian Manufacturers Association and other bodies. I refer to the Canadian Manufacturers Association deliberately because in January of last year at its convention it called by resolution for the removal of price controls as soon as possible. There is little doubt that the attitude of the Progressive Conservative and Social Credit opposition also had much to do with it, for we must not forget that in March, 1946, a resolution was adopted by a Progressive Conservative meeting in Ottawa, reading as follows:
We are opposed in principle to the continuation of every wartime wage and price ceiling, and restrictive controls.
Speaking in the House of Commons on March 21, 1948, the leader of the Social Credit party (Mr. Low) said:
Social Crediters are implacably opposed to planned controls.
On the other hand, C.C.F. members have repeatedly pressed the federal government to retain price control but have received very little support from any section of this house. I think recent events have proven, beyond a shadow of doubt, that on that occasion the C.C.F. was right.


Mr. Low:: No, wrong.


Eric Bowness McKay: Talk to the farmers and workers and see what they think about it. Controls should not have been removed until surpluses of goods were available on the market.


Solon Earl Low: There would not have been any surpluses.


Eric Bowness McKay: That is what you think. The C.C.F. is of that opinion still, and believes that price controls should be re-established on consumer goods if ceilings are to remain on the farmer's chief product in the west.


Mr. Hackeli:: Wage control as well?


Eric Bowness McKay: Wages are now being controlled. The subsidization of essential food products such as milk and butter should also be a part, as it was during the war years, of federal government policy-


Solon Earl Low: Now you are on sound ground.


Eric Bowness McKay: -so that production may be encouraged, and price levels reduced to the consumer. If it can work during a war emergency it is pretty hard to explain to the general public why it cannot work during peacetime. High prices of consumer goods are causing real distress to disabled veterans, old folks on pension, wage earners, and farmers, because of the prices they have to pay for consumer goods. They are now at the highest level in Canadian history. Big busi-
The Address-Mr. McKay ness was aware of the fact, and others too, that shortages of consumer goods would force up prices, and therefore profits would be increased. Neither the wage earner nor the producer desired the removal of price control because they knew from the past experience of twenty-five years ago following the first world war that they would be the ones forced to bear the burden of inflation.
But the government did not listen to the C.C.F. nor to the people who were canvassed by the Canadian institute of public opinion. They permitted the oil companies to increase the basic price of gasoline two cents a gallon on February 6, 1946. The effect of that increase was, of course, to boost the cost of production to the farmer, particularly those of the west who operate, in many cases, highly mechanized farms. On March 1 of the same year the federal government reduced or completely removed the subsidies on wool and cotton goods, which forced up the price of those commodities to the consumer. The government permitted the price of steel to go up $5 per ton even before the wages of the workers were increased, and despite the fact that the Steel Company of Canada, one of Canada's biggest producers, had a profit after taxes of $4 million in 1945.
On April 13, 1946, Canadian farm machinery was allowed to go up 12J per cent over the protests of this group in the house. The increase in machinery prices also forced up the cost of production for the western farmer, and other farmers all across Canada. Thus the cost of production to the farmer and the cost of living to the worker were increased long before those two groups sought any compensating increase for their produce or their labour. Despite this fact, big business still blames the farmer and labourer for the high cost of living, and I think this is done deliberately in order to divert attention from the enormous profits that have been made since the removal of price controls.
At this time I think it important that we should know just what the farmer and labourer do receive in relation to the present prices of consumer goods. According to figures recently compiled by the Ontario department of agriculture it was found that on a can of tomatoes selling on the local market at from 25 to 27 cents a tin the farmer's share of that selling price was very small, only 3| cents. Peas selling on the same market for 16 cents a can returned only 2J cents to the producer. Rolled oats, which retailed at 14 cents a pound, netted the farmer slightly over 2J cents. Pastry flour, which sold for 5J cents per pound, gave the man who produced the grain only 2 cents.
174	HOUSE OF
The Address-Mr. McKay


Solon Earl Low: How much to the government in taxes?


Eric Bowness McKay: That has nothing to do with it; I am showing the proportion the farmer receives. Labour, too, receives but a small portion of the increased prices the consumer pays. In a bulletin released last year by the United States trade commission it was shown that for every dollar wages had increased in the United States, prices had gone up $6.50, or six and a half times as much.


Mr. Mitchell:: Would that apply to automobiles?


Eric Bowness McKay: I am sorry; I cannot answer that.


Humphrey Mitchell: I thought you could not.


Eric Bowness McKay: These are the figures of the United States trade commission; that is all I know. They are considered reliable. There are no comparable figures with regard to Canada, but certainly conditions here are not very difficult. Therefore it must be obvious that big business alone is responsible for the inflation which distresses this country at the present time. In 1947 corporation profits in Canada were the highest in history, and they are still going up. According to the Nesbitt-Thomson index of dividend payments, basis pre-war as 100, dividends paid by business in September of 1948 were 202, or just twice as great as in pre-war days. The decontrol of prices has been very profitable for big business, and there is not much use of anyone trying to deny it. Therefore the C.C.F. supports the reimposition of price controls on consumer goods, because a large section of the Canadian people are on low incomes and are finding it well nigh impossible to make ends meet with the present high living costs. In the United States, according to the federal reserve board, 35 per cent of those receiving incomes in 1946 had either gone into debt or had just broken even. Canadians must be in an even worse position, because according to statistics our standard of living is not quite as high as that immediately across the line. The reimposition of price controls is the keystone, I believe, of any program for the betterment of conditions for both the farmer and the worker. It must be realized that any adjustments in income tax, wages, pensions or prices for farm products, will be of very little value without some control over the prices of consumer goods.
Another matter I wish to bring to the attention of the government is the inadequacy of the Prairie Farm Assistance Act under present farming conditions, particularly in southern Saskatchewan. Many farmers in


the dried-out areas of Alberta and Saskatchewan who require assistance are left out of the scheme as it now operates. The payment of benefits under the act, I believe, should be on an individual farm basis. Many farmers, because they are so unfortunate as not to live in the declared area set aside by the government, receive no award under the act. We have the case of a farmer who may live just across from a neighbour, with only a section or township line between them. The neighbour will receive the bonus and the other farmer will not. I believe the act should also be broadened to include losses from hail and insect pests as well as drought. There are complaints as well that the present payments are inadequate. Farm operating costs have increased enormously since this act was passed by this parliament. In my opinion the awards should be increased to $5 per acre in crop failure areas, with a maximum of $1,000 payable to the farm unit under consideration. This increase might mean a slight charge on the federal treasury, but I submit it would still be a wiser policy to follow than placing the people in those areas on the relief to which they were subjected in those dark days of the middle thirties.
Then I believe the government should give some consideration to the grading of wheat on a protein content basis. If this were done in the southern areas, which are usually the dry areas of the west, higher wheat prices would be realized, as the grain in the south usually has a higher protein content because of the dryness of the climate in that area. Such a plan is operated in the United States, or at least in some parts of that country, and I think the government should put such a wheat grading system into effect in Canada in order that the farmers of southern Alberta and Saskatchewan might realize more for each bushel of wheat they are able to grow, since yields tend to be low in those areas.
Now I should like to say a few words in regard to the need for irrigation in western Canada. Millions of acres of the finest soil in this country can be made productive through irrigation of the prairie land. Water is available in the South Saskatchewan river and other smaller rivers and creeks throughout the region. The United States, and almost every other country in the world, has a better record than Canada with respect to irrigation, and it seems to me about time this country realized that irrigation would be a great benefit to it. It would be a good investment for Canada, since the stabilization of agriculture in areas subject to drought would make for greater western prosperity and a greater

buying power. The proposed irrigation scheme on the South Saskatchewan river and associated projects would irrigate a very large area. The cost would be considerable; but if this scheme were implemented a million and a half acres of excellent land would be placed on a sound production basis. Such a program would add upwards of 250,000 people to the population of the western provinces, and this would make that much greater prosperity and buying power for that area.
The development of a full-scale irrigation program for the prairies would be an investment in the future of this country. I submit, Mr. Speaker, such a project would return enormous dividends to the whole Canadian economy. Millions in new wealth would be created; more jobs would be created and more homes set up. Small industries, such as meat packing, sugar refining and canning could be developed. Many young people would be enabled to secure work who are now forced to go to the large industrial centres east and west of the prairies in order to secure the occupations they desire.
The officials of the Prairie Farm Rehabilitation Act state that large scale irrigation in western Canada is feasible. Many surveys have been made and a small start has been made on irrigation. But, on the whole, very little has been done. I tell the government that people are wondering at the delay. Irrigation should not become a political football. It should not be something about which promises are made on the eve of elections and forgotten afterwards. It is a matter too important to the survival of the people in the dried-out belt of southern Saskatchewan. I believe those people are beginning to realize they must insist upon the government fulfilling its promises. The irrigation scheme should be commenced at once; not next year, not the year after, but right now.
The people of this area desire an irrigation project because they know the climatic conditions are such that, without the moisture which an irrigation project can bring, stability in agriculture is not possible in a very large section of southern Saskatchewan. The federal government should recognize this need and let contracts immediately for the development of the South Saskatchewan river, which is the major project, the Souris and Wood rivers as well as Notekeu and Swift Current creeks and other streams in the south. Only by irrigation can large areas of the south be rehabilitated and properly developed.
Finally, I should like to urge upon the government the raising of the personal income tax exemption to $1,250 for single persons and $2,500 for married folk. Living costs have increased materially since the last
The Address-Mr. McKay budget. If people are to have sufficient income on which to live, greater income tax exemptions are imperative.
I would urge the government to give some consideration to the farmer's wife. This consideration has been asked before on many occasions. I still think it is quite proper that we should ask again that some consideration be given to the farmer's wife, who does so much of the farm work for which she receives so little. When the exemption schedules are being drafted in 1949 for 1950, I suggest that careful consideration be given this matter.
More than that, I feel that the sales tax of eight per cent on a large range of consumer goods should be wholly removed because it has a tendency to increase the prices of these goods and therefore materially affects the cost of living. The burden has already reached such proportions, the people feel that if there is anything of that nature which the government could do it should be done.
Federal taxes are, of course, a very heavy burden for Canadians. The total tax revenue anticipated in the last budget, the budget of 1948, was $2,452 million or a per capita tax of $204 based on our population of twelve million people. For a family of five this means an average tax of $1,021, which is obtained from income tax, excise tax and other federal taxes. The federal government can render a real service to the Canadian people, and particularly to those people in the low-income group, by increasing income tax exemptions and by the removal of the sales tax. If such tax adjustments fall too heavily upon the federal treasury, may I make this suggestion, that the excess profits tax on big business be re-imposed. This tax netted the federal treasury $449 million in the last fiscal year it operated. If the treasury feels the need of additional revenue, this would be a good field in which to seek it.
It is my earnest hope, Mr. Speaker, that the government will give active consideration'to the matters I have just reviewed. The western farmer and all people in the low-income group are anxiously awaiting government action on these subjects. They are becoming just a little bit impatient.


Mr. J. G. Diefenbaker (Lake Centre):: Mr. Speaker, I join with those preceding me in extending congratulations, not only to the mover and seconder, but also to the new ministers, the new stars that have been added to the crown, in the person of my hon. friend the Minister of Justice (Mr. Garson), the hon. Minister of Reconstruction and Supply (Mr. Winters), and the hon. minister of external affairs (Mr. Pearson). I feel it is good that new members should come into this house
176	HOUSE OF
The Address-Mr. Diefenbaker and be added to the cabinet. They will be able to do no harm to that body.
I have listened with no little interest this afternoon to my hon. friend the Minister of Justice, and I shall shortly refer to some of his arguments. He did impress me, and he must be a good counsel. For, having undertaken a hopeless task, he failed in the end to indicate the government's stand.
I wish to join, too, in congratulations to the new Prime Minister, and in both congratulations and good wishes to my hon. friend the leader of the opposition. I believe it is good to have an infusion of new blood into the house, for parliament cannot exist unless the best possible men are mobilized into public service. Our parliamentary system cannot exist if obvious and outspoken examples of enmity, and declarations of hatred and contempt, occur between members, or when there is a substitution of personal abuse for argument. The people of this country have the right to ask that while we in this house shall be outspoken in our beliefs, strong and fearless in our statements, as befits strong men with strong opinions, we refrain from abuse. Democracy and the preservation of our way of life demands that public debate do not sink to the level of abuse. During the past two or three days there have been said in this house things which might well have remained unsaid. We can carry on parliament only if we maintain its amenities, without which parliament becomes merely a cockpit for the expression of personal enmities.
I shall now deal for a moment with the speech from the throne. Several declarations that appear bear the authority and the authorship of the resolutions passed at the Progressive Conservative convention last October. I refer to the question of assistance to build a transcontinental highway. The clause dealing therewith is sedulously couched in nebulous language in the speech from the throne, and reads as follows:
A measure lor assistance in the provision of a transcontinental highway will also be laid before you.
What the people of Canada want is the construction of that highway. It is necessary for the completion of confederation.
Then there is the matter of social security and the extension of the Family Allowances Act, matters also referred to in the platform of this party. But all the promises are not made here. A few are being made in the by-election in Nicolet-Yamaska. The Solicitor General (Mr. Jean) who, for various reasons, is not in the house today, made a promise of great interest to the people of Canada in the development of our constitutional set-up. On January 23 he promised that Canada soon will have a Canadian in the office of governor


general. When asked when that would be he said, "Very shortly." Why should a declaration such as that, representing as it does a major change in constitutional development, be made outside the House of Commons?
I should like first to touch on agriculture, which is of major interest not only to the people of my constituency and province but to the whole of the country. I listened with great interest to the hon. member for Wey-burn (Mr. McKay), and with much of what he said I am in agreement. He made one admission which I was glad to hear. He said, in effect, "We supported the government throughout in the British agreement." He gave his reasons. He showed that the hopes of the Minister of Agriculture (Mr. Gardiner)
*-and in these hopes he was supported by the members of the C.C.F. group-have not been justified. Now my friends to the left are trying to put themselves in the position that this party has always taken and now are supporting the stand taken by the former leader of the party, the hon. member for Neepawa (Mr. Bracken).
My hon. friend still speaks of expert planning and of the control of prices. He condemned the government, and quite properly, in regard to promoting the rise of certain prices. I ask him and his leader why, in the province of Saskatchewan, with a C.C.F. government in power, and with legislation on the statute books which permitted the control of prices, wages and commodities, they left that statute on the books only one year. Its life ran one year from April 1 to April 1. The act lived for one year and then without proclamation was permitted to die. They would be in a stronger position in their request for the continuance of price controls had they in Saskatchewan, where they had the power, carried into effect the policies that they advocate in the House of Commons, where they have not the power.
The wheat situation is serious. The Minister of Agriculture came back from Britain and spoke with unusual vigour in criticism of some of the planners who had failed so to arrange international affairs as to put Britain in a position to purchase our wheat at a fair and reasonable price. The situation with regard to agriculture today is summed up in the words of H. H. Hannam, the president of the Canadian federation of agriculture. He recently said:
The biggest problem facing agriculture in 1949 is rising cost of the things it has to buy and falling prices of things it has to sell. That in itself will be bad enough. The danger is that it could and might start a trend that could lead the Canadian economy into a period of business recession.
Our trade is diminishing with countries other than the United States. Our exports to all countries other than United States dur-

ing the ten months of 1948 fell by $144 million compared to those of the previous year. This happened despite the extension of credits, and $600 million Canada received in United States dollars or paid by loans to the countries under the Marshall plan. The time has come for the government to tell us what it intends to do with regard to agriculture; whether or not the farmers are to find themselves caught between continued high prices for the things that they buy and lower prices for the things that they sell. Something should be done now. Unless that is done, Canadian agriculture will receive a slap such as it has never received in the history of the country.
On his return from Britain the Minister of Agriculture pointed out the difficulties both here and abroad. The wheat farmers and other farmers have a right to know to what extent the saving clause for 1948 and 1949, 1949 and 1950, in the British agreement, will be carried into effect. Except the Minister of Agriculture and possibly the members of the cabinet, no one knows what happened at the meetings with the British cabinet representatives. In the face of present threatening conditions in the world, as far as agriculture is concerned, and more particularly in Canada, an immediate statement should be made by the Minister of Agriculture-


Mr. Gardiner:: If my hon. friend wants an immediate statement I am quite prepared to make it.


John George Diefenbaker: I am glad that we are to get that statement, and I trust that as soon as the minister gets the opportunity he will make it.


James Garfield Gardiner: It would take only two minutes to make it now.


John George Diefenbaker: There are certain things the farmer wants. First and foremost he wants an immediate payment of the twenty-cent participation payment out of the moneys that are his for the wheat sold by the wheat board during the years 1945 to 1948. Second, he wants the Prairie Farm Assistance Act amended to remove the many injustices that today deny farmers fair and proper payments under this act. He wants the area of qualification immediately reduced.
Mention was made of irrigation-and that is one omission the Minister of Agriculture (Mr. Gardiner) could immediately answer.


James Garfield Gardiner: Certainly.


John George Diefenbaker: I will give him a chance. Why is that omitted from the speech from the throne?-because, as I remember the Rosthern by-election, irrigation was one of the main promises dangled before the farmers of that constituency by my right hon. friend.
The Address-Mr. Diefenbaker


James Garfield Gardiner: Items with regard to that have been in the estimates year by year for the last three years; and they will be in the estimates again this year.


John George Diefenbaker: Those items are for
$75,000, $60,000 and $130,000.


James Garfield Gardiner: About $2,500,000 last year.


John George Diefenbaker: All right; it will take only forty-five years, at that rate, to complete this particular irrigation project.


James Garfield Gardiner: It was $2,500,000 last year;
I have not said what it will be this year.


Humphrey Mitchell: You wanted an answer and you got it.


John George Diefenbaker: The people of the prairie provinces, in the areas where irrigation is so necessary to the preservation of their standard of living, require, not $2 million set aside in the estimates each year, but an immediate commencement of this undertaking to the end that 500,000 to 1,000,000 acres will be rendered free from the danger of continued cyclical drought. This undertaking is omitted from the speech from the throne-and it means only one thing, that the promise of this undertaking made in the byelection in Rosthern is about as nebulous as some of the other promises made during that by-election campaign.
I come to income tax-and, in passing, let me say I am glad to see they are getting some reinforcements from some of the backbench boys whose support for reductions has been characterized by silence for three years, but who now summon up that courage which is so evident in anticipation of a convention-


Some hon. Members:: Oh, oh.


John George Diefenbaker: -of an election. Yes,
and conventions, too. They know they cannot win their conventions unless something is done about income tax.
I join with the western agricultural association which recently held a conference in Saskatchewan, upon which occasion they dealt among other questions with the injustices connected with the income tax administration. My leader, and those associated with him on this side of the house, have pointed out over and over again that a government collecting more than $600 million from the people of Canada owed to the Canadian people a substantial reduction in income tax rate as well as an increase in exemptions. I would like some of those in bureaucratic control of government, and who occupy the towering seats of the mighty, to have a talk with farmers. They would learn of anomalies and injustices perpetrated in the operation of the
178	HOUSE OF
The Address-Mr. Diefenbaker income tax. And that applies not only to agriculture but to all other phases of national activity as well.
As to the western agricultural association,
I want to see established at this session a house committee for the purpose of studying the question of income tax as it affects farmers and labour, so that the entire tax set-up may be revised to make it equitable in the operation and incidence of taxation. Such a committee could hear representations from organized agriculture, as well as from experts in the tax branch and other experts on farm production.
The hon. member for Kamloops (Mr. Fulton) over the years has been most assiduous in bringing before the house the question of reform in income tax, so as to remedy the unfairness in respect of its application to basic herds. This year a change was made, and the Minister of Finance (Mr. Abbott) proudly made the announcement. Cattle producers were encouraged by that announcement; but they are today being discouraged by the several interpretations made in various parts of the country by the several income tax collection agencies. The farmers want to know what is being done to preserve and enlarge their markets. They want to know what is being done to prevent the loss of their markets incident to the mistakes of expert planners. They want to know why the United States market is still embargoed against milk and pork products. They want to know what is to be done in connection with the establishment now of stable and adequate floor prices. As the hon. member for Weyburn (Mr. McKay) has said, they are asking-


James Garfield Gardiner: One of the hon. member's questions answers the other.


John George Diefenbaker: I am glad to hear my right hon. friend say that, because this is the first time there has been an answer from him on a question which so vitally affects the welfare of Canadian agriculture, and which he brushes aside with such a cavalier answer.
Then, above all, I should like to have from this government, a declaration of its intention to proceed at once with the development of a great irrigation plan for Saskatchewan and on the prairies.
For years the hon. member for Davenport (Mr. MacNicol) has advocated such a plan. He sold the idea throughout Canada. People everywhere realize that only in the encouragement and development of our natural resources can we hope to achieve that destiny which should be Canada's.
I should like now to pass on to the matter discussed by the Minister of Justice (Mr. Garson). My right hon. friend the Prime Minister roused himself to a high state of unjudicial dudgeon on Monday in regard to


some of the statements made by the leader of the opposition. All I would say to him is that as far back as June, 1946, he was warned that if he persisted in departing from the principles enunciated by Cartier, and by every minister of justice through the years, including the late Mr. Lapointe, he would place the constitution of Canada in jeopardy, for it would be in control of a majority in parliament.
The Minister of Justice gave us quite a dissertation on history. He dealt with the period of confederation-and, not having the book before me, I accept his conclusions-


Stuart Sinclair Garson: Thank you.


John George Diefenbaker: -knowing that they are not more than excerpts from the records. He called as witness a gentleman from Tasmania, and another from the United States. As he read what Mr. Maxwell had said I was wondering whether his information came from one of the government information bureaux of the time. Mr. Maxwell's conclusions bear so significant a similarity to some of the statements made by the then Prime Minister that I could only wonder what his source of information was.
However, let us get a little nearer home. I should like to quote one of the provincial premiers, a gentleman who sat in my hon. friend's seat during the years of war as a minister of defence. He set out his position when he spoke here in Ottawa on August 6, 1948-I believe he was followed by the hon. member for Quebec South (Mr. Power)-and he pointed out what we on this side have said, that since the war this government had departed and continued to depart from parliamentary procedure, and that it was infringing and entrenching upon provincial jurisdiction.
I should like to quote what Mr. Macdonald said, for his views are identical in this regard. No one can say that he was a nonpartisan friend of members of this government. Here is the news report of what he said on August 5 when the then Prime Minister sat behind him:
"You have here one great nation," he declared, "in all its affairs and in many other aspects as well. But then within that great nation you have nine other units which have their own rights, their own privileges which they are not going to yield willingly to the central government here at Ottawa."
That is exactly the stand of the leader of the opposition (Mr. Drew). Canadians are not interested in learned descantations or declamations of what was in the minds of those present or what was discussed at the time of confederation. What they are interested in is that the confederation pact shall be upheld in law, in spirit and in fact, and that

it shall not be departed from either in the guise of the emergency doctrine, which was used for quite a while to permit the government to infringe upon provincial jurisdiction, or for any other reason. Now with the passing into desuetude of that doctrine the Prime Minister claims that the federal authority can infringe upon provincial jurisdiction as long as what is done has to do with the defence of this dominion.
That theory is capable of infinite interpretation and expansion. If that doctrine be true, if all the world stands in peril internationally, then the government, having vacated the emergency doctrine, can now embark upon a new doctrine that is capable of infinite expansion in invading the field of provincial rights. I will continue to read the report of what Mr. Macdonald said, as follows:
We have sometimes been told that provincial rights are meaningless unless you have adequate revenues to carry out the responsibilities. I agree that there is more than one way to get the revenue and I am not sure that we have gone about it the right way in this country. I believe we should divide the field of responsibility between the dominion and the provinces and then you should decide-and I believe it can be done-what each political unit should have and give to it those sources and fields of revenue which would be adequate to enable it to discharge its proper constitutional responsibilities.
In epitome, it is largely the view that was expressed the other day by the leader of the opposition.
I do not know whether it was under the emergency doctrine that allowed this government to circumvent and then amend a statute of this parliament, the Immigration Act, by an order in council passed in September last. I thought that the days of orders in council that were not made public until they were pried loose ended in the fall of 1946. That order in council carries into the days of peace the conduct of this government in the days of war when statutes passed by the representatives of the people were amended, suspended or abrogated.
I can give another example. The Minister of National Health and Welfare (Mr. Martin) will remember what was done in connection with the building of a hospital at Moose bay in the north country.


Stuart Sinclair Garson: Which province was that in?


John George Diefenbaker: You will have to look at the order in council. It provides for the expenditure of approximately $1,500,000 when as a matter of fact the expenditure had been passed by parliament year after year from 1945 on. Under order in council the government rushed in and awarded a contract to a Windsor firm, after consultation with other contractors, at five per cent upon cost. There
The Address-Mr. Diefenbaker is another example of the use of orders in council by the government contrary to the rights of parliamentary government. There was no reason for haste in February of 1948 to hire a contractor by order in council when the moneys had been available over a period of several years.
I have mentioned the emergency doctrine whereby the government for a long time during and after the war placed the dominion in the position of a landlord having the power to vacate the provinces from any field of legislation that it desired and putting the provinces in the position of tenants at will of their legislative powers.
The Prime Minister now extends it to the defence doctrine. He complains that he has been misrepresented regarding the rights of minorities and the meaning of the constitution. The reason he finds himself in his present difficulty, in so far as section 133 is concerned, is that in the legislation which was introduced in 1946 there was given to the representatives of the people the power to pass an address by a simple majority and thereby to amend that portion of the constitution.
In taking that position he has departed from the experience of the years since 1867, and in particular from the declarations of the Right Hon. Mr. Lapointe, one of his predecessors as Minister of Justice. 1 remember well his dealing, on the 6th June, 1946, with placing in the hands of a majority in parliament the right to amend the constitution of our country. That course is a danger to the rights of minorities-and we are all minorities in this country-and particularly to the rights guaranteed under section 133 of the British North America Act. I had the honour to follow him when he introduced the resolution in this house. At that time I used words which were applicable then, and the experience of the past three years has borne out how dangerous it is to the spirit of Canadian confederation to accept the doctrine of amending serious and definitive portions of the constitution without consultation with the provinces. I said this:
Parliament is being asked to change one of the sections-not a section thirty-one years old. but one going back to confederation itself-upon which confederation was based. The Conservative party, and the Progressive Conservative party, since confederation has believed in change based upon experience; but it believes that the constitution is the bedrock of the rights of minorities and will resist changes in that constitution, without consultation with the provinces, under which the rights of the provinces will be affected or under which minorities may be affected. Parliament is being asked to pass an address which tomorrow will become a precedent which may be used to destroy the rights of minorities if in this house there should be a majority desiring to do so. This is an example of the dangers inherent in not requiring consultation with

The Address-Mr. Diefenbaker the provinces about amendments not directly concerned with the division of powers between the dominion and the provinces, which by the way are the only ones the Minister of Justice says cannot be amended without the consent of or consultation with the provinces. Under the procedure of amendment in the address section 133 and many others might be repealed or altered by means of an address passed by a majority in parliament. This, sir, indicates the dangers inherent in this haphazard manner, this novel scheme which is now before the house, of amending the constitution.
Then the Prime Minister, then the Minister of Justice, denied that anyone should regard with fear and trepidation the danger to constitutional rights under the British North America Act. He was warned by several of us on this side of the house about the danger to which he was subjecting the constitution, a danger which is apparent now and will become more apparent as the years go by. The Prime Minister in his address in this debate asked, when did the government ever interfere with the rights of the provinces. Well, sir, they tried in October, 1945. They introduced Bill No. 15-the national emergency powers bill. We on this side of the house who opposed that bill took our stand against it in view of the fact that several sections constituted an invasion of the inherent statutory jurisdiction of the provinces. Section 3 (1) of that bill reads as follows:
The governor in council may do and authorize such acts and things, and make from time to time such orders and regulations . . .
And so on. Then we have these words:
It is hereby declared that the powers of the governor in council extend to all matters coming within the classes of subjects hereinafter enumerated, that is to say:
(a) production, manufacture, trading, exportation and importation.
The manner of manufacture.
(c) transportation by air, road, rail or water.
Transportation by road.
(f) appropriation, control, forfeiture and disposition of property and the use thereof.
These matters were comprised in the original bill. The government asked for these powers, which were finally prevented by the opposition from becoming the law of this country. The Prime Minister, by his own action in 1946, in order to find a short-cut to secure passage through this house of an address, is responsible for a danger that exists today-the amendment of the constitution by a simple majority of parliament.
There are other matters to which I could make reference, but I want to conclude. I reiterate the necessity for action now in the building, extension and development of a great irrigation plan in western Canada; for amendments to the Prairie Farm Assistance Act, and, I repeat, the necessity for a declara-

tion now by the government of its policy on behalf of agriculture. In this country, farmers were deluded over the years by the plans of expert planners, but they are now beginning to realize that the one party that truly placed before this country the dangers inherent in a policy of control by experts was the Progressive Conservative party, and the spearhead of that attack was my hon. friend the member for Neepawa (Mr. Bracken).


Mr. Robert Fair (Battle River):: The Address-Mr. Fair the story. Then there is another item, perhaps small, which comes under the heading of the British wheat agreement. The editorial writer forgot to tell the people that out of the 1946 crop the Canadian wheat board supplied the people of Britain with 160,000,000 bushels of wheat at $1.55 a bushel. I am not blaming the wheat board for that; they were simply administering government policy. Out of the 1947 crop a similar amount was supplied at the same price. Out of the 1948 crop 140,000,000 bushels is to be supplied at $2 a bushel; and according to the latest information the same price will apply in 1949, the fourth and last year of the contract.
Again let me make it plain that we in this group did not object to Britain getting wheat at that price. We felt we had a moral obligation to that country. We feel that should not be the job of the farmers of the prairie provinces, because they are the only ones involved in supplying this cheap wheat to the British people. The supplying of this wheat should be undertaken by all Canadian taxpayers, and the difference between the price under the British wheat agreement and the class II price should have been taken out of the consolidated revenue fund and divided among the farmers who delivered wheat to that pool.
While we were selling wheat at that price, class II wheat being sold by the wheat board to countries other than Britain brought as high as $3.40 per bushel. This group initiated the demand, now taken up by other groups, that the government make up the difference between those two prices. There has been no announcement from the government as yet, but before this session ends I should like the Minister of Agriculture (Mr. Gardiner) or the Minister of Trade and Commerce (Mr. Howe) or the Prime Minister (Mr. St. Laurent) to tell the country just what they intend to do about that money which has wrongfully been confiscated from the prairie farmers.
According to the figures given in the house by the Minister of Trade and Commerce at that time, the farmers lost seventy-seven cents per bushel on wheat sold during that first crop year, 1946-47, amounting to a total of $123 million.


An hon. Member:: Which year?


Robert Fair: The 1946-47 crop year. During the early days of August of last year, after the end of the 1947-48 crop year, newspaper reports were to the effect that farmers had lost approximately $1.29 per bushel on the last year's deliveries. I am not saying those
figures are accurate, but based on those figures the loss would total $206 million, making a grand total of $329 million as the apparent loss under the British wheat agreement up to the end of July 1948. What will happen during the 1948 and 1949 crop years we are not in a position to say. As I stated earlier, it would not be fair to say now that is a definite loss. Unless improved prices are obtained, however, before the contract is terminated, then that must be considered a net loss.
Moreover, many people are not aware that our coarse-grain prices were based on the price of wheat under the British wheat agreement. They are not aware, either, that the price of beef and pork was based on the price of coarse grains. This whole matter can be put down to the price of wheat under the British wheat agreement during the years it has been in effect. People are not aware, either, that during the war years, when we contracted to sell large quantities of beef and pork to Britain, there was a guaranteed floor price at the seaboard for the packers but not one single bit of protection for the producer. On many occasions we have asked to have this matter straightened out, but we have not had any satisfaction so far.
During the early years of the war the farmers were told that, if they were content to accept low prices then-and we were told about the need for food in other countries which the farmers and their wives and families delivered in large quantities both overseas and at home-they would have some guarantee after the war was over. The only guarantee the farmer has received is the low price being obtained under the contract. Apparently the "have regard" clause of the agreement does not carry any weight. Judging from newspaper reports, the trip of the Minister of Agriculture (Mr. Gardiner) to Britain brought no benefits. The price for the 1949 crop should have been fixed during December of last year. We find that has been postponed until after the end of the contract period, namely, July 31, 1950. By that time we expect the general election, about which there has been so much talk, will have been held.
On motion of Mr. Fair the debate was adjourned.



BUSINESS OF THE HOUSE

Mr. Fournier (Hull):: Tomorrow we shall continue this debate.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing orders.
[Stage Direction]
Thursday, February 3, 1949