1949-10-21

Right Hon. L. S. Si. Laurent (Prime Minister):: Mr. Speaker, as a matter of
privilege I should like to make a short explanation to the house with respect to an answer given to a question asked by the hon. member for Vancouver-Quadra (Mr. Green). I am reported as having answered his question in the following way as appears at page 959 of Hansard:
That question is, I suppose, merely for clarification, Mr. Speaker; but a hypothesis like that would not arise except in the case of war, real or apprehended. I can give the hon. member the assurance that for the duration of this parliament there is no thought at the present time that there need be any fear about war, real or apprehended.
When I received the transcript from the reporter, instead of the word "fear" there was the word "care"-"any care about war, real or apprehended". I do not reproach the reporter. It may be that in answering the questions which were being asked I was not speaking very distinctly. I corrected it to the word "fear", which I believe is the word I used. The advance copies had gone to the press galleries, however, and in quoting me in their newspapers the reporters quite properly used the text as it appeared in the advance copies. Apparently the newspaper reporters were not misled by it, because the headline given to the article in one newspaper was, "P.M. says no war for five years"; another newspaper said, "Five years' respite from fear of war foreseen by P.M". Nevertheless I thought it desirable that I state I did make a correction in the advance sheet for two reasons: one, to absolve the members of the press gallery from any implied reproach that might arise in the minds of people who compared their report with Hansard, and, second, to correct any impression that I might have said that preparation for war was not one of our cares at the present time. It is precisely because of the care being taken by the nations of the North Atlantic security pact that we are able to feel there is no fear or apprehension at this time. Principally I wanted it to be clear that the newspaper
reporters had justification for the use of the word "care" as it appeared in the quotation mentioned.



BUSINESS OF THE HOUSE


Louis Stephen St-Laurent: Mr. Speaker, it is suggested that because of standing order 28 it might be irregular for you to remain in the chair while debate was continued on the motion made by the Minister of Finance last night that you do leave the chair for the house to go into committee of ways and means. To avoid any suggestion of irregularity, if I have the consent of the house I would move:
That the provisions of standing order 28 respecting the committee of ways and means be suspended for this day.
As I said last night, there is no intention of curtailing the debate on this motion to go into committee of ways and means, but there is some suggestion that under the terms of standing order 28 Mr. Speaker, without this motion, should leave the chair without question put and without debate.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Bill No. 66, to incorporate Alberta Natural Gas Company.-Mr. Maybank.


[Stage Direction]
On the orders of the day:
Mr. C. W. Hodgson (Victoria, Onl.):: I should like to direct to the Minister of Veterans Affairs a question supplementary to the one I asked him yesterday. Will his department recall the war medals now being distributed, in order that they may be properly engraved?


Hon. Milton F. Gregg (Minister of Veterans Affairs):: The answer is no.



SHORTAGE OF SUPPLY


[Stage Direction]
On the orders of the day:
Mr. G. K. Fraser (Peterborough West):: should like to direct a question to the Minister of Trade and Commerce. Does he know
1012	HOUSE OF
Inquiries of the Ministry that there is in Canada a great scarcity of cement which is impeding the building of houses? In Peterborough alone the building of houses, especially the construction of the foundation-even Central Mortgage and Housing Corporation houses-has been held up owing to the fact that we have had just a trickle of cement coming in there this year. Can the minister do anything to help the situation? Previously about a million barrels were obtained from England. Perhaps something like that can be done now.


Right Hon. C. D. Howe (Minister of Trade and Commerce):: I am aware that the
production of cement in Canada is not adequate for the requirements this year. The hydroelectric plants that are being built are this year taking something over two million barrels of cement. This type of construction requires abnormal quantities of cement, and the result has been a shortage. I believe the cement companies imported about a million barrels in an attempt to correct the situation.
I am informed that the situation is correcting itself rapidly, and that next year Canadian production will take care of Canadian requirements.


Gordon Knapman Fraser: May I ask this further question, Mr. Speaker? So many concrete foundations have to go in this year that construction of Central Mortgage and Housing Corporation houses is being held up. I wondered if there should not be some priority for those houses and others.


Clarence Decatur Howe: It is the purpose of the cement companies to give priority to houses and to work that is urgent. I shall be glad to draw the attention of the companies to the situation referred to by my hon. friend.



TELEGRAPH SERVICES


[Stage Direction]
On the orders of the day:
Mr. Gordon B. Isnor (Halifax):: I desire to direct an inquiry to the Minister of Transport. In view of the proposal of the government to establish the Canadian Overseas Telecommunication Corporation, is it also the intention of the government to enter into an agreement covering repairs and maintenance of cables, which will enable the cable ship to continue to be based at Halifax?


Hon. Lionel Chevrier (Minister of Transport):: The bill now before the house with respect to the Canadian Overseas Telecommunication Corporation provides for the expropriation of telecommunication assets


only. It is not contemplated in the bill that an agreement will be entered into concerning the maintenance and repair of these cables.



COMBINES


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: I wish to direct a question to the Minister of Justice. Have prosecutions now been launched under the Combines Investigation Act in respect of the alleged infractions of that act by certain bread companies in western Canada? If so, when are the preliminary hearings to take place?


Hon. Stuart S. Garson (Minister of Justice):: Not having received notice of his question from my hon. friend, I think I should delay the answer until Monday. I shall have to refer to counsel who is in charge of the case in order to ascertain what his latest action has been.



CANADA SAVINGS BONDS


[Stage Direction]
On the orders of the day:
Gordon Knapman Fraser: have a question I should like to direct to the Minister of Finance. Does he know that throughout Ontario, in the English-speaking sections, Canada savings bonds advertising has been sent out in the French language? A number of postcards in French were received in Peterborough, and on them was a picture of the Prime Minister's home town. I thought that I should bring this matter to the minister's attention, because it is a waste of money to send them in French to this area.


Hon. Douglas Abboff (Minister of Finance):: I thank my hon. friend for bringing the matter to my attention. There may be some waste of money in sending these cards to Peterborough, but I should not think so.


Mr. Cruickshank:: That will hold you.


Gordon Knapman Fraser: I wish to ask the minister another question, Mr. Speaker. Does he not know that Peterborough has always gone over the top in victory bond campaigns and in every other way?


Mr. Smith (Calgary Wesl):: I have a supplementary question to ask the Minister of Finance. Does he know-and if he does not, he should-that the best advertising he has sent out through these cards is taken from the Calgary stampede, and they are being distributed in Ottawa?


Douglas Charles Abbott: I thank my hon. friends for the compliment.



INSECT PESTS


[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinton):: In the
absence of the Minister of Agriculture and his parliamentary assistant, may I ask the member of the government who is Acting Minister of Agriculture today whether that department will take action to assist in meeting the situation caused by the plague of termites that is attacking certain areas of Toronto?


Some hon. Members:: Oh, oh.


Some hon. Members:: Hear, hear.


Donald Methuen Fleming: Perhaps I should make it perfectly clear that I am not necessarily referring to the members of the Liberal party. Will the Department of Agriculture give some assistance with a view to preventing the spread of infestation of these insects?


Louis Stephen St-Laurent: The hon. member may be assured that the proper officials of the Department of Agriculture will take cognizance of his question.



THE BUDGET


[Stage Direction]
The house resumed, from Thursday, October 20, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
Hon. W. Earl Rowe (Dufferin-Simcoe):: Mr. Speaker, before adjourning the debate last night I had listened to the speech of the Minister of Finance (Mr. Abbott), and I promised you, sir, that I would look it over in the meantime. I have done that, but I did not find many surprises in it. I was more shocked by the lack of additions to the speech than to read what I had read before. No budget has been practised so much and presented so often before being passed by the house. However, I feel that one cannot be unmindful of the great changes that took place during the past summer. The government's political success in the recent election is evidenced by its top-heavy majority in this house; in fact this is the first time that I have been almost completely surrounded by Liberals. Judging by their promising
The Budget-Mr. Rowe appearance I suppose one should call them statesmen. They are in front of you, behind you and on both sides of you. It is only natural that such a victory should bring to the Prime Minister (Mr. St. Laurent) and his colleagues a sense of pride and satisfaction, indeed a sense of supreme confidence. With all due respect, one can say that at times we almost see a growing complacency coming out of that great victory. I sometimes wonder whether the victory was too great. I observe that the Minister of Finance seems happier than usual, and he is always happy. He seems to think that everything is all right. The Prime Minister himself is not even afraid of war for the next five years. Everything is rosy; everything is fine. I am reminded of a description that was once given of optimism-in saying this I mean no disrespect to hon. gentlemen whom I see in front of me and the sincerity of their purpose in serving this country. The man who gave the description said that the best explanation he ever heard of real optimism was a fellow who did not care what happened so long as it did not happen to him.
I say in all sincerity that I hope this allpowerful government, with an unprecedented number of members so ready to support it, will not develop an optimism so blind as not to observe the swiftly changing conditions on our economic front. If I should remind the Minister of Finance and his government of the possible far-reaching effects of conditions that have arisen lately to becloud our economic future with great uncertainties, I hope that such will not be recklessly regarded by those who sit to your right merely as what an opposition critic might be expected to do-to view with alarm for the sake only of alarm.
May I, however, assure the minister that no political motive actuates my remarks of today. The government have just won a general election. Indeed they have won it in no uncertain terms. Nothing I can say now can alter that situation. In fact it is apparent that anything I said before the election had no effect on it.
I am not unmindful of my responsibilities. I know that, despite what has been said or has not been said, or how much joy or applause there may be over the victory that some organizations have had, if our prosperity withers and dies because its roots have been torn out of the export markets on which it was based, then it will be the Canadian people as a whole who will suffer, without any distinction between Grit and Tory. None of us wants that to happen. Certainly I do not. And so today I speak not from any partisan motive; I speak with a keen sense

The Budget-Mr. Rowe of my responsibilities to the people of Canada. May I, however, ask the Minister of Finance, who needs no lecture from me on the great responsibility he carries, to concede to me the same sincerity in the lesser responsibility that is mine on this occasion. It is my hope to bring to the attention of this house the importance of the government's shedding at this time its political battledress and meeting in a business way the economic challenges of the hour.
The presentation of the annual budget has been an event of growing importance in the life and progress of our people. But, it is unique in the experience of this house to have, as I have said, a budget presented so often and practised so much before being passed by this House of Commons. In fact it has been back and forth in this house so often that it is almost worn out. It is also passing strange to me that while the economic face of literally the whole world has been changing swiftly during recent months, the government's fiscal proposals of today are only a rehash of the proposals that were unwrapped last March to dress the stage for the June election. It gave temporary cash relief. I am sorry that it did not go a little further in some respects and increase the exemptions of the poor man, as the party to which I have the honour to belong suggested. It gave cash relief to many Canadian taxpayers; therefore it had a distinct appeal to millions of taxpayers. It was, Mr. Speaker, a great election handbook, and served as a successful political expedient for a hasty election campaign. It lacked inspiration; it lacked the semblance of ability to observe obvious signposts that everyone else but the government saw last spring. It is obsolete now in the sense of meeting world conditions that have changed so much since. The minister and his advisers refused to see that the devaluation of the Canadian dollar would so soon be inevitable.
I do not propose to trace, in their elaborate and confusing detail, recent economic world events. Indeed, the rapid development of international bilateralism in trade, and diminishing overseas markets for our agricultural, forestry and fishery products, were obvious at that time-I speak of last March when this budget was first presented-to all hon. members of the house except the government itself.
The serious aspect of this misleading official attitude lies not alone in its strange lack of relationship to the facts, but especially in its striking similarity to the "wait and see" policy of the Liberal party just before and during the 1930 election. I can well recall that, despite the fact that a serious recession had started in the latter part of 1929, our

international trade channels were drying up, every elevator in Canada was filled with unsold wheat and every lumber yard was bursting with unsold lumber-despite these facts, at that time the Liberal party to your right, Mr. Speaker, were taking exactly the same attitude as they are taking today, even though it was followed by the serious economic depression of the early thirties.
During the recent election the Minister of Trade and Commerce (Mr. Howe) for whom I have a very high regard-I hope this is mutual, although I am not so sure-made certain statements. I do say of him that he is an optimist, and he is reasonably practical in everything else except his politics. But he should understand what is happening. I can remember being in certain parts of Canada while the minister was there-sometimes even in the same city. On every occasion he said that the outlook for Canada's trade was never brighter. I think he must have meant political trade, because his department of statistics only last week stated emphatically that for the first eight months of this year Canada's favourable balance of trade was less than it had been in any year since 1938. This was the condition, despite the fact that we had a greater volume of trade-and I will not overlook that, because the Minister of Trade and Commerce mentions it every time he is on his feet. He reminds me of the fellow who is doing more business-buying more and selling less. The statistics show that in the first eight months of 1949 we had an unfavourable trade balance-more unfavourable than we have had at any time since 1938. Despite the rosy pictures which were painted to the public, he must be honest.
Now. if I may refer to the Minister of Agriculture (Mr. Gardiner)-I regret he is not in his seat today; and in passing let me say that I am glad he is restored to good political health-


Some hon. Members:: Oh, oh.


William Earl Rowe: I did not mean "political health"; I meant that I was glad he had been restored to good physical health. I know his political health is always pretty good. I think he will need good physical health in the future to endure the political associates he has had in the past.
Our farmers, from one end of Canada to the other, were told by the Minister of Agriculture that we had more markets for our agricultural products than we had agricultural products to sell. He was telling them this story to the point where they were eating twice as much as they did before-putting twice as much butter on their bread, and cutting their bacon twice as thick. The other evening in the house that same minister said

that during the first six months oi this year we sold to the United Kingdom, the greatest market we have had in the last fifty years, only one-sixth of the amount we sold the year before. And, despite all this brightness for the future, he added that now the United Kingdom did not care whether we sent them anything at all from our supply of foodstuffs. They would just as soon not have our bacon.
These trends which developed early this year were recklessly, or designedly, or both, disregarded by the government.
We all know that in recent weeks we have had a shocking currency devaluation on a broad international front. Some of us may be a little hazy as to the real reason for it, but none of us is doubtful as to what happened. We know how suddenly the United Kingdom devalued her currency-almost overnight, despite the fact that they had said they would not do it. They devalued their currency to the extent of thirty per cent. Then they followed with government-controlled currency-something like the hunter who chased the rabbit so far that it had to climb a tree, even though no other rabbit had ever done it.
We found the same thing here. Our great experts in the Department of Finance, the Minister of Finance himself as well, just laughed and said: "Me, too. Get on. We will go for the ride, whether it is a broncho ride or not. We shall have to take it". When the United Kingdom devalued its currency thirty per cent, all empire countries followed suit. The Argentine has devalued to the extent of forty per cent-with, it is true, extensive and highly complicated reservations. Canada has devalued to the extent of ten per cent, in other words twenty per cent less than the United Kingdom. It might have been made twenty, twenty-five or thirty per cent. They just got together and said: We have got to devalue; it might just as well be ten per cent as twenty per cent. Call it ten per cent, and let it go at that.
Canada devalued twenty per cent less than the United Kingdom, other commonwealth countries, and European countries associated in the sterling bloc. My hon. friends laugh, but they were not laughing over there in the east block-in fact they were all too much embarrassed to have good judgment.


Mr. Cleaver:: We are all laughing at the Tory policy of devaluation.


William Earl Rowe: The inevitable results of these startling facts are bound to have a far-reaching effect on our economy. In the first place it will be obvious to any schoolboy economist that Danish bacon; Danish cheese; Scandinavian newsprint, pulp and paper; Australian and New Zealand dairy products:
The Budget-Mr. Rowe Argentine beef; electrical supplies from Sweden, and hundreds of other commodities from the sterling area nations will be available to the United Kingdom market at a price at least twenty per cent below their cost from Canada, the cost at which Canada could put her products there. That is obvious, surely, to everyone.
Despite our country's potential resources in her present period of post-war prosperity, we must not recklessly disregard these economic danger signs. We have had prosperity not because of but in spite of the present government. This is a great country. There is nothing mysterious about that. There is not one hon. member in front of me today who can give me a specific reason for our prosperity for which the government has been responsible. The government has been riding on the crest of world affairs, with the result that we have had prosperity. It has been kidding the people of Canada that it has given them that prosperity-just like the fellow who had his bank credit extended because he was out with the bank manager the night before, and was able to borrow more money than he had ever borrowed previously.
One-third of our whole national economy is dependent upon export trade. Every hon. member in the house knows that the United Kingdom is by far the greatest and the most important market we have for our agricultural surpluses. No other market exists on a scale sufficiently large to replace it. How long shall we continue to hold that market if our goods are priced twenty per cent above the prices of competing goods from sterling area sources?
The effect of this bureaucratic trading dollar creates in fact, if not in intention, for the first time in the history of empire trading relationships, an empire preference in the United Kingdom markets from which Canada alone of all empire countries is now excluded. That is automatically the effect of Britain and the commonwealth countries other than Canada devaluing to the extent of thirty per cent, while Canada devalues her dollar by only ten per cent. This gives them an advantage, as everyone can see, of twenty per cent right across the board. Non-British countries of the sterling area devaluing thirty per cent have for the first time a preference over Canada of twenty per cent in the British market-and Canada is the senior partner in the British commonwealth.
That is the position we are in today. It is a strange economic situation indeed, and I submit it will have many repercussions on business, unless the government makes some move other than that indicated in the dusty document presented last night.

The Budget-Mr. Rowe
The general prosperity we have recently been enjoying must not blind our vision, if we are to safeguard our economic future from these dangers. This is a twenty per cent disadvantage to the lumbermen of British Columbia, a twenty per cent disadvantage to the fishermen of the east, to the grain and meat producers of central Canada, to say nothing of the secondary industries-textile and farm implement industries. Can anyone say that that will not be a matter of serious concern to every person connected with the business life of this country? Since no one laughs at that, sir, I think at least hon. members to your right understand it.
Despite our present prosperity there are signs all around that we should not ignore. I say to the minister with all respect that, despite the changes in the budget, he has brought down off the shelf the very same program. There are a few exceptions. The sales tax is being taken off fuel oil-something which should have been done last year or the year before. In fact the government should have taken off all the sales tax. This budget seems to be just the same as it was last spring, something that blindly ignores our economic problems and consequently offers no solution so far as the long-range viewpoint is concerned. It is good, and I compliment the minister upon the splendid way he presented it. I also compliment his departmental officials upon the form of the document they have prepared. But after all, it is just something that an auditor might present. There is no more inspiration in it now than there was last spring. At that time it was full of political craftsmanship; today it is no less barren of economic statesmanship to meet changing conditions.
During the past decade, and directly as a result of the war, our agricultural markets have been largely dependent upon contractual bulk trading purchases. Much of our production went to supply the British market, often at prices far below world prices or far below what the British might have been able to pay. This policy was pictured to us as being one with great long-term advantages, but in fact it was the most reckless experiment in international trade in Canada's history. This policy of government-directed selling was admittedly at great cost to the Canadian farmer, but it was expected to give long-term stability so far as the United Kingdom market was concerned. Of course it also served to keep down the prices of the commodities the farmer had to sell.
Unfortunately a shortage of dollars and a return by Great Britain to her traditional markets in Europe, coupled with the adoption by that country of a policy of bilateral

trade agreements with soft currency countries, resulted in our loss of those markets to the point where the Minister of Agriculture is unable to assure the primary producers of this country of any contracts beyond the contract year 1950. The stark truth is that those markets which we hoped to hold after the war and which are essential to a healthy agricultural economy in this country, and have been for the past fifty years, are practically lost. Those markets are necessary to the economic health of this great basic industry. This costly bulk-trading experiment has proved a failure because it has choked off future market stability. Even during a time of rationed foodstuffs in Great Britain we have lost a market which we had held for fifty years.
The full effect of this has not been felt, because there are still a few contracts. We have the benefit of support from the European recovery plan and the Marshall fund in the purchase of our wheat, but these markets have a definite limitation because the Marshall plan is scheduled to finish in 1952. The discontinuance of purchases in Canada through this medium will have a serious effect upon this country unless an alternative means of retaining these or other markets is rapidly found.
The alternative market which we have been able to secure for our surplus production in the United States is not at all assured for the future. Surpluses are now beginning to appear in that country, which means that our ability to sell there will become less favourable as time goes on. Our similarity of production, coupled with the capacity of the United States to produce, makes that market most hazardous at best.
The history of trade shows that our most secure agricultural markets for the last fifty years have been found in Europe, and especially in the United Kingdom. These traditional markets for Canadian products have been diverted to eastern Europe and other commonwealth countries under long-term bilateral agreements. The problem of trade in this sphere is made more difficult by the fact that these long-term bilateral trade agreements, such as Britain's five-year agreement with Poland, project far past the time in the future when it was hoped that trade channels would have been cleared of the obstructions resulting from dislocations caused by the war. As a nation with its agricultural economy dependent upon the export of surplus production to reasonably stable markets, we can no longer ignore the fact that the trend today is in a direction adverse to the future welfare of this country's basic industry.
Last week the representatives of ten western European countries met at Rome to

prepare a report to be submitted to the world conference of the food and agricultural organization scheduled to meet in Washington next month. The substance of the report which will be presented at that time is that the western European countries purchase more of the food they must import from eastern Europe and less from this continent. In other words the system of bilateral trade, which now expresses itself through some three hundred bilateral trade agreements among European nations, and which is slowly but surely closing its door to exports from this country, is to continue and constitute the order of trade for some indefinite period in the future. This should cause serious thought on the part of all businessmen and farmers in Canada.
Countries within or under the shade of the iron curtain are replacing Canada in the British market, in many cases under bilateral deals which extend up until 1955. Bacon which was formerly supplied by Canada is now being obtained from Denmark, Poland, Hungary, and other countries. Our present cheese contract for 50 million pounds is for an amount lower than our sales in this market at any time during the past fifty years. Our contract for eggs calls for the purchase of only three-fifths of our exports to the British market last year, which were below what they had been the year before-and this at a time when the farmers of other European countries are increasing their sales in the British market.
This market, which took as high as a million cases a year of evaporated milk and 8 million pounds annually of milk powder, has been lost to Poland, Australia, New Zealand, Denmark, and other countries. It is not surprising that the hon. member for Leeds (Mr. Fulford)-who by the way, has never been accused of not giving the Minister of Finance and his party full support-stated in the house the other night that this phase of agriculture has become the orphan of the dairy industry. That is even worse than anything that has been said on this side of the house. The hon. member stated that there were 2,500 farmers in his county who depended upon this branch of agriculture for their living. He said that 8 million pounds of evaporated milk have been stored in the county because there is absolutely no market at home or abroad. I wonder at the hon. member bringing this matter to the floor of the house and not taking it up with the Minister of Agriculture or the Minister of Trade and Commerce, who say they have markets for more than we can produce. I think it would have been better to take it up there. If those ministers had such markets during the election, I would suggest that in
The Budget-Mr. Rowe fairness to the 2,500 farmers in Leeds, some of whom may have supported the present hon. member for that riding, the hon. member should ask the permission of the Minister of Trade and Commerce and the Minister of Agriculture to use their names to set up a Howe-Gardiner sales corporation in Brock-ville to sell the 8 million pounds of milk now in storage. Those ministers are the past-master salesmen who during the election said that they could sell more than we could produce. It is not long since the election. I wonder if something along that line might not provide a lead for the business mind of the hon. member for Leeds.


Mr. Knowles:: Speak a little louder; the minister does not hear you.


William Earl Rowe: Mr. Speaker, I am not going to disturb him. I think it is just as well that I do not. He is exercising a parliamentary privilege. I will not enlarge on that, but I have listened to him often when I would rather have been doing something else.
A similar situation exists with respect to the markets we previously held for beans, poultry, canned salmon, flax fibre, fruits and fruit juices, vegetables, oats, barley, and numerous other agricultural products. Probably when the Minister of Trade and Commerce gets into action he may find markets for those products, but nobody else seems to know where they are going to be sold under present conditions.
In the field of non-metalliferous mining and quarry products, our exports to the United Kingdom markets have dropped to one-third of their 1938 volume. In the field of tobacco exports, Canada built up a considerable market in the United Kingdom, as everyone knows. Last year our exports of tobacco to that market were reduced to approximately 12J million pounds from the 22J million pounds we sold them the year before. At the same time Turkey, which had exported less than half a million pounds in 1947, increased that to over 10 million pounds in 1948, taking the market that we formerly had for our tobacco growers.
A similar story prevails with regard to leather and leather products. Our exports to the British market fell from over 5,000 hundredweight in 1947 to less than 1,000 hundredweight in 1948.
As I have already stated, the full impact of this loss of markets has been temporarily deferred by our finding markets in the United States of America. There is now every indication of a surplus of many articles in the United States, and the likelihood of holding those markets is very doubtful, as it always has been. To find new markets for surplus Canadian production, or have the domestic

The Budget-Mr. Rowe market absorb even a considerable portion without disrupting trade, presents a considerable problem indeed.
Efforts are made from time to time by members of the government to detract from the disastrous implications in our present trend of foreign trade by placing the entire responsibility on the shortage of dollars experienced by British purchasers. But that answer does not offer any solution. Since the close of the war, agricultural machinery has been a large export factor, but now the greater devaluation of sterling compared with that of the dollar is making the export of Canadian farm machinery very doubtful. As a result, as the minister knows, unemployment is beginning to mushroom in these important machinery factories.
The government's policy of holding the Canadian dollar at an artificial valuation is now anchoring the strategically important ocean shipping industry. Even before the United Kingdom and Scandinavian countries devalued their currencies, Canadian oceangoing bottoms were operating on a slender margin, as the minister knows, compared with shipping under other flags. Owing to higher wages, higher shipbuilding costs, higher standards of crew treatment, and higher operating efficiency, we believe, Canada faces a most difficult situation. To this difficult picture competing rates are reduced by thirty per cent, whereas Canadian rates can drop only by 10 per cent to maintain the same equilibrium. Thus, today, in every seaport of the nation, ships of Canadian registry are becoming known as "the mothball fleet". They are dropping their anchors and paying off their crews. They are unable to compete for cargoes against vessels of Scandinavian, British and other registry. The government certainly will not deny that several of its leading ministers have from time to time, as other hon. members have, emphasized the importance of our great merchant marine in the carrying of ocean cargo. Indeed, during the last war the part that the merchant marine played was the pride of many Canadians; in fact, many have said that victory would not have been possible had it not been for the great services it rendered. Today, because of the currency policy of the country, we find shipping services being crippled, which emphasizes the imperative necessity of getting down to solid common sense so far as currency values are concerned.
What has been the effect of this violent currency change upon our industries which cater to the domestic market? Clearly one effect of the British devaluation of thirty per cent is the equivalent of a cut in the tariff against the British goods. Can our textiles, our rubber and leather goods industries, our

footwear industry, and a whole host of others, compete with British tariffs thus cut down to almost nothing overnight? In addition they pay lower wages than we do.
For the past few moments I have been tracing-and I know that some will think haphazardly-the effects of devaluation on the major aspects of our national economy and the business life of the country. No one realizes more than I do that I have fallen far short of exhausting this subject, which today is bothering everyone who thinks seriously about our national economy. I have dealt with only a few concrete examples, because time prevents me from dealing with many others.
May I now discuss briefly what I consider to be the vital question underlying the whole situation, namely, what is the road that has led us into our present difficulties? Why have we had to resort to devaluation so suddenly and to this reckless tampering with our currency? It will be clear to all of us that we arrived at our recent crossroad of devaluation wholly and solely because some years ago, accepting the advice of experts, the government adopted what is known as foreign exchange control. If we had not retained foreign exchange controls after the war there would have been no problem of devaluation harshly and ruthlessly confronting Canadian industry almost overnight. Our dollar would have been fluctuating in accordance with the balance of our import and export trade, and would have been regulating that balance automatically from day to day. Its value would not be an arbitrary one fixed by some government decree. We have said that repeatedly, and now that the election is over, surely the government believe it. Their actions would indicate they do.


Douglas Charles Abbott: Then the actions are misleading because the government believe very strongly in foreign exchange control.


William Earl Rowe: Yours mostly have been. Its value would not be so arbitrarily fixed. I wonder if members of the house have paused long enough to realize just what it is that we do when we withdraw our dollar from the free currency market and place it under foreign exchange controls, or government decree. In effect we simply delegate to a departmental official, who neither buys, sells nor manufactures, the task of placing a rigid arbitrary value on our currency, independently of what it will buy or sell from day to day in the market places of the world. Actually that is all that we do. But it should be obvious to us that no government official or group of men should be asked- even with the Minister of Finance being called in-to be expert enough to price the

dollar exactly, or even approximately at its real value, over any long period of time. If by some freak one of them had such genius- and I refer to departmental officials for whom I have all respect-he would do much better elsewhere; if, by some even more mysterious freak, there might be one of those master minds among those you see to your left and right, Mr. Speaker, one who could fix the value of the dollar exactly where it should be, the Prime Minister could not keep him in his government. He would be too successful somewhere else. Anyone who had that type of supreme genius would be able to make a far greater fortune for himself by pricing the stock market than being a mere dollar pricer for the government. But no such expert exists either in the departments or in those surrounding the minister. The Minister of Labour (Mr. Mitchell) looks very bright, but I do not think even he would undertake that sort of thing. Mr. Speaker, I sometimes wonder why, in view of that fact, we continue to entrust the valuation of our currency to government and political decree. Such action is bound to bring us in a period of time to the necessity of rude and disturbing adjustment, the shock of which may indeed mean fortunes for a few and insolvency for those unprepared for the violent storm that follows.
That is the ultimate fate of all currency controls. None of them has ever led to expansion of trade. That is their record. To expect success for the first time from such a policy in Canada is dangerous and reckless optimism. I realize, of course, that such a view is heresy in the eyes of the so-called experts. Ever since these experts first succeeded in binding us in the chains of currency controls, they have sought to wrap the entire subject of foreign exchange in mystery and to establish it as far too technical a subject for comprehension by the ordinary lay mind. To a large extent their efforts along this line have been only too successful in increasing their popularity amongst those who do not understand the problem.
All my life, regardless of any other interests, I have been a practical farmer. I have been schooled in the belief that the Canadian farmer is equipped with the intelligence to understand any problem upon which his own economic welfare may ultimately depend. Consequently, I refuse to accept the subject of foreign exchange policy as a mystery too intricate for lay Canadians to concern themselves with. I simply translate it into the homely terms of my farming background. I realize that when the government guesses at the price our dollar should bring in the markets of the world, it is only a guess. To me it is like the farmer who takes
The Budget-Mr. Rowe his eggs to market and insists on pricing them at ninety cents per dozen, regardless of the fact that all the other farmers in the market stalls around him are selling eggs at seventy-five cents per dozen. Naturally, the public is not going to buy from him until he is willing to accept the prevailing market price. Similarly, foreign countries will not buy from us if they can get the same goods cheaper elsewhere. They will not pay the extra twenty per cent to secure our currency, except in respect to goods that they can get nowhere else. The range of such goods is far too narrow, Mr. Speaker, to be made the basis of a prosperous foreign trade. It is infinitesimal in comparison with the broader range of our national economy and trade.
May I express the same truth in another way? My common sense convinces me that we cannot obtain more for our dollar than it is worth. The way to find out what it is actually worth is not to have the government write and tie its price tag upon it, but to take it into the market-place to discover what world traders will give in return for it. Only when we release our dollar from exchange controls and allow it to function freely will we have assurance, not only as to its real worth, but also as to the basic soundness of our own economy. For a sound currency the meeting of the daily market test of free exchange against other currencies acts as a balance wheel or regulator of a nation's economy. It must not be too dear to prevent other nations buying from Canada. It must not become too cheap to prevent Canada using it to buy needed supplies abroad. The narrow fluctuations of each day warns that it is departing from equilibrium. Imports or exports then adjust themselves to bring it back into balance. That is how simply the free dollar works. It has worked that way throughout history whenever it has been given a chance unaffected by government decree and monopoly.
By contrast, Mr. Speaker, exchange control has never worked. In essence, it is a tampering with a nation's currency. When kings used to tamper with the currency in the old days, they lost their heads. Today whenever governments try tampering with their people's currency under the pretext of controlling exchange, the people invariably end up with an economic headache. Today we are discovering that from sad experience.
The question now arises as to whether or not during the past decade, under the system of state-controlled bulk purchasing which existed, we have lost much of our ability to buy and sell in competitive export markets. It is questionable whether or not we have forgotten how to do business by trading. Our loss of traditional markets for Canadian

The Budget-Mr. Rowe exports, and our failure to facilitate purchases of United Kingdom exports in short supply in Canada and which we have had to buy with scarce American dollars, warrants the immediate attention of the government. True, we have set up what is called a continuing trade committee and a dollar-sterling trade board. I think this indicates that the people outside are becoming so alarmed that they are going to do something on their own. I believe the government has given its blessing to that effort. I do not know how the government could have done otherwise because it has not done much about the problem. These efforts are creditable but are, at best, only exploratory efforts.
Our loss of traditional markets is of such concern to our future economic welfare in Canada that I suggest the problem be dealt with at top government levels at the earliest opportunity. Towards this end, I suggest that the Canadian government inaugurate steps for the holding of an empire trade conference at the earliest possible date. I make this suggestion, not with any idea of reverting to a policy of tariffs or violating our commitments under the Geneva trade agreements or the Annecy agreements, but in the firm conviction that this problem if tackled by top government representatives from all parts of the commonwealth can result in material advantage to all countries concerned.
The great British commonwealth of nations, Mr. Speaker, is not written off yet as one of the greatest trading forces in the world and is one in which Canada should be interested. Over five hundred million people are involved, and Britain has stood the longest of any of the world's great international organizations. In the early 1930's, an empire conference was held in Ottawa, following that debacle of the depression. I believe the result of it has been overlooked too often, Mr. Speaker, even by some of those to your right whose judgment, at times, is sound. Those people should know that no effort has been made in trade relations that has been so discounted as the British empire trade agreements of 1932 which were made in Ottawa. If anyone doubts me, Mr. Speaker, then I would ask him to look at the record. It would be found that inter-trade within the commonwealth in the five years following these empire trade agreements increased no less than fifty-two per cent.
We are a part, Mr. Speaker, of this great international institution, and despite our close association with the great republic to the south, we must not neglect a market that has been our best outlet for fifty years. The inroads being made today by communists or communist-dominated countries into

traditional Canadian markets prove conclusively, I submit, the possibilities and advisability of such a conference as I have suggested. These clear challenges to our long-range economic security and national defence far transcend the shifting fortunes of government or opposition parties. They demand more than a nonchalant political approach. They demand our best business approach. The prosperity we enjoy now must be weighed in the light of stern realities of world conditions. Our optimism as to its continuity must be tempered by the powerful factors that can alter it so abruptly. If we are to build a firm economic foundation for the future, we must discount the artificial financial stimulants so simple to apply in good times but so difficult to practise in hard times. We must plan for that day when we will be on our own economically, when the United States Marshall plan may no longer supply United States dollars for our overseas customers to pay for our wheat and bacon.
I have no doubts about the potential greatness of Canada. I am not preaching blue ruin, but I have had enough experience in farming to know that, no matter how prosperous you may be now, it is well to look ahead. There is an old saying about the goose hanging high. But no matter how high the goose may hang, a man would be more than I should like to describe parliamentarily if he did not look into the future to see how this prosperity, artificial or otherwise, can be sustained and to what degree. I am not preaching that we have not prosperity. I have emphasized the fact that we have.
I have no doubt about the potential greatness of Canada, with her resources and her possibilities. Under sound common-sense development the energy, genius and initiative of her people are sufficient to provide an ever-advancing standard of living for more people and greater national security for peace and prosperity in the future. No other country today has such latent strength with so few people. The government of today has the greatest opportunity of any government since confederation, despite the problems I have pointed out. Temporary expedients for political power are now no longer necessary to a government that enjoys an embarrassing numerical power surplus, even if some of that support has been gained by astutely discounting free enterprise itself. Of course it would be doubtful sportsmanship on my part to suggest to the government that they should repent at this time after such a great victory; but with all respect I suggest that with the serious economic and defence problems that stare us in the face and scream for solution, the hour has struck when every hon. member

of this house, no matter to what party he belongs, should shed his political armour, put on his working clothes, and face the difficult trade realities that so stubbornly ridicule our folly.
The members of any other sound executive board would stop and take stock at this time, and count the costs. If we are to safeguard our growth and development in this country we must start playing more economics and a little less politics.
In the field of social legislation we have progressed far in the years that are past, especially since 1920. We have not reached the peak of our endeavour or even the desire of our people in this regard. All parties in this house subscribe to the objective of making benefits under welfare legislation as adequate as possible. However, Mr. Speaker, this nation must have keen regard for the costs of those services, and our abilities to meet them as permanent fixed charges against the changing fortunes of our economy.
Social security expenditures in the present year will exceed $800 million. That amount is double the total tax and non-tax revenue of Canada in the year 1935. In periods of prosperity, with the high national income we now have, the costs of these services may not be too burdensome. There is no one in Canada so unkind as to suggest that we should not do all we can in the way of these services as long as we can pay for them. But we must realize the costs of these services and make sure that they are not too great a burden on our economy.
We have no assurance that the national income will continue at its present high peak. We have, however, a fair indication of the social services that the people of this country demand and that the people who are in politics want to give. I think the time has come for a careful re-examination of our whole approach to the question of financing the social security measures we now have and which, as a nation, we must sustain and expand in the future.
To the extent that unemployment insurance, old age pensions and family allowances may tend to keep up purchasing power, they will help this nation to meet problems that arise in a depressed economy. But let there be no illusion in the minds of our people about how social security measures are financed. They are paid for out of national income which, in reality, is the product of those who work. In other words, these services are, in the final analysis, made possible and are maintained, not by the government but by the national production and initiative of the Canadian people. Let us recognize that if it were not for the great wealth of our natural resources, combined with the
The Budget-Mr. Rowe industry and initiative of our great people, we as a nation, with such a small population, could never begin to take care of social security obligations involving $800 million this year. This is saying nothing of the welfare state that is suggested and the social services that many of us believe should be brought into being. There can be no true or continuing security for anybody without production of wealth, production that gives work, and opportunity for work that gives production.
The Minister of Finance closed his remarks last night by citing the tax reductions made each year since 1945. These reductions were, in the minds of the Canadian people, both welcome and necessary, and many of them were overdue. What the minister did not point out, however, was the relationship of government expenditures, or cost of government, to the gross national income of the country. If he was in his private business office, these are matters with which, I submit, he would deal, in any business concern he might be connected with. I do not mean to say that he is not just as honest in his public service, but he has so many miscellaneous problems that it makes it difficult for him to practise exactly the same in politics as you often have to practise in business. Now that the election is over I hope that the minister will get back to sound business practices.
I find that in 1938 our expenditures totalled $553 million. That was a great deal of money. At that time our national income was $5,100 million. This year our expenditures, according to what the Minister of Finance said last night, are going to be around $2,400 million. The national income that is flourishing so greatly, that he and the Minister of Trade and Commerce said during the election campaign was mushrooming all across the country-they were getting volume and dollars so mixed up that the people believed they were producing more volume than they ever did before-is approximately $13 billion. That is a great deal of money.


Douglas Charles Abbott: Closer to $15 billion.


Clarence Decatur Howe: Sixteen billion.


William Earl Rowe: I know that two or three billion do not make much difference to hon. gentlemen opposite. Perhaps it has grown in the last few days. I am not like the Minister of Trade and Commerce (Mr. Howe), who one night said that a million dollars did not seem to matter. I do not want to imply that I am so reckless that a billion or two does not seem to matter much. But I do know this, Mr. Speaker. Our national income this year is up two and one-half times what it used to be in days gone by, but our national expenditure for the same period is up four and one-third

The Budget-Mr. Rowe times. It is only a matter of mathematics for some of the experts in the Department of Finance to figure out how long we can go on in that way, where no matter how much you get in you are paying more out.


Douglas Charles Abbott: If we have to fight many more wars, we shall be worse off.


William Earl Rowe: The Prime Minister (Mr. St. Laurent) says there is not going to be any more war for five years, so my friends have nothing to worry about in that regard.
Buoyant revenues, resulting in surpluses for the past few years, have resulted in a decreased attention to the need of strict economy in administering government services. Our commitments for social welfare measures now on the statute books and as well measures contemplated and projected, plus the interest charges on our public debt, are inescapable.
To meet the danger of such a situation loading the economy of this country with a burden it is not yet prepared to bear, I would make the following recommendations in the sincere hope that this government, no matter how complacent they may feel with the great majority behind them, will give them every possible consideration. I would like to suggest to the Minister of Finance:	One, the
inauguration at once of a government-wide economy policy without creating undue hardship or hindering the economic development of this country. As a suggestion, I would like to see a survey undertaken to ascertain the percentage cost of the collection of revenue today as compared with the last year before the war. Two, in order to assure the ability of this nation to sustain the social security policies, the various price support programs, and the other fixed charges of government to which we are committed, and as well provide the necessary defence preparedness program Canada must have-no matter who says we are not going to have any trouble, I believe it is most essential-I suggest the inauguration, in co-operation with the provinces, of a national development program.
While economies can and should be undertaken at once, I do not believe that the effect of these economies alone, no matter how rigid they may be, would be sufficient to meet the staggering burden of increasing fixed charges on our national economy. We must increase production and if we are to stabilize our economy and make a sound recovery this must be accomplished. This can only be achieved by the genius, enterprise, and thrift of our people in expanding and developing more rapidly the great natural resources of our country. That is the only way we can develop our resources as rapidly as we should.

If we are to maintain our high standard of living, an adequate policy of social welfare, a high percentage of employment which is desirable to us all, and adequate defence preparedness, which no one wants neglected even if it means more taxes, then we must direct our efforts to those avenues that will create new wealth. To do these things we need a policy of development as much as we needed it in the days before 1900. Only a new accelerated production will create this national income sufficient to sustain those things to which the government now stands committed. We have built great structural buildings for a small population of about 13,000,000. If we are to live better than anyone else, be happier and nicer to each other and do all the things we want to do, we have to enlarge and expand our genius, initiative and hard work to develop the greatest resources that any similar number of people have ever enjoyed. Fortunately, in this country we are endowed with great resources. The oil and coal fields of Alberta, the mining fields of Ontario, Quebec and Newfoundland, the productivity and diversification of the agricultural industry of our provinces, the large timber areas of British Columbia and other parts of Canada, coupled with the industrial expansion of this nation, have in the last decade divulged more wealth than this country ever dreamed of.
The challenge now is one of fuller utilization of these resources, and the leadership for this must be encouraged rather than discouraged by the government. That leadership, however, must not be restrained by government controls and currency restrictions. It must not be restrained by the stagnant hand of socialism. Commitments must not be increased further in the future without serious regard for the fixed charges that are involved so that we may be able to meet them in times of recession as well as in times of prosperity.
I suggest that when the Prime Minister reorganizes his cabinet, which I understand he is going to do immediately following this session, he give consideration-


An hon. Member:: Oh, Oh.


William Earl Rowe: An hon. member laughs. It sounded like a laugh of satisfaction. Perhaps some will go to the Senate.


Mr. McCann:: You fellows are reorganizing it every three months.


William Earl Rowe: Judging by the size of the majority in the Senate you have been doing it every three months. I hope that when the Prime Minister reorganizes the cabinet those who go over to the quiet halls of the red chamber will come back to some of these

midnight meetings and urge the Prime Minister to establish a separate ministry that will give full attention-


George Alexander Cruickshank: We do not change our leader every three months.


William Earl Rowe: I hear a voice from British Columbia. Perhaps the hon. member is ready to take it on, I do not know. I hope they will direct their full attention to the development of the great resources of this country.
Canada needs foreign capital. As the minister knows so well, she needs enterprise and development. Our fiscal and taxation policies must be sound and attractive to those within and without Canada whose faith in our great potential resources prompts them to venture and risk their savings in the enterprise of our country's expansion.
In order to assist the government to try and open up greater opportunities in this country, to try to broaden the basis of taxation and to try to have our great resources flourish and expand so that the people can get the most out of them and this country reach her destiny, in order to assist the government in that and in safeguarding our economic security and progress generally, I beg leave to move, seconded by the hon. member for Danforth (Mr. Harris):
That all the words of the resolution after the first word "that" be deleted and the following substituted therefor:
This house regrets that the government has failed to take effective measures to prevent the present decline in our trade with the sterling area and is of the opinion that the government should consider the advisability of inviting the nations of the commonwealth to a conference in the immediate future for the purpose of working out arrangements to preserve and enlarge those traditional markets on which jobs and opportunities for Canadians very largely depend.


Mr. W. Ross Thatcher (Moose Jaw):: Before I begin my remarks this afternoon, Mr. Speaker, I should like to take exception to a report which appears in today's Toronto Star and which was just handed to me. It reads as follows:
To serve their own political ends Progressive Conservatives and the C.C.F. are conniving to "block, hinder or delay" the Liberal government's low-rental housing program, Perry Ryan said last night at his Toronto-Greenwood campaign headquarters. The Liberal contestant in Monday's by-election said both parties "automatically" opposed the government's plan for rental relief because it had been offered by the Liberals. They were against the program, he said, "because they would rather see appalling housing conditions continue than admit the Liberal government had a good plan to correct conditions."
I say, Mr. Speaker, that such a statement is a deliberate misrepresentation. Whether the Liberal candidate is a lawyer or not he should look at the libel laws of Canada,
The Budget-Mr. Thatcher because we may have occasion to use them if he does not watch his statements. In the C.C.F. group in this house there are thirteen members. I believe the Liberal party has 186. The candidate in Greenwood gives our thirteen members a great deal of credit if he suggests that we can hold up the Liberal party's housing program. This group has asked for low-rental subsidized housing ever since the end of the war. If the city of Toronto has not low-rental subsidized housing today it is the fault, not of our thirteen members, but of the Liberal party, the party of which he is a candidate. I am sure that responsible Liberal leaders would not approve of the statement he made last night in Toronto, and on behalf of this group I wish to take the strongest possible exception to it.
At the outset of my remarks this afternoon I must admit frankly that this is not the easiest budget in the world to criticize, for two reasons: It is difficult, first, because it was originally presented to the house more than six months ago, and secondly because, as the Minister of Finance (Mr. Abbott) pointed out last night, the government which presented it has since that date received an overwhelming mandate from the people of Canada.
May I say however that I am privileged to be speaking this afternoon-even though possibly my hon. friend from Fraser Valley (Mr. Cruickshank) will wonder why I am doing so.


George Alexander Cruickshank: I certainly do.


Wilbert Ross Thatcher: If the purpose of the budget was to win an election for the Liberal party, or to help win it, then very obviously it has been a successful budget.
A few weeks before the election was announced the minister and his colleagues were able to give a great many gifts to a great many people. For instance, the minister was able to promise tax relief to hundreds of thousands of Canadians. He was able to increase old age pensions for a large number of old age pensioners. Indeed I believe he was able to promise the building of a new bridge in the Cape Breton area. Thousands of prairie farmers were refunded millions of their own money in the form of participation certificates.
And so it went. The minister and his colleagues were able to give many things to many people; and from the viewpoint of the Liberal party the budget can be described only as a clever, effective and well-timed election-


An hon. Member:: Bribe.

The Budget-Mr. Thatcher


Wilbert Ross Thatcher: -bribe. That is as good a word as any-or an election instrument. Certainly the minister was most successful, in a political sense.
However the election is now over and I think that today we might leave the political aspects of the document behind. Some people look upon the budget only as a balance sheet of the nation's affairs. If it shows a surplus, then for the most part those people consider it a fairly good one. I know most hon. members would consider such a viewpoint to be superficial. It seems to me that, first and foremost, an effective budget should contain proposals to meet the major economic problems facing the nation. In our opinion this budget before us today fails to do that.
Probably the most critical problem facing Canada at this time is our steadily developing trade crisis. Most authorities agree, I believe, that before many months go by, the standard of living of most Canadians might well be affected by that trade crisis. As reported at page 1802 of Hansard for March 22, 1949, when the minister presented the budget, he said:
The Canadian government has taken and will continue to take all feasible steps to encourage the expansion of British trade with Canada.
I feel I must challenge the validity of that statement. The C.C.F. group in parliament feels that, far from taking all feasible steps to meet the deteriorating trade picture, the government has been apathetic, indeed it has been negligent, in its efforts to improve British-Canadian trade. In our opinion that negligence and apathy is the chief shortcoming of the budget we are discussing today.
It is so evident that Canada is facing a trade crisis that I do not think I have to labour the point this afternoon. During the recent election, as the hon. member who preceded me said, many cabinet ministers in various parts of the country made election speeches stating that Canada, after all, really had no trade problems.
For instance, the Regina Leader-Post carries the following report of a radio speech delivered by the Minister of Agriculture:
He asserted that, despite claims to the contrary, neither the home nor export markets were in danger of being lost.
Then a press report of the minister's speech delivered at Simpson, Saskatchewan, a few days later states:
Market is Safe Gardiner Says
Hitting out at political opponents who have been accusing the Liberal government of losing Canada's markets. Agriculture Minister J. G. Gardiner declared at a public meeting here Wednesday night there is no truth in such suggestions because Canada has no surplus of farm products to sell.

I ask hon. members to note the headline, "Market is Safe Gardiner Says." That was a few weeks before the election. Then the election came along. I happened to pick up an issue of the Toronto Globe and Mail a few weeks later, and I find that in this article the minister is reported to have been again talking about markets. This time however he had a different story. The article is headed "Gardiner Unsure Canada Can Hold U.K. Food Markets", and states:
We are trying to maintain Canada's markets in Britain, but there is no certainty that we can do so.
Please note those two statements: Gardiner before the election, "market is safe"; Gardiner after the election, "market is unsure". What happened in that time to change the situation?-unless it was the election. If I did not know the Minister of Agriculture so well, if I did not know his reputation, I would almost think he was trying to delude the electors of Canada.


An hon. Member:: He would not do that!


Wilbert Ross Thatcher: Some of the other ministers were equally confident of trade prospects during the election. On June 18 at New Westminster we heard from the Minister of Trade and Commerce (Mr. Howe). A Canadian Press dispatch carries the headline -"Howe Tells B.C. Liberals He's Stuck for Something to Sell". Then, over the Canadian Broadcasting Corporation stations, on June 3, the minister said, as reported in the Toronto Daily Star:
Anyone who suggests trade relations between Britain and Canada are deteriorating is talking nonsense.
Certainly the Minister of Trade and Commerce in his speeches before the election simply oozed confidence. I wonder if his statements were in accordance with the facts. I wonder if things were as good as he pictured them. Certainly many people in Canada did not think they were.
Here is what the Canadian exporters association had to say-around the time the minister was speaking-and I quote from the Montreal Gazette:
The federal government is charged by the . . . Canadian exporters' association with misleading the public as to Canada's export position through false statistics and unqualified announcements of trade progress.
The government is further charged with allowing continued and accelerating deterioration of the country's position and is asked to take constructive steps to recover a loss in world markets.
As a result . . . Canadian producers and the people of Canada are largely unaware of the markets Canada has lost abroad, of the danger that threatens our export trade.
That is not the statement of a C.C.F. member, or a C.C.F. organization; rather it

is the statement of a group of businessmen whose duty it is to look after the Canadian exports.
The Minister of Trade and Commerce went back last night to address the same body. I believe he spoke at a banquet, but this time he had an entirely different story to tell. In effect he told them that the situation was pretty serious. I do not think the minister would suggest that, as he put it, the Canadian exporters association was talking nonsense when it said that the trade crisis was deteriorating. When the Minister of Agriculture and the Minister of Trade and Commerce told the people of Canada several months ago that our traditional markets are safe, I do not think they were speaking correctly. They know now, as they knew then, that our traditional markets-particularly our market in Great Britain-have never been in greater jeopardy.
Our markets in Britain have been shrinking ever since the close of the war. This has been true particularly of our manufactured and processed goods, upon which we depend so fully to maintain full employment. But it has also been true of such pre-war staples as farm products, lumber products and the products of our fisheries. Our exports to Britain have been shrinking despite the fact that we have been making substantial gifts and loans to Britain. They have been shrinking despite the fact that the Americans have granted heavy ERP aid to the British to finance purchases in Canada.
As a matter of fact Britain today is buying from countries in western Europe many of the products which formerly she obtained in Canada. The causes of our present trade difficulties are well known to most hon. members, and I shall not take the time of the house to go into them. Prior to the war Britain bought three times as much from Canada as we purchased from her, but because of the devastation of war she is no longer in a financial position to do that. Great Britain has been forced by harsh realities to buy from those countries that will buy from her. It is not a case of ingratitude, as was suggested by some hon. members early this session; the fact is that she has not been able to trade with us on the old basis simply because she lacks Canadian dollars to do so. Unless we can do something to let Great Britain earn more Canadian dollars, then the chances are that our primary markets will disappear to an even greater extent.
The Minister of Agriculture (Mr. Gardiner), the Minister of Trade and Commerce (Mr. Howe) and other ministers have been telling the country that all is well, that our trade markets are safe. How can they
The Budget-Mr. Thatcher reconcile those statements with some of the statements British officials have made when visiting this country? On his trip a few months ago Harold Wilson, the president of the British board of trade, is reported in a Canadian Press dispatch of May 13 as having said:
We are faced with the knowledge that Marshall dollars will progressively decline between now and 1952.
So unless we manage to push up our earnings of United States and Canadian dollars faster than offshore dollars decline, we shall be able to buy less from Canada in future rather than more . . . even maintenance of the present rate will be dependent on a great expansion of our exports to Canada.
The Right Hon. Ernest Bevin told us precisely the same thing when he was here in Ottawa several weeks ago. Prime Minister Attlee, Sir Stafford Cripps and other British statesmen have told us, not once but many times, that the only way we can avoid this trade deterioration is by buying more British goods.
Last evening the minister told us that in the last twelve-month period our exports had been greater than in any similar period in the past. That may be true, but those exports are greater, first, because of the huge loans and credits which have been extended by our government; secondly, because of the ERP expenditures made in Canada which I understand will total $800 million this year, and thirdly, because we have not had to face German, Japanese and Czechoslovakian competition in the last few years.
ERP aid will probably be discontinued in the near future and at the same time competition from the countries I have mentioned will become progressively greater. Surely there is no cause for complacency in our trade picture. When he spoke last night even the minister hastened to point out that a decrease in exports was inevitable.
I believe the government has sought alternative markets for our primary products, particularly in the United States, but in spite of that search I think it is safe to assume that our best markets for lumber, wheat, farm products, fruit and the like will continue to be in Great Britain. The one way we can protect that market is to increase British imports. It seems to me that the government has been particularly apathetic in finding methods of increasing those exports.
Last night the minister spent about fifteen minutes telling us about the seriousness of the trade situation. He told us why some action had to be taken to increase British imports. He informed us that the dollar countries would have to remove tariff barriers, and then suddenly when we thought he was

The Budget-Mr. Thatcher going to tell us about the action the government proposed, he changed the subject and was content to say: "This is the situation which we must constantly keep in mind"; the government is "weighing action"; the government is "actively reviewing measures", and so on. In other words, he did not announce any concrete steps. He did not announce any immediate program. He did not make any attempt to translate his words into action of some kind.
Far too often, it seems to me, we in Canada forget that in order to be an exporting country we also have to buy. Our failure to realize that fact has caused a great deal of resentment, and rightly so, in Great Britain. They feel that perhaps Canada is not doing as much as it could to solve the present crisis, which after all is ours, as well as theirs.
Some weeks ago the British took drastic and courageous action to try to get into the North American markets when they devalued the pound. I think it is fair to say that if the tariff barriers on the North American continent had not been so high the British would not have had to devalue to the extent they did. But they brought about that devaluation despite the fact that they knew their cost of living would be forced up. They realized that devaluation was only an initial step which presented no permanent solution. They knew that it would allow them a little time, but if it is to prove of any real value they will have to find a long-term solution.
I suggest that it is in Canada's interest and in the interests of this parliament to help Great Britain find that long-term solution.
The Liberal party so far has failed completely in my opinion to adopt a vigorous import policy. They have been active on exports, but they have not been active in encouraging imports. The government has stood idly by, and is still standing idly by, while the British and European buyer has been gradually choked out of the Canadian market because of a lack of Canadian dollars. Surely it is the duty of parliament to rectify that threat.
I believe it would be in the national interest if this government set up an import board whose duty it would be to encourage British imports and imports from sterling countries, whose duty it would be to take imports now being obtained from the United States and reallocate them to British manufacturers. It is true that a private board was set up this week by a number of private citizens. I believe it is called the dollar-sterling board and is under the chairmanship of Mr. Duncan. We think that is a step in the right direction. It might be of some help, and we hope the government will give it every assistance, including financial aid. But we do not think


it is the final answer. We believe there should be a government board set up with all the support of the government behind it, manned by men who would spend their full time on this problem. This is a step which the C.C.F. party hopes this government will take in order to meet this trade crisis.
If we are as anxious as many have said they are, to give the maximum encouragement to British imports, certainly the time has come to grant the British tariff concessions. It seems to me that government tariff policy in recent years, particularly where Great Britain is concerned, has been very shortsighted. When delivering his budget speech on March 22, 1949, the minister said, as reported on page 1801 of Hansard:
In view of the pending tariff negotiations at Annecy and other trade discussions which are envisaged ... I am not proposing any tariff changes at this time.
He said that in March. That is strange language coming from a minister of a government which for years has paid lip service to the principle of freer trade. Several years ago the Geneva trade agreements were announced in Canada with a great deal of fanfare, but to this moment the government has not presented those agreements to parliament and allowed us to either approve or disapprove of them. As a matter of fact, many of the benefits which would have accrued to Canada from the Geneva agreements were nullified by government embargoes and the like.
The Annecy agreements were tabled several weeks ago but I do not think the most ardent Liberal will suggest that their effect can be anything but minor. About $20 million out of a total of $2 billion will be affected, less than one per cent of our trade. The Annecy trade agreements do not even touch Canada's basic trade problem. The government is only nibbling at the fringe of our trade difficulties. It has been making a great deal of fuss about very little when it talks about the Annecy agreements.
Of course Canadians will welcome the changes, but most of them will realize that the Annecy agreements are only a drop in the proverbial ocean. In his budget speech this March the minister piously said that it was government policy to facilitate the efforts of United Kingdom exporters to regain their historic share of the Canadian market, and that that was particularly so in the case of cotton piece goods. That was a sensible policy, but while in one breath the minister enunciated a policy of helping the British, in the next breath he announced higher tariffs on British textiles. The minister talked one way and acted another. At the very moment when we should be doing something to

increase British imports, at the very moment when lower tariffs are called for, the minister, a minister of a free trade government so-called, brings in higher tariffs. I do not see any consistency in that policy. As a result, British textile manufacturers have found it increasingly difficult to sell to the Dominion of Canada. A Canadian Press dispatch dated October 6 from London bears the following heading:
Tariff on Textiles Termed "Almost Disastrous"
The article quotes a British board of trade official as saying:
Reimposition of a Canadian preferential tariff on British textiles last July has had an "almost disastrous" effect on efforts to sell more cotton and rayon goods in Canada, a board of trade spokesman said yesterday.
Last night the Minister of Finance (Mr. Abbott) said that he was most encouraged and pleased to see President Truman giving leadership where tariffs were concerned. We think it is time that Canada also gave a little bit of leadership. Must we always play follow the leader? At this time we call upon the Liberal party to implement its longstanding pledge of freer trade. We ask for an immediate and substantial downward revision of tariffs on British commonwealth goods and on goods from the sterling areas, first, to allow those nations to earn Canadian dollars to buy our goods, and, second, to help lower the cost of living of the Canadian people.
I know that the Minister of Finance will probably say that such action is not feasible because of the Geneva agreements. I would point out to him in the first place that the Geneva agreements have not been ratified by this parliament. I would point out in the second place that, as I understand the Geneva agreements, there are various escape clauses which can be used to give the British preference if it is necessary, or if there is an emergency. I think there is an emergency today. Lower tariffs then are the second step which the C.C.F. suggests to solve our present trade crisis.
There is one further step which should be taken. During his budget speech the Minister of Finance repeatedly stated that he was opposed to bilateral trade agreements. I must say that I agree with a good deal of what he said. Yet no government can decide on its own what it is going to do and then pursue that policy regardless of the wishes of the nation with which it is trading. It is not a question whether or not we like to trade by bilateral methods. It is a question whether, in order to keep our British markets, we are willing to trade bilaterally if the British wish us to do so. Therefore we think 45781-65J
The Budget-Mr. Low
that, if Great Britain wants to make a bilateral agreement, rather than lose those markets the government should be willing to do so, where it is practical.
To conclude, Mr. Speaker, as I said earlier the main criticism which this group has of the budget is its failure to take adequate steps to meet the deteriorating trade situation, and particularly British-Canadian trade. We do not think it is enough for parliament to indulge in talk, drift along, and do nothing, because it lacks a program which will result in action. We urge the government to take the following steps without delay: (1) establish government import boards whose purpose it would be to encourage imports from British and sterling countries generally; (2) reduce substantially tariffs on goods coming from the British commonwealth and sterling area; (3) enter into bilateral agreements with the British if they so desire; (4) endeavour to sign long-term agreements for primary products such as wheat, livestock, fish, lumber, et cetera.
I move, seconded by the hon. member for Assiniboia (Mr. Argue):
That the amendment be amended by deleting therefrom all the words after the word "should" and substituting therefor the following words:
"Give immediate consideration to a reduction of tariffs sufficient to encourage an increase in imports from the United Kingdom and other sterling countries."
Hon. members of the Liberal party will see that there are no strings attached to that amendment. Anyone who believes in freer trade should have no difficulty in voting for it. I call upon my Liberal friends to vote the way they have been talking for the last fifty years.


Mr. Solon E. Low (Peace River):: Mr. Speaker, the financial year is more than half gone, and here we are, the elected representatives of the people of Canada, just now getting down to the consideration of the government's financial policy and program for the fiscal year 1949-50. I think that is an absurd situation. I say that for this reason: In spite of the fact that we as members of the House of Commons, the people's elected representatives, should be exercising control of the purse strings of the nation, the executive have gone ahead for more than seven months with plans of their own for which they have absolutely no legislative sanction whatever.
That is one of the things that lead me' to a conclusion that I want to discuss briefly a little later this afternoon, namely, that Canada is rapidly developing in absolutism. That is a serious situation. It seemed to me that, as the jovial Minister of Finance (Mr,

The Budget-Mr. Low
Abbott) presented his budget speech last night, he emphasized, if not by his actual words at least by a number of implications at several points, that the buoyancy of revenues, the condition of high production, the very satisfactory employment situation, and the general prosperity accompanied by those other circumstances, are entirely the result of the policies that have been pursued by the Liberal party. It seemed to me he suggested that they were all Liberal achievements for which the Liberal government of course quite readily wished to take the credit.
Anyone listening to the minister last night would agree that he was making no unmistakable claim that all these conditions came about as a result of the wise guidance of his colleagues in the cabinet of the Liberal party. Yet it has been my belief all along that the prosperity and the buoyant revenues of the various countries of the world-and by the way Canada has not been the only one which has experienced such things; they have taken place under governments of different stripes, Liberal, Conservative, Socialist, or what not-arose as the result of the action of one Schicklgruber who brought on the war. It is unfortunate that Hitler, who started the war, is the one to whom we nave to give credit for the prosperity we have aad since 1940 and 1941. That is tragic, but t is true nevertheless.
I am quite prepared to give the Liberal government full credit for full employment, revenue buoyancy, debt reduction, high production and prosperity if at the same time they are prepared to take credit for bringing on the war. I wonder if they are prepared to take the responsibility for the suffering and the anguish of the thousands who lost dear ones as a result of the war. I wonder if they are prepared to acknowledge that they are responsible for the tremendous increase in the national debt which has risen from about three and a half billion to around sixteen billion gross since 1938, and the interest burden that rests so heavily on the people, which has risen from approximately $140 million a year to about $450 million. I have not heard them declare that they are ready to take the responsibility for the increase in taxation by more than four times what it was in the last year before the war. I only inject these comments into the introduction of what I have to say by way of a sober reminder that the government must be careful about what it takes credit for, and a sober reminder to the government that most of those things for which they did take credit came about as a result of the circumstances of the times, coupled with the superhuman efforts of all the Canadian people.

In the minister's speech last night, under the heading of "Economic Review", he had this to say:
The latest figure for the wholesale price index is one per cent below a year ago, and for the cost of living index two per cent above a year ago.
Now, sir, during the course of my comments on the budget last spring, I emphasized the tragic results of the minister's failure to do something about the cost of living. It was not impossible for him to deal an effective blow against the continued rise in living costs in this country. At that time I contended, and I still contend, that the government should have overhauled the whole of its tax structure, beginning with the sales tax and other hidden taxes. On a number of occasions in this house, I have shown how the hidden taxation to which the government is addicted gives rise to a deadly upward spiral of consumer prices and the cost of living.
The eight per cent sales tax that is collected by the manufacturers from the wholesalers becomes a part of the wholesaler's cost. His regular mark-up, therefore, has to include the sales tax and so it increases the cost of the goods to the retailer. In due course, the retailer increases his price to the consumer in proportion, so there is a pyramiding effect all the way along through the imposition at different levels of these hidden taxes. It must not be overlooked, Mr. Speaker, that the sales tax is added to the tax paid on imports which further increases the cost of production and prices to the consumer on many items in daily use throughout this country. There are quite a number of other hidden taxes on products which are not called sales taxes. They are added at different levels of production and distribution, but they really have the same effect of pushing up the cost of production. All of these taxes contribute to the almost unbearably high cost of living under which the Canadian people have had to live for a number of years.
Everybody has had to pay these taxes. I contend, sir, that it is unfortunate that they bear more heavily in proportion on the poor than on the rich. These hidden taxes are just another way of freeing the rich from taxation and putting upon the poor the major burden of the taxes that are paid in this country. Even at this late date, the government should have wiped out the sales tax with one stroke. It only brings in, Mr. Speaker, approximately $350 million a year. By eliminating this tax, and by coupling it with action which would have given some concession perhaps to manufacturers and to industry, a very substantial reduction in the cost of living could have been ensured quite quickly.

Instead of this desirable action, last night the minister merely brushed a crumb or two oil the ministerial table for a few of the poor people of this country when he removed the sales tax from fuel oil and cider. Few poor people can buy cider or wine anyway.


John George Diefenbaker: And it would not affect the price anyhow.


Solon Earl Low: No, that is quite true. I should like to speak for just a few moments on this problem about which we have heard a good deal this afternoon. I do not intend to repeat at any length any of the things that have been said. I shall try to deal with the subject from an entirely different point of view. In the minister's speech last night, he admitted we do face a trade crisis.


Douglas Charles Abbott: No, I made no such statement, Mr. Speaker.


Solon Earl Low: I know the minister did not make that statement in so many words. While it is true, Mr. Speaker, that during the recent election campaign the Liberals denied that there was a trade crisis, last night the minister used these words:
Nevertheless, some declines in our overseas export markets have already occurred and some further declines can hardly be avoided. The government will do everything in its power to limit this decline in overseas trade but much will depend on the progress which our overseas customers make in overcoming their dollar difficulties.
This is mild language, sir, that is intended to soften somewhat the seriousness of the whole trade situation that we have been facing, not for just a few weeks but for months. The minister's attendance at both the London and Washington conferences, together with what was done there and the statements he made while he was there, indicate rather more clearly than his words last night the seriousness of this whole situation. By the way, it is not of recent origin; Canada has faced a serious trade crisis for almost a year.
In referring to the two conferences at London and Washington last night, the Minister of Finance referred to the consideration that was given to both long-term and shortterm measures which it was hoped would provide solutions to the trade impasse that has most of the countries of the world thoroughly worried. The minister said the long-term, positive objective must be the achievement of a pattern of world trade in which the dollar and non-dollar countries could live together within one single multilateral system under which a balance would be achieved by the expansion and not the contraction of trade. I believe those are his words.
Now, Mr. Speaker, to our mind that is a most worthy objective. At least, it is a good
The Budget-Mr. Low
start. The minister did not say, however, along what lines the discussion took place in efforts to find ways of achieving that objective. For instance, I should like to ask the minister and perhaps when he does speak in rebuttal he might deign to answer it- although on a number of occasions before we have asked questions which have received only a polite silence from him: Did the representatives at these two conferences, and particularly the Washington conference, consider as one means of getting on the right road towards the adoption of this multilateral type of trade a conversion of goods balances basis rather than the old basis of the convertibility of currencies which has failed? If not, I appeal to the government and the minister to give this idea of multilateral trade on the basis of convertibility of goods balances careful study to see if it would not be possible to adopt it as one means of helping to straighten out this world tangle.
I am sure the minister knows that multilateral trade on a convertibility of currencies basis is at the present time an utter absurdity, and it is likely to remain so until two very important changes have been made in the world. When I say "two important changes'' I refer to the attitude of the United States concerning favourable trade balances, and the fact that international exchanges are and have been in the hands of manipulators who promote currency wars for their own benefit.
Why do I say that multilateral trade based on the convertibility of currencies has failed? In the first place, the convertibility of currencies has been rendered impossible. The whole world has suffered from a shortage of United States dollars which has resulted from the determination of the United States to have a favourable balance of trade year after year. To ensure this, the United States must export more than she is prepared to import each year. Under such circumstances, anyone can see that there can only be one end and that is a world crisis in trade developing out of a shortage of dollars. I should like to illustrate what I mean by quoting some figures which I obtained from the United States embassy showing the amount of American favourable balance of payments for last year. They are as follows:
Exports goods (exclusive of Marshall
aid)	 $13,398,000,000
Interest on	investment	   1,257,000,000
Services	 2,171,000,000
Total	 $16,826,000,000
Turning to their import side:
Imports goods	 $ 7,711,000,000
Interest on	investment	
274,000,000Interest on	services	
2,506,000,000
Total



$10,491,000,000 HOUSE OF COMMONS

[Stage Direction]
The Budget-Mr. Low
In that series of figures I want to note particularly the tremendous sum for interest on services, $2,506 million as a result of investment policies over the years. Exclusive of any Marshall aid or ECA funds, that makes a favourable trade balance, for the year 1948, of exports over imports of $6,335 million.
Douglas Charles Abbott: It was balanced by Marshall aid.


Solon Earl Low: No, that is not true.


Douglas Charles Abbott: Largely.


Solon Earl Low: This is exclusive of Marshall aid. These are figures that we obtained from the United States embassy today. If you add the Marshall aid, it brings the total favourable balance for the United States for last year to something around $11 billion. No wonder the world has suffered a shortage of dollars! There could be nothing else under those circumstances.
Surely the whole solution of this problem turns on whether the United States in future will make available to the world an adequate supply of their dollars by balancing her trade with the world. It simply means of course their willingness to import into their country goods which they have purchased with their dollars in the other countries of the world, or to export less; in other words, buying from all of the countries of the world an aggregate of goods and services equal to the aggregate of those same things which they export to the rest of the world. That seems fundamental. But I am convinced that to achieve such a desirable end the commonwealth nations will have to draw closer together and will have to stand side by side, solidly shoulder to shoulder, to provide that balancing factor which is necessary to bring the world successfully out of its terrible position of unbalance in trade. As far as I can see, there can be no other way. It will certainly be necessary to modify or to suspend the most-favoured-nation clause in trade agreements until all the nations have demonstrated their willingness to balance their trade with the rest of the world. That unconditional most-favoured-nation clause will have to be modified.
I should now like to turn to something which is closely allied to this whole situation in trade, and that is the industrial development in our own country. The problem of industrialization cannot be divorced from our trade problems. Canada is twenty-five years behind the times in the development of her resources and her industry. I have here some figures which I obtained recently from our own bureau of statistics; they will indicate what I mean and will drive home the seriousness of this situation.
One of the things which are cluttering up our trade position is this. These figures indicate that last year we purchased from the United States, with cold United States dollars that are so scarce, coal to the value of $203,415,929. We bought in that country and from dollar countries oil to the extent of $187,241,729. We bought steel, raw and manufactured, to the value of $713,126,672, with United States dollars that have been so scarce; and we bought sugar to the extent of $560,551. One of the great reasons why we have been drained, almost bled white, of our reserve of United States dollars is the fact that we have not taken the bold course in developing our own resources and industry to the point where we can supply many of these things ourselves; and there is not anyone here who can deny that we could produce many of these things by ourselves and do so economically.
Canada should be pursuing a most vigorous national policy toward self-sufficiency in the essentials of living so that we can have a goodly measure of independence, a thing we do not possess today. Every time a strike takes place in the United States or in some other country of the world, it makes Canadians go short of things which we could be providing for ourselves. Right today the people of Ontario and Quebec are living in the shadow of fear for this winter because of the coal strike in the United States. Yet all the time we are living in a land that was abundantly blessed by the great Creator who placed right here in our own land forty-nine billion or fifty billion tons of coal that has not been developed.
I know of deposits of coal in large areas in Alberta, where the coal can be mined almost with strip methods at low cost. That is hard coal that can compare quite favourably with coal which we import from Ohio and Pennsylvania. That coal can be brought down and put onto the market of the east, in the central provinces, in competition with coal that is being brought in from the United States. We have lacked the vision or leadership to develop those mines and our transportation facilities so that we could bring that coal down here and satisfy this eastern market, thus making ourselves independent at least to that extent.
What I have said about coal is true of other things, steel in particular. There is no reason in this world why we should be purchasing sugar from any dollar country today or why we should be under that necessity. I say that in times of crisis, in times of stress, Canada must be in a position of independence. We must encourage industrialization to the greatest extent possible and as fast as possible. It must be done on a regional basis
fMr. Low.]

with widespread dispersion for safety's sake in these times. We must see to it also that justice is given to the various regions of Canada where justice has been absent hitherto. My friend the hon. member for Dufferin-Simcoe (Mr. Rowe) dealt to some extent with the problem of devaluation and I do not intend to labour it at all. I spoke about deflation once before and placed our views before the house, but I should like to say just a word about it. I think the minister described it as a short-term measure to improve world trade. It does seem strange, but it is true, that from a world point of view somebody seems to be able to drum up a crisis almost any day. The modern crisis, as revealed by the administrator of our finances last night in his budget speech, is that we are short of dollars. The minister and his counterparts from other countries met in London and in Washington. Evidently they believed that the way to meet the situation was to make dollars dearer, which they proceeded to do by devaluation. This was done evidently on the understanding or in the belief that it would make it possible for Britain to sell more in the United States, and of course to obtain less dollars from the sale. We have to keep that in our minds, and it would also enable Britain and Canada to buy less goods in the United States for more pounds or more Canadian dollars. I suppose one could use up a good many minutes of time discussing the merits or demerits of this whole thing as a short-term objective; but my inclination just now, Mr. Speaker, is not to launch out in discussion of the objectives but to try to probe the question that goes to the very root of our economic discontent of which devaluation is but one of the symptoms.
I speak of the widely held belief that money is and should be treated as a commodity in itself. It is a vicious conception. A mass of evidence to support my contention was placed on record before the banking and commerce committee of this house in 1923, and also before the Macmillan commission in London in 1930, I think it was. Out of the masses of evidence collected in these two hearings one gets clearly that the idea of money as a thing itself to be bought and sold like beans or rice or automobiles was very widely held at that time, and held almost with the fervour of a religion. This accounts for the fact that many of our most respectable Canadian citizens would throw up their hands in holy horror at the suggestion that they use an elastic tape measure; that they can see nothing at all objectionable in a rubber unit of account. That is a thing that is astounding to many of us who have studied this matter. But a rubber unit of account is exactly what
The Budget-Mr. Low
the manipulators have made of the Canadian dollar, of the pound sterling and of the United States dollar. There is a very real objection, sir, to a rubber unit of account. We Social Crediters object to it because it is destroying civilization step by step. Such things as forced devaluation, tariff and other barriers, trade crises, policies of unemployment and depression, poverty in the midst of plenty, and wars, all have their roots in the frantic effort to keep people thinking and acting as if the unit of our money is a commodity, and a rubber one at that, which can be stretched or contracted in almost unlimited degree to suit the whims of the propagandists who are the only beneficiaries of the system.
We Social Crediters strenuously object to that concept of money. We contend that money, the chief mechanism for distributing goods and services, should be looked upon and treated as units of account. We believe further that until such a financial policy, that is a financial policy based on that concept, is built and applied faithfully in this country, as well as in other countries of the world, there can be little hope for solving the problems of world trade or of the economic ills that confront us today.
History reveals that the root of the success of parliamentary institutions in the past has been that parliament controlled the purse strings of the nation. Resistance to the divine right of kings in the day of that policy, or to any totalitarian policy of any day, has been successful only where the people have kept control of their own money, and where the executive never got control of the purse or of any attributes of that purse or nation. A mass of evidence is available to support the view that since 1914 governments, including the Canadian government, have been moving toward absolutism.
As I mentioned earlier in my remarks, the people of this country no longer control the purse strings, nor their own money. The executive have usurped that control. Some effective way will have to be found, and applied very soon, of stemming this trend or the Canadian people will one day wake up as vassals of a supreme state. Perhaps the most effective remedy would be the institution, in this house particularly, of a responsible vote, independent responsible vote, that would pin any loss resulting from the exercise of it on the voting members, and not on the nation or on political opponents of the government in power. If this can be achieved then, sir, the way can be cleared for a reasonably incorruptible money of account, which is simply a policy that would ensure that all currency and credit in circulation in our land would be fully covered by wealth and readily exchanged for it under a

The Budget-Mr. Low
reasonably stabilized pricing technique. We have that technique and we propose it and are prepared to advance it wherever it is possible and necessary.
Let me emphasize this point, sir. A practical solution of the crises with which we are now faced all over the world can be reached through the development in each and all countries of a science of consumption that is not based on taxation. A solution cannot be reached by restricting consumption, nor by living a life of austerity, nor by maintaining a heavy weight of taxation.
In conclusion, sir, just a word about this whole situation of business recession. Only a short statement was made in the budget speech relative to the government's program for meeting the business recessions or depressions which may face us in the years ahead. I noted that housing construction and the construction of the trans-Canada highway were mentioned, but only in a general and nebulous way. The minister admitted the possibility of economic trouble in Canada as a result of possible failure of foreign markets for Canada's production. Surpluses of many of our products are already visible. The past summer I visited one section, Yarrow, British Columbia, where I saw all of the 1947 crop of berries stored in 400-pound barrels in the basement of a jam factory. Think of it! All of the 1947 crop of berries; and all of the 1948 crop of berries were stored outside the railway right of way in 400-pound barrels. They were lying out there in the blazing sun to rot. It was estimated at that time that fully the equivalent of a million cases of pure strawberry and raspberry jam was lying there and could not be sold at any price.
In storage in Canada we have 48,000,000 pounds of butter, much of which is surplus to our need. The condensed and powdered milk situation, as has already been mentioned, is becoming serious. These and many other item that could be cited indicate the way the wind is blowing. Let it not be forgotten that any unsaleable surpluses on the shelves in the storehouses of the nation usually precede unemployment and depression, with poverty in the midst of plenty. We think that so far the government has been so busy playing politics that it has neglected to draft and bring forward any adequate program of action to cushion the Canadian economy against possible depressions. In the United States President Truman has taken leadership in this matter, and through a committee he has set up has assured the nation that the United States has something ready, in case of difficulty. I hold in my hand "U.S. News and World Report" of October 14, 1949, and at page 18 I find a reference to the Truman ten-year plan,

described by the magazine as The Fair Deal Goal. Evidently it was issued under the direction of Leon Keyserling, vice-chairman of the council of economic advisers, and the No. 1 White House adviser on economic issues who, according to the magazine, has spelled out the fair deal goals for use by the President and the party in power.
The article goes on to say:
If the goals are realized, everybody is going to be well fed, well housed, well clothed.
That is a worthy objective, and evidently it has been developed to a certain degree, and in some detail, through a proposed program of action to ensure that this goal is reached. For example I notice that their 1949 level of production in the United States is approximately $260 billion. Under the fair deal goal they propose to stimulate production so as to bring it up to the $350 billion level. Ninety billion dollars of increased production they propose to use in the following ways: $45 billion is to go toward raising the living standard of two-thirds of American families to a $4,000 minimum. This is physically possible, and if it is physically possible we contend it must be and can be made financially possible.
Then I notice that $12 billion of the excess $90 billion is to go toward health insurance, old age pensions, unemployment benefits and aid to the needy, to ensure that they may have a future without fear.
I see that $2 billion is to be used for the development of natural resources. In connection with this I notice that the Reconstruction Finance Corporation made a huge loan of $34,400,000 to the Kaiser-Frazer Company to make plans for a new low-priced automobile in that country. That is a substantial amount, and will go far toward stimulating the development required if production is to be increased to the extent of $90 billion.
Then, $2 billion is to go to the nation's school system by way of federal aid to education-the very subject we were discussing the other night as being vitally necessary to our country, if we are going to remove some of the inequalities suffered by children in various parts of the country.
Then, $6 billion is to go toward housing, part for slum clearance and part for city planning.
The last item of $23 billion is for the improvement of public roads and for plant improvement.
These figures indicate that they are not asleep down there; they have a plan. They have at least an objective that has been worked out in detail. I am a great believer in objectives, and in my view we should

plead with our government in the months between now and the next session of parliament to develop their program in detail. They should make a statement of the objectives by which they hope to stave off any ill effects of the economic difficulties of other lands, and to cushion the Canadian economy against the impact of such disturbances abroad.
In concluding I would say that the people of Canada would like to be able to face the years ahead with a feeling that their government has taken every possible precaution to protect their economy against the impacts of disturbances elsewhere, wherever they may be. They have every right to expect their government to bring forward the details of their program for ensuring to every Canadian the opportunity to obtain for himself and his family a reasonably high standard of living- just as high as our abundant resources can make possible.
I appeal to the government to prepare carefully and to bring before the next session of parliament a comprehensive program of sound and adequate proposals for reform, for social justice and for national development and security, so that our people can feel like driving ahead, in confidence that everything possible has been done to remove fear and worry, and the spectre of needless suffering.
On motion of Mr. Weir the debate was adjourned.



OVERSEAS TELECOMMUNICATION ACT


Lionel Chevrier: the second reading of Bill No. 12, to establish the Canadian Overseas Telecommunication Corporation.


Mr. M. J. Coldwell (Roseiown-Biggar):: Mr. Speaker, before the minister speaks, would he mind answering a question I am going to ask, and thus set at rest some fears in the minds of employees in Montreal. I understand that the Anglo-American Telegraph Company deals exclusively in overseas telecommunications. The company is owned and operated by the Western Union Telegraph Company of the United States. Under the agreement it serves exclusive cable connections to the Canadian National Telegraph Company. Would the minister say whether this company is involved in the bill, or not?


Lionel Chevrier: The answer to the hon. member's question is no.
The purposes of the bill are twofold, first to acquire the external telecommunication assets of Canadian Marconi Company Limited
Overseas Telecommunication Act and Cable and Wireless Limited in Canada and, secondly, to establish a crown company in order to co-ordinate the maintenance and operation of these two commonwealth-controlled telecommunication systems.
Before going into the details of the bill, may I be permitted to say that the assets it is intended to expropriate under the bill are, with respect to the Canadian Marconi Company Limited, the following:
Their receiving station at Yamachiche; their transmitting station at Drummondville; the building and equipment at Montreal; and certain small holdings at Toronto and Vancouver.
Dealing next with Cable and Wireless Limited, the following:
Land, buildings and equipment at Barn-field; electrical equipment at Halifax, Montreal and Harbour Grace; certain furniture and stationery at Toronto and Vancouver.


Mr. Green:: Nothing in Newfoundland?


Lionel Chevrier: Yes, at Harbour Grace. The total value of these assets should not exceed $4 million, as set out in the bill-the additional $500,000 referred to in the bill being required for working capital. No assets are to be acquired which relate to the manufacturing, radio broadcasting and ship-to-shore activities of Canadian Marconi Company Limited. And I should like to dispel immediately any impression that what is being taken over is a liability. As I have stated already, the telecommunications side of Canadian Marconi showed a substantial profit in 1948.
These assets are being taken over for two reasons: First, because it is important that we should have control over these services for strategic purposes, and, second, because for many years the telecommunication services controlled by Cable and Wireless and their policies were not acceptable to the commonwealth countries. For the reasons already stated, which it is unnecessary to repeat at this time, and because of meetings which finally culminated in the commonwealth telecommunications convention in London, it was decided to proceed on this basis, namely, that each commonwealth country would take over the telecommunication assets in its own territory.


Howard Charles Green: What is to be done with the cables as distinct from the cable stations?


Lionel Chevrier: This bill does not provide for the expropriation of cables, only for the expropriation of the assets I mentioned earlier in my statement. Why is it done in that way? I suppose it could be done by setting up a
1034	HOUSE OF
Overseas Telecommunication Act division in one of the departments of government, but after giving that careful consideration it was thought that as these operations would compete with other operations it would be better to set up a crown company. Furthermore, we would like to continue these telecommunication facilities as they were operated heretofore. We feel that the best way to accomplish that is by means of a crown corporation.
Some mention was made that this is likely to create a monopoly. I have looked at the figures mentioned by the leader of the opposition (Mr. Drew) in so far as the control of Cable and Wireless is concerned. I believe the leader of the opposition was correct in stating that the move to nationalize commonwealth telecommunication facilities would result in control to the extent of some eighty per cent of the cable system by the British government. I should like to remind the house that the other twenty per cent is quite active. There is keen competition from the United States companies I mentioned before, the Anglo-American Cable Company and the Commercial Cable Company, both of which conduct telecommunication services to and from Canada. Because of that I do not believe that this bill will create a monopoly in any sense.
The bill may be divided into five parts. First, it establishes the crown company; second, it states the powers and purposes of the company; third, it provides it with staff; fourth, it defines its financial requirements and limitations; and, lastly, it stipulates the rules and regulations to govern its operation.
A portion of the bill provides for the appointment of five directors. One director will be the president and general manager and the governor in council will have the power to fix his salary as well as that of the vice-president. I should say at this point that these men will be appointed for a period of seven years. Of the other four directors, one is to be appointed for one year, one for two years and two for three years. These men will receive fees for attending directors' meetings only, and no salary.
It is stated in the bill that the corporation is to be an agent of the crown with restrictions on entering into certain agreements. For instance, the corporation may not without the approval of the governor in council enter into an agreement involving an expenditure of more than $50,000. It may not, without the approval of the governor in council, enter into for a period exceeding three years any agreement or lease that involves an expenditure in any year of more than $5,000. Finally, it may not without such approval acquire any real or personal property, the cost of acquisition of which exceeds the sum of $50,000, or


in any manner dispose of any such property having an original or book value exceeding the sum of $5,000.
Under another portion of the bill the Minister of Finance (Mr. Abbott) is authorized to advance the corporation the amount of money mentioned earlier in my statement, $4,500,000, for the purpose of taking over these assets and to provide working capital. The Minister of Finance may also lend the corporation money for temporary purposes not exceeding $100,000. The crown corporation must pay interest on capital advances and deliver certificates of indebtedness for the amounts of money that are lent from time to time by the Minister of Finance. If funds in excess of the requirements exist they are to be paid into the treasury and if there is a deficit on the operations it will be voted in accordance with the usual practice by means of an item in the estimates. The bill provides for an audit and the usual annual report.
During the discussion on the resolution several hon. members, particularly the leader of the opposition, suggested that it would be well to send this bill to a committee. I have no feeling one way or another. If the house feels it would be preferable to send the bill to a committee, I am quite willing to concur in that suggestion. After the debate on the second reading has been concluded and if the motion is approved I would move that the bill be referred to the committee on railways, canals and telegraph lines, if that is the wish of the house.


Howard Charles Green: Mr. Speaker, in view of the fact that the bill is to be referred to a committee there is little need to discuss it in detail at this stage. The official opposition asked that the bill be referred to a committee and we are glad that the minister has agreed to do so. It is particularly important that that be done with this bill because there seems to be quite a long story behind it. While the minister has given us considerable by way of explanation, it probably would be difficult for him, or for anyone else for that matter, to go into all the details on the floor of the house. Furthermore, the subject appears to be quite complicated and technical and we believe that this is a case where the bill should be considered in detail by a committee.
We agree also that the proper committee to give the bill consideration is the committee on railways, canals and telegraph lines; the government already operates telegraph lines and we presume that anything having to do with such lines would be referred to that committee; this bill having to do with telecommunications would fit in well with the functions of that committee.

Overseas Telecommunication Act
There are some matters arising out of this bill about which we are particularly concerned. I am going to run over a few of them hurriedly. The first is that apparently Canada signed an agreement with the other nations of the commonwealth about this matter some four years ago. We believe that agreement should be carefully reviewed. Having made a treaty, Canada certainly must see that its terms are carried out. The minister mentioned this afternoon that one reason why this course was being followed was for strategic considerations. That being so, it is all the more important that the house should carry out the agreement entered into some years ago.
The minister, however, was not very explicit about the board which is now to be set up with membership from each of the commonwealth countries. If I remember correctly the name of that board is the commonwealth telecommunications board, and each nation is to have one member. I believe the committee should examine the powers of that board very carefully. There was some mention made that it would regulate rates. The house will remember that the hon. member for Cariboo (Mr. Murray), when the resolution preceding the bill was under discussion, mentioned the high cable rates on the Pacific. That is one question which we believe should be thoroughly investigated by the committee because it would appear that the commonwealth telecommunications board has the power to set rates, and rates which are too high could be adjusted by it.
Very little has been said about the relationship of the new crown company and the commonwealth telecommunications board with the United States. Apparently the Right Hon. J. L. Ilsley made a statement about this matter on the 8th of November, 1945. In that statement he mentioned that United States-British commonwealh telecommunications conferences were being held. The Minister of Transport (Mr. Chevrier) did not mention such conferences either in the debate which took place the other day or in his remarks this afternoon.


Lionel Chevrier: Oh, yes. On the discussion concerning the resolution-I did not go into it in detail-I referred to the visit of Lord Reith, the chairman of the commonwealth telecommunications board to the various commonwealth countries, the conference that took place in Australia, and finally the telecommunications conference in London.


Howard Charles Green: The minister has not heard me correctly. I am referring now to a United States-British commonwealth telecommunications conference which took place in-


Lionel Chevrier: Bermuda?
45781-66J


Howard Charles Green: November, 1945. We have not yet been told what tie-up there is with United States telecommunications services. I believe that question also should be thoroughly investigated by the house committee. Little or nothing has been said about the method of operation. For example, the minister has just mentioned that the new corporation is not to take over any interest in the cables. We should know who is to maintain the cables. That is particularly important on the Pacific where there is such a long cable. I am not clear from the statements made whether it is to be maintained by Cable and Wireless Limited-


Lionel Chevrier: Yes.


Howard Charles Green: -whether the government will look after that maintenance, or just how the cable is to be kept in shape. In his remarks the minister also said very little about losses. He seems to think there will not be any losses, and I hope he is correct; but as I read the bill there is provision in it for Canada to pay whatever losses are suffered by the corporation. There is no limit set to the amount of money that can be advanced in case of a loss. The bill provides for a certain set amount for capital funds and a certain amount for operating expenses, but it does not set any limit on the amount that can be paid for losses. I believe that is another point which should be carefully considered by the committee.
The minister has given us some idea of the assets that are to be taken over, but he did not say anything about how the amounts are to be divided; how much is to go to each company. In the bill there is mention of a power to specify that certain properties shall not be required. In the committee I think we should be given details of all properties belonging to these corporations which are to be taken over.
So far as setting up a crown corporation is concerned, the official opposition do not believe in crown companies. We think that is one method of getting away from control by parliament. In the committee we shall expect the government to make it clear why it is felt that there must be a crown company in this instance. In the United Kingdom the post office has taken over overseas telecommunications. I understand that is the case, but the minister will correct me if I am wrong. We now have a department of the government in charge of dominion telegraphs, and we should like to be shown why this work could not be handled by the particular Canadian department which is in existence at the present time.
There is another feature about the bill which the minister did not mention, and that is that it covers all communication systems

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between Newfoundland and the rest of Canada, in other words, between one part of Canada and another, but no power is taken between any of the other provinces. That is done only in the case of Newfoundland. There may be a very good reason for that, but it should be explained by the government.
Finally there is in the bill a provision which appears to be a very welcome one. It is that the corporation may pay municipal taxes. I do not believe there is such a provision in any other dominion act. I hope that this particular section means that from now on the government is going to pay taxes in all of the municipalities where there is crown property. The situation has become very unfair to many municipalities. All hon. members of the house must clearly recognize that fact. The section in question does not say that the corporation must pay taxes but that it may pay taxes. I hope we will get definite assurance that the intention is to pay those taxes.
These are just some of the questions in connection with the bill about which we would like further clarification when the bill goes to committee. We heartily approve of the proposal of the minister to send it to the standing committee on railways, canals and telegraph lines.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on railways, canals and telegraph lines.
At six o'clock the house took recess.
[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.


[Stage Direction]
The house resumed, from Friday, October 7, consideration of the motion of Mr. Fulton for the second reading of Bill No. 10, to amend the Criminal Code (portrayal of crimes).
Stuart Sinclair Garson: Mr. Speaker, may I preface my statement tonight with congratulations to the mover of this amendment and to all those who have taken part in a high-class debate, including the hon. members for Saskatoon (Mr. Knight) and Vancouver East (Mr. Maclnnis), who have supported this amendment with misgivings of the most honourable and intelligent kind. The action of those members, and of the house itself so far, has been an example of sensitivity to public opinion and concern for the

common weal which our democratic system displays when it is functioning properly.
This is not the first time this matter has come up. The hon. member who introduced it referred in the debate to the action which he took in connection with this matter during the time of my distinguished predecessor, the Right Hon. J. L. Ilsley. I suppose it can be said that we have not been hasty in acting in this matter, either as a government or as a parliament. There may be those indeed who would say we were dilatory. But I am sure, sir, that all the members of this house, regardless of party, would deliberate most anxiously before taking any action against freedom of expression by writers or artists. But when publishers and disseminators of various kinds of crime comics and obscene literature are heartened and emboldened by this concern of ours for the preservation of literary and artistic freedom, and become steadily more impudent in their degradation of that freedom so that they transform freedom into licence, the time comes, and I think we all agree that it has come, when we must take further action to curtail their offences.
I therefore rise tonight, not only to support the amendment which has been offered by the hon. member for Kamloops (Mr. Fulton) but also to suggest that, to be effective, we must go further than this amendment does. With great deference, I do not think that the mere passage of this amendment will, of itself, cure the situation. I should like to offer some suggestions as to how, in my opinion, the code may be strengthened so that this amendment and section 207, of which after it is passed, it will become a part, will become more enforceable. The suggestion which I will make will have certain inherent and unavoidable defects to which some members will no doubt object on grounds which I will admit in advance are very good grounds. In my view, we are faced in this matter with a rather unpleasant dilemma. Either we shal. follow the course which I shall suggest, with all its faults, or we may avoid those faults by letting matters stand in the present unsatisfactory condition.
The amendment we are discussing now, sir, deals only with crime comics, but I think it may be said that the debate has made it quite clear, as it has developed, that at least equally offensive and at least equally injurious to the morals of our youth is the rising tide of pornography which has flooded the bookstands of this country for some time past. The few samples of this which have come to my attention, thanks to the courtesy of the hon. member for Macleod (Mr. Hansell) and which he tells me are fair samples, have

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no redeeming features of any kind; no distinction of conception or style; no humour; no sentiment; certainly no idealism; not even any genuine realism; nothing but hack-work filth seeking filthy lucre.
While no judge of such matters I should have thought, sir, that the influence of these obscene books and magazines would probably be worse than the crime comics. Yet these obscene books and magazines are now covered by section 207 of the Criminal Code and have been covered by that section for over half a century. This provision was first enacted, in, it is true, a slightly different form, in 1892. It was elaborated upon somewhat in 1900; re-enacted in the revised statutes of 1906, and enacted in its present form in 1909. During the whole of this interval prior to 1909, and since 1909 continuously until now, obscene literature has been covered by this section. Yet, sir, judging by the mass of evidence which the members of this house have brought forward in this debate alone, section 207 does not now seem to have been any great deterrent to the production or sale of this obscene literature.
Obscene books and magazines are covered by section 207. Crime comics are not covered -indeed, the purpose of this amendment is to have them covered by that section. Yet the obscene books seem to flourish at least as much as the crime comics. It is significant, I think, that in reply to an inquiry recently made by our department, Nova Scotia could not recall any prosecutions within the last ten years; Prince Edward Island, no prosecutions since 1942; New Brunswick, no information available of any such prosecution within the last five years; Ontario, a few prosecutions which usually failed because of the word "knowingly" or because the jury ruled against the obscenity element. Manitoba had no general statistics, but there were eight prosecutions in Winnipeg since the beginning of 1946 and none at all from 1944 to 1946 inclusive. In Alberta, there were about ten prosecutions in the last five years, while British Columbia recalled only one conviction within five years in respect of moving pictures. Prosecution considered in other cases was dropped because of this word "knowingly" and also a feeling that the persons who should be prosecuted were the publishers in eastern Canada. Of all the provinces of which we made inquiry and which I have named, Quebec, with one hundred prosecutions in the last five years, is the only one in which there has been prosecution on that scale which would seem to be warranted by the observations which have been made in this debate by the members who took part in it.
Now, sir, this amendment moved by the hon. member for Kamloops, when passed, will merely bring crime comics as paragraph (d) under the same section 207 of the code of which paragraph (a) now makes the publication and sale of obscene literature an offence. This is all that Bill No. 10 does; and if the experience in regard to obscene literature is any criterion, it is certainly not enough.
I admit I am not a criminal lawyer nor an expert in these matters, but it must be obvious even to lay members of this assembly that the great likelihood is that the crux of this matter is in certain words in the beginning of section 207, which reads as follows:
Everyone is guilty of an indictable offence and liable to two years' imprisonment who-
And these are the words.
-knowingly, without lawful justification or excuse . . .
publishes or sells obscene literature or, as we now seek to have it amended, crime comics and so on. In my judgment it is these words, "knowingly, without lawful justification or excuse," which would appear to make conviction so difficult and prosecution so apparently hopeless that but few prosecutions have been started.
Yet the reason for including these words in the description of the offence is, I submit, a good one.
On the face of it, it seems most unfair, in any country that has the conception of civil liberty that we in Canada have, that a bookseller, who in the ordinary course of his business sells thousands of books that he can never hope to read or to censor himself, should be convicted of an indictable offence and be liable to two years' imprisonment- for what, sir? For selling merchandise like chairs or boxes of soda biscuits that are all alike? No, for selling a book which is unlike the thousands of other books which he sells and which, without any necessary knowledge or fault on his part may, for all he knows, be obscene. It is therefore unjust and unfair to the honest bookseller that these words "knowingly, without lawful justification or excuse" should be absent from the definition of the offence. Yet when to protect the honest bookseller-and the law should protect honest people-these words are inserted in the definition of the offence, it apparently becomes-next to impossible to convict a dishonest bookseller; for, if he is prosecuted, all he has to do is to maintain a naive and wideeyed innocence of any knowledge of the contents of the books that he has sold in the ordinary course of business, in order to establish a good defence to the prosecution.

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It may then be asked: Why not prosecute the publisher? Surely he must read what he publishes.
There are two points to be noted with regard to this suggestion, the first of which is this. I am credibly informed that a good [DOT]deal of the publishing of this kind of literature in Canada consists in printing it in Canada from plates made in the United States; and it is conceivable-although in my opinion not at all likely-that the Canadian publisher may run off this print job of a particular book-for example, the one upon which the prosecution against him may be based- as a routine business without informing himself of its text. Under those circumstances he could come into court, and if he could persuade the magistrate that he did not know it was an offence, then he would escape conviction.


John George Diefenbaker: That he did not know it was an offence?


Stuart Sinclair Garson: I beg hon. members pardon. If he could persuade the magistrate that he did not know that the book he was publishing was obscene he would escape conviction.
In the case of crime comics the publisher would have difficulty in escaping knowledge. Thus, while the publisher could plead a lack of knowledge in the same way as the bookseller, this defence upon the part of the publisher, I think we must all agree, would seem to be much more difficult to maintain and to establish than upon the part of the bookseller.
The second point in connection with this suggestion-why not prosecute the publisher? -is, I think, a somewhat more difficult one. While this parliament, as a federal parliament enacts the criminal law, the enforcement of that law is exclusively a provincial right and provincial duty. Therefore, if he is prosecuted, the publisher can move his operations-and if they simply consist of printing from plates that are brought in from the United States it would not be a matter of great difficulty to move them-into and seek sanctuary in a province where the police and the law enforcement officers are less diligent in the enforcement of section 207.
At this point, in justice to the government of which I am a member, to my distinguished predecessors in this high office, to the officers of the Department of Justice and, I think, to truth itself, I feel that I must indulge in some plain speaking. The constitutional responsibilities of the federal parliament, and the federal government on the one hand and of the provincial legislatures or the provincial governments on the other, are in this matter as plain as a pikestaff. To the federal government is assigned, as class 27 of section 91

of the British North America Act, the power to make laws with regard to:
The criminal law, except the constitution of courts of criminal jurisdiction, but including the procedure in criminal matters.
To the provincial governments and the provincial legislatures is assigned as class 14 of section 92 of the British North America Act:
The administration of justice in the province, including the constitution, maintenance, and organization of provincial courts, both of civil and of criminal jurisdiction, and including procedure in civil matters in those courts.
I know that we lawyers are twitted, even in this parliament, for raising this matter of constitutional law when other matters such as the one we are discussing are brought up for discussion. I know that the courts have difficulty in determining whether certain subject matters fall under federal or provincial jurisdiction. But so far as I know there has never been any doubt or controversy over the division between federal and provincial jurisdiction in this field of criminal law. The enforcement of criminal law, as distinguished from its enactment, is neither a federal responsibility nor a federal right. There is no federal invasion of provincial rights which would be more quickly and more justly resented than that which would take place if the federal Minister of Justice were to go into a province over the head of its attorney general who, under our constitution, is its chief law enforcement officer, in order to enforce law and administer justice there, not in the name of the provincial attorney general but in the name of the federal Minister of Justice. I cannot recall a single case in Canadian history where the federal minister of justice has ever done such a thing. Quite obviously it would be the gravest sort of reflection upon both the integrity and the competence of the provincial attorney general were the Minister of Justice to do so.
Now, sir, there has been what, from my point of view, I must regard as a rather regrettable tendency on one or two occasions in this debate to imply at least shall I say, and in some cases to state explicitly, that it is the federal Department of Justice which is responsible for and has been remiss in the enforcement of section 207. The hon. member for Macleod (Mr. Hansell) made an excellent presentation of his viewpoint in this debate, and to him I am particularly indebted for the loan of his file of samples, without which our staff would have had much greater difficulty in dealing with this matter. It pains me to have to make the remarks that I am about to make, but in fairness to ourselves I think they must be made. I am sure that it was unintentional that the hon. member, during the course of a speech which

was in every other respect an admirable one, made this remark. He said, as reported at page 518 of Hansard:
Might I emphasize once again that, apart from crime comics if the Minister of Justice, who has the administration of the R.C.M.P. under his department, or if the various cities with their own police forces would take that section of the criminal code and enforce it, sending a few of these publishers to jail for a couple of years. I have no doubt but what it would make a difference in the type of publications in this country.
I must confess, Mr. Speaker, that with a part of that statement I am in agreement. Very probably the result which my hon. friend envisages here would come about. I have not the slightest doubt that sending a few of these gentlemen to jail would have an effect upon that type of publication in the country. But the point I wish to emphasize is that this action is not within our federal power and it is not our federal responsibility.
Even the reference to the Royal Canadian Mounted Police is misleading. It is quite true that they are administered under the Department of Justice, but in that capacity the only offences that they prosecute under my authority as Minister of Justice are offences like those under the Foreign Exchange Control Act, the Excise Act and similar federal statutes.
The governments of Alberta, Manitoba, Saskatchewan and several other provinces, under an arrangement that is in the highest degree in the interest of the taxpayers of this country, pay to this government a large sum of money for the use of the Royal Canadian Mounted Police in these various provinces. Having only one police force to administer both federal and provincial law is much more economical; but what is more important is that it commands a much greater respect for law enforcement and for the administration of justice. But, sir, if under the guise of this police contract, we were, by the control which we exercise through the Justice department over the Royal Canadian Mounted Police, to try to siphon away provincial rights by attempting to direct the mounted police in respect of those matters upon which they are supposed to take directions from the attorneys general of the provinces, it would not be long before the provinces would refuse to renew these police contracts. The plain fact of the matter is that the agreement which covers the renting of these police services to the provinces specifies that, when the Royal Canadian Mounted Police are engaged in the enforcement of all of these laws which come under provincial enforcement, they are the instrument not of the Minister of Justice but of the provincial attorney general and subject wholly to the
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latter's control. For that reason, the exhortations and the strictures of the hon. member for Macleod should be addressed not to me but to his good friend, the attorney general of Alberta. When I say that I want to make myself perfectly clear that I am implying no criticism of the attorney general of Alberta, who is an equally good friend of mine.
It may very well be that in that province, under conditions with which I am not familiar, the words "knowingly, without lawful justification or excuse" in section 207 would make it hard to secure a conviction against the booksellers in Alberta. One of the things that the prosecution has to take into account in this connection is that in offences of this nature against morals nothing is worse from every standpoint than an abortive prosecution. To the offender and to the offending publication the advertising value of an unsuccessful prosecution is simply beyond price. I believe it is said that Mae West claimed she got her start in life from having been so prosecuted. Therefore, sir, if there are no such publishers in Alberta- and my information is that there are none- it is not difficult to understand that the crown prosecutors in that province, like the crown prosecutors in those other provinces whose statistics I mentioned a few moments ago, will not be over-enthusiastic about taking on the difficult task of prosecuting Alberta retailers of books, when the crown prosecutors of other provinces have not done anything in the apparently easier task of prosecuting publishers within their jurisdiction.
The debate upon this amendment has shown that upon the one hand there is a huge volume of pornographic literature exposed for sale upon the newsstands of this country and, upon the other, that in relation to this huge volume of exposure and sale there have been in all of the provinces except one a relatively small number of prosecutions. It seems to me, as I have indicated before, that the apparent reason for this inconsistency is most likely to be found in these words "knowingly, without lawful justification or excuse."


John George Diefenbaker: Will the minister allow one question? What would be a lawful justification or excuse?


Stuart Sinclair Garson: If my hon. friend will wait just a moment I shall come to that.


Mr. Graydon:: The minister will be lucky if he does.


Stuart Sinclair Garson: I shall get there if I am not interrupted. I should like to deal first of all with the question of knowingly. As I said, my reason for the view that these words are the crux of the matter is some of the case

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law of this country. One of the leading cases is the case of the King v. Britnell, where it was held that the owner of a bookstore containing thousands of books could not be convicted of knowingly exposing for sale any obscene books under section 207 of the Criminal Code, and that in order to warrant a conviction under that section for selling and exposing for sale an obscene book it must be proved that the accused was aware of its obscene character and that it was sold or exposed for sale with his knowledge.


Mr. Fulton:: Was that the Ontario case of 1925?


Stuart Sinclair Garson: Yes, the Ontario court of appeal.
To come to the question asked by the hon. member for Lake Centre (Mr. Diefenbaker). He said, does it mean without-


John George Diefenbaker: What is lawful justification?


Stuart Sinclair Garson: I think I have a case here exactly on that point. It is Rex v. Wool-land, decided in the province of Manitoba by county court Judge Armstrong. The head-note reads:
On a charge of keeping without lawful excuse goods unlawfully imported into Canada contrary to section 217 (2) of the Customs Act it may not be necessary for the prosecution to prove knowledge on the part of the accused.
That is, the word "knowingly" was not in that section. Therefore it was not necessary for the crown to prove that it was done knowingly. But proof offered by the defence of no knowledge, and the absence of any suspicious circumstances to place one on inquiry takes him out of the class of "one without lawful excuse," the onus on the accused being merely to show lawful excuse and not lawful importation or payment of duty.
And in this connection-and this, I think, will answer my hon. friend's question-the county court judge said:
I cannot conceive of any more lawful excuse than the absence of any criminal intent and the carrying on of a legitimate business in the ordinary way.
It would seem that the removal of these words "knowingly, without lawful justification or excuse" would result in an absolute prohibition so that the bookseller could not plead as an excuse ignorance of the contents of the books upon his shelves. This undoubtedly would place a very heavy burden upon him. It would mean that he would have to satisfy himself as to the contents of all the books upon his shelves, or depend upon some system of censorship by his distributor or publisher, or take a chance. And the question this house has to decide-and this is where the unpleasant dilemma comes in-is whether or not the abuse of the sale

of these books has grown to the point where it is most unfair to the children and to their parents, and to the taxpayers of this country who have to put up the money to take care of the crime which is caused by the sale of these books.
It may well be that upon a balance between these two groups, the booksellers and publisher on the one hand, and the children and their parents, and the taxpayers, on the other, there is less injustice in being unfair to the honest man who unwittingly publishes or distributes or sells obscene books and crime comics than in being unfair to the children, parents and taxpayers.


Mr. Smith (Calgary West):: What about the distributor of a newspaper libel? He takes all those chances, does he not?


Stuart Sinclair Garson: Yes, but knowledge has to be brought home to him.


Arthur Leroy Smith: Every newsstand in a hotel.


Stuart Sinclair Garson: Yes, that is right. But heretofore in the carrying out of the ideas we have had as to freedom of literary expression, freedom of artistic expression and freedom of the press, we have not seen fit to have this definition in any form other than the form in which it now appears.
My reason for labouring that point is that I do not think it is going to be much of a solution, at all, to pass Bill No. 10. We have only to look at statistics to see that that is so. If we are really going to grapple with this and produce an enforceable section, we have to face up to the hard decision I have been trying to outline.
If we do this, there is another difficulty we must face as time goes on-one which we have not yet faced. That is the problem which arises under an enforceable prohibition of obscene literature in drawing a line between what is obscene and what is not- because there is a great variety of opinion on that score. One will find a crank who will regard as obscene some books which by others are regarded as the greatest gems of literature. The reason, borne out by statistics, why we have not encountered this problem to any great extent so far is that section 207 has not been sufficiently enforceable. But to the extent that we make this section enforceable, we shall, as time goes on, meet this other problem. And in that regard I do not think we could do better than to leave the section as it is, that is leave the obscenity content of the offending publication to be judged as a matter of fact by the court, upon the basis of the evidence presented to it.

From this debate I suggest seven points have emerged:
1.	The amendment moved by the hon. member for Kamloops (Mr. Fulton), would merely bring crime comics as paragraph (d) under the same section 207 of the code, of which paragraph (a) makes the publication and sale of obscene literature an offence.
2.	The prohibition of the publication and sale of obscene literature by section 207(a) of the Criminal Code has not deterred the publication and sale of obscene literature to any significant extent. In all provinces except Quebec there have been a very small number of prosecutions under this paragraph.
3.	Therefore, without more determined prosecution the mere adding of crime comics to this section 207 is certainly not likely to be a solution to the problem.
4.	In drafting an enforceable amendment, the most valuable suggestions which we could secure would be those from the crown prosecutors and law enforcement officers of the provincial governments whose responsibility it is to enforce the Criminal Code.
5.	The federal Department of Justice has received no representations upon this subject from any of the attorney general's departments of the provinces, with the exception of Ontario and British Columbia. Both of these departments say that the presence of the word "knowingly" in the definition of the offence under section 207 makes difficult the prosecution of shopkeepers charged with selling these books.
6.	On the other hand, the presence of these words in the definition of the offence does not seem to have deterred the law enforcement officers of Quebec from instituting some hundred prosecutions in that province during the past five years.


Solon Earl Low: How many prosecutions were successful?


Stuart Sinclair Garson: We made inquiry on that point but there were no statistics to be had, in a compendious form, and it would take some time to secure them. We would have to go to the localities where the prosecutions were instituted. I would deduce, however, that Quebec must have been successful, because I cannot imagine an attorney general's department going to the expense of having a hundred prosecutions if it were not getting some convictions.
Then, the seventh point is that the elimination from the definition of the offence of the words "knowingly, without lawful justification or excuse" would result in an absolute prohibition of the sale of obscene literature, so that the retail sellers-and that refers to the bookstand, the cigar store, the book
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shop, the magazine stand and the like-could not plead, as an excuse, ignorance of the content of the books upon their shelves. I think we must all admit that we would be putting a great hardship upon them.
Therefore the suggestion I would venture to make is that it would seem that these words should not be eliminated until the publishers as the source of this objectionable reading matter shall have been prosecuted, and it shall have been demonstrated in such prosecution that it is impossible to convict the publishers under the law as it now stands, as amended by adding crime comics as material banned by section 207.
In other words the only step which it seems will put some effective teeth in the law, this matter of removing these words, is going to be quite a hardship upon many hundreds if not thousands of honest small dealers throughout the country. Before that step is taken surely some attempt should be made to prosecute the publishers who are for the most part concentrated in two or three cities, with one city having more than all the rest of the country put together.
The second condition to the elimination of these words is that the law officers of the provinces, who are the ones who know, the ones who have the responsibility for prosecution, assure us that section 207 cannot be enforced effectively without the elimination of those words. They have already told us so in Ontario and British Columbia. Thirdly, the provincial law officers should tell us that section 207 can be enforced effectively if these words "knowingly, without lawful justification or excuse" are eliminated. I think the answer to that is likely to be, "yes."
For these reasons I should like to urge upon hon. members that we approve of the principle of this bill on second reading. Then when it gets to committee we should leave it there until we have secured from the attorneys general of the provinces, who have the responsibility of enforcing this section, the invaluable suggestions of their prosecutors as to the form that this amendment should take in order to prohibit crime comics and also make the whole of section 207 more enforceable than it has been.
In addition I should like to get the views of our committee on the revision and consolidation of the Criminal Code. We have already had a subcommittee of that body working on this section but I should like to have the views of the whole committee.
In making this suggestion I want to make it clear that there is no thought that we should delay action in this matter until another session. Nor are we, in seeking advice from those who have the responsibility of enforcement, in any sense abdicating our

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responsibility for passing criminal legislation. Whatever amendment we adopt is of little use if it is not enforceable. Our duty here is to turn out an enforceable law. It is to this end that I urge that we secure the best advice that we can from those extremely important sources, the men whose prosecution and enforcement of this section is an indispensable ingredient in its effectiveness.
I suggest that we hold this bill in committee in order to get the benefit of as many of these opinions as we possibly can, with the understanding, of course, that in any event we shall pass it in as effective a form as possible before prorogation.


Edmund Davie Fulton: When the minister refers to "prorogation" does he mean the prorogation at the end of this session?


Stuart Sinclair Garson: Yes.


Donald Smith: The minister made a distinction in connection with the elimination of these words. Any person who published or distributed such material would be liable just the same as the publisher.


Mr. Stewart (Yorkton):: He has protection.


Arthur Leroy Smith: He has no protection except under the different provincial statutes which provide for apologies and a lot of nonsense of that kind. He is liable to be prosecuted under the Criminal Code. No one has been hurt very much by that. I am not advocating one thing or another, but is it not a fact that if these words were eliminated it would put these scurrilous magazines-if I may call them that-in exactly the same position as a newspaper which publishes a criminal libel?


Mr. Murray (Cariboo):: I should like to say a word at this time-


Arthur Leroy Smith: I merely asked a question.


An hon. Member:: We are not in committee.


Arthur Leroy Smith: As a matter of courtesy I expected an answer; as a matter of rule I am not entitled to it.


Stuart Sinclair Garson: With the permission of the house I would be delighted to attempt to answer my hon. friend. The analogy my hon. friend has drawn between his point and my own is hardly a true one. The point I was trying to make was that, where in section 207 of the Criminal Code you have the words, "knowingly, without lawful justification or excuse" as part of the definition of the offence, it is likely to be easier to make out a case and thus secure a conviction against a publisher who has to set up the obscene material in type and run it through the press than it would to obtain a conviction

against a bookseller who may have that particular book among thousands of others on his shelves without necessarily having any exact knowledge of its contents. I was not discussing the question of liability, because the publishers and booksellers are equally liable under section 207 of the Criminal Code. But there would be much greater difficulty in bringing home knowledge to the bookseller than there would be bringing it home to the book publisher. The point of the hon. member for Calgary West was in connection with criminal libel. This point is somewhat different from the one I was discussing, although knowledge has to be brought home to the seller of printed libellous matter in order to secure a conviction against him.


Alan Carl Stewart: The minister has dealt with the word "knowingly" and the difficulty of prosecuting. Is it not a fact that any two people who might happen to read one of these publications could go to the publisher and say it is obscene and then if he distributed it after that he would be distributing it knowingly?


Stuart Sinclair Garson: Certainly.


Alan Carl Stewart: It would be a simple matter for any representative of an association to go along with a witness and prove that it was done knowingly.


George Matheson Murray: Mr. Speaker, I hesitate to say anything at this time as lawyers in the house have had their full say on this matter, but as a humble publisher I thought probably I should interject a word or two. This country is deluged with filth from the publishers of the United States and no effort is made to stop this material coming past the border. We have the right to impose a tariff upon the plates and illustrations and literature generally imported into this country. Unless we do that I think we can expect to continue to pay great profits to the publishers in New York, Chicago and elsewhere.
If one looks at a Canadian paper one will see that at least half of the news content is made up by material from news services originating in New York, Chicago or elsewhere. We have capable journalists in Canada who would be only too glad to write those articles, but apparently it is more desirable to import this material and along with it the so-called pornographic material which has been discussed here tonight.
As a publisher may I say that I do not think we alone are competent to judge what is good or what is bad. That is something for public opinion. We get just what we ask for. You can take the Bible and hold it up as an example of a publication which contains

within it articles and items which might be mentioned here tonight. I think we should encourage our Canadian press, our Canadian writers and our Canadian artists to build a healthy Canadianism. We are cutting ourselves off from the privy council by passing the Supreme Court Act. We could do much more for Canada by establishing a Canadian literature. We must encourage Canadian talent to take such a part in the publication of our papers that it will not be necessary to depend upon writers and artists and syndicates from other lands.


Mr. Adamson:: Before you put the question, Mr. Speaker, may I ask the minister what his motion is? I am all in favour of the question being put, but I want to know what it is.


Stuart Sinclair Garson: I merely suggested that we leave the bill in its present form. I did not move an amendment to it. My suggestion was that we give second reading to Bill No. 10 and then leave it in committee of the whole so that we can follow along from there.


Edmund Davie Fulton: Mr. Speaker,-


Mr. Speaker:: I must inform the house that if the hon. member speaks now he will close the debate.


Edmund Davie Fulton: Since it is very close to nine o'clock I hope the house will pardon me if I do not express as fully as I should like to my appreciation of the support which the bill has received and the generosity and courtesy which all members have shown to the idea in their discussion of the proposal. I should like to spend more time in expressing that appreciation, but I am sure hon. members will understand the reason if I cut my remarks short.
For myself I should like to say that the proposal made by the Minister of Justice (Mr. Garson) is one which I appreciate, and which I think should be accepted without reservation. I understood him to say that for his part he is willing to have the bill given second reading, which means approval of the principle behind the proposal, and then while it is committed to committee of the whole to obtain the opinions of the provincial law enforcement officers, with the assurance, as I understand it, that the bill will be reported out of committee, and some legislation will be enacted before the end of the present session. If I am correct in my understanding, that proposal is perfectly acceptable to me.
As for the points put forward by the minister, I feel it would be more appropriate to deal with them in committee in the discussion which the committee stage is designed to afford. I wish to conclude at this time merely
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by thanking the minister for the consideration which he has given the matter, and for the proposal which he has made. I should like also to express on my own behalf, and I am sure on behalf of all members of the house who are interested in this matter, our appreciation to the various organizations throughout the country which have done so great a service in arousing the people of the nation to an awareness of the problem. Some of them have been mentioned before, and I have a partial list here. I should like to refer to the federated women's institutes of Canada, the federation of home and school associations, the Ontario teachers federation, parent-teacher federations across the country, and one of the latest organizations to express its view, the national council of the Imperial Order of the Daughters of the Empire. To those organizations, as well as to those which I have not had time to mention, I wish to express on my own behalf, and I am sure on behalf of all hon. members, our appreciation of the work they have done.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Dion in the chair.
On section 1-Portrayal of crimes by pictures in magazines, etc., tending to induce violence.
Douglas Charles Abbott: Stand.


Edmund Davie Fulton: I take it to be the minister's desire that it should stand at this stage?


Stuart Sinclair Garson: Yes.


Edmund Davie Fulton: If so, I will ask you, Mr. Chairman, to report progress and ask leave to sit again.
Section stands.
Progress reported.


Mr. Speaker:: It being nine o'clock, and the hour reserved for private and public bills having expired, the house will resume the business which was interrupted at six o'clock.

The house in committee of supply, Mr. Dion in the chair.
DEPARTMENT OP VETERANS AFFAIRS Soldier Settlement and Veterans Land Act-
545. To provide for the cost of administration of Veterans Land Act; soldier settlement and British family settlement, $4,447,443.


Milton Fowler Gregg: to the number of applications for payment under the war veterans allowance assistance fund, I will give the following information. Total applications received to October 7, 1949, 3,155; the total applications declined, 740. The total number of applications approved to date amounts to 2,415. The financial commitment on the part of the department for those approved applications is $160,747. It will be noted that covers approximately a six-months period and, I should add, the best six months of the year. The six worst months in this connection are still to come.
The hon. member for Melfort (Mr. Wright) raised a question of beneficiaries under the Veterans Insurance Act. As I explained the other day, it was the intention of this act to provide protection for a veteran and his immediate relatives. I now state, however, that the department has currently under consideration a request to amend the regulations which would extend the list of contingent beneficiaries to include uncles, aunts and related family.
In the discussion of liquid assets of war veterans allowance recipients, the hon. member for Nanaimo (Mr. Pearkes) made reference to a specific problem. The problem was that if a veteran in receipt of war veterans allowance owns a house and sells that house, his liquid assets are increased and may be in excess of that set by the regulations of the war veterans allowance board. Of course, that is the case.
The hon. member requested that the veteran be allowed to retain the proceeds from the sale of his house, without jeopardizing his war veterans allowance, for a certain period provided he intends to reinvest in another house. I believe that interprets the hon. member's suggestion. On investigation, I find that that is the principle followed by the board in dealing with such cases. No account is taken by the board of such liquid assets for a period of one or two years, according to the circumstances. In other words, the veteran is permitted to retain the proceeds from the sale of his house for a certain period, for the purpose of buying another house, without being penalized as far as his war veterans allowance is concerned.
The hon. member for Kootenay West (Mr. Herridge) made some suggestions with regard to settlement of veterans on provincial lands, particularly as that problem is related to British Columbia. I am glad to inform the hon. member that working arrangements between the provincial authorities and the Veterans Land Act have been developed to a marked degree. I would suggest that the member contact the director of the Veterans Land Act, who will be only too glad to go into this whole problem with him and explain

some of the projects in which his branch and the provincial authorities are jointly concerned.
Hon. members will recall that some questions were raised in connection with the recovery rate of $9.75 per day charged by this department for treatment at our hospitals. It is obvious that considerable misunderstanding exists in connection with that, and I should like to place the facts on record in order that this matter may be better understood by all concerned.
In the first place, I wish to emphasize once again that $9.75 is an all-inclusive charge for hospitalization, including drugs, medicines, and medical attention by the leading physicians and surgeons of this country who are associated with the treatment services of this department. This rate is based upon the actual costs of operating the department's active treatment hospitals, and if anyone has any idea that this is an excessive charge, I should like to give him the actual figures for the cost of a normal appendectomy performed in an urban hospital with which I have recently communicated in order to obtain a comparison.
The hospital concerned quoted the cost as follows: Ten days' hospitalization at $6 per day, $60; drugs, extras, etc., $28; services of an anaesthetist, $15; surgeon's fee, $100; The total cost is $203. As opposed to this, the cost in a D.V.A. hospital would be ten days at $9.75 per day or a total of $97.50.
It was stated in this house during the previous discussion on my estimates that veterans had decided to obtain treatment at a civilian hospital rather than pay $9.75 per day in a D.Y.A. institution. This is quite incorrect, as any veteran with entitlement receives treatment from this department entirely free. If the veteran has no entitlement then the department has no authority to treat that veteran in the hospital. The exception to the latter is that a veteran can be treated in a D.V.A. hospital in case of an emergency, such as an acute illness or accident which occurs near the D.V.A. hospital. In such cases, the veteran is theoretically supposed to pay $9.75 per day, but departmental regulations provide that the cost of treatment of these classes of patients shall be recouped by the department "wherever possible".
This department does give treatment to a considerable number of individuals at the request of provincial workmen's compensation boards, the Canadian Paraplegic Association, foreign governments and other federal government departments, upon repayment of the current recovery rate of $9.75 by those organizations, not the individual veteran. In
Supply-Veterans Affairs addition, our treatment facilities are available to the Department of National Defence and the Royal Canadian Mounted Police for treatment of their forces at the recovery rate of payment.
A question has been asked by the hon. member for Calgary East (Mr. Harkness) as to the revenue received for the treatment of patients. In answer, I will give the amounts received for the first six months of the current fiscal year, ending September 30, 1949. The total collected was $386,015.62, of which $367,347.21 was collected from organizations such as provincial workmen's compensation boards, the Canadian Paraplegic Association, and so forth, but does not include the amount yet to be recovered from the Department of National Defence and the Royal Canadian Mounted Police. The difference between these two figures, namely $18,668.41, represents the total amount collected by the department for the first six months of this year for hospitalization of individual veterans. However, I am given to understand that most of this money is paid by insurance companies and the various prepaid medical schemes, inasmuch as a large number of the veterans concerned appear to be covered by protective medical insurance policies. I am quite sure, therefore, that all hon. members will realize that in actual practice hospitalization of veterans, other than those who have entitlement or who are sponsored by some organization, is not extensive and that very little cash is collected from the veterans themselves.
The hon. member for Kootenay West (Mr. Herridge) made some comments the other day with regard to the Veterans Business and Professional Loans Act, but on the whole my department has found that the branch managers of the chartered banks now possess a good general knowledge of the act, the regulations and the procedure. When in difficulty they undoubtedly refer the issue to their head office, and in all cases the services of the Department of Finance are available for advice and information. It must be borne in mind that the bank is obligated under the act to treat every application for a loan with the same care as is exercised in the conduct of ordinary bank business. Consequently, an opinion as to whether the venture is sound must vary as between individual bank officials in different localities.
I should like to add also that the responsible minister for the Veterans Business and Professional Loans Act is the Minister of Finance, but I would advise the hon. member for Kootenay West that I will refer the matter to that minister in order to see if it is considered desirable to communicate with the

Supply-Veterans Affairs various head offices of the banks to ensure that all necessary regulations are available to the branch managers.
If I remember correctly, I think that covers most of the miscellaneous points. Those that I now come to deal more specifically with pensions. The hon. member for Cape Breton South, who has been a member of many committees on veterans affairs, referred to divorce as applied to pensioners, and to one particular case wherein the Canadian pension commission do not pay additional pension on behalf of a wife. He mentioned a conversation with the Minister of Justice on this subject.
I assure the hon. member that the chairman of the commission had brought this subject to my attention a long time ago and has done so consistently since, and it is most actively being considered as a follow-up to the report of the subcommittee to the veterans affairs committee of 1948. Some hon. members who are here tonight were members of the committee in 1948. The chairman was the hon. member for Grey-Bruce, the parliamentary assistant to the Prime Minister. That subcommittee brought in a report which at that time, as hon. members will recall, did not make any specific recommendation for a solution, but we are still working on it.


Mr. Brooks:: I do not think they were dealing with that particular point. I think the question which was before that committee had to do with divorces in England.


Milton Fowler Gregg: I think hon. members will agree that this particular point was part of the terms of reference of that subcommittee.


Alfred Johnson Brooks: I was a member of the committee. I do not recall that.


Milton Fowler Gregg: Another case was mentioned by the hon. member for Cape Breton South, and I will quote what he said as reported at page 606 of Hansard, column 1:
A boy joined the air force early in the war, went through all the training, and qualified1 as a pilot. He was posted to one of the civilian flying schools as an instructor-pilot. My information is that he did not ask for that posting, he was sent there. While on a joy-ride one night he fell off a hay wagon and his skull was fractured.
He was refused pension for disability and my hon. friend suggests that it is our responsibility to award one to him. It happens that the commission knows this case well. A review of this claim indicates that the veteran volunteered for duty as a flying instructor at a civilian school in Canada and was granted leave of absence without pay for that purpose. He signed an application form dated June 5, 1943, asking to be released from the R.C.A.F. for nine months for employment as a staff pilot, and on January 18,


1944, this leave without pay was extended indefinitely. These civilian flying schools were provided with insurance covering disability or death on a scale equal to that of the Pension Act. Unfortunately, in this case the disability was not incurred while on flying duty but as the result of an off-duty accident on the evening of August 26, 1944, when he fell off a hayrack while going on a picnic and suffered a head injury.
The commission, of course, here as elsewhere, must be governed by the Pension Act in adjudicating upon claims, and in this one ruled that, having regard to section 11 of the act, the disability was not pensionable as it was incurred while on leave of absence without pay.
The hon. member for Acadia touched upon a few points affecting the Pension Act regarding which I should like to give him the information promised. He referred to the deletion in 1948 of the term "wilfully and deliberately concealed" from section 11 (1) (c) of the act and asked how many cases had been reviewed and how many veterans had benefited as a result of that change.
The chairman of the commission advises me that, ever since the amendment in 1948, the commission has actively pursued a review of each known case and that at the 11th instant the records show that out of 2,012 cases reviewed, the following decisions were rendered:
Pre-enlistment aggravated, pension for entire
disability	 i ,628
Pre-enlistment recorded, aggravated, not pensioned for entire disability	 292
Pre-enlistment obvious, not pensioned for entire disability	 gg
Entitlement granted as incurred during service	 g
Total	 2,012
Hon. members will recall that those two words "recorded" and "obvious" were inserted in place of those I mentioned a moment ago.
The two other pension points raised by the hon. member had to do with disabilities of pre-enlistment origin and the question of the benefit of the doubt. I am sure hon. members realize that where there is evidence of pre-enlistment origin, the commission must take cognizance of the fact. They must determine whether the injury or disease or aggravation thereof resulting in disability or death was attributable to or incurred during service. That is a statutory requirement.
With regard to the benefit of the doubt, I am sure the commission welcomes the provision in section 63 and takes full advantage of it. There must be a doubt, however, before the commission can exercise their discretion.

Each day this section is invoked on many occasions, but we do not hear so often when pension is granted after that study.
The hon. member for Kamloops made some interesting observations with regard to adopted children, and they are being made the subject of renewed study. I would, however, point out once again that the commission must be governed by the statutory requirements. Section 22 governs payment to children and subsection 3 thereof states:
No pension shall be paid to or in respect of a child unless such child was acknowledged and maintained by a member of the forces in respect of whom a pension is claimed at the time of the appearance of the injury or disease which caused the disability for which he is pensioned.
That portion of the section deals with any children adopted after the time of acquiring the disability. Then of course the section concludes with these words:
Provided, however, that a legitimate child born subsequent to the appearance of such injury or disease shall be entitled to a pension.
Subsection 4 gives the commission discretionary power in very special cases and they are glad to exercise that discretion.
The hon. member for Kootenay West made some kindly references to the work of my department, for which I should like to thank him. I can assure him that my officials sincerely appreciate them. He advanced the suggestion that appeal boards of the commission should sit in the smaller places and, as he said, "show the flag". His suggestion is good and the chairman of the commission advises me that the policy is to hold hearings at any centre where the number of cases to be heard and the accommodation available warrant such action. This week one sat for two days in Kingston and one for the same two days in North Bay. At present the commission is considering one for the interior of British Columbia.
The hon. member for Vancouver-Quadra made a special plea on behalf of educational benefits to the children of those members of the forces who lost their lives. I am sure we all feel strongly on this question. I take it that what he has in mind is something beyond the provision in the Pension Act which allows of the continuation of additional pension to the age of 21, where the child is satisfactorily pursuing a course of higher education and the parent is without adequate resources. The national organizations of ex-servicemen, and other organizations as well, have advanced similar pleas; and, I need hardly say, they meet with my great personal sympathy and are receiving study on the part of the government.
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The hon. member for Wetaskiwin asked: How many veterans have had their pensions reduced since January 1, 1949, and how many have been reduced by 25 per cent or more?
I trust the following will meet his request. World war I: disability pensions reduced after medical re-examination during period January 1, 1949, to September 30, 1949, inclusive, 47. Of the above, the number reduced by 25 per cent or more is four. In all these cases pension had not been stabilized as the assessments were adjusted following treatment and had not been in effect for three years or more.
World war II: the statistics are not available and would involve the review of thousands and thousands of review cards. The hon. member will appreciate that, following discharge from service or treatment, disability is assessed and pension put in payment. Initial awards are in many cases generous, particularly following surgery. The Canadian pension commission reviews these cases and pension is awarded in accordance with the extent of pensionable disability as found on medical re-examination from time to time.
The hon. member for Wetaskiwin also asked:
When a pensioner has been re-boarded, is there any court of appeal or tribunal to which he can appeal if he feels he has been aggrieved by the finding of the board?
The question is not clear. If it relates to a re-board for medical examination, the pensioner can apply to the local pension medical examiner. If the case is one wherein the veteran has appealed his claim before an appeal board of the commission, then the decision of that appeal board is final under section 52 (4).
There is, however, provision in section 58 (4) of the act whereby an application for leave to reopen the claim may be considered by a new appeal board of the commission subject to the statutory requirements of that section.
In answer to a number of questions I said that, for the information of all hon. members, I would try to put on the record as briefly as possible an outline of the procedure in effect by the Canadian pension commission in dealing with claims generally under the Pension Act. I must apologize to the committee for taking the time, but I think it may be worth it.
Let us start at the point of demobilization. An arrangement was entered into whereby the proceedings of each medical board on discharge from the service were forwarded to the pension commission. These proceedings or records were reviewed by the medical advisory staff and, if a disability was shown
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Supply-Veterans Affairs to exist, the case was prepared and submitted to the commissioners for decision. It is significant to note that this action was taken by the commission without any application whatever on the part of the veteran.
Where entitlement was conceded by the commission, that the condition was incurred or aggravated during service, notification was sent to the pension medical examiner in the district where the veteran resided to call him in for pension examination. This included a complete physical examination and a reference to the departmental specialist for reports and opinions when these were indicated. When this information reached Ottawa, it was reviewed by the medical advisers before submission to the commissioners and the disability was assessed and the file passed to the chief treasury officer to implement the commission's decision and get pension into payment.
It will be appreciated that in dealing with claims the commission came across a great number wherein it was clearly established on the record that the disability existed prior to service and, as a matter of fact, in thousands of cases was recorded on the attestation form. Where the review of the documents indicated no worsening due to service, the commission ruled "pre-enlistment condition, not aggravated during service". The decision rendered in that regard is known as an initial one and the applicant has the right to proceed further with his claim; and this is the procedure provided by the statute.
One, the applicant has the right to renew his application before the commission with additional evidence. Actually he is not limited to one renewal but may come back as often as he desires in an endeavour to establish his claim. The commission thoroughly and sympathetically reviews the application in the light of the history contained on attestation, that which is completed during service and, now, the post-discharge history, and renders a renewal decision.
Two, the applicant has the further right, when his claim is not upheld, to request an appearance before an appeal board of the commission sitting in his own locality. The claim is heard by three commissioners, none of whom has adjudicated upon his claim previously. It reaches them as an entirely new one and their decision is based upon the evidence adduced at the hearing by the applicant, his advocate and his witnesses. Incidentally, the applicant and his witnesses are compensated for out-of-pocket expenses and lost time when attending such hearings. These appeal boards of the commission travel throughout Canada and usually two appeal boards, in different centres, are sitting each


week, and I am happy to report that most cases are heard within a short time after their certification as being in readiness.
Three, the Pension Act states: "The decision of an appeal board is final." There is provision in section 58 (4) of the act, however, whereby the commission may entertain an application based upon any error in the decision of the appeal board by reason of evidence not having been presented or otherwise. Such an application is heard by three commissioners who are designated by the chairman for the purpose. Should the board grant leave to reopen the claim, it immediately constitutes a new one in so far as procedure is concerned. That is to say, it proceeds to initial hearing and, if necessary, from there to renewal and appeal.
Hon. members will be interested to know the Pension Act provides that, whenever an application is not wholly granted, the commission:
Shall promptly notify the applicant, in writing, of its decision, stating the grounds therefor, and shall inform such applicant that he may renew his claim, before the commission on the submission of additional evidence, or before an appeal board of the commission in person or by or with a representative, with or without additional evidence, and that he may have the assistance of the veterans' bureau free of charge or of a service bureau of a veteran organization, or other representative at his own expense, in the preparation and presentation of his application.
Each decision rendered by the commission contains the reasons leading to the decision and, when the application is not granted, the applicant has, generally speaking, full information regarding the grounds on which his claim was not granted.
I might add that the veterans' bureau, which is a branch of my department, has a chief pensions advocate and staff at Ottawa, and in each district office of the department there is an advocate, or there are advocates who are, generally speaking, barristers, and are specially trained in the preparation and presentation of claims. They have access to all the documents completed during service and, of course, to the records on the departmental files. This service is rendered without any charge whatsoever to the applicant. In addition to this, the service bureaux of some of the national organizations of exservicemen render very excellent and much appreciated service in the advancement of claims.
I have given an outline of the procedure in effect when an applicant claims entitlement for a disability and to complete my statement it might be well to give an indication regarding the procedure in effect in arriving at the amount of pension to be paid for a service accepted disability. Previously

I have indicated that examinations are carried out by pension medical examiners in the various districts, and wherever possible, and I am referring to world war II claims, the commission endeavours to make the award of pension permanent.
Some complaints, but as a matter of fact relatively few, reach my office, and no doubt have been received by hon. members, that an award of pension has been reduced, and a word in that regard might be helpful. The commission, in their initial awards, had a general policy of being generous. I am speaking now of world war II. I will deal Later with world war I. It was their desire to make sure the pensioner was fully compensated, and particularly so in the early stages when the injury or disease imposed a greater disability, because it must be understood that in many instances there was an improvement with time. Re-examinations were called for, generally speaking in a year or so, and the disability assessed in accordance with the degree found on examination at that time.
There are instances where the pensioner Lias complained regarding his assessment and there is provision in the Pension Act whereby such a complaint can be heard by the commission. The general policy is to endeavour to adjust the complaint locally and, if such cannot be done, the next stage is through consultation with the medical advisers of the commission at head office. When satisfaction is not reached, the case is referred to the chairman who, in accordance with the provisions of section 7 (3) of the act, arranges to have one or more commissioners hear the complaint in the pensioner's home locality, and I am advised this procedure has met with very great success and satisfaction to all concerned.
I am happy to bring these remarks to the attention of hon. members because although, fortunately, the minister is given no discretionary powers in the Pension Act-and I say 'fortunately" advisedly-nevertheless I am closely in touch with the work of the commission and the commissioners, all of whom are ex-servicemen with a good record of service. They are charged with a very heavy responsibility, one which I feel they discharge with sympathy and understanding, but they cannot go beyond the statutory provisions. There are now nearly two hundred thousand Usability and dependent pensioners, and the monthly liability for these awards closely approximates eight million dollars.


Howard Charles Green: I asked the minister for figures respecting disability decisions in which entitlement was refused on the ground of a
Supply-Veterans Affairs pre-enlistment condition not aggravated by service. He promised to obtain those figures for me.


Milton Fowler Gregg: I will have to ask the hon. member's patience in this regard, because this question involves a tremendous amount of searching. However, I shall undertake during the course of the session, and as early as possible, to have that information for him.


Mr. Lennard:: At the outset of his remarks the minister referred to a question I had asked earlier regarding the hospitalization of veterans under class 5(a) for veterans having meritorious service. Does his reply this evening indicate a decision later than the one set out in a letter from the deputy minister on October 7?


Milton Fowler Gregg: I can assure the hon. member that my reply tonight is up to date, because in preparing it I consulted with the deputy minister.


Frank Exton Lennard: Is it a decision made within the last day or so?


Milton Fowler Gregg: The point covered in my remarks dealt more particularly with bringing a veteran from what we call a civilian hospital to a D.V.A. hospital, when he was taken to the former hospital as a result of an emergency. I think the hon. member has in mind the case where the veteran did not go into a civilian hospital.


Frank Exton Lennard: No, where he did, in an emergency.


Milton Fowler Gregg: The hon. member will note when he reads my remarks that I stated we have full authority to pay his expenses in, and whatever expenses he may have incurred legitimately at the other hospital.


Frank Exton Lennard: Would it be an extreme case of emergency?


Milton Fowler Gregg: I believe I would be correct in saying it would be a case where circumstances were such that it would be difficult or impossible to get the veteran into one of our own hospitals.


Mr. Pearkes:: This particular item deals with the administration of the Veterans Land Act. When we were discussing the first item I had advanced some observations with respect to the administration of the small holdings sections of the act, and had called attention to the fact that a year or so ago the committee on veterans affairs had recommended that the amount of small holdings be reduced to half an acre. Since then the amount of land required for a veteran under the small holdings section of the act was increased to approximately three acres. The result of that has been that a great many

Supply-Veterans A fairs veterans who have taken up small holdings have found it impossible to maintain that amount of land, particularly when they have more or less permanent jobs in a city.
In most sections of the country three acres is not enough to sustain a family. The small holdings section of the act was not intended to provide a means of permanent livelihood for a veteran but rather to augment what he might be earning from his regular trade, or to augment some pension he might be receiving.
There seems to be some misunderstanding as to the actual extent of land a veteran must have before he may have the benefit of the small holdings section. I was always under the impression, until a few days ago, that it now had to be three acres; but I was informed that it has to be three acres provided the value of the land is less than $500 an acre. If it is more than that amount the extent of land may be reduced to two acres. Even then the director under the Veterans Land Act has some discretion in the matter, and may reduce either a three-acre or two-acre holding by ten per cent, if he considers such reduction desirable in order that a veteran may have the benefit of a particular small holding.
Furthermore if a veteran is drawing a pension and has a war disability which makes it impossible for him to operate two or three acres, as the case may be, at the discretion of the director an even smaller extent of land may be allocated to him.
I do not believe those conditions are generally known, and I would ask the minister whether the figures I have given concerning the extent of land are correct. If it is recognized that either because of the price of the land, or because of the disability from which a veteran may be suffering, the three acres may be reduced to a smaller amount, then I believe it would be in the interests of veterans who are taking advantage of this small holdings section in the act that the extent of land be reduced for all. If a man wishes to take up a small holding outside the limits of a city there are certain restrictions imposed so that it will not clash with some Central Mortgage and Housing scheme. It is therefore necessary that there be still greater flexibility. It should not be necessary for a man to take up more land than he can operate profitably and keep in a suitable condition. When land is left idle, weeds develop and become a menace to the people in the immediate neighbourhood.
I should like to ask another question with regard to the length of time that must elapse before a veteran can obtain a clear title to his land. I understand the period varies from ten to fifteen years according to the


risk, if I may use that word. A man who is getting on in years is not considered as good a risk as a younger man and therefore must pay up in a shorter period of time.
There are many veterans who have been able to meet all their payments well ahead of the period they contracted for but are not able to obtain clear title to their land until that original period has elapsed. Recently the Department of National Defence wrote to many veterans across the land asking them if they would consider rejoining the services. I have had letters from some of these men who have taken up small holdings and they tell me that they would be willing to rejoin the services but they do not feel they can do so because they have not free title to the land they have taken up. They do not want to be saddled with a home in one part of the country and perhaps be stationed in another part when they rejoin the services. A man might have to transfer his family from Alberta to Ontario for instance. If a man who had met all the payments could get clear title I think he would be more disposed to rejoin the services as they desire.
I presume the time limit was placed there to prevent speculation, but surely after a reasonable time has elapsed the opportunity or desire to speculate in connection with a small holding would have passed. Could consideration be given to granting full title to these lands at an earlier date? If it is not considered expedient to do it in all cases, I would ask that it be done in the case of the man who intimates that he intends to rejoin the services. At the present time a man who has met his payments may still have to wait some years before his original contract is completed.


Milton Fowler Gregg: The first point raised by my hon. friend was in connection with the acreage and I know this is a matter of interest to many hon. members as it is to us. As il stands at the present time it is three acres where the price of the land and a suitable water supply is less than $500 per acre, and two acres where the price of the land and a suitable water supply cost more than $500 per acre. The hon. member was right when he said that the director has discretionary power up to ten per cent.
Replying to the second point raised by my hon. friend, may I say that the veteran on a small holding may get full title at any time provided he pays the full amount of the cost to the director. After ten years he would have the benefit of the 233, per cent discount which amounts to approximately $2,300. I am sure that the motive in placing a limit of ten years was to discourage speculation.

In his third question the hon. member has put his finger on one of a number of rather difficult points that have turned up in the administration of this act. I am glad to say that that is one of the things that will be coming forward for consideration in the amendments announced in the speech from the throne. Those amendments are all of a category to try to eliminate bottlenecks and the Department of Justice is now studying them. I hope to have a resolution on the order paper before long covering these amendments.


George Randolph Pearkes: Did the minister say that a veteran could get free title at any time?


Milton Fowler Gregg: If he pays the full amount of the cost of the property and is prepared to forgo his conditional grant or discount.


Mr. Quelch:: When this act was first introduced and was before the veterans committee of the house it received pretty well the support of all hon. members. I think most of us felt that it was a good act, at least we considered it to be generous in comparison with the old Soldier Settlement Act. I remember when the act was being explained we were told that it was based upon the experience that in order for a farmer to be able to maintain his land he should have at least a forty per cent equity in it at the time he purchased. Therefore the veteran was required to pay a certain amount down in order that he might have approximately that equity in his place.
In 1945 there were many veterans anxious to settle on the land but quite often the Department of Veterans Affairs went out of its way to discourage them. I have had many talks with the superintendents in Calgary and Edmonton and they said that this was done because it was hard to get good farms, because there was a shortage of equipment at that time and because it was felt that prices were going to come down and it would be of benefit to the veteran to hold back for a year or two. In some cases they actually told the veteran that he would have to work on a farm for a year or two before he would be allowed to go on a place of his own, and in many cases the veteran had been reared and had lived on a farm all his life.
Apparently the intention was to make it difficult for the veteran to go on the land. They were told that if they would wait two or three years the price of machinery and equipment would come down, but just the opposite happened. In 1945 you could buy a John Deere tractor for $1,800, whereas in 1948 the price had gone up to $2,700. The result was that when these veterans finally tried to get in under the scheme practically the whole of their $1,200 grant had been wiped out by the increase in prices. I think
Supply-Veterans Affairs the minister will agree that was a most unfortunate state of affairs. Mind you, I am not blaming the Department of Veterans Affairs because there is no doubt that at that time they thought prices were going to fall. In 1945 I do not think anybody expected that we would have the kind of price increase that we had from 1945 to 1948, but it was a very unfortunate situation so far as the veterans were concerned.
I recall that during wartime the Minister of Finance told us what had happened to the veterans of the first war, that when they came back they found that prices had become inflated and they suffered the consequences. The Minister of Finance said they were going to see that the same thing did not happen to veterans of the last war. It has happened even to a greater degree than it happened after world war I. I say the result of the inflation of prices wiped out entirely the amount of the grant that was given for the purchase of machinery and equipment.
Of course it also hurt the veteran who had to buy land, because by 1948 the price of land had gone up so high it was almost impossible for a veteran to buy a good half section of land for $6,000 or $4,800, with the result that he had to put up a considerable amount of his own money in addition to the money he got from the Department of Veterans Affairs. Consequently he had very little money left with which to buy equipment. In order to get a start many of them assumed obligations which are making it quite difficult for them at the present time.
I will be quite frank and say that in so far as the veterans in my district are concerned the vast majority of them are doing quite well. I think they have been fortunate. They have had good crops, and the prices of the things they have to sell have been good, so generally speaking in the district where I reside it is quite a happy picture. I wonder if the minister could tell us what the general picture is throughout Canada. I refer only to veterans engaged in full-time farming. For example, will he tell us how many veterans, engaged in full-time farming under the Veterans Land Act, have made their current payments? How many, if any, have paid up in full? How many are in arrears, and how many, if any, have signed quit claims? Perhaps the minister might be able also to tell the committee how many veterans have taken advantage of order in council 4559 which deals with the crop share payment agreement.


Milton Fowler Gregg: While I am getting those figures I should like to say that, while I was not here during the period in 1945 which the hon. member mentioned, from observation

Supply-Veterans Affairs outside I can say-and I am assured by my officials-that there was no active discouragement of veterans going on the land. It is true that now, as then, those who administered the Veterans Land Act have perhaps been prudent or cautious, whichever word you choose, from their experience with the old soldier settlement board. I am not going to say whether or not they have been too cautious. There would be differences of opinion on that. At any rate, it is one feature of our rehabilitation plan which is still very much alive.
Today our great university training plan is on the way out. Next spring the main body of students will be through. Our vocational training is practically through. Veterans have been taking up professional loans in their small businesses, and so on, but a steady stream of young men and women are still finding their way into farming even four years after the war. I think it is only natural because in 1945, when demobilization took place so rapidly, a great many young veterans were offered jobs which provided more money than they were getting before the war. Some of them had never worked before. They jumped into employment and after a while began to wonder whether that was the type of work for which they were best equipped. Perhaps they came from the farm and had some youthful experience in farming.
A number of those, whose wives are in accord with the idea, are now coming forward, wanting to go into full-time farming, a few into commercial fishing, and many of course retaining their jobs under small holdings. The more extensive figures wanted will be given, but perhaps the committee might be interested in a brief summary I made for myself, which I have called statistical highlights. The total number of veterans who have had assistance towards rehabilitation under the Veterans Land Act up to August 31 has been 43,986.


Mr. Wright:: Small holdings?


Milton Fowler Gregg: Everything-farming, commercial fishing, small holdings. The total amount of the expenditure approved by way of loans is $214,781,000 in round figures. The number of applications approved for full-time farming is 21,818, and side by side with that one may put the number of applications approved for full-time farming on dominion and provincial lands-we keep that separate for obvious reasons-which is 4,158. That is in addition to the 21,818 I have mentioned. Applications approved for commercial fishing total 719. That is not a large figure, but I can assure the committee that it is serving a very useful purpose for our veterans along our seacoasts.

The number of applications approved for small holdings is 20,890. That includes all small holdings, both individual and incorporated within subdivisions.


Howard Charles Green: That is about half.


Frank Exton Lennard: How many of them were halfacre small holdings before the act was changed?


Milton Fowler Gregg: It is estimated that of the 20,890 small holdings approximately 40 per cent would be on the half-acre holdings within subdivisions.


Frank Exton Lennard: Were the half-acre small holdings becoming so popular and requests for them so numerous that the government more or less made the decision to change the act because they feared the number would be so great that they could not handle it?


Milton Fowler Gregg: No, Mr. Chairman. I should like to try to deal with that point later in all its aspects, because I know hon. members are interested in it. But the suggestion submitted was not the real reason at all, as I understand it. The total number of houses constructed or under construction under this act is 10,132. That includes new houses that may have been built on small holdings, for commercial fishermen, or for farmers. Of course some of the farm houses were there when they purchased their farms. The percentage of houses now under construction, where the veteran is his own contractor, is 65-2. The percentage of payments and still owing in all categories up to April 1, 1949, this year is 6 [DOT] 3. The 6 [DOT] 3 per cent does not include prepayments made by individual veterans amounting in total to $1,748,000. In other words, the $1,748,000 constitutes moneys that have been paid over and above what was actually due. Profit from revenue on backlog property held by the Veterans Land Act administration, less carrying charges on that property, is $719,737. That is property that was held in between the time it was purchased some years ago by the Veterans Land Act and the time it was disposed of to the veterans, having been rented and been a source of revenue.
The total number of the Veterans Land Act staff is 1,387.
The number of contracts cancelled in all categories is 1,656. Does that answer my hon. friend's question?


Victor Quelch: I asked the minister whether he could say how many veterans have signed crop share agreements under order in council 4559?


Milton Fowler Gregg: Eight hundred twenty-four.


Victor Quelch: There is one other point I should like to raise. At the time this act was first under consideration, many members urged that the merchant marine should be brought under the act. At that time, the Minister of Veterans Affairs pointed out that at the conclusion of hostilities there would be a shortage of seamen and, therefore, the department did not want to encourage them to leave the sea and go on the land. The minister stated quite definitely, however, that a few years after the war it might be possible to widen the scope of the act to include merchant seamen. I was wondering whether or not that question is now under consideration. I understand there are quite a few seamen looking for work, and no doubt they would like to have the opportunity of coming under this act.


Milton Fowler Gregg: Mr. Chairman, I am speaking now from memory, but I cannot recall any demand on the part of merchant seamen, or anybody on their behalf, for this particular benefit. There was a request for vocational training, and that, to some degree at least, has been fulfilled. I am assured by my deputy minister that he has not had, and I certainly have not had many inquiries for the benefits of the Veterans Land Act.


Howard Charles Green: I presume that is because the seamen know they are ineligible.


Victor Quelch: That is the reason. The seamen know they are not eligible now, but certainly many representations were made by members of the committee asking that they be included. If the minister feels there will be very few anxious to take advantage of it, then the government would have very much less responsibility and I would think the government would be more willing to bring them under it.


Alfred Johnson Brooks: In that connection, I might state that the Canadian merchant navy representatives appeared before the veterans affairs committee, and the following is a report of their request:
Mr. Chairman, we ask your committee to recommend to parliament that the veterans of the merchant navy be given the benefits of one, the vocational and educational grants; two, Veterans Land Act; three, rehabilitation grants; four, housing legislation; five, civil service preference.
I know that the merchant marine did make a very special request for the benefits of the Veterans Land Act, and I think that they made the request not only at this particular meeting of the veterans affairs committee but at a number of other committee meetings which I attended.


Milton Fowler Gregg: That is true, as part of the background of the request that the merchant seamen be treated in all respects as exmembers of the armed forces.
Supply-Veterans Affairs


Mr. Harkness:: I should like the minister to clarify the situation in regard to mineral rights on lands taken up under the Soldier Settlement Act. The minister will remember that not long after he took over the department I saw him in connection with this matter and he succeeded in straightening it out very well. I should like to take this opportunity to thank him for that. Regulations had been in effect for many years which prevented a veteran who had taken up land under the Soldier Settlement Act from obtaining the mineral rights to that land. Those regulations were changed later enabling him to get those rights.
During the past few months, I have had complaints from two men in connection with the fees charged them in order to secure those rights, and the difficulties they had in connection with them. One man apparently had to pay two fees. In this man's case, the land had been in the family before. It had belonged to his father and the veteran had purchased it from some member of the family under the Soldier Settlement Act. This man lost the opportunity to sell his mineral rights or lease them during the oil boom in the Turner valley. He now has to pay these two fees, and as a result feels rather annoyed. Could the minister explain what these fees are and what the necessity for them is?


Milton Fowler Gregg: Mr. Chairman, I thank the hon. member for his remarks. As the matter stands now we are in a position where we are able to return to the veteran, under the old soldier settlement board, all the mineral rights if the director of the soldier settlement board was in possession of those rights. I believe that is working out well in so far as it possibly can work. The fee charged was $25 to cover the cost of searching and drawing up documents-that sort of thing.


Douglas Scott Harkness: For what was the second fee charged?


Milton Fowler Gregg: I do not know of any second fee.


Douglas Scott Harkness: Just on that point, could the minister tell us how many soldier settlers did obtain their mineral rights?


Milton Fowler Gregg: I have not the figures here but I will get them for the hon. member.


George Matheson Murray: I should like to ask the minister if the rights of the soldier settlers at Montney in the Peace river country in British Columbia are being protected with respect to the oil rights on the land which has been taken over from the Indian reserve? There are 38 settlers in the neighbourhood of Fort St. John who have been very profitably settled on the land. The land having been

Supply-Veterans Affairs taken over from an Indian reserve, it carried, of course, the oil and mineral rights. It would only be proper that those rights should go to the returned veterans who have now taken up land and have cultivated it. I understand the department made a deal with the Indians whereby the Indians were given other land back in the mountains suitable for trapping and so forth, in return for this fine agricultural area for soldier settlement which is now being so successfully operated. I may say that oil is being found in that vicinity and it might very well be that these soldiers are in the centre of a great oil basin.


Milton Fowler Gregg: May I ask the hon. member whether that is the Bobtail reserve?


George Matheson Murray: That is the Montney reserve near the Alaska highway in the neighbourhood of Fort St. John.


Milton Fowler Gregg: I think I should like to look into that matter and be sure of my answer.


Alfred Johnson Brooks: Before the item carries, there is another question I wish to ask the minister. It is an old perennial, and I am sure if the hon. member for Battle River (Mr. Fair) were here he would ask the question. It has to do with the old soldier settlers. As the minister knows, there has been an agitation in practically every veterans affairs committee to have the soldier settlers given title to their land.
It is not necessary to review the history again. These men settled there after the first war. Many of them settled on land which was submarginal and they have not been able to make their payments. These men have raised their families and their sons have gone overseas. Many of them are now over sixty years of age and have not title to their land. There is no possible chance of their ever gaining title. I understand that the number of these men is now less than
2.000,	whereas originally, I think, it was over
25.000.	Of that 2,000, many of the men have paid the price of their land two or three times over. I think there are only about 21 who have no equity in the land at all, if I remember correctly the statements that were made before the veterans affairs committee. I should like to ask the minister if there is any disposition on the part of his department or of the government to include in the amendments to the Veterans Land Act a gift to these old soldier settlers of the titles to these lands. After all these years I think that could well be done. I do not think it would establish a precedent. I know that in our veterans affairs committee we would sometimes be met with the argument that it would establish a precedent; but the Canadian Legion has recommended it on

many occasions and I am sure that the sympathy of all the soldiers, whether they have paid for their own lands in previous years or not, is with these men. If the department is not already doing so, I should like to ask the minister if they would sympathetically consider granting the titles of these lands to these old soldiers who have lived on them for so many years, who now are old, and who have no title.


Milton Fowler Gregg: The department has considered the matter, but not in exactly the same wholesale fashion that my hon. friend indicates. Perhaps he missed it, but when our estimates were up for discussion before, as reported at page 623 of Hansard, in the second column, I gave a fairly detailed picture of how the matter stood now on the basis of doing it piecemeal. For the reasons given there, we feel that this method is obviating any hardship and is doing it better than it would be done by making a wholesale, sudden forgiveness.


Alfred Johnson Brooks: Doing things piecemeal seems to be a habit of the government.


Milton Fowler Gregg: My hon. friend may not agree with me, but he knows as well as I do that in his own province a great many of the old veterans under the soldier settlement board are getting cleared off in this fashion. Last year there was an item of $150,000 in the estimates; this year there is an equal amount; and I hope to ask for the same amount next year.


Alfred Johnson Brooks: The idea is eventually to see that these men are given the free title to their land.


Milton Fowler Gregg: That is correct.


Alfred Johnson Brooks: I thank the minister for the information he has given.


Milton Fowler Gregg: The report there will indicate that substantial progress has been made.


Alfred Johnson Brooks: I recall that the former member for Yukon, Mr. Black, spoke about getting certain land for the construction of homes in the Yukon. I believe some difficulties arose, and that the minister said he would investigate and see what could be done in that area. Has there ever been any investigation, and what is the situation with regard to those veterans in the Yukon?


Milton Fowler Gregg: Yes. If all the items related to the Veterans Land Act had come to as happy a conclusion as that, it would please me greatly. I think it was three weeks after the veterans affairs committee disbanded that the director of the Veterans Land Act and my parliamentary assistant took a plane to the Yukon. While there I

think they consulted with Mr. Black and the veterans organizations. I accused them of closing one eye in the interpretation of the act and certain legislation which comes under the Department of Mines and Resources. Nevertheless, it was approved by Justice that a formula could be found whereby they could do what they wanted to do, not under the small holdings section but under the same terms as applied to taking up provincial lands.


Alfred Johnson Brooks: They could eventually own the lands?


Milton Fowler Gregg: They could eventually own the property. I can assure my hon. friend that the veterans there are all very happy.


Alfred Johnson Brooks: I thank the minister for the information he has given.


[Stage Direction]
Item agreed to.
Soldier Settlement and Veterans Land Act-
547.	To provide tor the payment to the government of the United Kingdom on account of losses under the 3,000 British family agreement of August 20, 1924, and the New Brunswick 500 British family agreements of August 4, 1927, and August 27, 1935, $25,000.
Alfred Johnson Brooks: This item has to do with some settlers in New Brunswick. Some twenty or twenty-five years ago these settlers were brought out from the old country and settled in New Brunswick. I am rather surprised that we still have to pay $25,000 a year to Great Britain, it would appear, on behalf of these settlers. I should like the minister to explain just what the situation is. I thought these men had bought their farms long ago. Some of them are now grandfathers and their grandchildren are growing up on the farms.


Milton Fowler Gregg: The settlers were non-veteran settlers that came out away back in 1929.


Alfred Johnson Brooks: In 1927, I think it was.


Milton Fowler Gregg: I am told that this item is to reimburse or to continue reimbursing the United Kingdom government for certain moneys on their account. When we sell the properties, if a loss is involved it is borne pro rata by the Canadian government and by the United Kingdom government, in accordance with the original investment. This item is to take care of our share.


Alfred Johnson Brooks: It was a three-party
agreement?


Milton Fowler Gregg: Yes.


Mr. Maclnnis:: I too was looking at this item, and I noted that 3,000 families were brought out in 1924, I believe, and 500 at a later date. How many of these families are now settled on the land and how long will this payment on this item continue?
Supply-Veterans Affairs


Milton Fowler Gregg: As of March 31 this year, there are 593 of those contracts outstanding. That does not indicate that there are only 593 of those remaining. I have not the total number that are on the farms, because when the contracts are complete we do not carry them any more.


Percy Ellis Wright: How long will this payment of $25,000 a year continue?


Milton Fowler Gregg: I am unable to answer my hon. friend's question. It will depend. Until their contracts are fulfilled. I have not before me the exact dates of those contracts or any extensions thereof.


Percy Ellis Wright: The minister could at a later date give us the figures as to the total amount that has been paid for the settlement of these 3,000 families, and what payment we still owe.


Milton Fowler Gregg: I shall be glad to do so.


Alfred Johnson Brooks: I might say that it was a good investment.


Milton Fowler Gregg: With regard to any item such as that on which I promise to bring forward information if the item passes, I will undertake to bring forward the information when the amendments to the Veterans Land Act are under consideration.


[Stage Direction]
Item agreed to.
548.	To provide for the payment of grants to veterans settled on provincial lands in accordance with agreements with provincial governments under section 35 of the Veterans Land Act, 1942 (as amended by order in council P.C. 2122, dated 13th April, 1945), and payment of grants to veterans settled on dominion lands, in accordance with an agreement with the Minister of Mines and Resources, under section 35 of the Veterans Land Act, 1942, as amended (P.C. 1550 of 18th April, 1946), $2,536,000.
Mr. Herridge:: I was greatly pleased to hear the minister's remarks with reference to the settlement of veterans on provincial lands and projects under consideration. But at the same time I am interested in the reduction of this vote by $1,464,000. While I mentioned this previously when the minister's estimates were under consideration, I do again want to stress, and bring to the attention of the minister, the possibilities that exist under this vote for the settlement of veterans in the southern interior of British Columbia for full-time farming, possibly in the first place to a limited extent. There are great possibilities for the settlement of veterans on small holdings, particularly the type of veteran who is employed within three or four miles of a small village, or a pensioner or a veteran who qualifies under the War Veterans Allowance Act.
In the interior of British Columbia we have a great opportunity in that respect. I can

Supply-Veterans Affairs understand, Mr. Chairman, that it is not likely that a pensioner or a war veterans allowance recipient would want to settle on a small holding in the Acadia riding, but many of them are very much taken with the southern interior of British Columbia, particularly on account of our climate. That section of the country contains a large number of good lake locations where one can settle on a few acres of land beside some of our excellent lakes and enjoy the location, scenery and so forth. In this connection, Mr. Chairman, I do want to suggest that there is a splendid opportunity for the Department of Veterans Affairs to take even more positive action in this respect. The minister's officials can acquaint themselves with the opportunities in the southern interior of British Columbia. Many of the locations are still held within forest reserves. As the minister knows, the minister and the deputy minister of lands of British Columbia are sympathetic toward this sort of thing and are willing to co-operate with the department here in taking land out of the forest reserves wherever it is indicated as suitable for the settlement of veterans for full-time farming or for small holdings. I am bringing this to the attention of the minister again to emphasize the unusual and particular opportunities in the constituencies of the southern interior of British Columbia for settlement under this section of the Veterans Land Act.


Milton Fowler Gregg: I should like to comment on that. I thank the hon. member for that suggestion. I can assure him that there is no intention whatever to cut down on these loans provided the veterans want to qualify for the work. In 1948-49 the appropriation was $4 million, and we spent only $2,620,809. The figure given here is an estimate of what will be required for this year. If it is not enough we shall certainly ask for more.
With respect to the other point, there are more things going forward in conjunction with the Department of Agriculture and with the province of British Columbia in regard to settling veterans on provincial lands in the interior of that province. I can assure my hon. friend that the Veterans Land Act officials will be glad to follow that up.


Victor Quelch: Some weeks ago I discussed with the minister the question whether or not an agreement had been reached with Alberta to pay a grant where land is leased in special areas on a ten-year basis. Has anything developed since that time?


Milton Fowler Gregg: I am not in a position to answer the hon. member now, but I shall get him an answer.


[Stage Direction]
Item agreed to.
(Mr. Herridge.]
549.	To provide for the payment of grants to Indian veterans settled on Indian reserve lands under section 35A of the Veterans Land Act, 1942 (as amended by order in council P.C. 2122, dated 13th April, 1945), $600,000.
Douglas Scott Harkness: I am interested in the success of the scheme of rehabilitating our Indian veterans on their own reserves under the Veterans Land Act. Can the minister tell us how many of our Indian veterans have taken advantage of the act? Can he give us a breakdown of the number who have used the act in order to get into full-time farming operations on the reserves, and the number who have used it really as a small holdings scheme in order to secure homes and thus improve their living conditions? Is the limitation, imposed in the ordinary small holdings scheme, of three acres to enable a man to take advantage of the act, imposed upon the Indians on their reserves?


Milton Fowler Gregg: The number of full-time farming Indians is 505; small holdings 179; provincial lands, 3,474.


Douglas Scott Harkness: That has nothing to do with Indians.


Milton Fowler Gregg: I am sorry. The last figure was wrong. The number of Indians settled under the act is 1,014.


Douglas Scott Harkness: Where are the remainder settled? The number given as settled on fulltime farms and in small holdings on reserves is 684. Then the minister gave a figure of 3,474 which was applied to something else.


Milton Fowler Gregg: My hon. friend should cancel the breakdown I gave on full-time farming.
I have not that breakdown here. The total number of Indians, which is the only figure I have for all purposes is the one I gave, 1,014, in which the first figure would be included. The amount of money involved is $1,123,560.


Douglas Scott Harkness: What about the matter of limitation of buildings in which three acres were available? What is the situation in regard to that on the Indian reserves?


Milton Fowler Gregg: I stand corrected on this. In this connection we work in close co-operation with the Department of Mines and Resources under which the Indian administration comes. In the first place, the dominion government owns the land and our department furnishes the money. Offhand I am not aware of the limitation in regard to acreage.


Douglas Scott Harkness: The limitation of acreage was being enforced in so far as the Indians building houses on the reserves were concerned. I know the thing is under consideration. I had hoped that by this time the limitation would have been removed on these people because it is not a limitation which

should apply to Indians on the reserve where the land is held in common in any event. The most that the Indian has is a ticket, as it is called, which more or less guarantees him the possession of that particular piece of land and enables him to leave it to his direct heirs, if he has any. I do not think it is a limitation which should be kept in force. If it is in fact still in force, which is what I want to find out, I suggest to the minister it should be removed so far as these people are concerned. I was one who was strongly in favour of the amendment to the act to make it possible for our Indian veterans to take advantage of small holdings. Originally, under the provisions of the act respecting Indian reserves, they were not able to take ownership of land. I am rather disappointed that more of our Indians have not been able to take advantage of these provisions. What the various reasons may be, I do not know.
I would recommend to the department and to the Department of Mines and Resources that any of our Indians still eligible for benefits under the Veterans Land Act should be encouraged to take advantage of those benefits. All hon. members know that the general situation of Indians in Canada is deplorable, and any scheme of this sort which they could take advantage of would be worth while. When the legislation already exists, and the opportunity exists, I suggest every encouragement should be given to them to take advantage of its provisions.


Milton Fowler Gregg: I agree most heartily with the hon. member and shall discuss the matter with the Minister of Mines and Resources. Should any case come to my hon. friend's attention that could be remedied, I should be pleased to have him bring it to my attention.


[Stage Direction]
Item agreed to.
Soldier Settlement and Veterans Land Act-
550.	To provide for the reduction of indebtedness to the director of soldier settlement of a settler under the Soldier Settlement Act, in respect of a property in his possession, the title of which is held by the director, by an amount which will reduce his indebtedness to an amount in keeping with the productive capacity of the property and his ability to repay his indebtedness to the director, under regulations approved by the governor in council, $150,000.
Victor Quelch: This provision is in lieu of a grant of free title to soldier settlers. When we were dealing with the first item I asked the minister a question to which I did not receive a clear answer. I am familiar with a number of cases where local supervisors have called upon veterans and have come to agreements respecting reductions in 45781-67
Supply-Veterans Affairs amounts of debts. A veteran may have agreed that he will pay so much cash at the time, and that after harvest he will make another payment to pay off the balance. If the second payment is made the veteran gets clear title, but if he is not able to make that second payment the amount of indebtedness goes back to the original amount, and the amount he has paid can be returned to him.
Where a veteran is not able to complete an agreement by making a second or third payment, owing to crop failure, is it the policy of the department to extend the agreement for another year, or does the agreement automatically die and the amount of the indebtedness go back to the original amount?


Milton Fowler Gregg: I believe I am correct in saying that, as in many other things, the director under the Veterans Land Act has given a great deal of latitude to his district superintendents. An amount has been estimated that could be apportioned to the various districts. The district superintendents who are familiar with local situations and know the settlers under the soldier settlement board attempt to carry out the intention of this particular item.
I can assure the hon. member that the whole matter will be open to negotiation at any time. It has been explained to me, when talking with men working in the fields, that there would be another side contract under which it would be understood that a settler would be getting in some money when he sold his crops, and he would say, "If you will keep it open, I will be able to pay so much this fall, and probably so much next fall." I can assure my hon. friend however that this new contract does not cover any long period of time. It is just for a short period to see if the settler cannot take some part in the final liquidation of his land.


Victor Quelch: There is every possibility that there may be a crop failure this fall so that the veteran could not complete his agreement. I want to know whether the debt will go back to the original amount, or whether he is given another chance for another year so that he would not lose the benefit of the agreement. I agree that the reductions being made are substantial. A veteran does not wish to lose the chance of having the debt reduced just because of a crop failure, and his not being able to pay the second half.


Milton Fowler Gregg: There are not very many of those cases and, in the second place, as reported at page 626 of Hansard, it will be seen that my hon. friend asked a question and I replied that the matter would be taken into consideration. I did that with the

Supply-Veterans Affairs director, and he assured me that the object aimed at by the hon. member is being carried out.


Alfred Johnson Brooks: I understand that settlers under the Veterans Land Act or the Soldier Settlement Act have to make payments at certain stated periods in the year. In New Brunswick, for instance, where the potato crop is gathered in the fall, occasion has arisen where a soldier settler has been more or less compelled to sell his crop in the fall in order to meet his obligations to the board, whereas if he had been allowed to hold the crop for a few months he might have got a better price. Is there any discretion left with the officials of the department to allow a soldier settler to hold his crop, when by doing so he could probably get a better price? My information is that they are more or less compelled to sell at some particular time in order to meet these payments.


Milton Fowler Gregg: He has discretion. If it were held too long interest might accrue on it; but he has discretion.


Alfred Johnson Brooks: It might be a gamble, I understand.


[Stage Direction]
Item agreed to.
Demobilization and reconversion-
551.	Post discharge rehabilitation benefits including out-of-work allowances, university and vocational training including the training of merchant seamen and salt water fishermen pensioners, awaiting returns allowances, temporarily incapacitated allowances and unemployment insurance contributions, $28,850,000.
Donald MacInnis: A number of matters are covered in this item. Would the minister give a breakdown or, if he has not the complete breakdown, would he give the information with respect to merchant seamen vocational training. How much of the item is allocated for that purpose?


Milton Fowler Gregg: That subject comes more properly under the Department of Transport. However I placed on record earlier the figures the hon. member wants. The breakdown under the various headings is as follows:
Out of work benefits	 $	50,000
Vocational and technical training___	3,700,000
Awaiting returns	 1,010,000
Temporarily incapacitated	 10,000
University training	 18,005,000
Unemployment insurance contributions	  6,000,000
Transportation and travel for applicants for and recipients of rehabilitation benefits	 75,000


Donald MacInnis: Would vocational training for merchant seamen come under that item, or is there a separate item?


Milton Fowler Gregg: All vocational training is
included in that.


Donald MacInnis: How many merchant seamen are receiving vocational training at the present time under this item?


Milton Fowler Gregg: The number is 317.


Donald MacInnis: There seems to be considerable dissatisfaction among merchant seamen with the administration of their vocational training. I am glad the Minister of Transport came in a moment ago because I had some correspondence with him during the summer on this matter. On discussing the matter with officials of the merchant seamen's organization I am convinced that they have a legiti-, mate complaint. I believe that the Minister of Transport is interpreting the order in council too narrowly. On the other hand, it may be that I am interpreting it too broadly.
I mentioned in a letter that I wrote to the Minister of Veterans Affairs and which he passed on to the Minister of Transport that I felt that merchant seamen should be treated the same as persons who had served in the armed forces when vocational training was involved. The Minister of Transport replied that their training was under the Department of Labour. I have read the order in council through carefully and I can find no mention in it of the Department of Labour. The governing section, as to training, in P.C. 5983 of December 29, 1948, reads:
Sections 13, 14 and 17B of the Veterans Rehabilitation Act shall be deemed to apply pari passu to a merchant seaman receiving training under this order.
My knowledge of Latin is not extensive but I understand that means that their rehabilitation training shall be the same as that of men who served in the armed forces. I cannot find where the Department of Labour comes into the picture. The letter of May 12, 1949, from the Minister of Transport states:
I notice that you regard the training of merchant seamen as a return for services rendered on the same basis as educational grants for services in the armed forces, whereas, the intention of order in council 5983 is to provide rehabilitation in the form of vocational training through the Department of Labour to merchant seamen under thirty years of age, to avoid the disadvantages they would suffer when seeking shore employment in competition with older and more experienced men.
As I have said, I think that is a rather narrow interpretation of P.C. 5983. Another objection the seamen have is the shortness of the time for making application for training under the order in council. I understand the order came into effect on January 1, 1949, and applications had to be made within six months or before June 30, 1949. I have a letter in my file from a seaman who went to sea early in January, 1949, but who did not return to his home port until after

June 30, 1949. Because of the time limitation this man is shut out from receiving vocational training even though he may be eligible in all other respects.
Many Canadian ships have been sold to foreign owners. The number of ships being operated has dropped from 43 to 18 which means that a large number of seamen have had to give up their occupation as sailors. Because of the present shipping situation they are not able to get work at their former vocations. The order provides for training only to those under 30 years of age with the restriction of the six months' limit.
I should like to hear from the Minister of Transport and the Minister of Veterans Affairs that they intend to give a more generous interpretation of this order particularly in regard to age and the extension of the time limit for receiving applications.


Howard Charles Green: I had intended to say a word on this matter and perhaps I can add a little to the submission made by the hon. member for Vancouver East. Just this week I had a return showing the number of merchant seamen who had applied under this order in council and stating what had happened to their applications. This return shows that 770 seamen applied under order in council P.C. 5983. Of that number, 118 were ruled out because they were over the age of 30 years. One hundred applications were withdrawn voluntarily before the cases had been referred by the different district officers to Ottawa. Three hundred and twenty-one applicants were accepted for training. This evening the Minister of Veterans Affairs gave that figure as 317 so there appears to be some slight variation. Nine applications were rejected on the ground that the men had served on ships of a registry other than Canadian. With regard to that I understand that in many cases men were ordered to go to allied ships. If that is so they should not be disqualified on the ground they did not serve on Canadian ships. One hundred and thirty-two were rejected on the ground that they had not signed a manning pool agreement. My understanding is that many of these lads were so young that the manning pool authorities would not sign them up, and hence it is unfair that they should be ruled ineligible. Then others were at sea at the time, and for that reason did not sign a manning pool agreement.
The return also showed 26 had been rejected on the ground they already had employment or a vocation. This evening the Minister of Veterans Affairs said there had been 195 rejected on the ground that they had not left the sea. That is the first time 45781-674
Supply-Veterans Affairs I have heard of that reason for rejecting them, and I think it is not a very good reason because, as the hon. member for Vancouver East said, the number of men who can get such employment is being reduced steadily.
Another question I had answered showed that there are only about 4,100 officers and men now in the Canadian merchant navy, so that it would seem that these men, who will probably have to leave the sea, should be allowed to get vocational training.
In any event, the figures show that less than half of the number who applied were able to qualify. I suggest to both ministers that the age limit should be lifted. I do not believe there should be any restriction imposed for that reason. The war service these men rendered was some years ago, and if they were twenty-five at the time they went into the merchant navy they are now too late to get vocational training. Of course with the lifting of the age limit there should also be a lifting of the time limit for application. Quite wide discretion is given to the departments to rule on these applications, and that should be sufficient without imposing an age limit or a time limit.
Apparently they can only take the type of vocational training approved by the Department of Transport. I brought up a case the last time these estimates were considered. It was the case of a man who wanted to get a type of training that the Department of Veterans Affairs would give, but the Department of Transport would not approve of it. Since that time the Department of Transport have given in and now this man is going to get the training that the Department of Veterans Affairs would have given him all the time. Training actually comes under the Department of Veterans Affairs, and I suggest if they have a course of training these men should be able to take that course.
Really the order in council in question, P.C. 5983, is based on the Department of Veterans Affairs Act. The order in council itself refers to the Department of Veterans Affairs Act, so that the Department of Veterans Affairs is directly responsible here. The vocational training is given because of the provisions of the Department of Veterans Affairs Act. Section 5 of that act gives the department power not only to help men who served in the armed forces but also reads in part:
. . . any person who has otherwise engaged in pursuits relating to war, and of any other person designated by the governor in council.
Therefore there is power under the Department of Veterans Affairs Act for that department to give training to merchant navy

Supply-Veterans Affairs veterans. The responsibility really rests on the Department of Veterans Affairs rather than on the Department of Transport. I urge that the two ministers concerned give further consideration to the matter, not only to vocational training but also to educational training. Very few of these men can qualify now for educational training, and many of those who could qualify have been paying their own way to date. I suggest they should be helped now for the remainder of their courses.
I would point out to the Minister of Transport particularly that in the last annual report of his department which we have, that for the year up to March 31, 1948, there is a section dealing with nautical services, and in it we find that one of the responsibilities of the nautical services branch is:
Issue of campaign stars and the War Medal 1939-45 to merchant seamen in recognition of service at sea in dangerous waters during the second world war.
We also find that another of their responsibilities is:
Issue of Memorial Cross to mothers and widows of Canadian merchant seamen who lost their lives at sea or died as a result of service in the second world war.
Just the other day, in answer to a question asked by the hon. member for Nanaimo with regard to what procedure should be followed by ex-members of the Canadian armed forces and the merchant navy who are now resident outside Canada, in order to obtain their campaign stars and medals, the Minister of Transport brought down an answer which read:
Canadian merchant seamen who have taken up permanent residence in the United Kingdom should apply for their general service medals, earned for service in the merchant navy during the second world war, to the registrar general of shipping and seamen, Llantrisant road, Cardiff, Wales.
Then the answer goes on to say where Canadian merchant seamen should apply who have taken up residence in South Africa, Australia or New Zealand. The answer ended by saying:
Canadian merchant seamen who have taken up permanent residence in United States, or other countries not named above, should apply to the supervisor of nautical services, Department of Transport, Ottawa.


The Chairman:: Order.


Howard Charles Green: I am just about finished. Surely if any proof is needed that these men should be given vocational training and treated as though they were members of the armed forces, those two actions by the Department

of Transport furnish that proof. I would ask the two ministers concerned to give serious consideration to the suggestion.
Item stands.
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: On Monday the house will not meet until 4.30 in the afternoon because of the address by the Prime Minister of India. The first item of business will be resuming the debate on the budget. If it is completed or adjourned, we should like to open two or three new departments.


Howard Charles Green: There are only three left.


Lionel Chevrier: There are more than that. We should like to open National Health and Welfare, Post Office, and Finance.


Donald MacInnis: Will the Postmaster General be here?


Lionel Chevrier: Then we should like to go
into supply with the estimates of the Department of Transport.


Howard Charles Green: Can the minister tell us how many departments remain to be opened? I understand there are only three, and the agreement the other night was that only one would be opened on the next motion to go into supply.


Lionel Chevrier: I was not here when any agreement was made, but I shall be glad to look at the record. Speaking from memory only, over and above those I have mentioned this evening there are at least two, if not three, more departments to open.


Howard Charles Green: Three are already in.


Lionel Chevrier: Three are already in, and with these sixteen-there would be more than three.


Howard Charles Green: Will the minister check up the undertaking given by the Minister of Public Works the other day?


Lionel Chevrier: Yes.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order, until Monday, October 24, at 4.30 in the afternoon.
[The following items were passed in committee of supply]:

[Stage Direction]
Soldier Settlement and Veterans' Land Act-
545.	To provide for the cost of administration of Veterans' Land Act; soldier settlement and British family settlement, $4,447,443.

546.	To provide for the upkeep of property, Veterans' Land Act, including engineering and other investigational planning expenses that do not add tangible value to real property; taxes, insurance and maintenance of public utilities-formerly included under the vote for the administration of the Veterans' Land Act, $152,000.
547.	To provide for the payment to the government of the United Kingdom on account of losses under the 3,000 British family agreement of August 20, 1924, and the New Brunswick 500 British family agreements of August 4, 1927, and August 27, 1935, $25,000.
548.	To provide for the payment of grants to veterans settled on provincial lands in accordance with agreements with provincial governments under section 35 of the Veterans' Land Act, 1942 (as amended by order in council P.C. 2122, dated 13th April, 1945), and payment of grants to veterans settled on
Supply-Veterans Affairs dominion lands, in accordance with an agreement with the Minister of Mines and Resources, under section 35 of the Veterans' Land Act, 1942, as amended (P.C. 1550 of 18th April, 1946), $2,536,000.
549.	To provide for the payment of grants to Indian veterans settled on Indian reserve lands under section 35A of the Veterans' Land Act, 1942 (as amended by order in council P.C. 2122, dated 13th April, 1945), $600,000.
550.	To provide for the reduction of indebtedness to the director of soldier settlement of a settler under the Soldier Settlement Act, in respect of a property in his possession, the title of which is held by the director, by an amount which will reduce his indebtedness to an amount in keeping with the productive capacity of the property and his ability to repay his indebtedness to the director, under regulations approved by the governor in council, $150,000.