1950-09-13

Mr. George Prudham (Parliamentary Assistant to the Minister of Resources and Development):: On behalf of the Minister of Resources and Development (Mr. Winters) I beg leave to lay on the table copies of regulations made by the governor in council and copies of every order similarly made, from February 14, 1950 to June 1, 1950, authorizing the sale of land or the granting of any interest therein, as required by section 75 of the Dominion Lands Act, chapter 113, Revised Statutes of Canada, 1927, according to a list which is attached. The Dominion Lands Act was repealed by the Territorial Lands Act on June 1, 1950.



RIGHT HON. EMANUEL SHINWELL ANNOUNCEMENT OF VISIT TO CANADA OF UNITED KINGDOM MINISTER OF DEFENCE

Hon. Brooke Claxton (Minister of National Defence):: Mr. Speaker, I am glad to confirm the fact that the Right Hon. Emanuel Shin-well, minister of defence of the United Kingdom, has accepted my invitation to visit Canada prior to the meeting of defence ministers beginning in Washington on October 16. We hope Mr. Shinwell will arrive in Canada on October 11, to stay until the 13th, during -which time he will visit a number of defence establishments.



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. Coldwell:: 1.	Did the government commence an investigation into the pulp and paper industry or some part ol that industry under the Combines Investigation Act? If so, on what date?
2.	Has the investigation been completed?
3.	If so, on what date, and what is the result?
4.	If not, what has caused the delay?


Mr. Garson:: 1.	It has not been the practice to reply to a question of this kind unless and until the
commissioner has made a report under the act. This is a practice of long standing which was explained by the previous commissioner, Mr. F. A. McGregor, in his statement to the special committee of the House of Commons on prices on February 16, 1948, as follows:
I hope the committee will not require me to discuss or to give particulars of the cases we are working on or the industries and companies involved. Such a course might result in grave unfairness to those whose conduct is being examined, since some members of the public may be only too ready to conclude, without justification, that investigation necessarily implies guilt. Our practice has been not to disclose information about the inquiries we are making, even the fact that we are making inquiries in a particular industry, until our work is completed and the results are published in the form of a printed report.
No report has been made by the commissioner under the act in respect of the industry mentioned or any part thereof.
2,	3 and 4. Answered by No. 1.


PRAIRIE FARM ASSISTANCE
[Stage Direction]
1949 CROP

Mr. Diefenbaker:: 1.	How much has been disbursed in each of the provinces of Alberta, Saskatchewan and Manitoba under the provisions of the Prairie Farm Assistance Act in respect of the 1949 crop failure?
2.	How many municipalities in each of the said provinces received payment for full or partial failure of the 1949 crop?
3.	How many appeals or submissions of dispute, by provinces, were made to the board of review since the 1st of January, 1950, and of these how many were allowed?


Mr. McCubbin:: 1.	Manitoba, $326,809.50; Saskatchewan, $15,370,261.64; Alberta, $6,325,343.25.
2.	Manitoba, 19 municipalities; Saskatchewan, 210 municipalities; Alberta, 70 municipalities.
3.	Manitoba, one appeal or submission of dispute-none allowed; Saskatchewan, 37 appeals or submissions of dispute-21 allowed; Alberta, three appeals or submissions of dispute-three allowed.


IMPRISONMENT OF BAPTIST GROUP, VAL D'OR, QUE.
Mr. Catherwood:: What action, if any, is being taken by the Department of Justice to investigate the imprisonment of the Baptist group in Val d'Or, Quebec?


Mr. Garson:: None. Under the British North America Act the administration of justice

Questions
which includes the enforcement of the crim- QUESTIONS PASSED AS ORDERS FOR inal law and the maintenance of order within	RETURNS
the province rests exclusively with the provincial government and the municipalities EXPORTS TO u.s.s.r. and satellite countries
created under provincial laws. The federal Mr. White (Middlesex East): authorities do not intervene in this field in what is the total value of all exports, giving which every province has sovereign juris-* particulars as to groups or general classifications diction.	thereof, in (a) 1949; (b) 1950 to date, to (i) U.S.S.R.;
(ii) Hungary; (iii) Czechoslovakia; (iv) Yugoslavia; (v) eastern Germany; (vi) Bulgaria?
butter-sales of stocks in storage	Mr. Mcllraith: Return tabled.


Mr. Diefenbaker:: 1.	How much butter is now owned by the government?
2.	Have any sales of the government stock in storage been made since the 1st of July?
3.	If so, to what countries?
4.	What has been the net price received therefor in each of the months since the 1st of July?


Mr. McCubbin:: 1.	33,543,981 pounds.
2.	Yes. Entire balance of 1949 butter, amounting to 9,785,602 pounds, was sold to the trade in Canada during the months of July and August.
3.	Answered by No. 2.
4.	July 50-29 cents; August 50-02 cents. These prices cover the sales of 1949 butter and allow for deterioration in quality resulting from storage, plus charges due to extra handling in having samples withdrawn from storage for grading, tempering, et cetera.


POTATOES-PRICES AND COST OF PRODUCTION
Mr. Hatfield:: 1.	What is the present market price to the growers in New Brunswick for 165 pounds of potatoes?
2.	What is the present average cost to produce 165 pounds of potatoes and place them on the market in New Brunswick?
3.	What is the present market price to the growers in Prince Edward Island, per bushel, of potatoes delivered to the market?
4.	What is the present average cost of production per bushel of potatoes delivered to the market in Prince Edward Island?


Mr. McCubbin:: 1.	$1.00-$1.10, some $1.25.
2.	Information not available.
3.	70 cents per 75 pounds, or 56 cents per bushel.
4.	Information not available.


EXPORTS OF BACON TO BRITAIN
A. Earl Catherwood: How many pounds of bacon have been exported to Great Britain during the nine months ending August 31, 1950?


Mr. Mcllraith:: 74,802,100 pounds.
TMr. Garson.l


MARRIED QUARTERS FOR MILITARY PERSONNEL
Mr. Wright:: 1.	How many married quarters have been completed to date in each military district in Canada?
2.	How many are now under construction in each such district?
3.	For how many are contracts let but construction not started in each district?
4.	What is the average cost of such quarters completed to date in each military district?
5.	What is (a) the highest; (b) the lowest, cost of any single unit now completed in each district?


UNEMPLOYMENT INSURANCE
Mr. Balcom:: 1.	When was the Unemployment Insurance Act brought into effect?
2.	What were the original rates of contributions paid by (a) employer; (b) employee, and the various amendments thereto?
3.	What are the categories of workers covered at the present time?
4.	Are federal, provincial and municipal employees covered under the act If not, for what reason?
5.	Are there any special provisions as regards temporary employees in the public service?
6.	Is any consideration for exemption to be given to companies or organizations who have their own pension plan?
7.	Are those of the income group $3,000 to $4,800 included under the act? If so, for what reason?


Mr. Cote (Verdun-La Salle):: Return tabled.


FRUIT PRODUCTS AND BY-PRODUCTS    IMPORTS FROM UNITED STATES
Mr. Nowlan:: 1.	What were the quantities and values of all citrus fruit juices imported into Canada from the United States during the calendar year 1949, and for each of the months of the calendar year 1950 for which the information is available?
2.	What were the quantities, kinds and values of all apple products or by-products imported into Canada from the United States during the calendar year 1949, and for each of the months of the calendar year 1950 for which the information is available?
3.	What were the quantities and values of all cranberry products or by-products imported into Canada from the United States during the calendar year 1949, and for each of the months of the calendar year 1950 for which the information is available?


George James McIlraith: Return tabled.


OLD AGE PENSIONS
[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinton):: Mr. Speaker, I should like to ask a question of the Minister of National Health and Welfare. In view of the rapidly rising cost of living, will the government before the end of the present session introduce any measure to meet the hardships among old age pensioners? Particularly would the government consider a measure to permit pensioners to earn more income from sources other than pensions?


Hon. Paul Marlin (Minister of National Health and Welfare):: As my hon. friend knows, government policy in relation to all these questions is a matter for the government to decide, and government policy will be announced in due course.



PASSAMAQUODDY TIDAL PROJECT


[Stage Direction]
On the orders of the day:
Mr. A. W. Stuart (Charlotte):: I should like to ask a question of the Secretary of State for External Affairs. Has a report been submitted by the international joint commission with reference to the Passamaquoddy tidal project?


Hon. L. B. Pearson (Secretary of State for External Affairs):: Mr. Speaker, the hon. member was good enough to give notice of his question. This reference concerning the Passamaquoddy project, which was made to the international joint commission on September 9, 1948, is a limited reference, and simply asks the commission to report to the two governments on the scope and cost of a full-scale investigation which would be necessary to determine whether the project would be practicable and in the public interests of both countries.
The commission has not yet made its report to the two governments, but I understand that the commission's international engineering board has made its final report to the commission, and that the commission hopes to make its report to the two governments following its October meeting in Ottawa.



RAIL CONNECTION TO BORDER BETWEEN CANADA AND UNITED STATES

[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I should like
Inquiries of the Ministry to deal with a question asked on September 9 by the hon. member for Peel (Mr. Graydon), who is not in his seat this morning. On that occasion he quoted a press dispatch to the effect that the United States Department of State had told the Canadian government that it wanted to start discussions this month on proposals to build a railroad through Canada to Alaska. The hon. member for Peel asked for an indication as to how far these discussions had gone.
Upon looking into the matter I find that a representative of the United States embassy has told the Department of External Affairs that United States officials may wish to have discussions with Canadian officials some time this month on this matter. The question of holding detailed discussions looking to a location survey has been the subject of conversations with the United States embassy, but no decision has as yet been reached as to how far the matter should be gone into at this time. There is little more I can say on that aspect of the question until further information is received from Washington.
It will be recalled that on November 18 last I informed the house, in answer to a question, that the Canadian authorities had been surveying the possibilities of extending the railway from British Columbia to Alaska and were impressed by the high costs of such a project in relation to the expected volume of civilian and military traffic in the near future.
There is no indication that the views of the United States authorities will differ substantially from our present views as to the merits of proceeding with this project at this time. It would seem probable in any case that the demands of the expanding defence programs of both countries, which are making it necessary to reduce expenditures that are not essential to the defence effort, would make it very difficult to find in the near future funds for a sizable project of this kind. I say this because I believe that a number of people in western Canada have the impression that the United States authorities would be prepared to proceed with a location survey and construction of a railway largely, if not entirely, at United States expense.



WESTERN EUROPEAN DEFENCE


[Stage Direction]
On the orders of the day:
Mr. George A. Drew (Leader of the Opposition):: Mr. Speaker, before the orders of the day are called I should like to ask a ques-
664	HOUSE OF
Inquiries of the Ministry tion of the Prime Minister, to which, may I say, he may not be prepared to answer at this time, other than to give an assurance. Following the procedure of last June, will-he make a statement to the house before we adjourn indicating the position of the government in regard to discussions now taking place with respect to preparations for the defence of Europe?


Right Hon. L. S. St. Laurent (Prime Minister):: As to the discussions which are to take place, I am told that there is to be a meeting of the foreign ministers on this continent at the end of the week, and there is to be a meeting of defence ministers on October 16. If the house is in session at a time when we have anything that could be communicated, it will be at once communicated to the house.



MARINE SERVICE


[Stage Direction]
On the orders of the day:
Mr. T. A. M. Kirk (Digby-Yarmoulh):: should like to ask a question of the Minister of Transport. When will the new lightship, Lurcher No. 2, be ready to go on station at the Lurcher shoal off Yarmouth, Nova Scotia? Has any decision been made as to what disposition will be made of the old Lurcher lightship No. 14?


Hon. Lionel Chevrier (Minister of Transport):: I am informed by the builders of the Lurcher that it will go on station about the end of the first week of October. It is intended to retain the old Lurcher lightship for use as a spare lightship at Halifax and Saint John as the circumstances may require.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. T. H. Goode (Burnaby-Richmond):: Mr. Speaker, I should like to ask a question of the parliamentary assistant to the Minister of Fisheries. In view of the fact that the non-arrival of the famous Adams river run of sockeye salmon on the Fraser river is causing great financial loss to the gill-netters on that river, can the parliamentary assistant add anything further to the report given by the Minister of Fisheries the other day?


Mr. J. W. MacNaughl (Parliamentary Assistant to the Minister of Fisheries):: Mr. Speaker, I wish to thank the hon. member for having given notice of his question. The


only information I can give him is that contained in the report of the international Pacific salmon fisheries commission, issued yesterday in Vancouver.
In that report they state that seven days have elapsed since the special closure of sockeye fishing in the Fraser area was announced on September 5. During this period the commission has had widespread observations carried out to determine any new development or condition hearing on the large Adams river sockeye run which failed to appear as it has done on every fourth year for the past twenty years. These observations have failed to reveal the entry of any new supplies of sockeye to inside waters adjacent to the Fraser river mouth. They have also failed to indicate that the quantities of sockeye remaining in the gulf waters are appreciably greater than was estimated a week ago. During the past few days many jumpers from this body of fish could toe seen directly at the mouth of the river and along the flats as the time approached for them to make their upstream migration. During the past seven days the number of sockeye passing upstream toward the spawning grounds has continued to be negligible. The commission will issue another statement in a week's time, on September 19.



BUDGETARY PROPOSALS


[Stage Direction]
The house resumed, from Tuesday, September 12, 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, and the amendment thereto of Mr. Macdonnell (Greenwood) and the amendment to the amendment of Mr. Stewart (Winnipeg North).
Mr. J. H. Blackmore (Lethbridge):: Mr. Speaker, at eleven o'clock last evening I was arguing that the minister's budget speech was open to attack by reason of the fact that it indicates a financial policy identical with the policy pursued by the Liberal government throughout world war II. That policy failed to make financially possible in Canada what was physically possible. That policy still is failing to make financially possible in Canada that standard of living and national strength which Canadian resources, material and human, could easily support. That policy during world war II added at least $12,000 million to our national debt. That policy inflated prices, thereby cutting the value of the Canadian dollar more than fifty per cent. That policy indicates a financial system utterly inadequate to the needs of a nation of

rich resources in an age of abundance through the use of machines, modern technological skills and solar power.
I indicated my intention to quote from a speech delivered by the Minister of Trade and Commerce (Mr. Howe) to show that Canada is at present able to take her wartime responsibilities in her stride and at the same time provide her people with a high standard of living. At page 446 of Hansard of the present session we read these words:
We must at the same time maintain a decent standard of living consistent with the requirements of defence. We must show the world that the free democracies can be both prosperous and strong.
And again:
We have never had a larger supply of goods and services and a greater capacity to produce more of these goods and services.
Then on page 447:
First, our industrial capacity is so substantial that we can turn out a considerably larger volume of military equipment and munitions than could possibly be used by our own armed forces.
And again:
Secondly, our own preparedness program, large as . it is in relation to past peacetime performances, will still involve over the next year or eighteen months- barring a major emergency-only a small proportion of Canadian capacity and output, perhaps of the order of six to seven per cent of our gross national product. Requirements coming from abroad, even if they are substantially larger than now indicated, are still likely to be in this period only a small proportion of Canadian industrial production. Our preparedness efforts, including foreign demand, in this period are, therefore, likely to be of the order of less than ten per cent of our gross national product. This is a considerably smaller proportion than what we did during the last war. In 1943 and 1944, the years of our maximum efforts, about forty-two per cent of gross national product was either directly or indirectly related to the pursuit of war.
And again on that same page:
There is substantially increased Canadian ability to produce better and more intricate goods both for peace and war.
And again:
All this is evidence of increased production already achieved, and further expansion in sight is indicative of the fact that Canada has the capacity to take increased preparedness efforts in her stride, and still leave substantial resources free for civilian use.
And on page 448:
But with individuals and governments co-operating there is no reason whatsoever why Canadians should not maintain a high standard of living, and at the same time be adequately prepared to defend their way of life against aggression.
I believe the Minister of Trade and Commerce knew what he was talking about. He certainly has his finger on the pulse of Canadian industrial life. Inasmuch as those remarks were made by the minister I contend that certain of the various measures which are being taken in Canada under the budget,
The Budget-Mr. Blackmore and the various things Which are being permitted to occur in Canada, are simply not justified. The people of Canada are entitled to have a high standard of living, but at least eighty per cent of the people are decidedly not getting this.
Let us examine with some care the whole question of production. Looking at the details with which we are all familiar, let us consider this question of production. Does any hon. member in this house believe that we cannot produce all the potatoes that Canada could possibly use, war or no war? Does anyone believe that the people of Canada cannot produce all the vegetables of every kind, war or no war, that the whole people could possibly use, together with enough to support our armed forces? Is there anyone who will say that we cannot produce in Canada all the apples that anybody could use? Let us just stop and look at the prices being asked for apples today in Ottawa and in other towns in Canada. Will anyone say that people in the lower income brackets have access to sufficient apples? Should such a condition be permitted to exist in a nation of plenty like Canada? Under ordinary circumstances is there any question of Canada's ability to produce all the peaches, pears, prunes, cherries and other northern fruits that the people of Canada could possibly use?
Let us now turn to dairy products. As I pointed out the other day, there are few countries in the world better adapted for the production of dairy products than Canada. If we could have even common-sense management in respect of our dairy industry we ought to be able to produce an abundance of every kind of dairy product of which Canadians are capable of producing or using. To say that we have to limit the consumption of dairy products in Canada by any means in order to fight a war is simply to admit that one is out of touch with the facts. Is there any doubt that we could produce all the poultry products that we need in Canada? Surely no one will argue that we cannot.
Then a word with regard to beef. As I pointed out the other day, beef prices are far too high, but it is not beyond the capacity of the Canadian people to produce all the beef that the Canadian people could buy at moderate prices. If prospective producers were guaranteed against loss, they would go into beef production more extensively. Other devices could be used to bring about all the production of beef that we needed in Canada and all that the United States might care to take. Pork is in the same position. Will anyone argue that we cannot produce enough of these products? Will anyone argue that we need, to go on an austerity program with respect to these commodities?

The Budget-Mr. Blackmore
Let us turn to grain. We are producing grains fairly abundantly, but I do not think we are producing more than half of what we could prbduce if we really got down to good management of our grain producing capacity in Canada. We are allowing things more or less to drift along. People are mining the soil and are not replenishing the soil with fertilizers. If we really settled down to a policy comparable with the policies adopted by a number of European countries, where they have fewer resources to waste, we should be able to produce grains in much greater abundance than we now seem able to do.
I would suggest that low-cost beef production loans be made available, and that fertilizers be made available at low or no cost. We should fertilize not only our farms but our pastures and hay meadows. If we were to use the best system of crop rotation that can be devised in Canada it would greatly help. If we were to increase beet sugar production in Canada we would increase the fertility of the land wherever the beet sugar industry was carried on and thereby greatly increase the grain we could produce. If we took care of the appropriate mechanization of our farms so that those engaged in farming could get machines at a low rate instead of the exorbitantly high rate which they now have to pay, and about which complaints have been made by hon. members; if we were to make the best possible use of our irrigation facilities, we would get far more production of all kinds of grain and forage crops than we now are getting. If we were to guarantee prices suitably we could get a great quantity of grain produced that is not being produced now. As all hon. members know, grain is the factor that largely determines the amount of production of which we are capable with respect to beef, pork, dairy products, poultry and the like. Consequently our grain production is a matter of vital importance and should be attacked with scientific, purposeful and effective skill.
Is there anyone who will doubt that we can produce all the honey we need, all the sugar that we can consume, or all the coal that we can consume? When we consider matters of this sort we begin to look with some reservation upon certain of the statements being made by members of the government to the effect that we must tighten our belts and go without because we have to fight a war. In fact some of the statements seem to become genuinely extravagant in the light of the actual facts of the Canadian economy.
I should like to give a little more attention to the matter of grain. It now appears that we are going to have a fine crop. I have not had a chance to check in Hansard what the


Minister of Trade and Commerce (Mr. Howe) said yesterday, but I gathered that one of the reasons why wide spreads are being permitted between various grades of grain is that he wishes to make our grain attractive to foreign buyers. We do not need1 to worry about foreign buyers. We in Canada can use all the grain we can produce this year. I do not mean that we can eat all the products of all the wheat we can produce, but I argue that if we have the grains on hand during the next few years, which are likely to be years of grave anxiety, we shall be a great deal better off than we shall be if we are too eager to sell the grains which we are now producing in a relatively abundant harvest. I know that is quite contrary to the general theories actuating the people in charge of our grain business; nevertheless I contend there is virtue in what I am saying.
Let me give an illustration. Suppose we begin to store wheat on our farms. There was a time when our fathers used to keep a supply of wheat on their farms for two or three years. Is there any reason why we should not be able to do that? If there is, what is it, and what sense is there in it? People will say: What are you going to do about it? Well, solve the problem. How can you do it? Let us suppose that France would normally buy 100 million bushels of wheat. Of course that is all out of line, so let us cut the figure down to 20 million bushels. If we were to sell that grain to France we would expect United States dollars in return. All we do in effect is take the dollars and distribute them amongst our farmers in payment for the grain. I submit this suggestion with the utmost sincerity, and I challenge anyone to find any fault with it: Is there any conceivable reason why the Bank of Canada could not create the money to pay the farmers for the 20 million bushels of grain? If there is a reason why the Bank of Canada cannot do it, is there any reason why a currency commission, such as we used to operate under in 1915, could not do it? In 1914 and 1915 we had a finance act under which the treasury of Canada could create money. That act was strengthened again in 1923. If the present financial set-up is not as effective as what we had under that legislation, it is high time that we looked into the matter.
If we created money to buy the grain and enabled it to be stored in Canada, we would have the grain. It would belong to the government and would not cost the taxpayers a cent. We would have it right on the farms where we are likely to need it. We would have it right in the communities where, if anything should happen to our transportation system by reason of the exigencies of war, people would not be subjected to the danger

of having to go hungry for want of grain. This is one of the kinds of financial possibility that Social Crediters have in mind when they attack the present financial system. People will say that such action will cause inflation. Of course it will not cause inflation! How would payment for 20 million bushels of wheat with Canadian dollar bills or credit cause any more inflation than the same dollar bills or credit created on the strength of money coming from France?
If we used Bank of Canada credits instead of dollar bills, how could it cause inflation? Let us be realistic in our approach to these matters. If we were a little less anxious to sell our grain abroad and a little more anxious to build up a fine reserve to take care of us over the trying years ahead, I believe we would be walking in the paths of wisdom.
In passing I wish to say that the prices for western wheat are altogether unsatisfactory. I do not wish to be too critical of the Minister of Trade and Commerce, but I believe he has made a mistake in setting prices with such wide spreads. I do not believe he has given sufficient attention to the fact that the cost of production for the farmer has increased in every single item, even to the extent of a tax deliberately imposed by governments on the gasoline he uses.
It will be argued that we have not the necessary labour to bring about the production which I have envisaged. I imagine that if the truth were known we would find that there are tens of thousands of persons in industry at the present time who are not profitably occupied. Thousands of men, in my opinion, have been taken into the civil service of Canada who are not profitably occupied. In other words, they are not producing their keep. They have been fixed upon the body politic as parasites. The cost of their keep enters into prices, but they are not producing goods, the only source of wealth in Canada. If the government would look at the whole situation with that fact in mind and devise ways and means, I am sure we would find plenty of labour. There are many farmers who are busy only a part of the year. They are necessarily unoccupied for a considerable period of time. If we devise industry such as stock feeding on the farms so that these men can be occupied, we shall have no trouble finding the labour necessary for the increase in production which I have indicated.
I ask this question: Why should anyone in Canada be deprived of those commodities which we can produce in abundance? Why should the prices of those commodities be allowed to be such that people cannot buy
The Budget-Mr. Fulford them? There is no answer to these questions that will stand up to any critical fact-facing mind.
I have not offered any detailed suggestions as to how to deal with the situation technically, but members of the Social Credit movement know how the financial system of Canada can be so managed that all these matters can be taken care of.
I am warning the government that if it neglects this possibility of the most beneficial use of Canada's credit it will do so on its own responsibility, and will be found wanting in the eyes of future generations when men finally become aware of the monstrous outrages that have been perpetrated upon this nation by a faulty and outmoded financial system.


Mr. G. T. Fulford (Leeds):: Mr. Speaker, in rising to take part in this debate I wish at the outset to pay particular tribute to the Minister of Finance (Mr. Abbott). In this latest budget, which the press of Canada have come to term the baby budget, I feel the minister has adhered to the principles for which the Department of Finance has stood for many years, principles originally outlined by his able predecessor, Mr. Ilsley. We are continuing a pay as you go policy. It is true that there are those who are dissatisfied with the taxes imposed upon certain commodities under this budget, but how can anyone devise a tax that will not pinch somebody? The taxes proposed I think are remarkable in that they pinch so few and upset our economy so little.
Last evening the hon. member for Fraser Valley (Mr. Cruickshank), and yesterday afternoon the leader of the Social Credit party, the hon. member for Peace River (Mr. Low), bitterly complained about the tax levied on candy and soft drinks. These commodities are definitely in the luxury class. The people of Canada can well do without too much candy and too many soft drinks. If they can afford to buy those things surely they can afford to pay the not too heavy tax that has been placed upon them. It is not my intention to moralize or tell people what they should or should not eat; but if you ask any pediatrician or any dentist about the effects on the children of Canada of the amount of candy and soft drinks they consume, I think the answer invariably will be that the younger people of this country have been getting altogether too many sweets. For that reason, if for no other, this may be a service in disguise to the younger generation. I realize, of course, that sugar is necessary to produce energy, but on the other hand statistics show

The Budget-Mr. Fulford that we are one of the largest candy eating and soft drink consuming countries in the world.
I do not think enough publicity has been given to the amount we have paid off our national debt since 1946. While Canada has written off approximately $1,500 million from our large public debt, other countries have been adding to theirs. Just this year the President of the United States proposed a budget providing for a deficit of $5 billion, and that was before the Korean trouble was ever thought of. In other words he proposed an addition of $5 billion to the already staggering debt of that country. Canada is indeed the envy of the nations of the world. Taxation here is high; there is no doubt about that. You cannot pay your way and not have high taxation. But compare our taxes with those in effect in Great Britain. All admit that Great Britain has gone through a terrible war ordeal; that she has had to rebuild her cities, and all the rest of it. That is granted. No one would discount for a moment the tremendous contribution in men, resources and money made by Great Britain during two world wars. The fact remains, however, that taxation there has reached such levels that it is becoming detrimental to the initiative of the people. Certainly in Canada our taxation has not reached the point that private enterprise cannot be carried on in an orderly, progressive fashion.
Last evening the hon. member for Fraser Valley (Mr. Cruickshank)-I wish he were in his seat at the moment-suggested that a tax might have been imposed on margarine; and with that suggestion I agree. That would have been a good source of revenue, and at the same time would have helped the dairy farmer by at least making more nearly equal the prices of margarine and butter. However, I definitely refuse to refer to margarine, which is a good wholesome food, as axle grease, as my hon. friend did.
In the Ottawa Journal last evening a Canadian Press dispatch appeared dated Portland, Ontario, September IJl-and incidentally, this matter was also mentioned by the hon. member for Fraser Valley. The headline reads, "War widow and six children eke out living from $31 monthly". This case is well known to me, as it happens to be in the riding of Leeds, and I believe a few corrections in the newspaper story are in order. It was not my intention to bring up this matter on the floor of the house, but since it appeared in a Canadian Press dispatch to the Ottawa Journal, and also as a feature article in last evening's Toronto Telegram, complete with pictures, I feel that an explanation is due.


Mr. and Mrs. William Oprey were the parents of three children when, in January of 1949, they were presented with triplets. Immediately following this unique presentation the Department of Veterans Affairs sent an investigator to Portland, and as a result an application was made to the provincial command of the army benevolent fund, following which the accounts having to do with the birth of these triplets were paid in full. I personally interested myself to the extent of obtaining the "King's bounty" for them.
Unfortunately Mr. Oprey, who brought his English bride home after the war, died last July. Within a matter of days Mr. Sparling of the Kingston office of the Department of Veterans Affairs called upon the widow and found that she was entitled to certain moneys which had not been received due to an improper registration when the triplets were born. This matter was straightened out, and on August 4 of this year Mrs. Oprey was handed by Mr. Sparling a cheque in the amount of $201.37. Twelve days later, on August 16, a cheque for an additional $251.65 was sent the family. This was on account of the treatment the widow's late husband had had to undergo at Kingston. I understand a further payment will be made to Mrs. Oprey on the same account.
Furthermore, although this veteran's death was not originally attributed to war service, the case was reopened and Brigadier Melville, chairman of the pension commission, reported on September 5 that Mrs. Oprey had been granted a pension. This pension was allowed because of her husband's death -I am not a medical man so I shall have to read the cause of his death; it was due to herniation of nucleus pulposus of the sixth intervertebral disc, and although the immediate cause of death was pneumonia, it could be attributed to war injuries.
I am very glad to say that the pension has been made retroactive to the time of the veteran's death. The widow is now receiving $75 a month; plus $19 for the first child, $15 for the second child, $12 for the third child, and $12 for each of the triplets, which makes a total for the children alone of $82. Adding this to the $75 the widow is receiving, it amounts to $157. In addition to that she will continue to receive the family allowance for her six children, which, according to a Canadian Press dispatch, amounts to $31. Adding the $157 to the $31 makes a total of $188 per month. There may have been some delay in getting this for the widow, but I am proud and happy to tell this house how co-operative all the officials of the Department of Veterans Affairs have been.

As I said before, it was only a matter of days before the first investigator arrived from the Kingston office. Ever since that time this case has been under the closest investigation, and it was through these efforts that the awards I have just mentioned were made possible. I am particularly happy that these awards have been made to this woman, because the rumour was getting abroad that Canadians were neglecting their new citizens from England. This should prove beyond a shadow of doubt that Canada does not forget those who served her in time of dire need, and there is no discrimination. I believe it also answers the point raised by the member for Fraser Valley when he said that these pitiful allowances are no incentive for men to enlist in the Korean brigade. Canada is known for her generosity to veterans and their dependents. This is just another example of the efficiency and humanity of the Department of Veterans Affairs.
I should like to deal briefly, Mr. Speaker, with a matter which has been little discussed during this special session; in fact I believe only one question has been asked about it. It is the all-important subject of the St. Lawrence deep waterway. It was my pleasure and honour to accompany the Prime Minister (Mr. St. Laurent) to Canton, New York, last June when he received an honorary degree from St. Lawrence university. Naturally, the Prime Minister was the speaker of the day, and during the course of his excellent remarks he made a strong appeal to the people of the United States about the number of years Canada had waited patiently for some kind of action on the St. Lawrence deep waterway that would fulfil the promise made to Canada so many years ago. The Prime Minister made his appeal not only to the graduating class of St. Lawrence university but also to the people of the United States, because his speech was carried on a nation-wide broadcast. It was particularly gratifying to sit in the audience composed of university students and graduates and hear the applause with which the Prime Minister's remarks were greeted.
I have lived on the bank of the St. Lawrence river all my life. Anyone who lives on the bank of that river cannot help but grow to love the mighty stream, and at the same time realize the potentiality of its waters which for so many years have been only partly utilized. Now that the whole world is in turmoil, and both Canada and the United States have been compelled to enact legislation concerning the allocation of certain materials for the production of munitions and supplies of war, I feel it is time to strike as hard as we can for the completion of this
The Budget-Mr. Fulford project. All one has to do is to pick up the daily papers of the last week and read the urgent requests made by the Ontario Hydro Electric Power Commission to conserve electricity, in order to realize how desperately this country needs further power development. There is no more beautiful view in this part of Canada than that which one sees from a point just above the city of Cornwall overlooking the Long Sault rapids. When one looks at that view, however, it is appalling to realize that between 216,000 and 260,000 cubic feet per second of water are going to the sea scarcely utilized. This water is capable of producing 2,200,000 horsepower of electrical energy, which would be divided equally between the state of New York and the province of Ontario. This electrical energy would go far towards alleviating the shortage that Canada and the United States are experiencing. It could be utilized to great advantage in the program of industrial expansion which will be necessary if Canada is to furnish the materials necessary for war. When I say "materials necessary for war" I do not mean to imply that it is war; it is materials for the defence of Canada and the north Atlantic nations which is the greatest guarantee that this country and the world have that there will not be war.
Apart from the power development of the St. Lawrence deep waterway, there are the tremendous potential manufacturing facilities along the entire great lakes system right from Prescott in the east to Fort William and Port Arthur in the west. Even today we see vessels passing through midstream of the St. Lawrence river, bearing not only the flags of Canada and the United States, but those of Norway, Sweden, Holland, and in one instance this summer even Iceland. These ships are performing a valuable, but not too economical service, owing to their limited capacity, in taking the goods of Canada direct to the ports of Europe. I have in _ mind one vessel in particular, the Prince Wilhelm III which makes Brockville a regular port of call, and which picks up anywhere from 10,000 to 20,000 cases of condensed milk.
The house will remember that a year ago I expressed some concern about the future of the evaporated milk industry in Canada. That worry has been completely dissipated. The evaporated milk industry of Canada is in a remarkably healthy condition, and I might say that part of that is due to the direct shipments that have been made from the ports of the great lakes and the St. Lawrence river to the ports of Europe.
I mentioned that operation of these ships is uneconomical. That can be understood
670	HOUSE OF
The Budget-Mr. Fulford when they are limited to a length of 250 feet or thereabouts, and a total draft of 14 feet. Were the canals deepened and the waterway and the locks completed, ocean-going vessels of much larger size could penetrate to the middle of this continent, and the commerce of the world would be open to all tlhe great lakes ports of both the United States and Canada.
The point of immediate importance, especially because of our accelerated production for defence materials, is that of obtaining vast quantities of iron ore. Last winter we had the privilege of viewing moving pictures presented in the railway committee room by the Timmins interests. It was a revelation to all of us to see the vast extent of the iron ore deposits of northeastern Quebec and Labrador, iron ore deposits which some believe to be the greatest in the world, iron ore deposits which could and must replace the dwindling deposits of the Mesabi range in the state of Minnesota.
Canada is still obliged to import large quantities of iron and steel. We could be absolutely independent of the world if we could take this iron ore from Labrador and northeastern Quebec to our smelters on the great lakes. True, some of this iron ore will find its way to the Dominion Steel and Coal Company at Sydney, Nova Scotia, but the vast flow will be to the west, up the great lakes to such places as have large steel industries, such as Hamilton and Sault Ste. Marie in Canada, and Cleveland, Ashtabula and other ports in the United States, for transshipment to Pittsburgh and other steel centres. Furthermore, this steel would be utilized directly not only for the manufacture of materials for national and international defence, but also to increase the production of automobiles, trucks, tractors and the shipbuilding industry of the great lakes, and could furnish in secluded waters all the inland shipping that would be necessary in the event of the outbreak of hostilities.
The point I have not heard mentioned is the possibility of bringing the crude oil of Alberta directly from Superior, Wisconsin, by the large tankers which now sail the seven seas, not only to Sarnia but also to the refineries now located in Montreal, which are dependent for their crude oil supply on the Portland, Maine, pipe line, the oil for which comes from South America, the midcontinent fields and the Far East. This would ensure transportation by tankers in waters which at no time would be submarine infested, and therefore would constitute a large safety factor which would be lacking, no matter where the oil came from, if the ocean-going route had to be depended on.


I urge the government ht this time to renew, with all the force at its command, the efforts which I know have been made to interest the congress and the President of the United States to put through the St. Lawrence deep waterway project as a vital necessity at this time if Canada and this entire continent is to increase its production to the maximum.
I had the privilege of standing beside the late President Roosevelt when he made his famous address at the Thousand Islands bridge on August 18, 1938, in which he referred to the waters of the mighty St. Lawrence as dividing the two countries, but he added, "They should in the near future serve as an ever-increasing bond of friendship between our two great countries."


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, during the course of this debate we have had, particularly from the government side, a good deal of theory and a good deal of oratory designed to counteract the rising demand in this country for price controls. I hope that having said that, having characterized what has come from the other side as theory and rhetoric, I will not indulge in the same myself; for what I want to do is to deal with this problem of rising prices in very practical terms, and with reference to one particular group of people in our country. Having done that, I shall make the point that what applies to the one group with which I shall deal applies to a great many other groups of our Canadian people, indeed to our whole population.
However, before I get right down to cases I should like to deal with one of the rhetorical utterances made yesterday by the hon. member for Coast-Capilano (Mr. Sinclair) when- and I think it was a peak that he hit-he said, as is recorded at page 630 of Hansard for September 12:
However, there is one characteristic about the Canadian people. They will not be pushed around needlessly. There is no sacrifice that the Canadian people will not make for their country once they are convinced of the necessity of it. But a Canadian has an instinctive abhorrence and revulsion against unnecessary regimentation, unnecessary pushing around.
Let me say to the hon. member, who is watching me like a hawk as I refer to his speech, that I agree with him one hundred per cent when he says that the Canadian people abhor being pushed around. Where he gets off the beam, however, is when he thinks that price controls mean regimentation and pushing around. The fact of the matter is that what regiments people, what pushes them around and also pushes them down, is the lack of controls which leads to high prices such as our people are experiencing today. The whole concept of our democracy is based upon the rule of law. The logical

conclusion of the position taken by the hon. member for Coast-Capilano is that we should not have the rule of law, but rather that we should have anarchy in our economic affairs. We have had too much of that, and the result has been economic tyranny during far too many of the years our people spend upon this earth. When we ask for the rule of law in our economic affairs, when we ask for regulation and control of prices, we do so because we know that ordinary Canadians abhor being pushed around by blind economic forces. We know they want freedom, and that they will not have real freedom until they have economic freedom, along with those other freedoms we prize so much.
I could go on in that vein, but I must measure up to the challenge I have accepted for myself, namely that of staying away from rhetoric and getting down to cases. The particular cases I wish to get down to are those of our old age pensioners. In particular I want to point out what rising prices have done and are doing to the standard of living of our older citizens.
I have before me the minutes of proceedings and evidence, No. 2, of the special committee on old age security which met during the last session. This is the issue covering the sitting of April 18, 1950. At page 28 we find a most useful and valuable chart which was presented to the committee by Dr. Davidson, deputy minister of national health and welfare. The chart to which I refer is headed "Chart 'A'," and its title indicates that it is a chart showing the value of maximum pension payable from time to time in relation to changes in the cost of living index.
What the chart does is to indicate where the cost of living index stood in each year from 1927 down to the time of the issue of the chart; and in those years where the amount of the pension was changed, the cost of living index is given two or three times, as may be necessary. Then there is a column showing the maximum pension payable during those years. It starts at $240, or $20 a month, as it was in 1927. Then the various increases are recorded, first to $300 a year, then to $360 and then, finally, to $480.
The third column in the chart is the significant one, and is headed, "Maximum pension in 1927 dollar values". In other words this third column shows what the decrease or increase in the cost of living has done, in terms of real values, to the amount of money we are giving to our old age pensioners. The real value, for the purposes of this table, as prepared' by the Department of National Health and Welfare, is based upon
The Budget-Mr. Knowles the value of the dollar in 1927. Obviously the reason that year is taken is that it was in that year old age pensions had their beginning. I shall have something to say later on as to what would be the result if we were to take the period 1935-39 as the base.
At any rate the table shows that during the depression years, when the cost of living index declined, it had the effect, which we can all understand, of increasing the 1927 dollar value of the pension being paid to our people at that time. Similarly it showed that when the cost of living index began to rise, and particularly when it got above what it was in 1927, the dollar value of what we were giving to our old age pensioners began to come down.
I have studied these figures carefully, and I have done some work on them, the nature of which I will set out clearly. For example, I have taken the figures which are given in this table on an annual basis, and divided them by twelve, so that We may see them in monthly terms, which are more comprehensible. Similarly, whereas this table was given to us in April, and therefore had the cost of living index only as late as March 1950, I have computed what would ibe the figure with the cost of living index as it now stands, namely at 168-5, the figure for August 1.
As a result of doing this computation and converting the figures from an annual to a monthly basis, I find that when in 1949 by act of parliament we increased the old age pension to $40 a month, we actually gave to our old age pensioners, in terms of 1927 dollar values, not $40 a month but $29.67. I emphasize that these are not my figures. They are taken directly from this table furnished by the Department of National Health and Welfare. All I have done is to divide the annual figure by twelve, so as to produce the monthly figure. There it is: The cost of living index at that time, in the early part of 1949 when we made the change, stood at 161-6. Let me repeat that with the cost of living index at 161-6 early in 1949, the $40 we gave our old age pensioners was worth at that time only $29.67 in terms of the value of the dollar in the year when the old age pension started.
Since then the cost of living index has gone up to 168-5 as of August 1, 1950, which is the latest figure. The chances are that it is higher than that now. The result is that the cost of living has still further reduced the value of the $40 pension we are now paying as the maximum to our older people down to $28.46 per month in terms of 1927 dollar values.

The Budget-Mr. Knowles
There is nothing in the minister's budget by way of an increase in the personal income tax, but here are persons by the thousands who in effect are paying a tax because the cost of living is decreasing, by the dollars and cents I have given, the amount on which they have to live. I go one step further-I think I am quite reasonable in this-and I ask: What will happen to our old age pensioners if the cost of living index continues to rise? Suppose it rises to 175? I do not think it is out of the way for that to happen if the government takes no action to prevent it. The 168-5 index was for August 1, but here we are at September 13 and the index is probably over 170 right now. If that happens and if the government takes no action to control prices and the cost of living and the index go up to 175, the value of the $40 we are now paying as a maximum to our old age pensioners will go down to $27.40.
I should point out that the same thing is happening to the ceiling placed on old age pensioners' incomes. As hon. members know, and as was emphasized this morning by the answer to the question the hon. member for Eglinton (Mr. Fleming) put to the Minister of National Health and Welfare (Mr. Martin), there is a ceiling on the amount of income, including pension, of $50 per month. When the government set that ceiling in 1949 it was worth only $37.09 in 1927 dollar values. With today's cost of living index that $50 ceiling has a value of only $35.57 in 1927 dollar values. If the cost of living index should rise to 175, the ceiling would then be down to a value of $34.25.
It does seem to me that this is no time for theorizing against price controls, such as we had yesterday in the oratory of the hon. member for Coast-Capilano. When you realize that in plain dollars and cents the standard of living of our older people is being depressed day by day, both in the reduction of the value of their pension and in the reduction in the value of the ceiling on the amount they are allowed to earn from all sources including pension, it is time to do something about it.
I should like to point out that in what I have been doing thus far I have been following the idea which was presented to us by Dr. Davidson on April 18 when he gave us the fluctuations in the value of old age pensions in terms of 1927 dollar values. Most of us are accustomed to considering changes in the cost of living or dollar values in relation to the base set by the bureau of statistics, namely, 1935-39. In 1935-39 the cost of living index was considerably lower than it was in 1927. In other words, the value of the dollar was quite a bit higher. I submit that

it would be a more accurate portrayal of the situation of our old age pensioners if we were to compute the value of the pensions they are now getting in terms of 1935-39 dollar values, that being the base period determined by the dominion bureau of statistics. Considered on that basis the situation is far worse.
Taking the 1935-39 base period as 100, the 1949 cost of living index of 161 -6 would make the $40 maximum pension which was then granted worth at that time only $24.75 in 1935-39 dollar values. It means that with the present day cost of living index standing at 168-5, the $40 we are paying our old age pensioners is worth only $23.73 in 1935-39 dollar values. Similarly if my prognostication is correct, if the government does nothing about it and the cost of living index goes up to 175, which may happen before we come back next year, that would mean that the $40 we are paying our old age pensioners would be down to $22.85 in 1935-39 dollar values. To carry that projection a little further just to see the arithmetic of it, if the cost of living index were to go as high as 200, then the value of the $40 we are paying our old age pensioners would be cut in half and would be worth only $20 in terms of 193539 dollar values.	.
The hon. member for Saskatoon (Mr. Knight) points out to me that I am taking the most conservative position possible in connection with this matter. Old age pensioners spend a large portion of their money on food, and the food index is considerably above the general index. At present it is up to 216-7. If I were to use that figure, or some figure higher than the general cost of living index, in an attempt to get at what is actually the cost of living for old age pensioners, it would be clear that the situation is considerably worse for our older people than I have shown it to be with the figures I have given.
Let me go on with some more of the figures I have. On the basis of the 161-6 index, which was the figure when we made the pension $40 per month, in 1949, the ceiling of $50 was worth only $30.94 in terms of 1935-39 dollar values. With today's cost of living index of 168-5 the $50 ceiling is worth only $29.66 in 1935-39 dollar values. Similarly, if the index should go to 175 the ceiling would be worth only $28.56 in 1935-39 dollar values. If it got as high as 200, the ceiling would be down to $25 per month.
May I point out an interesting situation with regard to the years during which price controls were in effect. We all know that price controls benefited the whole community, but as I have been picking out one particular group in which I am interested I

should like to go on to show what price controls did for old age pensioners during the war years.
I find that in. 1941, 1942, and a part of 1943, when the pension was only $20 a month- and it was really pretty bad that it was so low-nevertheless the value of the pension in terms of 1927 dollar values was always a little more than $20 a month. Similarly, when the pension became $25 a month, it was only $25, a shameful pittance if you will, but at least its value in terms of 1927 dollar values was always a little more than $25.
On the other hand, when the removal of price controls began in 1945 and 1946 the reverse became the case and the value first of the $25, and later of the $30, went down below the actual amount of cash being paid to our old age pensioners. In other words, Mr. Speaker, I submit the case is very clear that when we had price controls we protected the value even of the small amount of money we were giving to our old age pensioners. Now without price controls we are letting the value of a slightly larger amount of money deteriorate almost to the level of the smaller amount that we were paying some years ago.
I am glad to note the interest-and I hope it is that-that the Minister of National Health and Welfare is taking in my remarks. I have a notion that this sort of thing worries him. At least it should. I believe that it worries him to think that the amount of money that his department is responsible for paying out to our old age pensioners is being allowed to deteriorate in this way and our old people made to suffer beyond all decency and reason.
The moral of all this is surely very clear. There are of course two main conclusions to be drawn. On the one hand, I think it is clear from the figures I have given why the people of Canada are today asking for price controls. They are asking for them for the very reason given yesterday by the hon. member for Coast-Capilano, that they do not like being pushed around and that is what blind economic forces are doing-relentlessly depriving our people of the standard of living they thought they had won,
I suggest that the case I have made for old age pensioners can be made similarly for every group on fixed incomes. It certainly applies to superannuated civil servants. It applies to those on the burnt-out pension and to those on disability pension. It applies to a great number of our people whose incomes are of that nature, and it also applies to the wage earners who know from experience that their wages, even when they get increases, never catch up with prices that are continually rising.
The Budget-Mr. Knowles
On this occasion, however, I have presented the case for one group. I submit that that in itself is sufficient reason for the government to change its position with respect to price controls and introduce the necessary legislation to prevent our people, and especially our older people, from being pushed around in this way, and to protect their living standards.
The other lesson that I think must be drawn from what I have presented to the house this morning is the need for early action with respect to the implementation of the report of the special committee on old age security made to this house on June 28 of this year. I want to pick my words very carefully in dealing with this matter, despite the fact that behind my words there is very deep feeling and determination. I do not want to say anything, or have anyone interpret my remarks as indicating anything, that in any way could interfere with the forthcoming dominion-provincial conference agreeing to implement the recommendations of the committee, as a minimum objective. On the other hand, Mr. Speaker, I think that unless some voices are raised pretty strongly the dominion-provincial conference may be influenced by the kind of irresponsible editorializing that is going on in some of the newspapers of Canada calling upon the government to defer the implementation of the report, and calling upon the people of Canada to agree to the deferment of its implementation.
I think most hon. members will recall that when this question came up on the floor of the house rather unexpectedly last June I did not hesitate to get to my feet-


Mr. Rinfrel:: You never do.


Stanley Howard Knowles: -and say that, even though the report did not go as far as I wanted it to go, I felt that the job of members of parliament of all parties was to get behind the report and make sure that it was implemented, whatever the next stage might be. Certainly that was the position to take in the sense that nothing less will do; but I call to the attention of the government, and particularly the Minister of National Health and Welfare, the kind of propaganda that is now being put before our people in the editorial columns of some of our newspapers to the effect that because of the international situation the recommended changes will have to be deferred.
Rising prices, with their corollary of depressing the value of the old age pension, make it imperative that something be done about this matter now. In fact I would say to the government that the time within which

The Budget-Mr. Knowles the people of Canada will accept the implementation of only what was in that report will soon run out. When the report was tabled last June, conditions at that time seemed to justify a report of that kind, going only as far as it did; if nothing is done to implement it in a matter of months, by next year, with prices higher, that report will not be good enough. Many people feel that it is already time to revise the recommendations of the report, to raise the amount to at least $50 a month without any means test, and perhaps to make other changes.
I cannot urge the government too strongly about the seriousness of this matter, and as to the seriousness of the time element in the whole question. I notice that the trades and labour congress convention has before it, if it has not already passed it, a resolution respecting this matter. They are asking, and justifiably so, for $50 a month, whereas all the report asks for is $40 a month at age seventy free of a means test, and $40 a month from sixty-five to sixty-nine with a new type of more liberalized means test. Times are moving, and one of the reasons why times are moving so fast with respect to this matter is that the government has done nothing with regard to price control. I submit that when the government goes to the dominion-provincial conference this fall and this question is being dealt with, the government should make its position clear that the will of parliament was that that report-certainly nothing less -should be implemented without delay.
I point out that the recommendations of the report do not involve any increased burden on the provinces. The report indicates that clearly and gives figures in proof thereof. The report indicates that implementation involves finding additional revenues at the federal level to the tune of about $250 million a year. When that figure was discussed in the committee last year there were some who thought it was a staggering sum, and that the committee had to act responsibly about it, and it did. But when we came to this session and were faced with huge expenditures, the first thing that the Minister of Finance (Mr. Abbott) was able to tell us was that conditions had improved to such an extent, and prices were up to such an extent, that the tax rates already in effect are going to produce $180 million more this year than he estimated when he brought the budget down at the last session. You know, Mr. Speaker, it is strange how huge these sums are when you ask for $250 million for old age pensions, but how easily this $180 million just turns up in the minister's speech. I think he should make a speech once a week if he can turn up money that easily.

The taxes he proposes in this budget are not very severe, after all, according to the hon. member for Coast-Capilano. He made it clear that in his view they are pretty easy. They amount to some $59 million, which together with the $180 million that was found by the minister in the manner I have just indicated makes a total of $239 million. Right there you have an amount, found quite easily, almost equal to the amount it would cost to implement this report so far as the federal treasury is concerned, bearing in mind again that it involves no increase at the provincial level.
May I point out also that the minister has made clear that the taxation measures he now proposes would net in a normal year around $2,800 million, which is $370 million more than was proposed when the budget was brought down last year. That is an amount considerably larger than the cost of these old age pensions. I am not suggesting that we should take this money we are voting this session away from the defence effort and put it into the old age pension account, but I am suggesting that if it is possible to find this money so easily for the defence effort, it is possible to find it for such an important purpose as old age security.
I suggest also that these figures do not represent the total as far as the defence effort is concerned. We have approved commitments for future years, and we have the large sum of money we have voted for help to our western European allies. So all told it is pretty clear that the money can be raised when it is wanted. I know that is an opinion expressed every day by the man in the street. It seems to me that is a sound opinion, and I agree with it-that if money can be found for defence purposes it can be found for such an important matter as social security. I urge also that this is part of the whole battle on the ideological front. Indeed, if we are going to win the war of ideas, if we are going to convince our people that our democratic way is not something we should prize just because we have inherited it but that we really believe in it, one of the things we must do is improve our whole position with respect to social security. The Secretary of State for External Affairs (Mr. Pearson) said that in his speech earlier this session, and he said that this was a time to redistribute the load on the camel's back. With that we agree.
I would point out as well, to those who argue against the implementation of this report at the present time on the ground that it would produce an inflationary effect, that the recommendations of the committee called for the raising of that additional $250

million by taxation. As a matter of fact, though the committee could not agree on a precise recommendation, it did make suggestions as to how that money could be raised, namely, in the field of taxation on individual incomes and on employers or corporations. I submit that for any editorial writer to say that such a program would involve inflation means that he just has not read even the last chapter of the report. It might be argued that throwing new money into the stream to pay this $250 million would be inflation, though even that is arguable; but you cannot argue that it is inflationary in any sense at all when you take $250 million out of the economy in the form of taxes and pay it out in the form of increased old age pensions. That is just redistributing the load on the camel's back, and as a matter of fact it might turn out to be an anti-inflationary move; for the result might well be a draining off of some purchasing power now being devoted to luxuries, using it instead for the purchase of necessities such as food and clothing, which the Minister of Trade and Commerce tells us are in good supply.
So, Mr. Speaker, on all counts I am convinced that the time has come for the immediate implementation of this report. The figures I gave in the earlier part of my remarks would indicate the absolute necessity of this. As a matter of fact I submit that it is already too late for $40 a month at age seventy without a means test; it is now time for $50 at age seventy without a means test, and for a better deal for those sixty-five and up. I contend, as I have stated already, that the money can be found. We have shown that this session. I point out again that to argue that this would be inflationary is completely false in view of the terms of the recommendations made by the committee.
I believe I have kept within the position I indicated a few moments ago, when I urged that what I was saying was not to be interpreted by anyone as interfering in any way with the discussions at the forthcoming dominion-provincial conference. I feel rather that the kind of editorials that have been appearing in our newspapers might be read by some of those attending that conference, and that it is time other voices were raised to remind them that this parliament is behind the recommendations contained in the unanimous report of last session's committee. That is the will of this parliament, and the government should make that fact known to the dominion-provincial conference when it meets to discuss this whole matter.
Now, Mr. Speaker, I have just one other point to deal with before I sit down. I am back to where I started in one sense, namely 69262-43J
The Budget-Mr. Knowles that I am thinking of some of the things said yesterday by the hon. member for Coast-Capilano. This indeed was a supreme example of how rhetoric and oratory can be impressive even though one gets away from the facts. At page 630 of yesterday's Hansard the hon. member mentioned our complaining about the cost of living index standing at 168. Then he said:
Let us look at that for a moment. The 168 is based on what? It is based on the average cost of living between 1935 and 1939. Let us remember the conditions in 1935 and in 1939. In 1935 we had the worst unemployment the country had ever known. Even by 1939, according to a royal commission, seventeen per cent of our working force were without jobs.
He went on to say that prices were low then, but wages were also low. Then he said:
, There is not a Canadian worker I know today who would want to go back not only to the 1939 prices but to the 1939 employment level and wage scale.
He went on to say:
I think perhaps the time has come when the base should be brought more up to date.
The whole inference was that those of us who talk about the cost of living index are somehow trying to take the country back to the base period of 1935-39. The hon. member for Coast-Capilano knows better; but what he does not seem to be prepared to admit is that the cost of living index, based as it is upon the 1935-39 level, merely says that today it would cost 168-5 as compared to 100 to buy the same budget of goods and services that were acceptable to the Canadian people at that time. I checked this very carefully, by reading again about the cost of living index both in "Canada 1950" and in the Canada Year Book, and by talking with the dominion statistician about the matter this morning. It is very clear that the cost of living index is still based upon the same total quantity of goods and services that it was based upon in 1935 to 1939. The hon. member is right; our standards are higher. Today we think people should have more to eat, better clothes and better homes than they had in 1935 to 1939. If that is so then the real cost of living today, taking into account the higher standard of living that the hon. member rightly argues for, is not 168-5 compared to 100 but is probably well over 200. I agree with him on one point, that it is time we had a new base. I understand from the Canada Year Book that the dominion bureau of statistics is working on a new base. The point is that when you study closely the basis of the cost of living index, you find that the view of the man in the street-and the housewife in particular- is quite correct; the cost of living index is too conservative. The position is really far worse than those figures indicate.
676	HOUSE OF
The Budget


Mr.   DiefenbakerMr. Abbott@: What is the wage index today?


An hon. Member:: What is the price of wheat?


Stanley Howard Knowles: The same old question. The minister and the members of this house know that the experience of the worker and the housewife is unanswerable-that when wages go up they do not overtake the rising cost of living.


Mr. Abbott:: If we are talking about indexes, then the wage index has gone up more than the cost of living index.


Stanley Howard Knowles: My hon. friends can say what they wish, but they know from actual experience that what I am saying is so. People do not get increases in wages to equal the rise in the cost of living, even on a statistical basis, let alone on the basis of the higher standard of living to which our people are entitled, which is not reflected in the official cost of living index.
So, Mr. Speaker, because of the facts and figures which I have presented to the house today, I feel that two things must be done right away. Price controls must be brought in, and the recommendations of the old age security committee of last session-or something better, such as $50 a month-must be implemented without delay.


Mr. J. G. Diefenbaker (Lake Centre):: Mr. Speaker, there are one or two references I should like to make, in view of the fact that we are now approaching the end of this session. One of them has to do with the meetings that are taking place during this week and the weeks to follow: The meeting of the foreign ministers of Britain, France and the United States; the prospective meetings of the twelve foreign ministers of the Atlantic pact countries, and the meeting of the general assembly of the United Nations.
We were brought here for the purpose of doing something to meet the situation with respect to the aggression that today threatens Korea and every part of the world. The Secretary of State for External Affairs (Mr. Pearson) is about to leave this country to confer with the foreign ministers of the other Atlantic pact countries; yet the Prime Minister (Mr. St. Laurent) has indicated that this house will receive no further information at this time. Yesterday in the British House of Commons Mr. Churchill pointed out the difficulties and dangers in Europe. I am not going to read what he said; it was placed on Hansard last evening by the member for St. John's East (Mr. Higgins). Mr. Churchill is giving full support to the Attlee government in the extraordinary measures that are being


taken in Great Britain. He has stated that the situation today in western Germany requires action now if the peace of the world is to be preserved. Amongst other things, he has called for two or three divisions to go to Europe from Canada.
The minister is leaving now to represent Canada at these meetings, but there has been no suggestion from the government as to what stand Canada is going to take. Within the last three days, namely, on September 9, the Christian Science Monitor has dealt with this matter. The article refers to a proposal to station between five and ten American divisions on the continent of Europe as the United States contribution to the North Atlantic treaty organization's defence forces, provided that Great Britain and Canada put additional troops on the continent as well. The article states:
The decision to send five, six, or up to ten United States divisions to France, if other treaty countries contribute their share, shows a real determination on the part of the White House to act that is reflected by both parties at the capitol.
What is Canada's attitude to be? Is this matter to be discussed in parliament? Are the representatives of Canada to go to this conference without any discussion or decision by parliament? Anxious as is anyone to go home at the conclusion of the session, I contend that if it was necessary to call parliament together to meet the situation in Korea, it is an affront to this house, with parliament now sitting, for the Prime Minister to say that our representatives will go to this conference without any statement being made to the house about the attitude to be taken toy the Canadian representatives. The Prime Minister may laugh, and by his attitude indicate that the representatives of Canada are to go to the conference without an expression of opinion from parliament, which surely has the right to toe placed in possession of the facts. The serious situation in Europe has been mentioned not only in the United States, but also by the former prime minister of Great Britain. All we are asking, and I -think we have a right to ask it, is that Canadians as a whole shall know what Canada's attitude is to be.
Yesterday, the member for Coast-Capilano (Mr. Sinclair) said that there were periods in two world wars when the United States was not at war when Canada was, and that is true. But today we are building up an international organization to prevent aggression, and Canada has accepted some responsibility in that regard. Surely, when aggression faces Europe-as it must, otherwise Mr. SEPTEMBER 13, 1950
Churchill would not have used the words he did yesterday-parliament has the right to know what the stand of Canada's representatives will be in relation to decisions which may well assure our defence against aggression for a period of many years.
At one o'clock the house took recess.
The house resumed at three o'clock.


John George Diefenbaker: Mr. Speaker, when the house rose at one o'clock I was referring to the situation in Europe as outlined by Mr. Churchill and had stated that I did not intend to quote his remarks. I now feel that a portion of them should be quoted so that I can found my argument on them:
Winston Churchill appealed in parliament today for "a European army of at least sixty to seventy divisions" to make "some sort of front in Europe." He was speaking in the debate on Britain's new three-year rearmament drive.
"We have to form as fast as possible a European army of at least sixty to seventy divisions to make some sort of front in Europe and to close what I have called the hideous gap in the protection of western Europe from the Russian communist onrush to the sea."
A little later on Mr. Churchill said:
If an army of sixty to seventy divisions can be deployed on our gaping eastern front, the greatest threat of world war in the next three or four years will be substantially diminished if not indeed removed.
This will undoubtedly give the western democracies the best chance of securing a return in the normal relationships of states and nations. Whether we shall have time or not no one can tell.
Finally he went on to ask for two or three divisions from Canada among others for Europe. In these words he again stated the gravity of the situation as it has been stated on many occasions in this house during the present session. The situation referred to by Mr. Churchill in these terms is such as to be not only grave but dangerous if the necessary action is not taken. He expressed the hope that if action was taken we might indeed be assured of peace over the years.
Having regard to the importance of the meetings which are about to take place I said this morning that parliament should not be adjourned without parliament being advised and Canadians being told whether or not Canada intends to act. Having regard to the challenge given by Mr. Churchill and supported by Mr. Attlee I ask whether Canada intends to act. At least we in parliament should know what will be the attitude of those who represent us at the important meetings that are about to take place.
The Secretary of State for External Affairs will be attending these meetings. Surely we
The Budget-Mr. Diefenbaker have a right to expect some indication as to what Canada's stand will be. When I say that I do not mean to imply that any other nations should dictate to us, I mean that parliament has a right to expect that the attitude to be taken by Canada's representatives be known. That is not asking too much. The view to be taken by the British representatives at these meetings is known; they have already expressed themselves. Before leaving the British House of Commons the members of the ministry indicated it. Why should we in this country, with parliament sitting while these events are taking place, be denied information as to whether or not Canada agrees with Churchill and Truman that it is necessary to have these divisions available in the interest of international defence, in the discharge of our responsibilities under the United Nations agreement and the agreement binding the Atlantic nations?
Why should we not have that information? Why should we adjourn at this time and be told to go back home, that all will be well; trust us to do what is right? After all, parliament has the right to say, parliament has the right to indicate, parliament has the right to be consulted on the decisions to be made on matters so momentous as these. Certainly we were weeks and weeks late in regard to Korea. Under the circumstances as outlined yesterday in the British House of Commons, we cannot afford to be late in regard to the situation in Europe itself.
Mr. Speaker, in asking the government to let us know what are the plans, what is the general purport of the contribution to be made by Canada to these deliberations? Certainly no word has yet been uttered in this house, so far as I can recall, except the general words of the Secretary of State for External Affairs, which would indicate where Canada will stand on a matter so important as this.
After several days of debate, parliament has voted many millions of dollars, and has done it willingly because the Canadian people as a whole are anxious and desirous that everything shall be done. No one in any part of the house will deny that for several years, from 1945 on, we were in a state of apathy, brought on by the fact that we believed the possession of the atomic bomb to be our defence against any possible aggression. We developed a Maginot line
678	HOUSE OF
The Budget-Mr. Diefenbaker mentality. That mentality has gradually disappeared since it was generally realized that the U.S.S.R. now has an atomic bomb of its own.
There has been $1,500 million spent over the last few years, and little to show for it. Hundreds of millions of dollars are now voted, and there has been no suggestion on the part of any minister of the crown, except in generalities, that the wasteful expenditures that must have taken place in connection with the hundreds of millions of dollars that have been voted will cease, will end, once and for all, in this country.
Certainly the granting of further hundreds of millions of dollars will in no way change the attitude of those who are in charge of expenditures. Canada has little to show for the many hundreds of millions which have been spent. We ask, as the Canadian people ask, and as they have a right to ask: What is going to be done? What measures are to be instituted by the government to ensure the end of wasteful expenditures and ensure effective and efficient expenditures?
There has been no suggestion on the part of the government that any serious reduction in unnecessary civil expenditures is to be made. There has been only the expression of a pious hope that departments of government will be notified that they ought to reduce their expenditures. We in parliament have the right to demand that there will be a reduction in expenditures which are unnecessary and which are too often made. Again we have not that assurance. What assurance have we to carry back to the people of Canada that the present extremely high cost of living is to be reduced? What message have we to carry back to them that inflation is to be met? After all, it is the sixth column, and it does almost as much as the fifth column in destroying effective defence expenditure.
With the exception of a few powers granted to the Minister of Trade and Commerce (Mr. Howe), and some powers in connection with consumer control, there is nothing that will meet the situation and answer the call of the Canadian people that something be done at once, as it is being done in the United States, to curb and to stop the results of inflation.
Indeed, an examination of the budget will show that one person has been forgotten, and he is the consumer. The continually rising cost of living, which over two and a half years ago we were led to hope would be stabilized at 145, has climbed up and up. While parliament sits, prices increase.
The problem of inflation we have not faced. The government has given no effective leaderfMr. Diefenbaker.]

ship in facing it. If it were giving effective leadership, steps would be taken to cut down civil expenditures. Over and over again, as in the British House of Commons, we in the opposition have asked for the setting up of a committee on estimates, to the end that<at this time we should reduce to the limit unnecessary expenditures.
The hon. member for Coast-Capilano said yesterday that if it was a case of making a choice between chocolates and guns, there would be only one answer. That, in effect, was what he meant. We are to get $18 million or thereabouts in revenue in consequence of the imposition of the tax on chocolate bars. But how many millions could be saved in travelling expenses and living allowances? I am not going to name persons, unless anyone wishes to have them named. $22 million was expended last year in travelling allowances and expenses. I shall give the house a few of them: $8,360 salary; $12,000 allowances, $5,868.34 travelling expenses, and $528 removal expenses. That is one person. Here is another: $6,900 salary; $11,652 allowances, and in addition the Canadian people paid his living allowances. One of our international representatives received his living accommodation throughout the year, a salary of $10,000, and allowances of $14,392.
I can give the pages of the public accounts if anyone wants them. That type of expenditure is not justified. Canada of course has to keep up a certain standard as a nation, a standard in keeping with her responsibilities. Here is another: $8,000 salary; $12,936 allowances, $1,903 travelling expenses, and $2,870 removal expenses. On top of that there is living accommodation.
How many of these are there? Well, last year I asked this question:
How many civil servants or officials in the fiscal year 1949-50 received in addition to salaries and travelling expenses, living allowances in excess of $5,000?
The answer was that there were seventy-two with living allowances in excess of $5,000, in addition to being paid salaries and travelling expenses. Why not restrict such expenditures, unjustifiable as they are today? Give reasonable and fair allowances and expenses, but many of the seventy-two who are referred to in this return should not have been allowed such heavy expenditures. I suggest that if a matter of this kind were submitted to a committee on estimates we would save several millions of dollars without in any way detracting from the efficiency of government.
When I go back to my constituency I will be asked as other hon. members will be

asked: What did you do to stop profiteering? The only answer I can give is: We did not deal with it this time. How is it to be met? Certainly the situation today demands action. While profiteering does not occur in general, it certainly occurs in particular cases which will come to the minds of hon. members in all parts of the house.
What is being done? While the cost of living continues to rise, the Minister of Justice (Mr. Garson) has a committee sitting for the purpose of ascertaining why the Combines Investigation Act is not working as efficiently as it should be. Certainly nothing is being done to meet inflation; nothing is being done about profiteering.
Hon. members of the C.C.F. have moved an amendment asking that the excess profits tax be imposed. The plan has been ridiculed by one hon. member. Some years ago it was held up in the house by members of the government as one of the most effective forms of taxation to prevent injustice by those who would extract from the people of Canada the last dollar they could pay. Of itself it would not be effective in removing the profiteering referred to in the amendment. Other things are required in addition. Above all we need the assurance of the government, as represented by the Minister of Justice, that the Combines Investigation Act will be used effectively rather than sparingly and too often against those who are not responsible for profiteering to the same extent as others who are not being prosecuted.
I come to the matter of civil defence. This matter was discussed at the mayors' conference in Saskatoon. No one looks forward to the day when we may be subject to atomic attack but the possibility must be faced. The hon. member for Lanark (Mr. Blair) referred to this matter at length, but that subject we have not dealt with in this house. We do not know the attitude of the government. I realize that the administration of civil defence must rest with the provinces, in particular with the municipalities who would supply the necessary hygienic, police and fire administration, but the extra expenses, imposed by the necessity of preserving our towns should be met by the federal authorities.
Mention has been made on several occasions of the necessity of increased production. There is nothing in the budget that encourages increased production, except that the income tax is not being increased and there is but a small increase in company taxation. In the United States, under powers analogous to those being given to the Minister of Trade and Commerce, production is to be encouraged by means of pro-
The Budget-Mr. Diefenbaker duction loan guarantees. Every effort is to be made there to expand and develop hidden resources, and the production of copper, iron, zinc and other commodities requisite to the mobilization of the nation.
In this matter of increased production I suggest that something must be done for the western wheat farmer in connection with an injustice that is growing from day to day in the changing of grades. I have received one letter after another about the growing dissatisfaction of the Saskatchewan farmer with the system of wheat marketing. One farmer says that he has heard of several cases in which the grade has dropped as much as three grades overnight. The farmer will be receiving 35 cents less per bushel as an initial payment this year than he received last year, and a large portion of the crops has been affected by frost and drought. Grades are down. If we are to expand the production of wheat next year, which after all is the cereal food upon which our defence depends, there [DOT]will have to be a full investigation of this situation by the board of grain commissioners to the end that injustice in connection with grading will be removed and thereby the highest possible return secured for the farmer.
The hon. member for Royal (Mr. Brooks) dealt at considerable length with the necessity of decentralizing our industry; but have we heard anything about the subject from the government? During the last war industry was centralized in Ontario and Quebec, and to a lesser degree in British Columbia. The trend today in the United States is to decentralization. If there is to be expansion and development of industry on the prairies, power projects such as the one proposed for the South Saskatchewan river must receive the attention of the government.
According to the Minister of National Defence (Mr. Claxton) there is danger of atomic attack on our industrial production. I have a report of a speech he delivered in Toronto, in which he pointed out that danger and indicated that he believed in the necessity of decentralization. This cannot be done unless there is the necessary power development. Power developments such as the one proposed for the South Saskatchewan river are necessary if there is to be an expansion of industry in Saskatchewan. By decentralization we could build up our economy and at the same time lessen the dangers of atomic attack.
I think Canadians as a whole are asking about the matters I have referred to today. They are asking: What is the plan? What is expected of us? Will profiteering be ended

The Budget-Mr. St. Laurent as far as possible? Unless inflation is stopped we shall have to reduce our standard of living and the production of the requirements for defence. Surely parliament has the. right to know what the government is going to do. The people of Canada have a right to know what their trustees intend to do in general. We gave the government during the last five years a blank cheque of $1,500 million to spend on defence. Having regard to that expenditure I wonder how many hon. members believe that our defence has even been partly secured? The attitude of the government has been: Give us the money and we will do the job. They had the money for three or four years and yet today we are fearful-I feel restrained from saying more -that all that should have been done has indeed not been done.


Louis Stephen St-Laurent: Mr. Speaker, those of us, and there are several, who saw last night the press dispatch reporting the speech made by Mr. Churchill in the House of Commons at Westminster and who have read the newspapers are not at all surprised to hear hon. members on the other side of the house echoing that speech and putting it forth as a great challenge to the Canadian people. I should like to suggest to hon. members opposite that they might take their cue from the headline covering the report of that speech in a newspaper with which they are not altogether unfamiliar. I refer to the Montreal Gazette. The headline in this morning's Montreal Gazette is:
Churchill hits U.K. defence plan.
Underneath there is the following:
Asks seventy-division European army; two or three divisions from Canada suggested.
It should not be forgotten that at the present time Mr. Churchill occupies in the House of Commons at Westminster the same position that is occupied in this house by the hon. member for Carleton (Mr. Drew). He is the leader in that house of His Majesty's loyal opposition, responsible to the electors of the United Kingdom. In this country it may be surprising to some, but I am sure not to very many, that decisions about the formation and use of Canadian armed forces are to continue to be made by the government of Canada, and by the House of Commons responsible to the electors of Canada.
The hon. member wishes to have some further information. I will say to him at once that the government of Canada at this time is not considering the raising of Canadian forces to dispatch to Europe as a deterrent to aggression in Europe, and has not before it any such suggestion from any of the governments of the North Atlantic treaty nations.

Some three weeks ago it had some suggestions from the council of deputies of the permanent members of the North Atlantic treaty nations as to the provision of arms and equipment for increasing the deterring forces in Europe with respect to any possible aggression against them there. Those suggestions were considered. The decision of the government in respect thereof was brought to parliament, and parliament has appropriated $300 million as an answer to that suggestion.
It should be realized that the planning under the North Atlantic treaty is being done by the governments of the North Atlantic treaty nations, and not by the opposition parties in those respective nations. Personally I do not expect that those governments will suggest that the armed effort of a nation of some fourteen million people for the purpose of deterring aggression in Europe should be twenty or thirty per cent of the armed effort of a nation of 140 million people. Nor do I feel they are apt to suggest that the best value to be obtained from Canada's contribution would be by sending men to Europe, and housing, clothing, feeding and providing for them there, rather than by using those men here to help in our production of arms and equipment for men available in Europe, whose need of arms and equipment is greater than the European countries themselves can meet.
I say that because it seems perfectly obvious to me that if we are to get the greatest possible effective strength in Europe for the money and resources we devote to national and international security, $300 million spent on the equipping and arming of men already in Europe, men who are there, who have to be fed, clothed and lodged even if they are not armed, is going to provide much larger forces than the expenditure of the same amount of money in raising, equipping, arming, training, feeding, clothing and sheltering young Canadians who would, under the present condition of full employment, have to be drawn from the productive stream of this nation.
The government's present plans with respect to its obligations to the United Nations or to the members of the North Atlantic treaty group have been disclosed to the country and to the house. If and when those plans are changed or enlarged the government will follow the constitutional practice of formulating the decisions here in Canada, and of communicating those decisions at once to parliament so that members of the Canadian parliament will also have the opportunity to discharge their responsibilities to the Canadian public. If and when the governments of the North Atlantic treaty group cease to have the confidence of their respective

constituents, the opposition parties in the United Kingdom, Canada or elsewhere, wherever that might happen, will then have the responsibility of doing the planning in their stead; but until then the role of opposition parties and opposition leaders will no doubt continue to be that of critics hitting defence plans just as hard as they can.


John George Diefenbaker: Do you say that Mr. Churchill did that over the years?


Louis Stephen St-Laurent: I say that the Montreal Gazette, which is not unknown to my hon. friend, carries that as its headline over the speech which he brings to the attention of the house as a challenge to the Canadian people.


George Alexander Drew: Politics first.


Louis Stephen St-Laurent: Politics first because politics is the art and responsibility of governing democratic nations. It may be that some opposition leaders find that politics does not do the kind of job they would like to have politics do. Nevertheless that is the democratic system, and the system for the maintenance of which this session of parliament was called. Obviously that does not mean that the Secretary of State for External Affairs (Mr. Pearson) is going to the North Atlantic council with a closed mind, and that the government is not ready to give the most careful and deliberate consideration to everything which may be proposed or recommended to make more effective the joint efforts of the nations banded together under the North Atlantic treaty. But our present view is the view that was expressed when the recent defence appropriation was before the house, that is to say, that the most effective immediate contribution Canada can make to the joint strength in Europe of the north Atlantic nations is the provision of arms and equipment which will enable the young men of the nations of western Europe to have effective means of providing security for their own homelands, and of building up their combined strength as a deterrent to aggression from any quarter.
Now I should like to deal very briefly with some of the other points made by the hon. member for Lake Centre. He inquired whether Canada believes with Churchill- and, he added, with Truman-that it is necessary to have these divisions available; I assume that is the two or three divisions referred to by Mr. Churchill. Well, if the question means, does the government believe with Mr. Churchill that these two or three Canadian divisions should be made available at this time in Europe, I will say to him that the government does not hold that belief. The government does not believe that is the 69262-44
The Budget-Mr. St. Laurent most effective way of making its contribution to the joint forces necessary to deter aggression, even in Europe.
The hon. member says parliament has voted large sums of money, and of course that is true; but he says there is nothing to show for it, that we get no information, but just generalities. Well, I am sure that in listening to him many hon. members must have felt that he was quite an expert in generalities, in the assertions he made about extravagance and the fact that, because those sums are large, there must be wasteful expenditures somewhere. The hon. member said the cure-all to do away with wasteful expenditures would be to accept his suggestion that a committee on estimates be set up. Then the hon. member proceeded to give some few examples of the terrible, wasteful expenditures which were going on. He said he had the names there; no one asked him to give them, but from the other details he gave I think everyone realized that he was referring to officials of the Department of External Affairs. They are the officials who receive salaries, living allowances and all the rest of it.


John George Diefenbaker: And trade and commerce.


Louis Stephen St-Laurent: If any one of the four cases to which the hon. member referred is not an official of external affairs I should be glad if the hon. member would so intimate. He spoke of salaries, living allowances, travelling expenses and removal allowances, and they are the only officials in the service to my knowledge who receive amounts under those four headings. Perhaps before making my point it would have been safer, in order not to have any controversy, to have the hon. member give the names, but I did not think that was necessary; I thought he had sufficiently identified those at whom he was aiming.


John George Diefenbaker: You have forgotten trade and commerce.


Louis Stephen St-Laurent: The hon. member enumerated the terribly wasteful items of expenditure. One of them was $8,000.


John George Diefenbaker: On a question of privilege, Mr. Speaker, the Prime Minister says this is done only in the Department of External Affairs. I refer him to the public accounts dealing with the Department of Trade and Commerce, where salaries, allowances and travelling expenses are also shown.


Louis Stephen St-Laurent: I gathered from the figures given by the hon. member that he was referring to four specific cases of officials of the Department of External Affairs.


John George Diefenbaker: But you said there were none outside that department.

The Budget-Mr. Drew


Louis Stephen St-Laurent: I am still making my argument on the basis that the assumption is founded on fact. The hon. member, who has such confidence in committees on estimates, happens to be a member of a committee called the standing committee on external affairs. I have before me a list of members of that committee, of which the chairman is the hon. member for Cochrane (Mr. Bradette) and the vice-chairman the hon. member for Peel (Mr. Graydon). That committee was given as an example that might well be followed by other departments in order to cut out this wasteful expenditure. It so happens, however, that in spite of what I have no doubt was the hon. member's regular attendance at all meetings of that committee, and in spite of his anxiety to check all these small leaks that might develop in the great vessel of state, he did not find it opportune to question any of these items referring to the salaries, allowances or living allowances of our representatives. On the contrary I am informed, though I am not a member of the committee, that the statement frequently was made- and it is true-that those who represent Canada abroad get less in the way of salaries and allowances than the representatives of other countries, and that those allowances or salaries should be increased. I am also informed that representations have been made in that committee that the number of posts in foreign parts should be increased in order that this young nation may be properly represented abroad. In spite of what the hon. gentleman has said, Mr. Speaker, you know this young and growing nation has not been in the state of apathy he describes since 1945.
I think I have dealt with all but the general assertions that fell from the lips of the hon. gentleman. I am sure the speech he made was not designed to catch and magnify any wind of discontent that may appear anywhere in the Canadian nation, but I am afraid I must conclude that, while it was not designed to have that effect, that is the only possible effect it can have.


George Alexander Drew: Mr. Speaker, this house has been sitting since two weeks ago Tuesday. In the first two days we dealt with the bill having to do with the strike situation, which was the reason for our meeting here. Since then we have been dealing with national defence and the various measures brought before the house in connection with the situation that has arisen.
When the Prime Minister (Mr. St. Laurent), in a sarcastic tone and a manner utterly out of keeping with the events of the day, saw fit

to play up to those who want cheap politics instead of action, and got the applause he is accustomed to get from his servile followers, he completely overlooked the fact -that at a time when he was speaking with some measure of earnestness, and no doubt intending to mean what he said, he complimented the opposition on the spirit in which they came into this house; the opposition had made it clear that they were anxious to co-operate in every way, but that the extent of their cooperation must be measured by the degree to which the opposition was taken into the confidence of the government. Since that time neither privately nor in this house has the government taken the opposition fully into its confidence in respect of any important matter that we have had under consideration.
Just as an example, the Prime Minister and others have made a great show about their belief in parliamentary practices and their view that it is not in keeping with the traditional discussion of these subjects to go into secret session. When we suggested that we should be glad to have an explanation, which we have not received as yet, of any plans the government has to meet the commitments it has undertaken, it was stated that a secret session was not in keeping with our practices. This government they tell us believes in coming right out in the open. There must have been those who were interested in reading that only yesterday in Banff the Minister of National Defence (Mr. Claxton) addressed a secret session of the Canadian chamber of commerce, so that he could discuss with them some of our defence requirements. No secret session for the House of Commons in which the minister could place before the members the information to which the people's representatives are entitled, but a secret session for the chamber of commerce in which he could discuss the things he claims he is doing for the defence of this country.
This house has been waiting patiently to hear some statement as to the way in which the plans of this government are being made to use the forces of this country in some effective manner; and yet in that case, as in others, we have to read in the newspapers about the things that are being done with those forces. They are not announced in this house. So far as the performance the Prime Minister has just put up is concerned, Mr. Speaker, may I say that the suggestion was not made here, nor will it be made at any time from this side of the house or from any part of this side of the house, that this parliament should abandon any of its authority over any of the obligations it has to the people of Canada. On the contrary we are seeking to assert the supremacy of parliament over the

business of this country. We do not think this government should be constantly telling us that we do not know what we are going to do until we have been told by the United States what they want us to do. Whatever respect we may have for Mr. Churchill-and there are those who apparently have more respect for his views than the Prime Minister -no matter wha't admiration we may have for any man or for any individual, the business of Canada rests in this parliament. It is for this parliament to make decisions with knowledge of the facts; but we do not want to be told that the government does not know yet what it is going to do because some other nation has not suggested what we should do.
This afternoon we were told that the Prime Minister does not think it will be suggested we should use our forces in any other way. It is for this government, with the support of this house, to say what should be done both in the matter of defence and in regard to our participation in whatever collective obligations we undertake. But, Mr. Speaker, at a time when we are being told over and over again that the Prime Minister of this country is almost the father of this idea of collective security, we do not want him to disown the child.
Let us be quite clear as to what it is that the members of this house are asking in connection with the various subjects that are before us. The Minister of Trade and Commerce (Mr. Howe) said yesterday it had been suggested by some of the members on this side that we wanted to see Canada an armed camp. There is not one word anywhere in Hansard, not one word outside of it, which suggests for one moment that anyone on this side of the house ever asked that Canada be made an armed camp. On the contrary, what has been asserted on a number of occasions is that we most thoroughly agree with the proposition that in taking such steps as should be taken for effective participation in defence of freedom, we should not assume such a burden as will threaten our economy. If we do that, we may actually lose a substantial part of the battle without having fired a single shot. It is because of that very proposition that the members of this house have clearly stated on different occasions that one of the duties of the government at this time, consequent upon its obligation to make effective preparation for national defence, is to take every step within its power to effect economies for the purpose of protecting the financial position of this country, upon which the strength and security of our people rest.
A number of methods, Mr. Speaker, have been suggested for dealing with the business
The Budget-Mr. Drew of this house. Those suggestions have been made in a constructive and conciliatory manner, but they have been rejected. Over and over again the Minister of National Defence has refused to consider the appointment of a defence committee to assist him. The government has refused to appoint a committee on estimates which could examine those estimates when they were brought down. Last spring the government refused to consider the setting up of a royal commission, similar to the Hoover commission in the United States, for the purpose of examining ways in which economies could be effected. The Prime Minister has said, and in this case one could perhaps not object to a device which is very simple, that the member for Lake Centre (Mr. Diefenbaker) was sitting on the external affairs committee, and although he was a member of that committee no suggestion came forward as to economies which could be effected. There are other committees, Mr. Speaker. There are committees on public accounts, one on railways and canals, and others which deal with various matters. It can be said that not one of those committees has made a specific recommendation for reduction in expenditure, but I hope that no one outside of this house will be misled by that statement. The members of this house know exactly why that is so. Under our rules there is no such thing as a minority report. The rules of this house call for a report based upon the majority decision of the committee. Many recommendations for economies were turned down by majority votes in those committees. Furthermore, those committees used their majority to prevent effective inquiry at any point where they thought an inquiry might be embarrassing to the government. This device has made committees ineffective which could have been extremely useful.
We have suggested that there should be committees which would have some freedom of action, something of the right to do a job which is accorded to the committees of the British House of Commons. I understand that in Great Britain the committee, on estimates is actually under the chairmanship of a member of the opposition, which enables it to bring before it those who can give evidence on any relevant subject. Sometimes it is only by the least important but most ridiculous examples that one can understand best how far these things go. Just a week ago Friday a subcommittee on estimates of the British House of Commons presented a report to that body, pointing out that the disease of publicity is a disease which feeds on itself. They suggested that a thorough examination should be made of the

The Budget-Mr. Drew publicity pamphlets which go out. I hope that most hon. members have seen some of the very interesting pamphlets that are going out from the Post Office Department. If they have not, may I strongly urge that they all get them. They can get them by an inquiry of the public relations officer, Post Office Department, Ottawa. If they want the telephone number it is 9-2937. There they will find pamphlets which I must say one must examine for a second time before finding out what their actual purpose is. Pamphlet No. 1 issued by the Post Office Department is coloured and well printed. Many hon. members will know that it did not go out without some expense. As I say, it is printed in colours and well done. This pamphlet contains a picture of a figure; it does not say who it is. The heading is: "What's Your Score". It is a picture of a baseball player. On the second page the following appears:
Canada Post Office: join the Canadian direct advertisers.
Then on the last page:
Your personal representative-the postman.
Pamphlet No. 2 reads:
If a football came through your window-
Then there is a picture on the front of a football arriving on a desk. On the inside we find:
You'd have a kick coming!
In case you have a kick and you do not know what to do about it, the back page says:
Carry the ball of direct advertising to your potential consumers.
Ask the public relations officer of the Post Office Department.
The next one is a picture of a hockey player and it reads:
We can pass-
On the second page appears a picture of a puck and it reads:
-on to you information you may need for your direct mail advertising campaign.
The next pamphlet contains a picture of bowling in a bowling alley and reads:
You can afford to blow about the completeness of your advertising program-
It is also from the public relations officer of the Post Office Department.
The next is a picture of a boxer and reads:
Come out of your corner and put some punch in your advertising-


Some hon. Members:: Oh, oh.


George Alexander Drew: Yes, Mr. Speaker, I will pause here and say that this is peculiarly appropriate. I would say to every member on the
TMr. Drew.]
government side:	Come out of your corner
and talk out the way you are talking outside.
The next pamphlet is a picture of the basketball basket, and it reads:
The story of your product where it really counts.
It really looks like a wastepaper basket.
On the back you have a picture of a basketball team, again with the request that you find out how to post a letter from the Post Office Department.
The next pamphlet carries the picture of a pole vaulter. It is well drawn and is a very dramatic picture. It says:
Put yourself over with the help of a strong program.


Some hon. Members:: Oh, oh.


George Alexander Drew: You see, Mr. Speaker, how transparent it is. Hon. members on the government side have no doubt that it is political advertising, that it is a party program which is being talked about.
The next pamphlet shows the picture of a skier and reads:
For a fast and sure return-


Some hon. Members:: Oh, oh.


George Alexander Drew: Apparently hon. members
recognize it as part of their political propaganda paid for by the people of Canada
Then No. 9 is-


Mr. Cruickshank:: That is a bad one to an old soldier.


George Alexander Drew: I thought that after the hon. member came in on a flying saucer he may have needed one, I do not know.
No. 9 is a picture of a golfer and it says on the front:
When you tee off-
I will give this in detail.
When you tee off for your next round of advertising remember to use the proper club, direct mail. Combine your drive with the follow through your post office is able to give you, and let the postman putt a message in your prospect's cup.
Call "fore" and then with confidence go down the fairway past other players in the "rough." Avoid the bunkers-pits-and scrub of wasteful effort. Public relations officer at your local post office.
Whom is the Post Office Department in competition with, Mr. Speaker? We were under the impression that this was a public service given for the benefit of the people of this country who wanted to use it. Is it a competition between the minister of that department and the minister in charge of telegraphs? Is it a competition between the minister in charge of that department and the minister in charge of radio? Certainly it is very difficult to know exactly what form of competition it is that they are meeting. The fact is that we have not yet had placed

before us the need of encouraging the people to use the postal service, but rather the emphasis was on the fact that the postal services were being stepped up in every way they could be to meet the demands of the people of Canada at this time.
I said at the outset that the best way we can sometimes illustrate the way in which reckless waste creeps in is by a ridiculous example of that kind. Here is a perfect example of the way in which departments get out of control when someone decides that it would be a good thing to start a new type of advertising. At the moment I do not know what the cost of this is. It is at least a substantial figure. It would pay for some other service which has some use to the people of Canada; but make no mistake about it, Mr. Speaker, there are scores of other places where savings could be effected on a much larger scale, where the same kind of thing is being done, and where it would certainly be stopped if there were an effective examination into the organization of the government of this country. In this short session it would not have been practical to attempt to conduct inquiries into some of these things.


Some hon. Members:: Oh, oh.


Mr. Fraser:: The Postmaster General (Mr. Rinfret) has just gone out.


Mr. Whitman:: You ought to get some nails.


George Alexander Drew: I do not know whether that remark by the Minister of Finance suggests that they are also carrying on a pamphleteering program to sell the government nails.


Douglas Charles Abbott: I did not say a word.


George Alexander Drew: I would not be surprised if we found that, too.


Douglas Charles Abbott: I did not say a word. I have been listening with bated breath.


George Alexander Drew: Then, if it was not the Minister of Finance I must give credit to the member who has a voice very similar to his, and who made the remark about nails.


George Alexander Cruickshank: You are lost.


George Alexander Drew: The discussion today is one which relates to the preparations this country is making, or should make, to play its part in the collective effort for peace. That is the purpose, the preservation of peace. No suggestion that the only role of the opposition is to criticize-and it has been amply demonstrated in this session that that has not been the exclusive role of the opposition-nothing of that kind will get us away from the fact that the second of the two reasons for which
The Budget-Mr. Drew we came here was to examine, as the representatives of the people of Canada, the steps which have been taken to deal with this allimportant subject.
The Prime Minister (Mr. St. Laurent) has sought to emphasize the fact that in the press report today of the speech made by Mr. Churchill yesterday in the House of Commons at Westminster, the first-line heading emphasized the fact that he was criticizing the government for their defence preparations. That is so. There was not one word in the speech of the hon. member for Lake Centre (Mr. Diefenbaker) which suggested that this house was in a position which called for it to take its instructions from Westminster or from anywhere else.
But remember that this subject has been discussed not only at Westminster. Last Saturday it was discussed by President Truman when he said that the United States was going to increase the number of men it would place in western Europe as part of an effort, not of the United States but of the members of the Atlantic security pact, to hold back the threat of communist aggression there. In that speech he made it clear that the extent to which it would be possible for the United States to go would be measured very substantially by what it would be possible for the other members of the Atlantic security pact to do at the same time.
Canada is a member of the pact. Canada's position is more nearly similar to that of the United States than any other nation in the world. For that reason the people of the United States very naturally would be looking with interest to see what position we take in regard to the obligations we have discussed with them, not only as members of the Atlantic security pact, but also as members of the United Nations and as members of that unique association, the joint defence board of Canada and the United States.
The question as to how many men Canada should maintain, and the further question as to where those men should be, are undoubtedly questions of major government policy to be dealt with by the House of Commons after being put before the house for approval or otherwise. No one who understands our constitutional system could possibly challenge that. Nevertheless whether our role is to be one that is directed exclusively to preparation for the defence of the North American continent, or of participation in any of the wider efforts to stem the threat of communism, the fact remains that those with whom we are associated will want to know from us what we propose to do in connection with that over-all plan of defence.

The Budget-Mr. Drew
The question is not so much: How many men will go to Korea? It is not so much a question of: How many men may or may not ever be sent to Europe? The question is: How many men are we going to train for active service here in Canada as part of our joint responsibility for the collective preservation of peace. That is the question.
The importance of Mr. Churchill's statement is not in any way that it can be taken as something in the nature of a call to us to do a particular thing; rather, it is a statement as to what he, at any rate, as an individual, thought would be our appropriate part in that particular collective plan-an opinion based upon the greatest experience possessed by any man in the world today as leader of a nation in a time of stress.
It is only upon that basis that we can examine those words. But those words must nevertheless be tied in simply as evidence of what others with wide experience are likely to think our responsibility might be. They should be examined along with Mr. Truman's statement on Saturday, and with the report we already have, which appears to be sufficiently authoritative, as to what they are discussing at the meeting of the representatives of the Big Three in New York today.
We are informed, with all the appearance of reliability, that they are discussing now what the measure of defence will be that should be set up in western Europe for the one purpose, and the one purpose only, of preserving peace by holding back the communist threat-a threat not to Europe and to Britain alone but also to us, to the United States and to all mankind. That is what they are discussing, and that is what the Secretary of State for External Affairs (Mr. Pearson) will be called upon to discuss when the ministers meet in a few days.
The Prime Minister in his remarks today has made a statement which it is difficult to accept as a final statement in regard to what will be done when Canada meets the other nations. Surely there is one thing all of us can agree upon: Whatever is done when the foreign secretaries meet next week, let it not be suggested that Canada is waiting for someone else to tell us what to do. No government has boasted more than this government of what it has done to assert at all times the doctrine of Canadian sovereignty. May I point out that the doctrine of Canadian sovereignty is not a new doctrine. It goes back many years and found its clearest assertion in the position taken during the first world war by Sir Robert Borden when 

he insisted that Canada as an independent nation must act on its own in all decisions that it made at that time.
We give way to no one in this house in our assertion of the belief regarding the complete sovereignty of this great nation of ours. But sovereignty is not simply a matter of refusing to take direction from Westminster. You do not gain sovereignty by asserting that you will not take any suggestion or direction from one quarter and then simply leave the impression that you are waiting to be told by Washington what to do each time a crisis arises in world affairs. That is a type of colonialism which none of us wishes to see implanted in this country when so many are still talking about a form of colonialism that disappeared in 1867.
This country must make its own decisions. I am sure that this country is willing to accept the obligations that have been imposed as a result of the decision of this government to be a full participant in the actions of the United Nations. May I remind the Prime Minister (Mr. St. Laurent) and those associated with him that, far from seeking to take advantage of every opportunity to criticize, the fact is that in the effort that has been made to rank Canada side by side with the other free nations in the defence of freedom not one single voice has been raised on the side of the opposition against the complete acceptance by the government of its obligations under the charter of the United Nations. That was our position; that is our position.
But we ask that in dealing with these things the members of this house be taken into the confidence of the government, be told what we are going to do, be told what plans there are and that we as members should not leave here, we as representatives of the people should not be dispatched to our homes, only to learn afterward through the press or over the radio what our executive has decided to do, a decision which must have been made already.
Even at this stage of the debate, with information being held back which we should have had, I repeat what I said in the debate on the speech from the throne: that the Prime Minister will find full co-operation to the extent that he takes the house into his confidence. To the extent that it is informed and can be convinced that the work is being done, the opposition will support what the government does on every occasion and will seek to encourage support of those efforts whatever they may be.
We urged that there be a secret session of this house so that we could be taken into the

confidence of the government. Although that has been turned down I hope that in view of the experience the Minister of National Defence has gained in another tribunal, which although important has not the same responsibility to the Canadian people, I hope that in view of the new developments of the past few days the Prime Minister will consider the wisdom of having a secret session so that we may be brought into the confidence of the government and be able to go home to our constituencies as members of one team to urge the people of Canada to get behind plans that will really do the job.


Édouard-Gabriel Rinfret: Mr. Speaker, I think the reference made today by the leader of the opposition (Mr. Drew) to my department and the reference he made two weeks ago indicate the pattern of the discussion that he has been following in respect to the questions that have been brought before the house. Two weeks ago he praised my department and today he damned it.


George Alexander Drew: Two weeks ago I did not have these.


Édouard-Gabriel Rinfret: The leader of the opposition takes one side of an issue one day and a contrary side the next. He has admitted that perhaps he might gain some advantage from what is contained in the pamphlets referred to, but unfortunately he read only part of one pamphlet. The leader of the opposition quoted:
Put yourself over with the help of a strong program.
He should have continued to quote the rest, which reads:
You can beat your previous sales record by wisely using the mail to tell your story.
Those pamphlets were issued with the idea of encouraging the people of Canada to use direct mail advertising and to let them know that there are public relations officers in the Post Office Department ready to help them in this connection. The people have responded to these pamphlets and are using direct mail advertising more and more, thus producing more revenue for the Post Office Department. Another idea behind the pamphlets was to let people know that they could go to these public relations officers to find out how best to use the mails for advertising.
We have been able to make some economies in the department because when people know just where to go to inquire about advertising and how to go about to post their advertisements it makes it unnecessary to have two or three men handling this material. One
The Budget-Mr. Rinfret will suffice. Reference has been made to the cost of putting out these pamphlets, and the leader of the opposition has given some praise to the design. I think they are well designed and I want to compliment the officials of the department upon the design. These pamphlets were designed, printed and published in my department. Forty thousand copies in English and ten thousand copies in French were printed of each pamphlet, there being nine pamphlets in all. The cost, including designing, printing and distributing, was $195. Therefore the cost of the whole series represented a total expenditure of $1,755. I can say to the house that I do not regret having put out these leaflets because they have produced much more revenue than $1,755 and have resulted in economies of a much greater value than $1,755.


Brooke Claxton: Mr. Speaker, it is not my intention to delay the house for more than a minute in taking the vote but I must correct the record because of the reference made by the leader of the opposition (Mr. Drew). There was no secret session at all at the Canadian chamber of commerce meeting. What happened was that the chamber had given notice of a symposium of their members with myself and some others, which was to be a closed session. This was drawn to my attention when certain members of the press said that they would like to be there, with the result that the press, and everyone else who wanted to come, was there. In order to ensure frankness of discussion on the part of members of the chamber of commerce, it was announced by the chairman of the meeting that the discussion would be off the record. So far as I was concerned, of course no information of a confidential character was given, and I was assured those present at the meeting, perhaps unlike members of the opposition, felt that they had received useful information about our defence work.


Mr. H. R. Argue (Assiniboia):: Mr. Speaker, I do not want to become involved in a discussion of whether this particular advertising done by the Post Office Department was or was not good. All I want to say is that I believe the Post Office Department is a shining example of a public service operated in such a manner as to result in great benefit to all Canadians. At the same time I think that what has just taken place between the leader of the opposition (Mr. Drew) and the Postmaster General (Mr. Rinfret) might be taken as an indication of what might

The Budget-Mr. Argue follow in a great many instances if the suggestion of the leader of the opposition were accepted by the government, namely, for committees of the house to make a detailed examination of the expenditures of all departments and ferret out any waste there may be. If the record is good, as it apparently is in the case of advertising being done by the Post Office Department, why should the government not want committees where opposition members could ascertain, and thus perhaps prove to the public, that there is not any great amount of waste, and by that means help the government in what it is doing?
When the average Canadian sees a budget of $2,500 million I think he is bound to assume that that amount of money cannot be spent without some waste. When apposition members ask for committees to investigate expenditures and are not successful in securing such committees, then I am afraid that the general public may assume that there is a good deal more waste in public services than perhaps is actually the case.
It has been said during the present session by members of the C.C.F. party on almost every occasion on which they have spoken that we support collective security, the United Nations, and Canada's contribution to the stopping of aggression in Korea. It has been said that we will support future action by the United Nations to stop aggression no matter where it may arise. Having said that, I believe I should say that I agree with remarks made by the leader of this group about Chiang Kai-shek's occupation of Formosa. He said he felt that the best thing that could happen to Chiang Kai-shek would be to have him kicked out of Formosa.
Almost every day one can see in the press that a great many influential, honest and wellmeaning people are concerned about the United States' unilateral action in sending their seventh fleet to the waters between Formosa and the mainland of China. As one who supports the actions of the United Nations, I cannot support unilateral action by one country which in any way may prevent or hinder the United Nations from taking necessary action. I believe that Canada, as was done by Great Britain, should have recognized the present revolutionary government of China months ago. I believe such action would have been to our long-term advantage, and of course we would have been recognizing something which is a fact. Therefore I say as to the future of Formosa that the United
Nations should make the decision, and that all nations of the world should abide by that decision.
When the budget is being increased by a large amount for expenditures that are necessary-and I am sure all of us wish it were not the case-the government should act at all times in such a way as to make its legislation as fair as possible to all sections of the Canadian people. I agree with those who have already said that the present initial price for wheat and the spread between the various grades will result in only one thing, a severe deterioration in the living standards of the western farmer. Of course no one knew that a frost was coming. A severe frost occurred, and it may be true that there have to be wide spreads between the frosted grains and the good grains in order that frosted wheat may find a sale on the international markets of the world.
I am not complaining because I am not qualified to say whether or not the spread between feed wheat and No. 1 hard is too great, but I say that, in view of the fact that western farmers' incomes will be reduced because of the severe lowering of grades, the prices of all grades should be increased. On June 5 last the members of this group moved a motion asking for $1.75 wheat for the next three years. Members on the government side of the house voted solidly against our motion and by doing so brought about its defeat. Even if that opinion were held by government supporters at that time, in view of the reduced prices as a result of the frost surely consideration now should be given to increasing those prices. I am receiving many letters from western farmers who not only complain about the reduced prices for wheat but are fearful lest the final payment of the five-year pool may not be-large. They say, and I agree, that the payment should be not less than 25 cents a bushel. That figure is supported by the rural municipal association, the united farmers of Saskatchewan, the united farmers of Alberta, the Alberta wheat pool and other farmers' organizations. While saying that, however, I want to emphasize that it is even more important to provide security for the farmers in the years to come.
Then I want to advocate that some changes be made in the Prairie Farm Assistance Act, on the basis of the real emergency that exists because of the frost damage. That act is drawn on the basis of the crop yield per acre. If wheat yields eight bushels per seeded acre or less a farmer may receive payment; but with severe frost the eight bushels of wheat may equal in value only five or six bushels.
CMr. Argue.]

So I would ask that changes be made in the P.F.A.A. this year so the eight bushels will mean eight bushels in value and not necessarily just eight bushels in yield, in order that farmers who have suffered from severe frost may have a chance to obtain necessary benefit under that legislation.
I come now to this budget. I well remember that in the spring of this year, in the face of an unemployment situation with four hundred thousand out of work, the government informed us that they had abandoned their theory of a shelf of public works, that they were not going to implement their 1945 proposal to deal with unemployment. As so often seems to happen with this government, however, something occurred over which they had no control, and employment increased as a result of the tense international situation. But I believe this government are no better prepared to adequately deal with the situation we are facing today than they were prepared six months ago to deal with the very real unemployment situation then existing.
We remember that last session when members of this group advocated a universal old age pension of an amount that would give the pensioners a reasonable standard of living we were told it would involve such a huge sum that it would mean an impossible burden of taxation. The press across this country said we did not want a welfare state, that it would kill initiative and cost the public too much money; so the government merely set up a committee, as they do in connection with so many things of this kind. That committee brought in a report recommending a pension of $40 a month to everyone reaching the age of seventy, without a means test, with the federal government to pay half the cost of a pension of $40 to those between the ages of sixty-five and sixty-nine, with a means test. The committee estimated the total cost at $365 million. According to the committee's report, this year the government will spent $106 million on old age pensions, so if the report were implemented it would cost the Canadian people an additional $250 million. That was we were told an impossible amount for this government to provide last session for improved old age pensions.
Today we are facing a critical situation in the world. We in this group support the measures brought in by the government to improve our own defences and enable us to play our part in combating aggression. In this situation, however, with a little war on and the threat of a bigger war in the offing, the government now can do what it could not do last spring for the old age
The Budget-Mr. Argue pensioners. In his budget speech the Minister of Finance (Mr. Abbott) estimated that the tax proposals he was making would bring in a total of $189-5 million next year. Then he stated that since he delivered his budget speech last spring the government had received a windfall of another $180 million in increased revenues not forecast at that time. So the minister is getting $180 million he did not know he would get, and in addition is taxing the public to the extent of about another $190 million. In other words he has been able to find $370 million in the present situation. I want to say I am glad he has been able to find it; but in this situation he has been able to find fifty per cent more than he was unable to find last spring for an adequate old age pension.
I admit right away that this budget will not impose a crushing load on the backs of the Canadian taxpayers, but I am afraid it is placing emphasis on the wrong things, that it indicates the beginning of a policy which, if continued, will mean a crushing load on the Canadian people. I want to quote from the budget speech of the then minister of finance on September 12, 1939. Speaking about the inflationary method of financing, at page 139 of Hansard of that day Mr. Ilsley said:
It represents merely a thinly disguised scheme of taxation of a most unjust type. It throws a grossly unfair proportion of the burden upon the person of small or medium income, the wage earner, the salaried man and those who have savings deposits, insurance policies or securities of any kind whose value is fixed in money. It represents a complete violation of the principle of taxation in accordance with ability to pay.
I agree with Mr. Ilsley that inflationary methods of financing are a complete violation of the principle of taxation in accordance with ability to pay. The present Minister of Finance told us that of the $180 million windfall rather more than half was being brought in because of increased production and rather less than half through increased prices. I do not know how many million dollars may be represented by the word "rather" so I will say it is just fifty-fifty; that half the $180 million is brought in through increased production and half through inflation. From inflation we are to get $90 million which, according to Mr. Ilsley, is the worst possible method of financing. In this year's government revenues there is $90 million which in my opinion, since I agree with Mr. Ilsley, is an evil way for the government to finance its expenses.
690	HOUSE OF
The Budget-Mr. Argue Yesterday when the hon. member for Mel-fort (Mr. Wright) was saying that the government's actions were inflationary, the Minister of Finance (Mr. Abbott) interrupted and said this:
We are paying all our bills, and have a little over.
I am glad the government is paying all its bills and I hope it will have a little over, but even if it pays all its bills and has a lot over that does not necessarily mean that the actions of the government will prevent inflation. Whether or not inflation is with us can best be judged from statistics obtained from the dominion bureau of statistics and other departments of this government. In 1939 the Minister of Finance set out the evils of inflation. He said the government of that day would be prepared to fight inflation. For the eight months from January to August, 1940, the cost of living index went up 2-1 points. From January to August, 1941, the cost of living index increased 5-4 points. In October of that year the prime minister announced a system of over-all price controls based upon the period, from September to October. In other words in 1941 an increase of 5-4 points in an eight-month period was considered to be so inflationary that price controls were implemented. During the same period in 1950, from January to August, the cost of living index rose from 161 to 168-5, or 7-5 points. There has been more inflation in 1950 than we had in 1941, but in 1941 the government took steps to prevent inflation and in 1950 the government is taking no adequate steps whatever to cope with the present inflationary situation.
Inflation has reached the point where the ordinary people of this country cannot afford to continue the savings they have made in the past. Let us say that a person had $1,000 on the first of January this year, and decided to invest it in government bonds at three per cent. During the first eight months of this year that bond would earn $20. If the figures released by the dominion bureau of statistics in relation to the cost of living index are correct, and I have never heard anyone in this house say that they reflected a greater increase in the cost of living than actually took place, it means that the value of the bond drops $50. There are farmers in my area who could postpone perhaps the buying of new machinery, but they cannot afford to postpone such buying because the price goes up almost every month. To protect themselves they must buy goods as quickly as possible before prices rise.
It has been stated that there has been a great increase in instalment buying. I believe that one of the reasons for this is that prices 

are going up so fast that if people do not hurry and get the article at today's price, they will certainly not be able to afford it at next year's price. The government has done nothing to guarantee that there will not be continued inflation which will reduce the living standards of the old age pensioner on a fixed income; the wheat producer whose wheat prices have been lowered, the worker who is not able to get increased wages fast enough to keep up with the increased cost of living. My main objection at this time to this budget is that nothing is being done to guarantee that inflation will not continue. Some anti-inflationary steps have been taken, such as curtailing the amount of loans farmers may get for new implements; to make it more difficult for people to finance the building of homes; and to make it more difficult for people to buy consumer goods on the instalment basis. These are anti-inflationary measures, but they are aimed at reducing further the standard of living of the little people in Canada. They allow anyone with a large income to continue buying anything he cares to buy.
Another important failure of this budget is the fact that its financial measures are not on the basis of equality of sacrifice. In 1939 Mr. Ilsley said in his budget speech on page 140 of Hansard of September 12:
In imposing the new tax burdens which this policy will require we shall be guided by the belief that all our citizens will be ready to bear some share of the cost of the war, but we shall insist on the principle of equality of sacrifice on the basis of ability to pay.
I agree wholeheartedly with Mr. Ilsley's statement that the budgetary principle the government should follow is equality of sacrifice on the basis of ability to pay. This 1950 budget falls down completely when one judges it on that basis. It falls down first when one realizes that $90 million is going into the government treasury through inflation and through nothing else. I am sure that every minister of finance will admit that is the most unfair way of raising public funds. There has been an increase of 5 per cent in corporation taxes. The minister believes that will, during the remainder of this year, bring in $13,500,000. I want to say that I support that particular part of the budget. At the same time the Minister of Finance announced increased taxes on soft drinks, candies and chewing gum which he estimates will bring in $18 million of revenue during the present year; $18 million from the children of Canada, in the form of a tax on soft drinks and candies, and in the same period $4,500,000 less than that amount will be collected from all the big business corporations

in Canada. I do not like the tax on soft drinks; I do not like the tax on candies and chewing gum; and in 1949, just before the election, apparently the Minister of Finance (Mr. Abbott) did not like them either. On March 22, 1949, he said that these taxes had not been easy to collect. He also said that they are the least popular of all the so-called nuisance taxes. They are not easy to collect; they are unpopular; they are nuisance taxes; and yet when we are facing a grave international situation the Minister of Finance goes into that revenue field during the present year to collect $4,500,000 more than he is asking in additional revenue from all corporation taxes. I say that certainly that part of the budget is not based at all on the principle of equality of sacrifice or on the basis of ability to pay.
In addition to that there is the excise tax of $17,300,000. I think that tax, roughly speaking, is based on ability to pay, to some extent, at least. People who want new automobiles, sporting equipment, jewelry and so on should, in the present situation, be called upon to pay higher taxes. There is the tax on alcoholic beverages, an increase in the tax on spirits and on malt, both of which will result in an increase in liquor and beer prices. Increased taxes on alcoholic beverages are inevitable. If the country were facing a much graver situation than one can read into this budget, these taxes should be increased and increased rapidly. But I want to say that increase in taxes on alcoholic beverages is regressive. It is not based on ability to pay.
The Minister of Finance knows that today many people in Canada like a glass or two of beer once in a while. Of course a tax such as this means that it is being spread over a large section of the public irrespective of their incomes and irrespective of their ability to pay. They will pay $10 million on that tax and the corporations will pay $13,500,000 during the remainder of this fiscal year.
I should not like to criticize the budget of the Minister of Finance without suggesting to him something which might be considered an alternative. I do not profess to be an expert in financial matters. The Minister of Finance is an expert; but nevertheless I feel I can outline steps which could have been taken in this budget in order that it might have been based on the principle laid down by the Minister of Finance in 1939, namely, that as far as possible there should be equality of sacrifice on the basis of ability to pay.
In his budget speech the Minister of Finance told us that we needed $189,500,000 next year in the way of increases from
The Budget-Mr. Argue taxation. I want to assume right now that the Minister of Finance was correct; that that is how much money we need. To get that money one of the things he did was to put a 5 per cent increase on corporation taxes. I would much rather have seen that tax 10 per cent. The Minister of Finance may tell me that an increase in the corporation tax from 33 per cent to 43 per cent would mean that business would be extravagant, that it would not be efficient, that it would not give the services in the future that it has given in the past and the services that are necessary. I do not think he would be right.


Douglas Charles Abbott: It is 48 per cent.


Hazen Robert Argue: In some provinces.


Douglas Charles Abbott: In all provinces.


Hazen Robert Argue: I am sorry. Some provinces are collecting 5 per cent-


Douglas Charles Abbott: Thirty-one per cent in the agreeing provinces and 37 per cent now in the two central provinces. The tax rate now for the larger corporation is 38 per cent. That is 33 per cent federal and 5 per cent provincial in the agreeing provinces and 40 per cent in the two central provinces. That is the rate before the increase.


Hazen Robert Argue: Before the raise.


Douglas Charles Abbott: That is right.


Hazen Robert Argue: I am out 5 per cent.


Douglas Charles Abbott: So that 10 per cent on that would make 48 per cent and 50 per cent respectively.


Hazen Robert Argue: We will take it at that, but my argument is still valid. The minister may say that such an increase would cause inefficiency, and we would not get the services that we expect from business. But even assuming he is right, then perhaps there might have been-


Édouard-Gabriel Rinfret: He is an expert.


Hazen Robert Argue: -an increase in the corporation tax of more than the 5 per cent. Let us assume he had increased the corporation tax to per cent to get 150 per cent of the revenue that he is now asking in the way of increase for next year. That would have brought $127,500,000, leaving another $62 million to raise. I have said that I thought the $34,400,000 increase in excise taxes was fair and reasonable. That brings us down to $27,600,000, and leaves out the increased tax on alcoholic beverages, leaves out the tax on soft drinks, leaves out the tax on candies and chewing gum. We are short $27,600,000, and we have not invaded those fields so far.
In 1949, just before the election, the minister announced a reduction in the income tax and
692	HOUSE OF
The Budget-Mr. Argue an increase in the exemptions. He estimated at that time that, by having brought these things into effect, at the end of the year it would mean a loss in revenue of $270 million.
I know that if these taxes were applied today they would bring in even more in the way of an increase than the $270 million, because production and incomes are up. So surely a small part of that reduction in income tax could have been placed on the higher income groups during the present session. Surely, the persons who are earning, shall we say, $3,000 or $4,000 or more a year should be willing to pay additional income taxes. If the minister would only bring back into effect 10 per cent of the loss in income taxes through the action in 1949 he would toe able to balance his budget, he would be able to meet all of these expenses and have a small surplus, without all of the regressive and unfair taxes that were brought down in the budget. I think that is the type of budget that should have been presented to the people of Canada during the present crisis.
Before I conclude I want to emphasize again that unless steps are taken to prevent a further increase in the cost of living, all that will result from this budget is that the little people of Canada, the small-income group, through inflation will be called upon to bear an unfair and unjust burden as a result of the government's financial policy. If the minister would implement price controls to hold down the cost of living, and to prevent further deterioration in the value of the dollar, then he could embark upon a savings campaign. I am sure the people would be willing to save money if they knew that when saving the value of their savings would be protected and that, in addition, they were helping the government and their country in the present situation.
I believe the corporation tax should be increased even further. The taxes being adopted in the budget mean that the man who must work for a living will pay increased taxation on a number of items. The tax on earned income is being increased, but the tax on unearned income, that is on corporation profits is in my opinion being increased by too small an amount.
I say the government has failed to take steps to prevent inflation, and has failed to bring in a budget based upon equality of sacrifice, judged on the basis of the ability to pay. The government has failed not only this year but in the years past to do for the people of Canada by way of improving social services and increasing social security those things that should have been done in peacetime, because it said the money could not be found.


It can find the money now in a time of crisis for purposes of defence and to prevent aggression. It should not hesitate even now to find like or even larger sums to implement needed social security measures.


Mr. D. A. Riley (Saint John-Albert):: Mr. Speaker, after the outburst of oratory that rocked the rafters of this chamber this afternoon, as a humble backbencher I hesitate even to rise in my place. However, I should like to say a word of congratulation to the Minister of Finance (Mr. Abbott) for the excellent budget he brought down the other evening. I say that on behalf of the people of my constituency, who consist chiefly of little people who, because of the seriousness of international events had been anticipating that more would have been taken from their pockets than had been formerly, in order that they might meet their obligations as citizens of this country.
I cannot say that I am entirely in accord with everything that was brought down in the budget. I did hear that my little four-year-old was busy circulating a petition among his playmates, with the intention of sending it to the Minister of Finance in vigorous protest against the imposition of the additional tax on soft drinks.


Mr. Maclnnis:: Why blame the kid?


Daniel Aloysius Riley: I do not blame the child, because the soft drink has become a part of the daily routine of the youth of this country. Perhaps my little Danny is too young to be drinking Coca-Cola and the like; but it is pretty hard to keep him away from it because he has access to the stores.
However, I do feel that perhaps the minister did not fully appreciate the significance of the effect of the imposition of the soft drinks tax upon the daily lives of office workers, school children and the like. I do not think that the soft drink is a form of dope. I do not think it is everything nasty that people say it is, and I hope when the next budget is brought down our good, sane and logical Minister of Finance will see fit to lessen the burden.


Stanley Howard Knowles: He will take it off just before the election.


Daniel Aloysius Riley: It would be a good thing if he would, because it is not well to have all the good things coming after an election.
My principal reason for rising was to reiterate in part some of the remarks of my neighbour in New Brunswick and my very good friend, the hon. member for Royal (Mr. Brooks). He pleaded with the government and particularly with the Minister of Trade

and Commerce (Mr. Howe) to encourage where possible the decentralization of industry.
In that connection I should like to read into the record an editorial which appeared under date of August 14 in the Saint John Telegraph-Journal, one of the leading newspapers in eastern Canada, and, it goes without saying, which enjoys the widest circulation in my province. I believe that through the good offices of the Saint John board of trade this editorial found its way into the mail boxes of all members of the House of Commons. I should like to place at least this part of it on the record:
It is earnestly to be hoped that authorities will heed this resolution-	.
The reference is to a resolution passed by the maritime board of trade.
-and that this part of the country will get a better deal than was the case during the second world war, when industrial expansion was concentrated in Ontario and Quebec. The policy of putting nearly all war plants in those two provinces was extravagant and harmful.
Among other things, it involved moving thousands of workers from the seaboard to the interior, where new housing had to be provided for them. It also placed an added burden on the railways, which had to transport military supplies from central Canada to Saint John and Halifax for shipment overseas. (Had more of these supplies been manufactured in coastal centres, the strain on the railways would have been eased.)
On top of that, the fact that so many factories were located in central Canada, and practically none in the Atlantic provinces, led to post-war economic problems.
These factories, after the conflict ended, were turned to the production of civilian goods, and brought Ontario and Quebec the greatest wave of industrial growth in their history. The eastern provinces were in no position to share in this. When a company could get a ready-made plant in Ontario or Quebec for a fraction of what it would cost to build one, it was certainly not inclined to consider operations in provinces where no such plants were available.
It is clear now that in the next few years Canada will spend hundreds of millions of dollars on rearming. The Russian threat makes this imperative. With this program in the offing, the government has an opportunity to take practical steps to decentralize industry and to lay the foundation for sound future prosperity in the seaboard region.
I would commend that editorial to the Minister of Trade and Commerce and the other members of the cabinet.
May I also make reference to a resolution which has been or will be passed by the Canadian chamber of commerce at its present meeting. The resolution was to have been initiated by the Saint John board of trade, and reads:
We urge the Canadian government, as a matter of paramount importance, that immediate steps be taken in the face of the rearmament program and the mobilization of Canada's industries, to see that
The Budget-Mr. Riley they be decentralized both in relation to available manpower and in the face of the probable additional hazards to the larger centres of new global strategy.
That resolution was passed by the Canadian chamber of commerce at the locus referred to by the leader of the opposition as the locus of the mystical, imaginary and secret session which took place in the presence of the Minister of National Defence (Mr. Claxton).
I should like to direct the attention of the Minister of Trade and Commerce (Mr. Howe) and members of the government to the fact that our problem in the maritime provinces is a serious one. I realize that I may be regarded as rethreshing an old crop, that it may be considered as a plaintive howl from a maritimer, as something that is heard so often and referred to so disdainfully in other parts of the country, but I believe that something can be done to bring about economic progress in the maritime provinces.
If the government could see fit to allocate contracts to industry in the maritime provinces and to encourage the founding of new industries to use the raw materials that are available or close by, it would stimulate the growth of those provinces. It would encourage our young people to stay at home and not go to other parts of the country or to other countries in an effort to obtain security for themselves and their families. If some of the large munitions plants in central Canada were broken down a bit and part of the operation carried on in eastern and even in western Canada, the central parts of Canada might not be faced with the problem of unemployment which is likely to arise in the future when work cannot be found for the influx of labour which had come from the eastern and western sections of Canada during a period of abnormal prosperity brought about by periods such as we are about to enter into.
I know the Minister of Trade and Commerce (Mr. Howe) is alive to this problem and is constantly endeavouring to find a solution for the difficulties faced by the maritimes. I ask him to give impetus to any program he may have in mind along these lines. I am encouraged by the knowledge that in looking around the country for a place to spend a holiday the Minister of Trade and Commerce decided upon St. Andrews-by-the-sea in the constituency of my good friend, the hon. member for Charlotte (Mr. Stuart). It was with keen pleasure that the people of my province learned that the minister had purchased a home in St. Andrews. He is simply following in the footsteps of great men like
694	HOUSE OF
The Budget-Mr. Riley Franklin D. Roosevelt, who spent many holidays at Campobello island, also in the constituency of Charlotte. The Prime Minister (Mr. St. Laurent) was also attracted to our province last summer when he spent an enjoyable time in the constituency of the hon. member for Gloucester (Mr. Richard).
There is one problem which is common to both the hon. member for Charlotte and myself, the problem that faces the fishing industry. I do not want the house to think that I am introducing a subject which is not equal in importance to those that have been dealt with during this session. I feel, as does the hon. member for Charlotte, that the fishing industry in Saint John-Albert and Charlotte in New Brunswick is dangerously close to extinction. We maintain that it is of national importance that the Department of Fisheries and the Department of Public Works should give encouragement to the fishing industry and to fish processing programs.
Before coming to Ottawa I had the privilege of attending a number of meetings called by fishermen in my constituency who told me that in the bay of Fundy, particularly in Saint John county, the young men do not want to take up fishing because it is impossible to find safe harbours during stormy weather. I urge the Minister of Public Works (Mr. Fournier), as I have urged his officials in the past, to take cognizance of the fact that the fishing industry in that section of New Brunswick is an integral part of our economy and there must be safe harbours for the fishing craft if they are to land their catches from the bay of Fundy.
The breakwater at Lorneville in my constituency has completely disintegrated while at Chance Harbour the breakwater is inadequate to provide the required protection from the heavy seas of the bay of Fundy. Those seas tend to become heavy at various times during the year. Plans have been drawn up indicating splendid breakwaters to be built for these fishermen, but they have waited year after year and nothing has been done.
I urge the Minister of Public Works not to attempt to economize to the disadvantage of the fishermen of Chance Harbour and Lorneville in my constituency.
I realize that economies must be effected in order to make more money available for national defence, but there are certain programs under way in respect to the harbour facilities at Saint John which should not be overlooked when an endeavour is being made to cut down expenditures. Saint John is always an important harbour in time of war for the transportation of men as well as


materials and everything possible should be done to keep its harbour facilities in the best condition possible.
I had intended to speak for only five minutes when I coaxed Mr. Speaker to recognize me but, as I said before, the oratory which preceded me simply carried me away.


Mr. J. W. Noseworihy (York South):: Mr. Speaker, I rise at this time to support the subamendment moved by the hon. member for Winnipeg North (Mr. Stewart). Before speaking on the subject matter of the amendment to the amendment, the imposition of an excess profits tax, I want to deal briefly with the present budget with relation to the subject of inflation. In recent years it has been generally recognized among economists that a budget is something more than just a means for raising revenue. In Sir Stafford Cripps' budget speech last spring I think he stated the purpose of a modern budget when he said:
The budget itself can be described as the most important control and as the most powerful instrument for influencing economic policy which is available to the government.
My criticism of the budget before us now is that it reverts to the sole purpose of raising money. The minister appeared to me to have completely disregarded the power, which could have been exercised through the budget, to check inflation, and has contented himself with the raising of the few millions extra needed for our defence. The budget, in my opinion, ignores completely the fact that we are in the midst of a period of inflation, an inflation that is certainly greater than anything the minister or the government expected when they embarked upon their decontrol policy, an inflation that is certainly much greater than the one which brought about various price controls in 1941.
Members of the house have already compared the cost of living at that time with the cost of living today, and have submitted ample proof that there is a much greater degree of inflation in Canada today than there was when the government took those steps in 1941. Before the final vote is taken on the budget I should like to hear from the minister just how he thinks the new taxes contemplated by the budget will affect the rising cost of living, and just what effect these hew taxes will have upon inflation in this country. I do not think the tax on chocolate bars and soft drinks is intended to check inflation. I do not think that a 5 per cent increase in corporation tax is going to be sufficient to curb seriously profiteering on war materials, or to prevent a further rise in the cost of living. I do

not think that the additional excise tax on spirituous liquors is going to result in any decrease in their sale.
It seems to me that no measures have been submitted by the government at this time, either in the budget or in any of the bills placed before us, that are designed to check inflation, or that give any indication that the government is fully conscious of the serious nature of inflation today. The Minister of Finance (Mr. Abbott) referred to the present inflation as an incipient one. I wonder how much he wants the housewives of this country to pay for meat, coal, boots and shoes, and clothing before he recognizes an inflationary condition. I seriously suggest that the Minister of Finance consult Mrs. Abbott on this matter instead of some of his present advisers, whoever they may be.
The budget which we are called upon to approve will remain in effect until March 31, 1951, more than six months from now. In my opinion it gives the "go" sign for an open season in profiteering and inflation from now until the next budget is introduced. It is true, as the Prime Minister (Mr. St. Laurent) suggests, that we may be spending only 10 per cent of our national income on defence measures instead of the 40 per cent we spent during the war years, but whether we spend 10 per cent or 40 per cent the cold, hard fact is that we have today an inflation which is more serious so far as the mass of the people of the country are concerned than the inflation in 1941 which was met by control measures. It is true, as the government suggests, that we may not actually be engaged in war. We may only be spending money on defence measures on our way up the hill of difficulty on the road to peace to which the minister referred. The fact is that we are going to require the concerted efforts of our people to make those measures effective just as we would if we were actually engaged in what the government would consider a war.
The former prime minister, the late Right Hon. W. L. Mackenzie King, had some very good things to say about the evil effects of inflation upon the country in 1941. He gave us his views in a classic broadcast he made in October of that year. I think it would be good for the soul of the Liberal party if they would re-read some of the things that their former leader had to say on that subject, and take them to heart. I am sure it would be worth while for the minister and the country to recall some of his statements. I am going to refer to what he said in the broadcast at some length. I shall quote from a report of the broadcast which appeared in the Montreal Star of Monday, October 20, 1941. I give these references because I think they are
The Budget-Mr. Noseworthy quite relevant to the present-day condition. Among other things Mr. King had this to say:
It is scarcely necessary for me to say that a rising cost of living is a source of acute personal anxiety to all and, particularly, to those with small incomes. And it is this very anxiety which is the danger to our war effort. For in the making of war no weapon is more powerful than peace of mind.
We all know that we cannot do our best work and put forth our utmost effort if we are beset by personal fears and anxieties. And we know that a maximum effort for Canada depends upon each and all working together in conditions that are just to all. That is why the government, which is responsible for the direction of Canada's war effort, is deeply concerned about the effect of rapidly rising prices upon the prosecution of the war. That is why the government has decided that hereafter prices must be controlled more rigorously than they have been during the first two years of war. The needs of today demand it.
In passing I want to say that in my opinion the needs of today demand rigorous measures of price control, just as much as did the conditions of 1941. During that broadcast Mr. King quoted a statement by the secretary of the treasury of the United States, which it would be well to keep in mind today:
Only the profiteer, the speculator and the hoarder gain from inflation.
I think one might add that the Minister of Finance sometimes has a budgetary gain from inflation, since this year he expects to get $90 million as a result of this condition. Then the prime minister of that time went on to say:
Rising prices and a rising cost of living do not have the same effect on all households. The smaller the family income and the larger the family, the more serious the hardship imposed. For those with small incomes, rising prices of clothing, goods and other necessaries may mean serious hardship, while for those with larger incomes only luxuries and small comforts may have to be given up.
I suggest that this statement represents a different attitude toward the interests of the common people of this country than that expressed in the budget now before us. Some hon. members have asked whether industrial workers would approve the imposition of controls, and this is what the former prime minister had to say in that connection:
Rising prices thus serve to aggravate the inequalities in society, and to throw the heaviest burdens on those least able to bear them. Wartime experience has shown that prices rise faster than wages or salaries-
That is a fact we sometimes forget; prices rise faster than wages or salaries.
-and bear more heavily still on those who live on small pensions or life savings.
So the leader of the government of that day was concerned with the industrial worker, in contrast to the attitude of the present government.
696	HOUSE OF
The Budget-Mr. Noseworthy
I want to give another quotation with respect to wages:
The truth is that all but an insignificant minority of the population would be worse off as a result of rising prices, if prices were permitted to rise unchecked and, in general, the relatively poor would
suffer more than the relatively well-to-do.
Speaking of conditions following world war I, Mr. King said:
Much hardship resulted because the incomes of the mass of the people did not keep pace with prices. Unfortunately in a period of rapidly rising prices, they never do.
Then the question has been raised here as to what would be the attitude of the farmers toward price controls. This was the opinion of the Liberals in 1941, as contrasted with the opinion they hold today:
Nor is the position of the farmer any happier than that of the wage earner. The present war is a war of machines. Because of the heavy demands of war on industry, the scarcity of manufactured goods is likely to be greater than the scarcity of farm products. The rise in prices will consequently be unequal, if prices are left to themselves. The things farmers have to buy tend to go up in price more than the things they have to sell.
I am going to give just one more brief quotation which I think applies to the present government. Speaking of inflation Mr. King said:
I think I have said enough to make it clear why the government is unwilling, as a means of reducing consumption, to allow prices to rise unchecked. That would be the easy way out of the immediate difficulty.
I suggest to you, Mr. Speaker, that today the Minister of Finance and the government are following that easy way out of the difficulty now confronting the country. They are taking the course of least resistance, the do-nothing course, the easy way which Mr. King referred to in 1941 as the way the government of that day was not prepared to go. I submit that today, though we may not be at war as we were in 1941, and though we may not be spending forty per cent of our national income on defence as we were then, the question of inflation, rising prices and the cost of living is just as serious to the Canadian people as it was then, and that it can interfere with any united effort to build up our defences against communism just as it would have interfered with our allout effort in 1941. I believe any government concerned with the welfare of the people would be taking measures today to protect their welfare and avert the evils of inflation, similar to the measures the King government took in 1941. Unless we want to adopt a policy of appeasement, such as gave Hitler his head start in Germany in the last war, the international situation can soon become just as grave as it was in 1941.


Altogether apart from the international situation and its gravity, however, I believe the domestic situation in respect to inflation is just as threatening today as it was in October, 1941.
Does the minister for one moment believe that industrial workers will, when this parliament adjourns with the imposition of a budget which does nothing to check inflation, sit on the sidelines and watch prices continue to rise? Does he believe these workers will be content to watch the purchasing power of their pay envelope become less and less? There is not a trade union leader in this country who would be worthy of the position he holds if he were to sit idly by and watch the process of profiteering continue in this country, watch the purchasing power of the pay envelope become less, without taking measures to effect an increase in wages for his workers. Mr. King well understood that situation. He knew that in times of inflation prices will rise before wages, and that wages cannot keep up with the spiraling staircase of inflation. I have not any doubt but that this budget, and the government's refusal to face up to rising prices, will result in the recurrence of interruptions in production; the recurrence of demands for increased wages from trade unions all across this country. With all the discontent among our people, such a situation is the result. It is for reasons such as these that I, and those in this group, have been insisting that price controls and excess profits taxes should be reimposed at this session.
There are a few things I want to say, Mr. Speaker, on the subject of excess profits taxes. I have carefully read the reasons the minister gave for not imposing excess profits taxes at this time. He gave three reasons, and they are to be found on pages 422 and 423 of Hansard for September 7, 1950. The first reason was that, to be effective and fair, an excess profits tax must be based on a comparatively recent period. He suggested that if such a tax were based on the last three years not much revenue would be collected because profits had been so high. I agree with the minister that an excess profits tax must of necessity be based on a recent period in order to tax the more recent expansions in industry and new industries which have grown up in recent times. It is, however, by no means necessary for the government in adopting, say, the past three years as the base, or any one of the past three years, to exempt' one hundred per cent of the profits made in those three years or in any one of those years. The government may

fix a ceiling of any percentage of profits it chooses which, in its opinion, would be fair and equitable.
It is true that the past few years have not been normal years. Business in this country has had a field day during the past few years. This has been due to the need for reconstruction in Europe, Marshall aid, and relatively high peacetime expenditures on defence. All these things have contributed to high profits for business in that period. In the light of that, I submit it would not be necessary for the government to fix a ceiling which would exempt one hundred per cent of the profits made in those years. There was some justification for exempting one hundred per cent of the profits made in the base period when the previous excess profits tax was put into effect. The base period represented an abnormal time, because it was immediately following the depression when business was not good. Many small businesses, particularly, had not recovered from the depression, and as a result there were many inequalities. The government was probably justified in exempting one hundred per cent of the profits made in that base period, and placing an excess profits tax over and above the one hundred per cent. These arguments, I submit, do not apply to the past three years with which we are dealing.
The minister's second reason was not particularly complimentary to corporate management. His statement was to the effect that the excess profits tax would encourage waste and extravagance on the part of corporate management. I quite understand that corporate management would expect a statement of that kind from a C.C.F. speaker.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
Joseph William Noseworthy: Mr. Speaker, when the house rose at six o'clock I was examining the objections which the Minister of Finance raised to the imposition of an excess profits tax at this time. I agree with the minister's contention that an excess profits tax should have as its base a recent period of time; it should probably be based on the years 1947, 1948 and 1949. I disagree with the minister in his statement that because profits were so high in those years no excess profits could result in taxes to the government from such an act. My contention was that it was by no means necessary for the government, in taking this base period, to exempt a hundred per cent of the profits made during those
The Budget-Mr. Noseworthy years from taxation before imposing an excess profits tax. The government could take as its ceiling any percentage of those profits which it considered fair and equitable.
In the light of the favourable conditions under which business operated during those years, conditions arising out of post-war needs, I feel it would be quite equitable for the government to place that ceiling at much less than one hundred per cent of those profits. If we look at the profits made during those years and compare them with previous years I think we can see where the government, without interfering too much with corporate business, could levy a tax of at least $200 million or $250 million.
Corporation profits before taxation in 1944 amounted to $1,221 million. Of that $1,221 million we collected in taxes $603 million, or approximately fifty per cent, leaving $618 million of profits after taxation. In 1949 we had a very different picture. In that year corporation profits amounted to $1,914 million. In that year we took only $673 million in taxes, only $70 million more than we took in 1944. In other words, where in 1944 we took fifty per cent of corporate profits in taxation, in 1949 we took only about thirty-three per cent in taxation. In that year out of the $1,914 million in profit we left $1,241 million to corporation shareholders in profits after taxation. I feel that there is room for an excess profits tax that would bring to this country at least $200 million or $250 million.
The second objection which the minister raised is, as I mentioned, before six o'clock, not very complimentary to corporate management. He says an excess profits tax is an invitation to extravagance and waste in corporation management. As I pointed out before six o'clock, I have no doubt corporate management would not be surprised to find C.C.F.'ers offering such a criticism as that. I am sure corporate management must have been a little surprised to find such a criticism coming from the Minister of Finance of a government that has had considerable experience in administering an excess profits tax. Are we to understand from the minister's statement, and from one who ought to know, that corporations will slacken on the job of production when there are no profits in sight, even though their country is taking those profits for the protection of free enterprise against communism? Are we to understand that corporate management will slacken on the job of production when every housewife in Canada, when every child in Canada, is already suffering from the
698	HOUSE OF
The Budget-Mr. Noseworthy evil effects of inflation? That I submit, Mr. Speaker, is a statement which even a C.C.F.'er finds very hard to believe.
Surely our great captains of industry, those great supporters of our free enterprise system, those to whom the defeat of communism means so much, surely those men have more patriotism and humanity in their business dealings than the minister would have us believe.
The minister's third objection was that an excess profits tax at this time would, as during the war years, work severe inequalities. He leads us to believe that it is almost impossible to impose an excess profits tax that will not create these inequalities in business. I will agree with the minister that there were a great many such inequalities under the old Excess Profits Tax Act. I think those inequalities arose from the fact that the period which was taken as the base period for the administration of that act was an abnormal one. Those were years following the depression, years in which a great many small businesses in the country had not recovered sufficiently from the depression to have arrived at any stage of profit.
These conditions do not apply to the years 1947, 1948 and 1949. I am confident that an excess profits tax with those years, or any one of those years, as a base period, would not inflict the same severe inequalities as were experienced under the old act.
In concluding I should like to quote two short passages from the former prime minister. First I shall quote from a published address of his delivered in Toronto on March 24, 1941. The address is entitled "A New World Order". We heard a great deal about that new world order during the years of war. I shall now read to the house the new world order visualized by Mr. King.
First perhaps it might be well to refresh our memories as to what we were talking about in the early forties. This paragraph is headed "A New Heaven and a New Earth" and is in these words:
A new heaven and a new earth-are not these, in very truth, what we seek today? A heaven to which men and women and little children no longer will look in fear, but where they may gaze again in silent worship, and in thankfulness for the benediction of the sun and the rain; an earth no longer scarred by warfare and torn by greed, but where the lowly and the humble of all races may work in ways of pleasantness, and walk in paths of peace.
Mr. King went on to point out that this new order found expression when Britain determined to put an end to aggression in Europe in 1939. It found1 expression when the nations of the British commonwealth took their place at the side of Britain, and in the 

resolution of the United States of America to lend its powerful aid to the nations which were then fighting for freedom.
Mr. King did not foresee in 1941 that in less than ten years it would become necessary for the freedom-loving nations to oppose aggression by force. In that address he made one prophetic statement, the truth of which may be seen today, when he said:
If that new order is not already on its way before the war is over, we may look for it in vain.
How true were those words. We have only to look back in order to realize to what extent we failed to secure the beginning of that new order before the war was over. We may today be on the verge of another titanic battle between the free nations of the world and another dictatorship. We shall need in that struggle, as in the last, all the united effort our people can put forth. That united effort in this country will depend upon the government's success in removing from all Canadians the personal fear and anxiety which rising prices, with their trend of profiteering, hoarding and speculation, create.
So far we have very little indication from the government, either in this budget or in any legislation presented, to show that it is at all cognizant of the dangers inherent in the present economic situation.


Mr. Ray Thomas (Welaskiwin):: Mr. Speaker,-


Some hon. Members:: Hear, hear.


Ray Thomas: That is the best hand I have ever received upon rising in the House of Commons. I do not want to prolong the debate, but I do feel I should spend a few moments to stress one point that has not been stressed to any degree, and one which I think is of some importance to the people of Canada.
I think it can be truthfully said that the main reason we have been sitting here for two weeks is that international communism has become a serious threat to the peace and security of the world. If that means anything at all, then it must mean that Canada is equally threatened.
I think, too, that the only reason the budget was brought down was that it was necessary to maintain our Canadian peace and security which has been threatened by international communist imperialists. It is my firm belief that the danger is real, not fancied. Any intelligent person who can read can see that the forces of darkness and evil have combined themselves with Russian communism and have become so powerful that they are forcing the rest of the world to waste their

efforts in the building up of armed forces strong enough to fight against aggression.
I saw service in the last war, and I know something of what war can do. I, and I think all the men who served with me during the war, hate war. At the end of the last conflict I had hoped that Canadian youth would never again be asked to take up arms anywhere in the world. But, much as I hate war and all that it stands for, I love my freedom much more. And so, because the main aim in the budget is to raise money to prepare Canada against any active aggression, as well as to discharge our obligations to the United Nations, I feel I must give my general support to the efforts of the Minister of Finance (Mr. Abbott) at this time.
At the same time however I feel I must be critical of the government's failure to take any effective steps to combat the spread of communism right here in Canada. I think we shall face more dangers from internal sources during the next ten or fifteen years than we shall ever face from forces from the outside.
Those who promote the cause of international communism are not fooling this group one bit with their protestations of pious anxiety for the welfare of the ordinary Canadian. Their aim is not to make the lot of the ordinary man any better; their aim is power for themselves. In reality they have the most callous indifference to the sufferings of human beings. The promoters of international communism hold life very cheaply, but they worship the god of power which they hope to have rule over the lives of men and the economies of nations.
However, let us not make any mistake by thinking that they have little or no appeal to the unfortunates, the downtrodden and discontented people of this and every other country in the world. They work with diabolical cleverness and have tremendous influence over the unwary. It is surprising how many people find themselves unwitting tools in the hands of these promoters of international confusion. For example, during the course of the Winnipeg flood propaganda was circulated asking for immediate help for the people of Winnipeg, but right in the middle of that propaganda was this sentence:
Canadian welfare must come first-not preparations for atomic-bacteria warfare.
Now that war has come to some part of the globe things like this are being circulated:
Let Canada act to save world peace. "It is not too late," declares Tim Buck, national leader of the Labour-Progressive party, "to stop this insane rush to disaster." Read this stirring plea by the foremost spokesman of the Canadian working class for unity around proposals that can help save peace.
The Budget-Mr. Thomas
Then this sort of thing from the Stockholm peace conference has come through the mail to all hon. members. It is quite apparent that they are quite willing to put forward any excuse to discredit the capitalist and democratic countries in the world.
Newspaper reports of the past four or five years in Canada indicate that communists have followed a very clever program of infiltration. They have got themselves into home and school groups in an effort to use this medium for the promotion of communist ideology. They have infiltrated into the labour unions and achieved many positions of leadership. I am happy that the Canadian Congress of Labour and the Canadian Federation of Labour have taken action to oust known communists from positions of leadership, but reports in the papers of the past few days indicate that there are still many communists who have managed to get themselves elected as delegates to represent their unions at labour congresses. I suppose one can safely say that infiltration has proceeded into practically every phase of Canadian activity. There is every reason why international communists should concentrate their efforts on the labour unions because Lenin stated at the Russian communist party congress in 1921, when referring to the Russian trade unions:
Not they form the nation; not they are the dictatorship of the proletariat; that is the task of the communist party.
In other words what Lenin was saying was that once the unions had done the wrecking job their usefulness would be finished and any attempt on their part to revive the function of the unions as protesting bodies against bad wages or working conditions would be branded as a capitalist survival and punished by banishment to a slave labour camp. The American Federation of Labor survey of April, 1947, stated that there were then more people permanently hungry and starving in the Russian slave labour camps than were ever temporarily hungry in the worst unemployment in any capitalist land. .
It is therefore essential in their own interests that the labour unions of this country continue to clean house and to banish from the organization every known communist whose purpose is not forthright or whose motives prove to be ulterior in any degree. Time alone can tell whether a communist's association with any one of the labour movements is harmful or detrimental to the broad interests of all members and all groups within the movement. But when time does reveal that a communist and his activities are harmful to the interests of the members of the union,
700	HOUSE OF
The Budget-Mr. Thomas then I think that union is obligated to expel him and keep the spotlight on him until he changes his heart.
I have often said that Canada's internal danger from communism is not so much from the registered members of the communist party as it is from those people who allow themselves to become fellow travellers or sympathizers or mere tools in the hands of the communist party. These make up the much more insidious group. It was only last week that we saw a demonstration around this building by a large number of misguided people, among whom it is doubtful if one could find more than a few out and out communists. These people, although not registered members of the communist party, can be just as useful to the cause of communism as are the out and out members.
It has been said over and over again that communism feeds on discontent and thrives among those who are victims of social injustice. I think that is largely true in any country, but it does not account for the attitude of mind of many of those who have become leaders in the communist movement. The real communist is activated by the hope that same day he will be in a position of power over the lives of men. He looks forward to the day when he can crack his whip and force obedience to his orders. For that reason it is not wholly true to say that the correction of injustice within Canada would put an end to the spread of communism.
But these little dictators, these guttersnipes who would sell their country into the hands of the Russian imperialist ring could no longer play their nefarious game with any success among a contented and happy and secure people. That is why it is so important that we make every effort to banish from among the people of Canada all those conditions upon which communism might thrive. That is also why it is imperative that Canada and the other nations of the world make every effort to banish the same conditions in other lands. This must be done if we are to prevent the further spread of this insidious foe of human liberty.
That is why I have felt that this budget is not all that it could have been. As long as thousands of Canadian people are discontented because of the tremendously high cost of living and other social Injustices there will remain fertile ground in which communist activities can grow and spread. As was stated by my leader, the hon. member for Peace River (Mr. Low), I think effective steps could have been taken under this budget to set right those things that are causing the high cost of living. I appeal to the Minister of Finance (Mr. Abbott) and his colleagues 

to take action without further delay to see that the Canadian dollar is stabilized at a level that will return reasonable prices to producers and at the same time make possible reasonable consumer prices. It is not an impossible task by any means. If that is done, if steps are taken to abolish profiteering, and if those of our population who are living on fairly low fixed incomes are given some sort of adjustment, let us say in the nature of a cost of living bonus, I feel certain that the Canadian people will be united in their efforts, not only to resist the spread of communism in Canada but to put an end to aggression wherever it may be on the face of the earth.


Mr. J. R. Garland (Nipissing):: Mr. Speaker, I should like to take exception to the remarks of the hon. member for Leeds (Mr. Fulford) this morning concerning the detrimental effect of soft drinks. As I listened to him, I could not help remembering the words of another man, the late Franklin Delano Roosevelt, who said: "Soft drinks are now an important part of our American way of life". All hon. members will realize that the soft drink industry was indeed dealt a serious blow by the budget we are now debating with the imposition of the 30 per cent tax, causing as it will higher prices to be paid by the consumer, and a serious reduction in the volume of sales by the retailer and the manufacturer. I want you to understand, Mr. Speaker, that I am not speaking for the industry, but I have good reason to believe that as an industry we accept the budget as a necessary evil, and most certainly are prepared to contribute our share to bolster the defence forces of Canada. However, when the hon. member for Leeds rises in his place, praises this particular phase of the budget, and then goes on to say that soft drinks have a detrimental effect on the consumer, it is more than I can understand.
I do not wish to make a speech on the merits of soft drinks at this time because I do not believe it is necessary. I believe all hon. members realize the cool, satisfying flavour, the zestful tang, the quick energy and the pleasant refreshment that awaits them at their nearest soft drink cooler, every bottle meticulously prepared to the most rigid standards and carefully supervised to ensure the consumer the maximum enjoyment and value for his money.


Mr. Smith (Calgary West):: Gas in the
stomach.


John Richard Garland: services. The additional goods and services purchased with these savings must be produced and distributed, resulting in additional employment of persons in the manfacturing and distributing fields. It calls for additional labour for the necessary expansion in manufacturing facilities to make possible the production of these additional goods and services.
In our efforts to manufacture and distribute goods at the lowest price consistent with the increasing standard of living, we have reexamined almost every phase of the production and distribution process. This continuing study has resulted in great and constant change so that the manufacture and movement process today looks quite different from that of fifty years ago. In that period we have progressed from a simple to a highly industrialized and complex society. Some of the most original changes have taken place in the packaging and availability of all types of low-priced goods. A greater variety and quantity of low-priced products are now available to our people than ever before in history. Most reasonably priced goods are sold by the transfer of coins rather than on credit. An undetermined but nevertheless large number of millions of dollars of merchandise and services are thus traded year after year; yet today we still have the same variety of coins in our currency that existed nearly fifty years ago. With all the changes we have made, it would seem logical that we look at the penny, nickel, dime and quarter to determine whether they adequately fit our needs. An analysis of present conditions in buying habits truly reveals the necessity for new coinage to make our system flexible, convenient and economical.
Let me briefly summarize the advantages of two and one-half and seven and one-half cent coins:
1.	The half nickel and nickel and a half coin would provide added flexibility and convenience in making payments at any price level.
2.	Two and one-half and seven and one-half cent coins combine readily with present coins to make pricing possible at present popular five, ten, fifteen and twenty-five cent levels.
3.	The half nickel and nickel and a half represent an orderly and logical sequence of mid-points within our present multiple nickel pricing system, whether used alone or in combination with other coins.
4.	The two and one-half and seven and one-half cent coins provide in effect a one-half cent coin without actually minting such a coin, and take full advantage of the flexibili ty provided by one-half cent pricing.

5.	Two and one-half and seven and one-half cent coins fit into our present coin packaging system. Our present coins are rolled in lots of either forty or fifty to make even dollar amounts. The two and one-half and seven and one-half cent coins could be packaged in lots of forty each to give a roll value of one dollar and three dollars respectively.
6.	Two and one-half cent and seven and one-half cent coins encourage pricing closer to value and permit the one-half cent pricing, such as two for fifteen cents.
7.	The two and one-half and seven and one-half cent coins have been approved by competent economic authorities as economically sound.
8.	Historically the half nickel is a success. The equivalent to two and one-half cent coins has been used successfully for a great many years in Holland, Panama and Ecuador.
Let it be known that I do not contend that this proposal will be the panacea for all the economic evils suffered by the Canadian housewife or wage earner, but I do contend it would be a contributing factor toward a betterment of the situation, and I believe all contributing factors should be considered and, if found desirable, put into action. I realize there will be opposition to this plan by those who are always opposed to any change in the status quo. Opposition, it seems, comes in the form of resistance to change, and the apathy of people in industries most needing this new coinage. Their apathy arises from their belief that it is virtually impossible to bring about the necessary legislation. This is due to their lack of knowledge of the legislative process, and their inability to appreciate the political effectiveness of the individual.
It is my intention at the next session of parliament to request the government to add two and one-half and seven and one-half cent coins to our present currency. At that time I will give the house a more detailed statement and, I hope, ample proof of the necessity of adopting this proposal. In the meantime I would welcome suggestions or criticisms from any faction of our society that would be affected by this proposal.


Angus MacInnis: Mr. Speaker, since I understand it is the desire to take the vote this evening I shall be as brief as possible. I only take part in this debate to emphasize that the difference between us in this chamber is not as to aim but as to method. I think all parties in the house are agreed on the program the government has proposed to meet the situation in which we find ourselves, and the modifications that
The Budget-Mr. Maclnnis must be made in our economy. So I repeat that our differences in this house are differences of method, not of aim.
I believe we should understand each other, and in order to do so I do not believe it is necessary to become either heated or abusive. We do not all have the same access to the means of life. Some have more than they need; some have as much as they need; and a great mass of our people have much less than they need. We in this group wish to point out that this budget, as well as most of the other budgets we have had during the past few years, have placed additional burdens on those who already have burdens greater than they can bear. When we have asserted the necessity for certain controls, hon. members opposite raise the question of the control of wages. I have pointed out to this house before, but I shall point it out again so that the dullest can understand, that wages are already controlled.


Some hon. Members:: Oh, no.


Angus MacInnis: If wages are not controlled will some of the bright boys up in the northwest corner who are say "no" tell me why the railroad employees had to negotiate for fourteen months for an increase of a few cents? After they have told me why that is so, will they tell me how it is that the rubber companies can put two price increases into effect in so many minutes without asking anyone, and without any special session of parliament to deal with it?


Mr. Ferrie:: If they were controlled, they could not negotiate.


Angus MacInnis: Those are some of the things you should understand, and be able to explain, before you try to make yourselves heard.
Before I leave this point, may I say that we had a rather new doctrine expounded in the house yesterday by the member for Coast-Capilano (Mr. Sinclair). The hon. member is a bright young man but I suggest to him that he should not take himself too seriously, because he does not know everything yet. He should not try to pose as a big shot for a few years yet. He says the C.C.F. are always asking for controls but they never want controls for the farmers. According to him the farmers of Canada are profiteering. This is the first time I have heard of farmers profiteering. This is, indeed, a new Liberal doctrine.
On page 626 of Hansard of September 12, I find this:
First of all, let us look at prices.
704	HOUSE OF
The Budget-Mr. Maclnnis
All right, look at them and watch them go up.
What makes prices go up? The C.C.F. always has the easy answer: profiteering. That is, when it is companies who are concerned. But of course when farmers get higher prices and sell their beef at 281 cents a pound on the hoof, which the hon. member for Calgary West last night translated into a dollar a pound to the housewife, that of course is not profiteering . . .
I heard someone say not very long ago that it was a rather peculiar thing, but when a Liberal got in a jam he always quoted a Conservative.


Stanley Howard Knowles: And the Conservatives fall back on Truman.


Angus MacInnis: Will the member for Coast-Capilano say that the farmers who receive 281 cents a pound for beef are profiteering?


Mr. Gibson:: It includes the horns.


Angus MacInnis: I am doubtful if the member for Comox-Alberni (Mr. Gibson) would know a steer from a goat.
So far as I can ascertain the Minister of Finance (Mr. Abbott) made the first use of the report of the royal commission on prices, 1949. It cost the country $300,000 and the Minister of Finance got two short quotes out of it. I too want to quote from it. At page 27 we find this:
During our inquiry we tried to ascertain whether there has been any marked growth of restrictive business practices during the post-war period and whether the effects of these practices on competition had played a major role in raising prices.
Among the industries on which we report, we found a number where conditions were highly competitive. A good example was the primary livestock industry, in which there are a very large number of producers, no one of whom handles more than a small fraction of the total output.
Surely when you have an industry on a high competitive basis there can be no possible chance for profiteering. As a matter of fact, had the member for Coast-Capilano remembered from one paragraph to another paragraph what he was talking about, he would not have said that there was.


Stanley Howard Knowles: That is too much to ask.


Angus MacInnis: I know it is too much to ask, but we shall have to let the house know that he does not do it.
On page 627 of Hansard the member for Coast-Capilano is recorded as follows:
Let us turn now to the reason that I at least see for the rise in prices in this last period. In the old days of course, under a free economy, it was quite different. If prices went up, consumer resistance began and unsold goods began to gather. Other manufacturers saw an opportunity to get into a profitable field and started extra production. The law of supply and demand worked and down came prices. But this is no longer a free economy . . .


The member for Coast-Capilano says it is no longer a free economy.


Mr. Sinclair:: Because?


Angus MacInnis: I continue the quotation:
. . . because of the economic strains of the last war; and our expected expenditures on war industry and war equipment in the next year or two are going to accentuate the fact that this is no longer a free economy.
Surely my friend, who admits that he does not know a great deal about economics, knows sufficient about economics to realize that monopolies and combines are not the result of the last war. I can tell him that there is another report on prices which was made in 1934. In it he will find abundant evidence of the power of monopolies at that time. He will find how they controlled prices. What we were concerned with at that time was not that prices were too high but were, for some commodities at least, too low.
I have read what the report of the royal commission on prices said about the livestock industry. I proceed with another quotation from that report:
On the other hand, we found a number of industries where competitive forces were limited because of the small number of firms in such fields. For instance, there are only three firms in Canada manufacturing primary fertilizer materials and the very high capital investment required for this industry makes it difficult for new firms to enter this field. Another example occurs in primary textiles, where a few big firms dominate the cotton industry and where the three producers of the three types of synthetic yams manufacture the entire Canadian output.
What happens under circumstances such as are mentioned in the report? When goods are being produced in quantities to more than meet the demand in the market do prices come down? Certainly not. But employees are laid off, production is restricted, prices are maintained. I believe that is only a small part of what the prices commission found. They also found that the manufacturers control prices of the manufactured article through the retailer. Shirts are a good example of this. All shirts sold by manufacturers had to be sold by the retailer at a certain price. He was not free to sell at a lower price if he wished. He was compelled to sell at the manufacturer's price, otherwise he would not get his next supply of shirts.
Let me read a little more from the report of the royal commission on prices:
More significant is the growing tendency toward monopolistic competition through brand names and special advertising, price leadership by a few large firms in an industry and resale price maintenance whereby a manufacturer sets the retail price for his product.
Under such circumstances what opportunity is there to bring down prices when supply is

more than sufficient to meet demand? Such situations make a monkey out of your opposition to controls, because if there is one thing sure today it is that someone is going to control; and if it is not the government, who are and can be held responsible to the people who elected them, it will be people who have no responsibility to anyone but themselves.


Arthur Leroy Smith: Will the hon. member permit one question?


Angus MacInnis: I will permit a question, but I cannot promise you that I can answer it.


Arthur Leroy Smith: The hon. member spoke of a monopoly. Is not the tightest monopoly, the greatest profiteering monopoly, in Canada operated by each of our provincial governments in the sale of liquor? And the hon. member's province has a price second only to our own in the Dominion of Canada.


Angus MacInnis: It is unfortunate that the hon. member asked me about the price of liquor, because although I do take a drink occasionally, I never buy any.


Arthur Leroy Smith: I am going to try your practice.


An hon. Member:: What is the name?


Angus MacInnis: I can tell you of a very good brand of Scotch whisky; it is called "Old Angus". I continue with the quotation:
The experiences and influences of the war period have created conditions conducive to the spread of patterns of behaviour from which active price competition is excluded. The effective organization of industry for war purposes required concerted rather than competitive efforts in many aspects of business activity, leaving a tendency towards less rather than more enterprise.
With conditions of that kind being made known to this house as the considered opinion not only of the prices commission of 1948 but of the prices commission of 1934 as well, what is the sense in trying to tell the members of this house or the people of Canada that prices are not controlled? We should have the courage to tell the people of Canada either that we are going to control prices ourselves or that we are going to leave controls in the hands of people who are interested only in themselves.
In his speech the hon. member for Coast-Capilano (Mr. Sinclair), for some reason or other, raised the question of the railway strike and what was said in this house with regard to Donald Gordon. May I say at once that I have the highest regard for Mr. Gordon and for the good job he did while he was chairman of the wartime prices and trade board. But I say this now just because it was raised here yesterday and the name of this party was mentioned in connection with it: Mr. Gordon 69262-45
The Budget-Mr. Maclnnis may be a good administrator but he has not the slightest understanding of industrial relations. Evidently he looked upon the railway employees as so many cogs in a wheel. The hon. member for Coast-Capilano said that Donald Gordon did a good job for the government in controlling prices and now when he was going to do a good job for the government in making a financial success of the railways, or words to that effect, he gets nothing but abuse. I have no objection to him, and I hope he will make a financial success of the Canadian National Railways; but I do not want to see the workers made to pay for taking the company out of the red.
If Mr. Gordon wants to start in in that way he can start on his own salary. After he had done that he could very well ask the workers to contribute out of their meagre wages and salaries to make the Canadian National Railways a financial success. The time has come when this matter should be dropped. I am not suggesting that because I am afraid to discuss it, but whatever value it may have had at one time, I do not think any good can be accomplished by rehashing it.
As I mentioned before, the pattern of this budget, as has been repeated time after time in this debate, is to make the little fellow pay for the addition to our defences. That was well stated by three or four hon. members during the debate today when they pointed out that while we were taking only $13 million for the remainder of the fiscal year out of corporation profits, we were taking over $17 million out of pop, candy and chewing gum. I am not saying that the children pay for that, but I say that the parents of the children, the majority of whom have not sufficient income to get along on, will be compelled to pay that additional amount. I say it is an exceedingly poor way in which to raise revenue in a country such as Canada.
I want to refer to one other matter which was referred to in the minister's speech. It has to do with controls over instalment buying. A bill was passed in regard to that, and I am not discussing the bill, but I am discussing the principle that underlies what was done. Let me illustrate: Here are two people, Mr. Black and Mr. White, each of whom is setting up housekeeping and they want refrigerators. Mr. Black has a good salary of $5,000 or $6,000. He can pay cash for his refrigerator. He can buy and it is nobody's business. But Mr. White wants a refrigerator, or his wife wants it, and he cannot pay cash for it, but he can pay for it on the instalment plan. He is not allowed to buy it now, excepting on terms laid down by the government.


John Lambert Gibson: Good.

The Budget-Mr. Maclnnis


Angus MacInnis: If there was anything necessary to prove not only the lack of understanding of the hon. member for Comox-Alberni (Mr. Gibson) but his total lack of human feeling, it is just a statement of that kind.


An hon. Member:: How funny.


John Lambert Gibson: When did you get your refrigerator? You got yours a long time before I got mine.


Angus MacInnis: I may have; but I still want the other fellow to get his, and you don't. That is the difference between us.


An hon. Member:: And you say you paid cash.


John Lambert Gibson: I raised two kids without one, too.


Angus MacInnis: I am not an advocate of instalment buying; I am the opposite. But I do not want to see a man or woman penalized because he or she is poor-and that is exactly what is done under the provisions of this budget.
The same thing is carried through in the proposals connected with housing. The minister said Central Mortgage and Housing Corporation would advance less money on a house, and this would mean that for the purchase of the house it would require a larger down payment. Just let us think about that for a moment. At the session of 1949 we thought it would be desirable to lower the down payment, so that the poorer people would be able to buy houses. That was understandable and logical, because the greatest difficulty in our housing situation was to provide ways and means whereby those in the lower income brackets could buy or rent homes.
What do we find now? When the government wants to raise a little extra money and wants to curb inflation, does it begin taxing the man who has sufficient money not only to make a large down payment but perhaps to pay cash for it? No; they begin with the man who has not enough to make a small down payment. They increase the down payment and thus make it not only difficult but impossible for those in the lower income brackets to provide themselves with homes.
If there is anything in what we have been saying, not only in all those weeks but in all those years, about the necessity for defeating communism, then surely that is the wrong way to begin. That is the way to make communists, not the way to eliminate them. I believe I said once before in the house that we should do things it is desirable to do, not for the purpose of destroying communism but because those things are good in themselves.
[Mr. Gibson.l

If we do them only in order to contain communism, then we are going to fail just as surely as the sun will rise tomorrow morning; because what will be done will be too little and too late.
We cannot put the burdens of financing a war on the shoulders of the underpaid, low-income members of the community, and hope to get away with it. The war has got to be paid for. The working people will pay for it in work and sweat; and when they have done that they have done their part, then I say those who have the money should pay the financial cost. There is no other way in which we can meet the difficulties which will confront us in the days that are ahead.
I suggest in all earnestness to the government that if they continue to put the burdens of financing the war and of building our defences on the shoulders of the working people of this country, we may be able to drive the North Koreans back to the 38th parallel but, as surely as we do, we will build communism in this fair land of Canada.


Mr. Speaker:: Before putting the question
on the subamendment, I wish to observe that because of the emergency character of this special session I have allowed a number of motions to stand which under ordinary circumstances I would have felt inclined to rule out of order. In some instances I have expressed my doubt; in others my doubt has been unexpressed though none the less real. For example, it seems to me that the amendment, moved on the second reading of Bill No. 5, was irregular, at least in part, in that the specification of the materials and services to be subject to the bill could have been accomplished by moving an appropriate amendment to the bill in committee. See Beauchesne's Parliamentary Rules and Forms, third edition, citation 658. Moreover, I am not satisfied that the words "expressing opinions as to any circumstances connected with its introduction or prosecution", as they appear in citation 657 of Beauchesne's third edition, contemplate circumstances of the nature set forth in the amendment.
Similarly, it seems to me that the present subamendment is of questionable regularity in that, while it bears a certain relation to the introductory words of the amendment, it does not purport to alter the amendment in any substantial particular, but in fact raises new matters foreign to the amendment. See Beauchesne's third edition, citation 364.
At this closing stage of the session I would not wish to introduce a discordant note of severity. For this reason, and since there will be no other occasion on which the matter contained in the subamendment could
e formally raised, I will allow the sub-mendment to stand. In addition, I am ware that considerable latitude is allowed in mendments proposed to the motion for an ddress in reply to the speech from the drone and during the budget debate.
At the same time I do hope that, at the ext regular session of the house, members rtien drawing motions, especially amend-lents, will have more scrupulous regard to le rules governing their admissibility. This dll tend to minimize procedural debate and dll greatly facilitate the orderly transac-on of the business of the house.


Mr. Cardiff:: Mr. Speaker, I was paired. Had I voted I would have voted for the amendment to the amendment.


Mr. E. T. Applewhaite (Skeena):: Mr. Speaker, it is not necessary to advise the house that I am no authority on international affairs or military matters. Therefore I do not propose to try to advise the house how to decide what should be done with respect to the situation developing in Europe. I am rising to ask for information. The chronic cry of the official opposition seems to be: We have no information. The leader of the opposition (Mr.'Drew) and the hon. member for Lake Centre (Mr. Diefenbaker) in speeches more eloquent than enlightening-and they were supported by several others of the same calibre-have been claiming that they have

Dumas Eudes Ferrie Follwell Fontaine Fournier (Hull)
Fournier (Maisonneuve-Rosemont)
Fulford
Garland
Garson
Gauthier (Lake St. John)
Gauthier (Sudbury)
Gauthier (Lapointe)
Gauthier (Portneuf)
George
Gibson
Gingras
Gingues
Goode
Gosselin
Gour (Russell)
Gourd (Chapleau)
Gregg
Harris (Grey-Bruce)
Harrison
Healy
Hellyer
Helme
Hetland
Hosking
Howe
Huffman
Hunter
Jeffery
Jutras
Kent
Kickham
Kirk (Antigonish-Guysbo rough)
Kirk (Digby-Yarmouth)
Lafontaine
Laing
Langlois (Berthier-Maskinonge)
Langlois (Gaspe)
Lapointe
Larson
Leduc
Lefrancois
Leger
Little
Macdonald (Edmonton East)
MacKenzie

The Budget-Mr. Applewhaite no knowledge as to what is the policy of the government with respect to the European situation.


Gordon Knapman Fraser: Correct.


Mr. Ferguson:: We know you will not give us much information.


Edward Turney Applewhaite: The Prime Minister (Mr. St. Laurent) this afternoon stated that policy, and stated it clearly. He said that, in so far as the European situation is concerned, the policy of the Canadian government is not to send Canadian troops to Europe at this time. What I want to know is, what is the Conservative policy, or is there one? This afternoon the hon. member for Lake Centre (Mr. Diefenbaker), who to do him justice can certainly put words together so beautifully that you would almost think he had a policy behind them, outlined the problems we would face when we returned to our constituencies and had to report upon this session. We will have to report, he said, on the plans of the government. Believe it or not, Mr. Speaker, I should like to make a fair report on this session. I should like to report on the proposals of the government and I should like also to report on the proposals of the official opposition. If I am to do that, however, I find that I must first ask the official opposition: what would you do? How can I report on the proposals of the opposition if we do not know what those proposals are? If this government is wrong in its stated policy, what is the suggested alternative and who has suggested it? I would ask someone in the official opposition, if anyone over there can do it, to tell us what they would do.


Mr. Speaker:: I declare the amendment lost.


Mr. Browne (Si. John's West):: Mr. Speaker, was paired with the hon. member for ukon-Mackenzie River (Mr. Simmons). If had voted I would have voted for the mendment.


Mr. Speaker:: It it the pleasure of the house ) adopt the main motion?


George Alexander Drew: Mr. Speaker, before this house Loses there is one subject which I believe it i my duty to deal with, I have been greatly rrprised, as I am sure many other members ave, by the nature of some of the statements lade in this house about opinions expressed utside this house by the hon. member for Lamloops (Mr. Fulton). Until yesterday I id not think that those comments were rorthy of attention, as they were most of all
reflection upon those who employed such ictics on so serious an occasion. I am not repared, however, to permit the words of re member for Coast-Capilano (Mr. Sinclair) i pass unchallenged in view of the extremely ffensive nature of his remarks.
No one will question his right, or the right f any other member, to express any opinion i regard to the views put forward by another lember; but in his remarks to this house esterday he first referred to the member for Lamloops as an isolationist, and then went n to say that he had done something of a ature similar to that for which someone lse was sent to an internment camp.


George Alexander Cruickshank: Hear, hear.


George Alexander Drew: I would point out-


Some hon. Members:: Order.


George Alexander Drew: I would point out that in the case /hich he suggested as a parallel the govern-ient alleged that a law had been broken, n this case, whether one agrees with /hat the hon. member for Kamloops (Mr. 'ulton) said or does not, no law has been roken, and I am sure the hon. member for Loast-Capilano was well aware of that fact, 'urthermore, the complaint of the govern-lent in the other case was that it was itended to hinder our military efforts. Whether well advised or otherwise, the opin-Dn expressed by the hon. member for Kam-aops was directed to a greater military effort han that which was being put forward by the overnment.
The Budget-Mr. Drew


An hon. Member:: Nonsense.


Stuart Sinclair Garson: Oh, oh.


George Alexander Drew: Listen. I do not agree with what was said by the hon. member for Kamloops. He is well aware of that fact. Whether I agree with him or not, however, I do know that he was sincere, and completely sincere, in putting forward the ideas he expressed.


George Alexander Cruickshank: So was Houde.


George Alexander Drew: It comes with very bad grace from any member of this house who has not seen combatant service to reflect upon the loyalty of the gallant member for Kamloops.


George Alexander Cruickshank: Mr. Speaker-


Some hon. Members:: Sit down.


George Alexander Cruickshank: To say that the hon. member for Coast-Capilano (Mr. Sinclair) did not have combatant service-


Some hon. Members:: Sit down.


George Alexander Cruickshank: On a question of privilege-


An hon. Member:: You are not the only soldier in this house.


George Alexander Cruickshank: Perhaps I am not the only soldier in this house. On a question of privilege, to say that my colleague, the hon. member for Coast-Capilano, did not have combatant service-


Mr. Pearkes:: He did not say that.


George Alexander Cruickshank: To say that he did not have combatant service is not worthy even of the leader of the opposition (Mr. Drew).


George Alexander Drew: He might well have found reasons-


Some hon. Members:: Withdraw.


George Alexander Drew: I am not withdrawing anything I have said. I said, it comes with very bad grace from any member of this house who has not seen combatant service to reflect on the loyalty of the hon. member for Kamloops. I would point out that there are those in this house who have not seen combatant service who have reflected on the loyalty of the hon. member for Kamloops, one member using the expression "sabotage".


An hon. Member:: Very small.


George Alexander Drew: He might well have found reasons for not offering his service-


Mr. Pouliol:: Mr. Speaker, I rise on a point of order. The leader of the opposition is taking on the defence-


George Alexander Drew: Mr. Speaker, I would ask what the point of privilege is.


George Alexander Cruickshank: You will find out.

The Budget-Mr. Drew


Jean-François Pouliot: I will speak strictly to the point of order, and I will have something else to say afterwards. Speaking to the point of order-


George Alexander Drew: What is it?


Jean-François Pouliot: The leader of the opposition is attempting to defend the hon. member for Kamloops.


George Alexander Drew: Mr. Speaker, I ask that the point of order be stated.


Jean-François Pouliot: Give me a chance to speak.


Mr. Speaker:: Order. I would ask the hon. member for Temiscouata (Mr. Pouliot) to state his point of order as briefly as possible.


Mr. Adamson:: And not make a speech.


George Alexander Cruickshank: Give him a little Bren gun.


Jean-François Pouliot: With due deference to you, Mr. Speaker, I will say it in one sentence with a comma.


Arthur Leroy Smith: In a coma, you mean.


Jean-François Pouliot: I will have to repeat the first part of the sentence, though. The leader of the opposition is attempting to defend the hon. member for Kamloops, and he complains about something that was said by some other hon. member about the character of the hon. member for Kamloops. My question is-


An hon. Member:: There is no question.


Jean-François Pouliot: In raising the point of order I would first like to know what the hon. member for Kamloops said, before the leader of the opposition takes his defence.


George Alexander Drew: Mr. Speaker-


George Alexander Cruickshank: What did he say?


George Alexander Drew: I pointed out that the hon. member for Kamloops might well have found reasons for not offering his services: the son of a widowed mother, he joined the Seaforth Highlanders early in 1940, served in Italy and later served in the different battle areas of Europe on active service right up to VE-day. I might add that his brother, the distinguished "Moose" Fulton, D.S.O., D.F.C., A.F.C., was killed on active service with the R.A.F. during the war. Combatant service and loyalty to Canada and service to his country are not unknown to the hon. member for Kamloops or to the members of his family.
But it was suggested in the speech yesterday to which I referred that I should feel some measure of concern about anyone expressing a different opinion from that which I hold. May I say that I have not yet heard any suggestion from the hon. member for


Coast-Capilano, or from anyone else on tha side of the house, that the Prime Ministe (Mr. St. Laurent) had any reason to becom answerable in this house and to explain word such as those which have been used by mem bers of his party. I had not suggested it no do I now; but I would remind the hon. mem bers who have made the suggestion, fo instance, that a front bench member of th Liberal party said this in the house, and quote the words:
We are to discuss Korea. Why? Because of th yellow press that has magnified the incident. Whs are we going to do about it? What interest do w have in Korea? There may be a few Canadia missionaries of various denominations in that plact but how many Canadians are there in south Korea I use my privilege as a Canadian citizen and as member of parliament to give a warning to yoi sir, to the House of Commons, to the parliament c my country, and to every man, woman and child i this country. It is very nice to beat the drum! We hear the beating of the drum at the beginnin of the war and at a military funeral. The sound i made on the same instrument, but is it the same We may think of that. As a member of the parlia ment of Canada I cannot do otherwise than to regrs that nearly all members of parliament have thei mentality shaped by the yellow press in Canada; th yellow press which exploits the credulity of th people to the limit.
That is a quotation from Hansard.


Jean-François Pouliot: Hear, hear.


George Alexander Drew: 
James Sinclair: I still believe it.


George Alexander Drew: Whether the hon. member for Coast-Capilano (Mr. Sinclair) agrees with all that the hon. member for Kamloops (Mr. Fulton) has said, at least it can be said that, unless he has changed his opinion-and he indicates that he has not-then he holds substantially the same views as those which prompted the remarks of the hon. member for Kamloops.


George Alexander Cruickshank: Nonsense.


George Alexander Drew: I hope that, whether hon.
members agree with what has been said or whether they do not, we shall not again hear in this House of Commons aspersions on the loyalty or good faith of a gallant young veteran of the last war whose combat service is certainly quite equal to that of the hon. member for Coast-Capilano.


George Alexander Cruickshank: You are just being funny.


George Alexander Drew: The loyalty of the hon. member for Kamloops has been proved in the most severe test that man can face.


Jean-François Pouliot: Mr. Speaker, in the first place I want the leader of the opposition (Mr. Drew) and the hon. member for Kamloops (Mr. Fulton) to understand that I am not going to discuss their military records, which are excellent. But it is not because anyone had a good service in the army, a good military record thirty, ten or even five years ago that he must be declared infallible for the rest of his life. A man may have been a gallant officer, like the leader of the opposition or like the hon. member for Kamloops, or like the hon. member for Coast-Capilano or, in fact, anyone else in the army, the navy or the air force. It does not prevent him from making human mistakes in his life.
The Budget-Mr. Pouliot
By the way, everyone has been witness to the countless mistakes made by the leader of the opposition. Nevertheless, he is gallant, and I prefer him when he smiles to when he frowns. The hon. member for Kamloops is a gallant officer; he can take good care of himself. But listening to the leader of the opposition I thought the hon. member for Kamloops was a baby in his crib-


An hon. Member:: You knew better.


Jean-François Pouliot: -and that the Tory party was the nursery, in charge of a strong nurse, the leader of the opposition.


An hon. Member:: Flat.


Jean-François Pouliot: It may be flat, but my hon. friend is one of the babies. I see many of them, and there is nothing so interesting to me as to see the Tory babies in front of me. They are like children.


An hon. Member:: You just got from the corral yourself.


Jean-François Pouliot: I will say to my hon. friend who just interjected that he made a sound that it was impossible to understand.
Well, here we are. The leader of the opposition has found that the hon. member for Kamloops has been the victim of two insults. The first one is that of being compared to His Worship the Mayor of Montreal, the hon. member for Papineau (Mr. Houde). We see what tact the leader of the opposition has shown in this occurrence. No greater insult ever would befall the hon. member for Kamloops than to have been compared to His Worship the mayor of the metropolis of Canada, one of our colleagues, the hon. member for Papineau. He did not always speak like that.


Mr. Casselman:: And this is the parliament of Canada!


Jean-François Pouliot: I will tell His Worship that he has been insulted by the leader of the opposition in the house, and he will not believe it. He will say, "How much the times have changed."
Another insult is that the hon. member has been called an isolationist. It is a new accusation to terrorize anyone who does not agree with the warmongers, with the Tories, with the jingoes. Any time one differs from those self-complacent gentlemen he is called an isolationist. What does it mean? It is a new expression which is used wrongly at times by opportunist journalists, who wish to try to frighten somebody and to prevent him from using freedom of language, which has been so well advocated in theory, more than in fact, by the hon. member for Lake Centre (Mr. Diefenbaker).
712	HOUSE OF
The Budget-Mr. Mutch
The leader of the opposition reminds me of the defunct Bennett when he read an excerpt from one of my speeches. Does he know that Bennett was so fond of my speeches that he was running after the fresh copy of Hansard. the typewritten Hansard, before it was printed? It was the only sensible thing he ever said in the house, when he read my speeches. I will pay the same compliment to the leader of the opposition: he never was so eloquent, he never spoke so well as when he read an excerpt from a speech I made in the House of Commons. He read it in his inimitable way of saying things. He was grand!-much more than I ever was. The next speech I make I want him to deliver for me.


Mr. L. A. Muich (Winnipeg South):: Mr. Speaker, I do not propose to take more than three or four minutes in the debate tonight. I came back to the house today from another place where some 700 or 800 men and women of this country with some claim on the country for their sincere interest in it have been deliberating, without the responsibility that devolves upon this house, the problems of this nation. I came back rather hurriedly because I thought I would like to hear the end of the deliberations of this serious question.
The debate tonight has not inspired me and it has not particularly interested me. I have not enjoyed the remarks that were made about either one of two of the more brilliant and gallant younger members of this house. If we do anything to discourage expressions of individual opinion we will not succeed in raising the level of legislative debate. Parliament lives by virtue of the initiative and personal courage of those who come to it. I am not surprised that any one of us should make an error of judgment. I would remind parliament that errors of judgment are sometimes best forgotten. It is only those who do not do anything who make no errors.
I am not condemning the right to make them, but I am not condoning the nature of this debate. I am responsible only for my own remarks. But I am not inspired by personalities and I am quite sure that large numbers of people who read the debates of this house tonight will not be inspired by personalities to a higher regard for parliament at this hour.


Mr. Speaker:: Shall the motion carry?


George Alexander Drew: On division.
Main motion (Mr. Abbott) agreed to on division.
(Mr. Poullot.]



WAYS AND MEANS

[Stage Direction]
The house in committee of ways and means, Mr. Dion in the chair.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Income Tax Act and to provide:
That in respect of income of a corporation from and after September 1, 1950, the rate of tax be increased from 10 per cent to 15 per cent on income not in excess of $10,000 and from 33 per cent to 38 per cent on income in excess of $10,000.
Stanley Howard Knowles: I noticed in the speech of the Minister of Finance the other night a prediction that the increase in the corporation tax would result in a revenue of $13,500,000 for the remainder of the current fiscal year, but that it would produce $85 million in a full year. I took that to mean the next full year. If the remainder of the current fiscal year means the period between September 1 and March 31 next it means that a revenue of $13,500,000 will be obtained in seven months, which is at the rate of approximately $1,900,000 a month. If $85 million is to be realized in a full year that would be at the rate of $7 million per month. I assume there is a ready explanation for this wide difference.


James Sinclair: I am informed that there is a six-months lag in the instalment paying of corporations and the corporations now affected will not start paying in accordance with this but in actual fact the full amount will be obtained when the final assessment is made. The collections may not be fully made until six months from now. The hon. member is quite right in saying that in seven months we should receive seven-twelfths of a full year's revenue, but because of that lag in collections and receipts there is that delay.


Stanley Howard Knowles: It will not be possible for a corporation by some bookkeeping device to avoid paying the full tax during this present period?


Mr. McCann:: If the fiscal periods of all corporations ended at the same time, then seven-twelfths of the revenue would be collected in the seven months following the introduction of this resolution. But as hon. members know, the fiscal periods of corporations may end in November, December, March, February or almost any month. A corporation has six months in which to make a complete return, and the result is that the actual money collected is usually six months after the end of the calendar year.


Stanley Howard Knowles: But the corporation will pay the new rate on all profits as from September 1?


James Joseph McCann: Exactly.


[Stage Direction]
Resolution agreed to.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Excise Tax Act and to provide:
1.	That the excise tax on goods mentioned in schedule I, section 80A and section 80B of the act that are at present subject to the rate of ten per cent be increased to fifteen per cent.	.
Donald Methuen Fleming: This is not a subject that is new and the view I intend to express is not new. However, I feel called upon to express it because I think it is a valid view and should be expressed in justice to those who are going to be called upon to pay this tax.
The taxes proposed to be increased under this resolution are levied at the manufacturer's level. They are passed on from hand to hand to the wholesaler, to the retailer, to the public, and in some cases also pass through the hands of a jobber.
This tax is subject to two vices. The first is the fact that it is a hidden tax. The consumer is not always conscious, as he ought to be, of paying it and that is one reason why it is popular with governments.
The second vice arises from the fact that it is levied at the manufacturer's level. As the goods are passed on from hand to hand mark-ups are added, which include mark-ups on the tax. That does not yield one cent additional revenue to the country, but it does add greatly to the price the consumer pays. I quite appreciate that there is no tax that does not arouse a certain amount of antagonism. Taxes are never popular. If the Minister of Finance has to find more revenue and is not going to make the necessary economies in order to meet the need, then presumably we are going to have more taxes. While this tax may not hurt a person on low income as much as a direct tax on him nevertheless it does hurt persons with low incomes out of proportion to their incomes.
In the third place, these taxes are consumer taxes. They are based upon consumption. The amount that the poor man pays through these taxes, compared with what the well-to-do man pays, is quite out of proportion to his means. It is obvious that the increases in these taxes are going to be made, but for my part-and I am speaking for myself-I wish to put myself on record, as I have on similar occasions in the past, with regard to taxes of this nature by saying that they are not the kind of taxes that ought to be encouraged by the House of Commons. They are discriminatory against people of small means. They are hidden taxes, and in the third place the consumer pays for more than the tax. The consumer pays the original tax plus the wholesaler's mark-up on 69262-46
Excise Tax Act
the tax, plus the retailer's mark-up on the mark-up on the tax. In that way you will find that in most cases what the consumer pays, by reason of the imposition of the tax, is just about twice as much as the government receives by way of tax levied at the manufacturer's level.


John Horne Blackmore: I should like to ask the
parliamentary assistant to read to the committee the items covered in schedule 1, sections 80A and 80B, so that we shall know just what they are.


James Sinclair: This section refers generally to those items in schedule I at present subject to a 10 per cent excise tax which is to be increased to 15 per cent. In schedule I there is one item, cigars, which is not at 10 per cent but at 25 per cent, and therefore it is not affected by this change. However, in the actual body of the Excise Tax Act, in sections 80A and 80B, there is provision for a 10 per cent tax on furs, and furs have not been included in the schedule. The actual effect of this section is to raise to 15 per cent the excise tax on those articles which at present are taxed 10 per cent where those articles are mentioned in the schedule or actually, as in the case of furs, in the body of the act.


John Horne Blackmore: What I desire to have is a list of the items included in Hansard so that people will know what items we are discussing.


James Sinclair: I will very gladly do that again. I do not know whether it is a good practice to repeat in Hansard parts of existing statutes.


Donald Methuen Fleming: They are all in the schedules to the act.


James Sinclair: They are in the schedules to the act. I think in the last two sessions we placed the schedules on Hansard for the purpose of easy reading. Provided the house agrees, I have no objection to putting schedule I on Hansard. We will also include the actual phrasing of sections 80A and 80B.


Some hon. Members:: Agreed.


James Sinclair: The following	is the
information:
Furs
80A. (1) There shall be imposed, levied and collected, an excise tax equal to fifteen per cent of the current market value of all dressed furs, dyed furs and dressed and dyed furs (i) imported into Canada, payable by the importer or transferee of such goods before they are removed from the custody of the proper customs officer: or: (ii) dressed, dyed, or dressed and dyed in Canada, payable by the dresser or dyer at the time of delivery by him.
Fur content of garments, etc.
80B. There shall be imposed, levied and collected an excise tax equal to fifteen per cent of the current

Excise Tax Act
market value of the fur contained in any garment, robe, or other article imported into Canada, payable by the importer or transferee of such goods before they are removed from the custody of the proper customs officer.
First Schedule Schedule I
1.	Automobiles adapted or adaptable for passenger
use, with seating capacity for not more than ten persons each, fifteen per cent; provided that the tax on automobiles shall apply on the total price charged for such automobiles, which price shall include all charges for accessories, optional equipment, advertising, financing, servicing, warranty or any other charges contracted for at the time of sale, whether charged for separately or not; provided, further, that the tax shall not apply to automobiles imported under customs tariff items 702,	704,
705a, 706, 707 and 708.
2.	Articles, materials or preparations of whatever composition or in whatever form, commonly or commercially known as toilet articles, preparations or cosmetics, which are intended for use or application for toilet purposes, or for use in connection with the care of the human body, including the hair, nails, eyes, teeth, or any other part or parts thereof, whether for cleansing, deodorizing, beautifying, preserving or restoring, and to include shaving soaps and shaving creams, antiseptics, bleaches, depilatories, perfumes, scents and similar preparations, fifteen per cent.
3.	(a) Electrical appliances adapted to household use, viz. blankets; chafing dishes; coffee makers; curling irons or tongs; dish washers; food or drink mixers; food choppers and grinders; floor waxers and polishers; garbage disposal units; hair dryers; irons and ironers; juice extractors; kettles; portable humidifiers; razors and shavers; toasters of all kinds; vacuum cleaners and attachments therefor; waffle irons, fifteen per cent; (b) firearms and complete parts thereof and ammunition except for military or police purposes, fifteen per cent; (c) motor cycles and all other two- or three-wheeled motor-driven vehicles including motors for attachment to bicycles but not including vehicles specially designed for carrying goods or for use by invalids, fifteen per cent; (d) golf clubs and golf balls, fifteen per cent; (e) fishing rods and fishing reels, fifteen per cent.
4.	Devices, commonly or commercially known as lighters, which produce sparks, flame or heat whether or not in combination with other articles on the separate or combined value, as the case may be, fifteen per cent.
5.	Cameras and unexposed photographic films and plates, except those sold for industrial or professional photographers' use; projectors for pictures except those sold for commercial, religious, or educational purposes, fifteen per cent.
6.	Phonographs, record playing devices, radio broadcast or telecast receiving sets and tubes therefor, fifteen per cent.
7.	Coin, disc or token operated slot machines and vending machines; coin, disc or token operated games or amusement devices of all kinds, fifteen per cent; provided that the tax hereby imposed shall not apply to coin collectors used on pay telephones, turnstiles for collecting tolls or charges, coin operated locking devices, nor gas, electric or parking meters.
8.	Trunks; suitcases; bags and luggage of all kinds; purses; wallets; billfolds; key and card cases; handbags; jewel cases; dressing and toilet cases; shopping bags, except paper bags; golf and other sports bags; all the foregoing whether fitted or not, fifteen per cent; provided that the tax

hereby imposed shall not apply to the goods mentioned herein when manufactured expressly for a customer for his use in the operation of his business or profession.
9.	Ash trays; tobacco pipes; cigar and cigarette holders; cigarette rolling devices and other smokers' accessories, not to include lighters, matches or tobacco, fifteen per cent.
10.	Fountain pens; ball-point pens; ink pencils; propelling pencils; desk sets and all other desk accessories, fifteen per cent.
11.	Cigars, twenty-five per cent; provided that the sale price of cigars manufactured in Canada shall include the amount of excise duty payable thereon under the Excise Act.
12.	Matches, fifteen per cent.
13.	Tires and Tubes: (a) Tires in whole or in part of rubber for automotive vehicles of all kinds, including trailers or other wheeled attachments used in connection with any of the said vehicles, fifteen per cent; (b) Inner tubes for use in any such tires, fifteen per cent; provided that the tax hereby imposed shall not apply to the goods mentioned herein when used exclusively for the original equipment of such automotive vehicles.
14.	(a) Clocks and watches adapted to household or personal use, except railway men's watches, and those specially designed for the use of the blind, and alarm clocks where the sale price by the Canadian manufacturer or the duty paid value of those imported does not exceed ten dollars fifteen per cent; (b) Articles of all kinds made in whole or in part of ivory, jet, amber, coral, mother of pearl, natural shells, tortoise shell, jade, onyx, lapis lazuli, or other semi-precious stones fifteen per cent; provided that the tax on the articles enumerated in subsections (a) and (b) of this section shall not apply to the goods mentioned where the sale price by the Canadian manufacturer, or the duty paid value of the goods imported, does not exceed one dollar; (c) Articles commonly or commercially known as jewelry, whether real or imitation, including diamonds and other precious or semi-precious stones for personal use or for adornment of the person; goldsmiths' and silversmiths' products except plated table knives, forks and spoons; pewter ware; articles of cut glassware, crystal glassware, cut or not, etched glassware, or metal decorated glassware; articles of china, porcelain, earthenware, marble, stoneware or other pottery ware, except articles for use in the preparation or serving of food or drink fifteen per cent; provided that the tax on the articles enumerated in subsection (c) of this section shall not apply to the goods mentioned where the sale price by the Canadian manufacturer, or the duty paid value of the goods imported, does not exceed fifty cents.
15.	Carbonated beverages, aerated waters, unfermented fruit juice beverages (not including beverages at least ninety-five per cent of which consists of pure juice of the fruit) and imitations thereof and all other compounded or mixed soft drinks where the beverages, waters or drinks are put up in bottles or other containers for sale thirty per cent.
16.	Candy, chocolate, chewing gum and confectionery that may be classed as candy or a substitute for candy thirty per cent.


John Horne Blackmore: I should like to associate myself with the views of the hon. member for Eglinton. I believe that, so far as the consumer is concerned, the price structure in Canada is far too high already. My objection to this whole section of the resolution is that it is going to force up the cost of living.

believe if the ordinary person in Canada new to what extent the prices he is paying or the ordinary commodities on which he ives were the result of direct governmental mposition of taxes-


Donald Methuen Fleming: Indirect.


John Horne Blackmore: Indirect, but nevertheless overnmental imposition of taxes-he would e appalled.


Donald Methuen Fleming: Hear, hear; he certainly irould.


John Horne Blackmore: I believe everybody would e appalled. Many people throughout the ountry are blaming the big interests for xploiting the people. We often hear our l.C.F. friends expounding on this general ubject.


Stanley Howard Knowles: Hear, hear.


John Horne Blackmore: They blame the big inter-sts for exploiting the people when as a latter of fact the big interest that is exploit-ng the people is the big government of lanada.


Donald Methuen Fleming: Hear, hear.


John Horne Blackmore: I protest against this with very bit of power in my being. I do not lelieve that we should be passing any of hese excise taxes at all at this time. It is me thing to impose excise taxes that increase he cost of living when the cost of living is noderate, but when the cost of living is completely exorbitant I consider it an outrage o pass such excise taxes.


James Sinclair: Mr. Chairman, I shall not
eply to the argument as to whether the mposition of taxes at the manufacturers' evel is pyramided into the final price because remember that on the budget resolutions last pring we had a very long argument with he hon. member for Lethbridge and the hon. nember for Eglinton on mark-ups and mark-ips and mark-ups. There was a great lifference of opinion between those who hink that the wholesalers and retailers fol-ow a rigid rule of thumb and automatically >ut on mark-ups, no matter what the cost if doing business is, and those who believe hat the cost of doing business is the factor vhich affects mark-ups. Anybody who is nterested in my views can find them in the liscussion of the budget resolutions of last pring.


Mr. McLure:: The question I should like
o ask has reference to the 50 per cent idvance on furs. There is an increase from 0 per cent to 15 per cent, a 50 per cent idvance. Is that on raw, semi-processed or >rocessed furs, or is it carried over to the 69262-46J
Excise Tax Act
finished articles when they are made into garments? Where does the tax begin and where does it end?


James Sinclair: Sections 80A and 80B, which specify it in the act, specify that the tax shall be on the current market value of the dressed furs, not raw furs.


Winfield Chester Scott McLure: When it is manufactured,
only after it is processed or dressed.


James Sinclair: At the dressed level; that is right.


Winfield Chester Scott McLure: It is not on the finished fur when it is made up?


James Sinclair: Not on the retail level, no.


[Stage Direction]
Resolution agreed to.
2. That there be imposed, levied and collected an excise tax of fifteen per cent on the following: (a) electrical appliances and equipment adapted to household use, viz., blankets; chafing dishes; coffee makers; curling irons or tongs; dishwashers; food or drink mixers; food choppers and grinders; floor waxers and polishers; garbage disposal units; hair dryers; irons and ironers; juice extractors; kettles; portable humidifiers; razors and shavers; toasters of all kinds; vacuum cleaners and attachments therefor; waffle irons; (b) firearms and complete parts thereof and ammunition except for military or police purposes; (c) motorcycles and all other two- or three-wheeled motor-driven vehicles including motors for attachment to bicycles but not including vehicles specially designed for carrying goods or for use by invalids; (d) golf clubs and golf balls; (e) fishing rods and fishing reels.
Stanley Howard Knowles: Mr. Chairman, I cannot
help but wonder how the line was drawn in clause 2. I was glad to hear that such important items as electric stoves, refrigerators and washing machines were not being made subject to this tax. Nevertheless it seems to me that, while the list we have before us may include some things that are to some extent in the luxury class, certainly that can hardly be said to be the case for irons, toasters, and perhaps some other similar items. There are a lot of these things that were luxuries according to the pattern of living of a few years ago, but they are becoming necessities today. I point out that stoves and refrigerators are rather costly things these days, and of necessity many people have to buy them secondhand. But people still like to buy a new iron, a new toaster, or some of these other things. It seems to me that to impose a tax there is to put a tax on something that is really a necessity, and again it hits the little fellow. I do not want the parliamentary assistant to get up now and make the kind of speech he made yesterday, and say I am opposing the raising of revenue for the purposes for which this money is being raised. I am sure he will not do that, but I should like to know on what basis the line was drawn excepting

Excise Tax Act
the more costly refrigerators and stoves while not excepting items such as irons and toasters.


James Sinclair: This brings up one of the great problems of any taxation system. As the hon. member just pointed out, ten years ago electric stoves, refrigerators and even washing machines were regarded as semiluxuries. Today they are regarded as necessities. The problem is always where to establish the borderline between what is a necessity and what is a luxury. I have no doubt that if we had exempted toasters and irons the hon. member would have turned to the next group and asked why they were not included also, since they may be almost as essential. It is simply a matter of drawing a line somewhere; and certainly in most Canadian homes today electric stoves, washing machines and refrigerators are essential.


Winfield Chester Scott McLure: I see a tax of 15 per cent on blankets. What kind of blankets are those?


James Sinclair: Electric blankets.


Winfield Chester Scott McLure: Do you not think that should have been specified?


Donald Methuen Fleming: I should like to support what has been said by the hon. member for Winnipeg North Centre. I grant that a line must be drawn somewhere if we must have these increases in taxation and there are to be exceptions, but it seems to me this is a very arbitrary and discriminatory sort of selection which on the one hand makes an exception in the case of a washing machine, saying that is not a luxury, and on the other hand says an electric iron or toaster is a luxury and therefore should be taxed. I select for example the same two articles mentioned by the hon. member for Winnipeg North Centre, the electric iron and electric toaster. Having regard to the habits and standards of living of the Canadian people it seems to me that anyone who speaks of those as luxuries is taking a very distorted view of what constitute luxuries in the experience of the Canadian people. How any government or any Minister of Finance can draw a line like that and say an electric refrigerator or electric washing machine is not a luxury and therefore should not be subject to this kind of tax, and at the same time say that an electric iron, costing perhaps 5 per cent as much as an electric refrigerator, or an electric toaster costing about 5 per cent as much as an electric washing machine, is a luxury and should be taxed, is something that I am sure will baffle the intelligence of the average Canadian. I am absolutely unable to understand a line drawn like that. I submit there is no justification for applying an excise tax of 15 per cent on such things as electric
[Mr. Knowles.)
irons and toasters, bearing in mind that thi consumer will have to pay not 15 per cent but probably more like 30 per cent by way of increase when he buys these goods across the counter.


John Horne Blackmore: I find myself at a loss tc understand why such a group of articles should have been selected anyway. I am wondering whether the object is to discourage the use of these articles because into them goes a certain amount of metal which might be used in the war effort; or whether the object of the government is to discourage the use of electricity; or whether the object is simply to raise money. If the object is tc simply raise money I must say that it is a contemptible tax. If the object is to discourage the use of the metal entering into the manufacture of these articles, or to discourage the use of electricity, I can understand why that should be done. But if it is desired tc discourage the use of electricity, and of the materials entering into the composition oi these articles, why not ration them instead of taxing them and raising costs? I wondei if the parliamentary assistant could tell us whether the object is to discourage the use of these materials, or to raise money?


James Sinclair: Certainly during the war ir this type of taxation there was the elemenl of the great need for power conservation. 1 do not believe that need is so great at the moment here in Canada. The principal purpose of these tax changes, of course, is to find enough revenue to make sure we pay as we go for the rest of the current year. The hon member for Lethbridge said this was a contemptible tax. I imagine that at one time oi another most taxpayers have regarded all taxes as contemptible, and have used harsh language in connection with them. The faci remains, however, that we must raise this revenue. The hon. member for Eglinton suggested I had said these things were luxuries. I put it in perhaps a negative way by saying that certainly washing machines, refrigerators and stoves were necessities, but
1	would say that all the articles mentioned here certainly are in common use. It will be recalled, however, that in our sales tax structure we do tax things that are in very common use, again because of the necessity of raising the revenues required to carry on the operations of the government.


Agar Rodney Adamson: In subsection (a) of section
2	there are two items which I think the parliamentary assistant should consider removing from the list. They are chafing dishes and kettles. A great many people are living in what is known as shared accommodation, in extremely cramped quarters where they have no stoves and must do their essential cooking

Excise Tax Act
aver an electrical device known as a portable grill or perhaps a chafing dish. These people do not have adequate facilities. They do not have a stove, electric or any other kind. I suggest to the parliamentary assistant through you, Mr. Chairman, that these portable grills should not be taxed, because they are absolutely essential to people living under these conditions.
My second point is in connection with kettles. People living in these extremely cramped quarters find electric kettles an essential part of their cooking apparatus. While to those of us who have an electric, gas, wood or coal stove an electric kettle is a luxury, though a very useful one, that is not the case with people living in shared accommodation. If they have young children they probably heat the baby's bottles over an electric element in the bathroom, or use an electric kettle for similar purposes. To these people a kettle is definitely not a luxury; it is just as essential as an electric stove or refrigerator is to a more established family. So 1 suggest that consideration should be given to people living under these conditions.


James Sinclair: I can state that the government is quite aware of this problem and has made provision for it, because in the classification of electric stoves there are included these various types of hotplates and these new small roasters which are capable of cooking a meal completely. A hotplate is an essential because most of these one or two room apartments to which the hon. member refers are rented by people who cannot afford to have an electric percolator, electric kettle and all the other electrical appliances. They find it simpler to have a hotplate and use an ordinary kettle, and so on. These various types of hotplates and roasters which cook a meal completely are included in the classification of electric stoves.


Agar Rodney Adamson: I am glad to have the parliamentary assistant assure us on this point. Most of these hotplates are one or two burner devices, and I hope the government will give consideration to exempting the electric kettle as being an essential part of the equipment for a small family. These hotplates usually have two burners, and if one is cooking a meal and intends to have a hot beverage one needs another piece of equipment to heat the beverage. I assure the parliamentary assistant that these electric kettles are an essential piece of equipment.


Mr. Fournier (Hull):: Mr. Chairman, I move that the committee rise, report the resolution which was carried concerning the Income Tax Act, and report progress on the other resolutions.
Progress reported.
Resolution (income tax) reported, read the second time and concurred in.
Mr. Fournier, Hull (for Mr. Abbott) thereupon moved for leave to introduce Bill No. 6, to amend the Income Tax Act.
Motion agreed to and bill read the first time.



BUSINESS OF THE HOUSE

Alphonse Fournier: the adjournment of the house.
He said: Tomorrow we shall continue in committee with these budget resolutions and the bills that will follow the resolution. In Votes and Proceedings today there are two notices of motions of bills in the name of the Prime Minister which we would like to take up.
Motion agreed to and the house adjourned at 10.55 p.m.

Thursday, September 14, 1950