1950-02-23

[Stage Direction]
Bill No. 7, to incorporate Alberta Natural Gas Company.-Mr. Maybank.


Hon. Stuart S. Garson (Minister of Justice):: I should like to make a correction to an answer which I gave yesterday, as reported at page 128 of Hansard. The hon. member for Winnipeg North Centre (Mr. Knowles) yesterday asked me a question without previous notice. When the Hansard proof came to my office for correction I realized that I had mistaken the question asked by the hon. member as dealing with the flat glass report rather than with the match report to which it did refer.
The answer I gave yesterday was quite correct in relation to the flat glass industry. The situation with respect to the match report is as follows:	In accordance with the usual
procedure, the match report, after being considered by the law officers of the Department of Justice, was submitted to outside counsel on February 6, 1950, for an opinion as to whether prosecution is warranted. It is expected that this opinion will be received in the near future.



INQUIRY AS TO ASSOCIATION OF EDDY MATCH COMPANY WITH E. B. EDDY COMPANY

[Stage Direction]
On the orders of the day:
Mr.  W. Chester S. McLure@Queens: should like to direct a question to the Minister of Justice. I gave him a copy of it, and I know he is prepared to answer it. In view of the minister's intimation a few days ago of impending prosecutions in the match industry, will the minister inform the house whether the Eddy Match Company, mentioned in the McGregor report, is affiliated with or associated with the E. B. Eddy Paper Company in Hull, just across the Ottawa river from this building?


Stuart Sinclair Garson: I want to thank my hon. friend for giving me
notice of the question. From such inquiry as I have been able to make in the short time since I received notice of the question, I find that the E. B. Eddy Company, of Hull, and the Eddy Match Company, which has a factory at Pembroke, Ontario, are separate corporations. That is all I can say.


Hon. Alphonse Fournier (Minister of Public Works):: Mr. Speaker, I know personally that there is no relationship between the Eddy paper company in Hull and the Eddy Match Company. I understand that in 1924 the E. B. Eddy Company sold its interests in the Eddy Match Company to some other firm in this country or outside. The local company in Hull has no relationship with the Eddy Match Company.


Mr. Knowles:: In view of the publicity given to the minister's answer of yesterday, will he inform the house as soon as a decision has been reached with respect to this matter?


Stuart Sinclair Garson: Yes, I will, Mr. Speaker, in accordance with our usual practice.


Stanley Howard Knowles: Not the way you did it last time.



INQUIRY AS TO PAYMENT ON SALES, 1945 TO 1948 CROPS

[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: I wish to direct a question to the parliamentary assistant to the Minister of Trade and Commerce, arising out of the widespread desire of western farmers to know whether or not the wheat board will in fact make an interim or final payment in connection with the sale of the 1945 to 1948 crops. Is the parliamentary assistant now in a position to give some information with regard to that matter?


Mr. G. J. Mcllrailh (Parliamentary Assistant to the Minister of Trade and Commerce):: I am
not in a position to give much information that would be helpful. The situation is that a great njany messages have been received from members, producers and farm organizations with respect to this matter. The subject matter of the representations has been passed on to the wheat board, and they are now considering the whole question. Beyond that I have nothing to say that would be helpful.

Inquiries of the Ministry TRANS-CANADA HIGHWAY



INQUIRY AS TO AGREEMENT WITH PROVINCES AND BEGINNING OF CONSTRUCTION

[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: I should like to direct a question to the Minister of Resources and Development. Will the minister inform the house what progress has been made in signing agreements with the provinces in respect of construction of the trans-Canada highway? Will he also tell the house when actual construction work will begin?


Mr. Speaker:: With regard to these questions, I might say that I have allowed some latitude because questions on the order paper are not being answered. If I allow at this time questions which in the ordinary course would appear on the order paper, I hope that hon. members will not take advantage of my leniency.


Hon. Robert H. Winters (Minister of Resources and Development):: Mr. Speaker, as the hon. member knows, the house passed the act last session. Immediately after parliament prorogued there was a conference to discuss technical matters. That conference was very cordial and in my opinion a successful one. We continued discussions with the provinces on various points, including the choice of routes through their respective areas, and the discussions have progressed to the point where I hope to be able, within the 'course of the next few days, to send to all provinces a draft agreement.



QUESTION AS TO ISSUE OF NEW GOVERNMENT TELEPHONE DIRECTORY

[Stage Direction]
On the orders of the day:
Mr. G. K. Fraser (Peterborough West):: May
I address a question to you, Mr. Speaker, or to the appropriate minister? I believe this matter comes under your jurisdiction, sir. I should like to ask when members of parliament will be supplied with a new telephone directory, showing the changes of telephone numbers of the new ministers, deputy ministers, and so forth. As things are at the present time there is much inconvenience.


Hon. Douglas Abboit (Minister of Finance):: I shall make inquiries and endeavour to give my hon. friend and hon. members generally the information as soon as possible.



FISHERIES


[Stage Direction]
On the orders of the day:
Hon. R. W. Mayhew (Minister of Fisheries):: Before the orders of the day were called yesterday, the hon. member for Queens asked me a question about the extension of the fishing season for smelts in Prince Edward Island. He did not send me notice of the question. I regret that I did not hear his question distinctly, but I am prepared to give him an answer now.
The fact is that we have no requests from the fishermen of Prince Edward Island for an extension of time. When the extension was being considered for New Brunswick and Nova Scotia we did make inquiries as to whether in Prince Edward Island they wanted an extension or not, and we found that there was no general demand for it.


Mr. McLure:: I wish you had asked me.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Victor Quelch (Acadia):: I should like to address a question to the Minister of Veterans Affairs. I have not given him notice of the question, but I did not think he required it. In view of the fact that during the past fifteen years it has been customary to set up a special committee on veterans affairs at the start of each new parliament, will the minister give me the grounds for refusing to set up that committee this session? I should like to remind the minister that this is the second session of a new parliament.


Mr. Speaker:: Order. Unless the minister particularly wishes to answer that question, it seems to me to be a controversial one which could be reserved for later. I did say that in respect to questions on the orders of the day I was allowing considerable latitude at this time, but I hope that hon. members will not, for that reason, refrain from putting questions on the order paper which should appear thereon and will ask only such questions as are urgent when the orders of the day are called.


Victor Quelch: Numbers of us have received several telegrams. We thought the minister would like to have an opportunity of answering them.



UNEMPLOYMENT INSURANCE


Hon. Paul Marlin (for the Minister of Labour) moved: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the Unemployment Insurance Act, 1940, to provide for supplementary benefits during the winter season in any year and government financial contribution in consequence thereof, for additional insurance coverage, for readjustment and simplification of rates of contribution, and for consequential amendments; to provide also for an increase in the membership of the unemployment insurance advisory committee from six to eight members; and to provide further that the members of the national employment committee shall receive the same remuneration as the members of the unemployment insurance advisory committee.


Mr. Graydon:: Mr. Speaker, I know that the Acting Minister of Labour wishes to make a full explanation of this resolution, and we are most anxious at this time to facilitate his desire.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion?


Mr. Maclnnis:: No, Mr. Speaker. Under the circumstances I think it is due to the house that the minister should make at this time a statement of what is involved in the resolution before us. After that is done we can decide whether or not there is any urgency. If we can facilitate debate later on, I think we had better do so; but we must have the co-operation of the minister to begin with.


Paul Joseph James Martin: Mr. Speaker, I am sure that I express the view of all hon. members when I say that we all regret the necessary absence of the Minister of Labour, and we look forward to his return within a very short time.
Of course I agree with what the hon. member who has just taken his seat has said, namely, that there should be an explanatory statement of the general scope and purposes of the amendments contemplated by the resolution now before the house.
We have in Canada a well-established and comprehensive national unemployment insurance scheme, which has been in operation since July, 1941, covering employed workers in industry and commerce. This act has provided and will continue to provide a first line of defence for workers and their families against unemployment. It gives protection in an automatic and systematic way for more than two and a half million workers. Including these workers and their dependents, over 7 million persons are offered a measure of protection, as a right and not as a dole or a charitable gift.
Unemployment Insurance
Since the first benefit payments were made in 1942, over $223 million have been expended in unemployment insurance benefits. A complete system of regional and local insurance and employment offices has been established across Canada to administer the insurance provisions of the act and the national employment service which has been established in conjunction with the insurance operations.
These offices facilitate the placement of labour by informing persons in search of work of the jobs obtainable, and by informing employers of the type and number of persons seeking work. It offers a common meeting ground for employers and employees. Workers obtain employment sooner than would otherwise be possible, and employers' recruitment and placement costs are lower. As an illustration of the importance of this service to employees and to employers, as well as to our economy as a whole, it should be mentioned that 684,179 placements were made by these employment offices during the past year. Of these, 127,059 were casual and 557,120 were regular placements.
The protection provided to workers by the provision for unemployment insurance benefits in periods of unemployment has added very substantially to the stability of our national economy.
The government proposes in this bill to make provision, by the enactment of a new part to be added to the Unemployment Insurance Act, to give added protection to insured workers against unemployment in that period of the year when, due to the rigours of our winter climate, employment is normally at its lowest level, namely, in the period from January 1 to March 31 of each year.
The added protection to be provided takes the form of a provision for the payment of supplementary insurance benefits for periods of unemployment to persons employed in industries and occupations which are under the insurance coverage.' These supplementary benefit payments will, subject to compliance with the qualification conditions provided in the legislation, be payable to persons unemployed in the period January 1 to March 31 in any year, but in the present calendar year will be payable from the date the legislation comes into force until April 15, 1950.


Mr. Ferguson:: Does that affect unemployed members of parliament?


Paul Joseph James Martin: It would depend upon whether they come within the act.

Unemployment Insurance
The payment of supplementary benefits under the new part of the act will be in addition to and without prejudice to .benefit rights otherwise established by payment of insurance contributions under the act.
The groups of persons who may qualify for payment of supplementary benefits within the specified winter period which I have just defined, and the extent of the supplementary benefits payable, are as follows:
Class one:	Insured unemployed persons,
whose benefit rights under other provisions of the act have become exhausted or otherwise terminated since the March 31 preceding the date of claim, may claim supplementary benefits payable during the specified winter period up to the same number of days of benefits to which they were entitled under their last regular benefit year, but not exceeding the number of days in the specified winter period.
Class two: Insured unemployed persons who have not made the minimum number of insurance contributions required to qualify for payment of benefits under other provis-sions of the act, namely, a minimum of 180 contributions within the two years preceding claim, but who during the period since March 31 preceding the claim for supplementary benefit have made a minimum of ninety daily insurance contributions under the act, may claim for supplementary benefit payable during the specified winter period for the number of benefit days arrived at by dividing the number of contributions made by five, but not exceeding the number of days in the specified winter period.
The ratio of one supplementary benefit payment to five contributions corresponds to the ratio of benefit payments to contribution under the existing provisions of the act.
As I have already stated, the payment of supplementary benefits does not exhaust, interfere with or diminish rights to benefit payments accrued under other provisions of the act.	.
Class three: Persons who have worked in lumbering and logging in any area where contributions have not been required up to the present for such employment or in an employment of this category, and in other insurable employment, for a minimum period of ninety days in any consecutive twelvemonth period within the eighteen months preceding the date of claim, may claim for supplementary benefit payable during the specified winter period for the number of days arrived at by dividing the number of days so employed by five, but not exceeding the number of days in the specified winter period.
Class four: Persons who since the 31st of March preceding the date of claim have

worked for a minimum period of ninety days in an industry which has been made insurable employment in the twelve-month period preceding the date of claim, may claim for supplementary benefit for the number of days arrived at by dividing the number of days so employed by five, but not exceeding the number of days in the specified winter period.
The supplementary benefit rates payable will be eighty per cent of the standard benefit rates authorized to be paid under provisions of the act.
Provision is made for financing the payment of supplementary benefit payments by increasing the daily contribution rates payable by employers and employees by the amount of one cent per day each, to which will be added the government contribution equal to one-fifth of the combined employer and employee contributions, derived from the additional one cent contributions payable by them. These amounts will be paid into the insurance fund.
In addition, the government will pay into the insurance fund the amount of the supplementary benefits paid out to unemployed persons in the classes three and four which I have described, namely, the groups who are to be or may be brought under insurance or have been brought under insurance in the year preceding claim, and who have accordingly not had the time to make the prescribed number of insurance contributions to the fund.
While it is estimated that the financial provision outlined above will be sufficient to provide for supplementary benefit payments, nevertheless, since the provision is novel, and in order to safeguard the insurance fund, the fund will be guaranteed against any loss which is sustained in the payment of supplementary benefits up to March 31, 1952.
Now, the whole purpose of this new part of the act is to endeavour the better to adapt our unemployment insurance scheme to fit the normal Canadian employment pattern, in which, in many areas of Canada, unemployment is substantially higher and employment correspondingly more difficult to secure during the winter season.
Our seasonal employment trends are, because of our climatic conditions, more pronounced than in other countries, such as the United States and the United Kingdom, and, subject to compliance with fundamental unemployment insurance principles, I believe we should endeavour to shape our insurance scheme, as far as may be practicable, to take these conditions into account.
The supplementary benefits provision, which is an extension of the present insurance

provisions, conforms in its basic principles and operation to the present insurance provision and will be financed in a similar manner.
I know that hon. members will wish to know what effect the bringing into effect and the application of the supplementary benefits provision will have in relation to the present group of unemployed persons. Well, the known figure of applicants for work registered in our employment offices as at February 2, 1950, as has already been indicated, is 375,600. Of this total, at least
250,000	are either drawing unemployment insurance benefits, or have claimed benefits and the claims are in the process of adjudication. This leaves approximately 125,000 persons looking for employment, who might be grouped as 75,000 who have either exhausted their benefit rights or had insufficient contributions to enable us to pay them benefits; an additional 25,000 who would be normally employed in lumbering and logging, and a similar number in regard to whom we have no knowledge which would enable us to put them in any specific category at the present. It is expected that the proposed amendments which we are seeking at the earliest possible date will benefit approximately 100,000 individuals.
The amendments to the act will also bring additional workers under insurance coverage. At present the act insures salaried workers on weekly or monthly rates if their earnings are $3,120 or less per annum. It insures workers on hourly, daily or piece rates, regardless of the amount of earnings. The amendments which are covered by this resolution propose to raise the ceiling on such salaried workers to include those earning $4,800 or less per annum. The estimated number of persons who will be brought under insurance coverage by this amendment is 90,000.
Other amendments to the act include provisions to give effect to a number of recommendations of the unemployment insurance advisory committee, which, as the house knows, includes in its membership representatives of both labour and management. The more important other amendments to the act are:
1.	The reduction in number of the existing contribution classes from nine to six, and the creation of a new contribution class for employees earning $48 or more per week.
2.	The equalization of employer and employee contributions. Employed persons under sixteen years of age or earning less than ninety cents per day whose contributions heretofore have been paid by the employer,
Unemployment Insurance and who have not been entitled to benefits will hereafter pay their own share of contributions and will be entitled to draw benefits in like manner as other claimants.
3.	Modification of the first statutory condition in the act. At present a claimant is required to have 180 contributions during the two years preceding his claim, at least 60 of which must have been paid since the commencement of the previous benefit year. It is proposed to relax this to some extent by providing that of these 180 contributions, 45 must have been paid within the six months prior to the claim, or 60 contributions within one year prior to the claim.
4.	Changes in the present non-compensable day rule. At present the first day of unemployment in any week is non-compensable unless it follows or is in a complete week of unemployment. As amended, in future the first day of unemployment in any period of unemployment will be non-compensable unless it follows a period of employment of three days or less. If a person is working short time, the first day of unemployment in any period of unemployment is non-compensable in every case.
5.	The number of members of the unemployment insurance advisory committee is increased from six to eight, to give added representation to labour, and of course correspondingly another representative to management. In addition there are a number of amendments to strengthen the enforcement provisions of the act, or to clarify uncertainties in some sections of the act.
6.	The permissible earnings which the claimant for benefits is permitted to earn in subsidiary employment without impairing his right to receive benefit is raised from $1.50 per day to $2 per day.
All these matters I have explained in a general way, and I commend the resolution to the house because of the important provisions that it contains.


Gordon Graydon: Mr. Speaker in rising to make a contribution to the debate on the resolution introduced by the Acting Minister of Labour (Mr. Martin), I should like to say that when one views legislation of this kind one cannot help but think it is too bad that we have to consider a substitute for work instead of legislation that would be creating work for the Canadian people. What I say this afternoon will not be said in any critical way, because I think most of us feel heavy at heart in having to deal with legislation made necessary by the fact that people are out of jobs or may be out of jobs in the future.

Unemployment Insurance
It is a matter of deep concern to all of us that a change in legislation such as this is necessary. Those who experienced the conditions of certain previous days will rebel at the very thought of having again to go through anything approaching that type of condition in our Canadian national life. It is my fervent hope and prayer that the legislation to follow this resolution will not have to be used in the days that lie ahead in a way similar to that in which relief was granted at one time to our Canadian people.
When the government gave notice of the introduction of this measure, and indicated the urgency therefor, we were anxious to facilitate their action as much as possible, for reasons which of course will be obvious to all. We wanted to have these payments made available, with the least possible delay, to the people entitled to them. For this reason we are prepared to facilitate the legislation and to have the bill brought in for consideration.
The minister and other hon. members of the house will at once recognize the complexity of the explanation which the minister gave. I think it was as clear an explanation as it was possible to give, having in mind the changes which it is proposed to make.
I do not complain about that, but there were a number of matters dealt with by the minister which perhaps should be left for more mature and detailed consideration when the bill comes before the house for second reading and is considered afterwards in the committee stage. Nevertheless, time being of the essence, we hasten to indicate to you, Mr. Speaker, and to the house that we support the resolution so that the bill may be introduced at the earliest possible moment and there may be no possible reason for delaying the payments to be made under it. I express the wish, however, that its purpose was to create work rather than to provide a feeble substitute therefor.
The minister said that unemployment insurance was the first line of defence against unemployment. Of course that was about all that those of us who took part in the proceedings of the committee on unemployment insurance when the bill was first brought into the house ever thought it would do. I think it is only fair to workers and to industry generally to say that, because the benefits arising from unemployment insurance at their best have never been great. They can only be regarded, as I said before, as a weak and feeble substitute for a job.
I have taken a personal interest in unemployment insurance legislation, largely because of the fact that in my own riding
[Mr. Graydon.i

there is a great body of working men and women who come under its provisions. My interest arises also because of the fact that when the committee was set up in 1940 I was a member of it, and I was extremely interested in the work it did. Without introducing any note that should not be introduced, I think I may say that although I was not in the house at the time, I take some pride in the fact that a former prime minister of Canada, who was then the leader of our party, introduced unemployment insurance into Canada for the first time in 1934.
I think it is the proper time now for me to say a word on the question of unemployment; because at the root of this change in the legislation is the fact that the government recognizes that jobs are in jeopardy in certain parts of our land. I do not know whether everybody realizes it, but we must recognize that when a man is out of work and without any income, and unemployment insurance benefits are not available to him, for any of the various reasons that may be advanced, in most parts of Canada there is no way in which he can seeure any help from public agencies other than welfare organizations to which voluntary contributions have been made. It is true that in some places that is done on a municipal basis, but generally speaking in many parts of Canada all he can do is sit there without any means of support. We cannot afford to allow that to happen to anyone in Canada so long as we have the power to remedy the situation.
We have heard enough in the house since the session began a week ago to be convinced that, while there may be an argument over the extent of unemployment in Canada, there has been a substantial increase in unemployment in many sections of the country. I should also like to point out to the minister that, while his figures and those of the government seem to hover around
380,000	unemployed in Canada, as others have said, that does not indicate the true picture. Apart altogether from those who may never have intended to register under the Unemployment Insurance Act-and there must be many thousands across Canada who do not utilize its provisions-the minister well knows that if a man does not renew his registration at the end of thirty days from the date he first registers, his file becomes dormant. He may not have a job at all; nevertheless in the records of the unemployment insurance office he is regarded as a man to whom no more attention need be paid so far as a job is concerned. It is taken for granted, and I suppose naturally

so, that he has obtained employment elsewhere. There must be a substantial percentage of people who are in this category, and in the category I originally mentioned. Therefore the number of unemployed in Canada must be well over 400,000, a figure which I think would be nearer the mark today.
I am not taking part in this debate for the purpose of trying to paint a dark picture as to the unemployment situation. There is nothing to be gained by that; there is nothing to be gained by exaggerating the unemployment situation in Canada. Neither is there anything to be gained by not looking at the true picture and seeing what the actual position is. One of the things which has impressed members during the present session is that in view of the warnings which have been given as to falling markets and prices, and the warnings and cautions which come from those who are in the exporting business generally, the question of finding work for Canadian citizens is one of the major jobs of the government, parliament and the people. I suggest it is not good enough to wait until things get worse. That is too much like locking the stable door after the horse is stolen. Unemployment should be nipped in the bud; we should not wait until it reaches unmanageable and uncontrollable proportions. I am quite sure the government will take heed of the warnings that have been given. That is the very purpose for which parliament exists-to bring forcefully to the attention of the administration any situation that may develop in the country.
I am not an expert in economics, as I need hardly tell hon. members; and there are many people in Canada who, like myself, are not economists, so this is one of the infrequent occasions on which I find myself in the majority. But speaking in a simple way as a layman dealing with economics, I believe the ordinary man in the street is asking certain questions which might as well be asked on the floor of this house now as any other time. One question has peculiar force to me, as I think it will have to hon. members generally.
It may be said that 380,000 or more unemployed is not a very large number; still it is a substantial group of our people, and I am sure the government regrets that unemployment exists even to that degree, just as we all regret it. But one of the questions the people are asking is this. Why did we have to wait until a war engulfed the world before people were able to have full employment? This parliament and this country are striving to the very limit of their ability to see that we never have another war. People are saying: Surely we do not have to have a war
Unemployment Insurance so that people may find work. And1 of course we do not have to; because for a man-made economic recession there must be a manmade cure. The nations of the world have made great advances in science, in medicine, and in every other line. Surely the world is not going to admit that on the economic front somehow or other we are unable to keep people fully employed and enjoy a high standard of living from one end of the country to the other, short of having a war.
It seems to me this is particularly significant so far as the ordinary people are concerned. The world has been able to master so many problems; why can we not master this one? Apart altogether from the anguish, privation, starvation and suffering that come with recessions and major or even minor dislocations of our economy, there is something else we should bear in mind. Democracies generally-and I am not especially referring to Canada, because this runs all through the picture-must find a way in which to provide full employment and prosperity for their people. There never was a time when democracy faced a greater test in competition with another ideology than the present time. Another group, now comprising one-third of the world's population, a group competing with our way of life, is watching how successful the democracies are going to be in handling these periodic dislocations of our economic life. I am afraid that in the days to come many people in the world may come to the conclusion that if we in a democracy cannot master these problems, which we ought to be able to solve; if we cannot handle the periodic recessions which bring misery and poverty to our people, we have weakened our appeal for the support of those sceptical millions throughout the world who must make their choice between our free way of life and another way which is much less free. As a democratic state we should be able to show those who would follow the communist way of life that, with the maximum of individual freedom and the minimum of regimentation, democracy can provide prosperity and' a high standard1 of living and happiness for the masses of the people.
I commend this resolution to hon. members of the house so far as its broad principles are concerned, with the details to be considered during the second reading and committee stages. I hope, as I am sure we all hope, that unemployment legislation will not be needed in the coming months. It seems to me that we have a responsibility not only to our own people, but also to democracy as a whole, to make democracy work; and to do so we shall have to provide our people with jobs, prosperity and good times.

Unemployment Insurance


Angus MacInnis: Mr. Speaker, the Acting Minister of Labour (Mr. Martin) preceded his statement in connection with these proposed amendments to the Unemployment Insurance Act with a short review of the provisions and purposes of the act itself. It was my privilege to have a part in the adoption of that measure when it was introduced here in 1940. Not only did I support it in the house; I also supported it outside the house, among many working class organizations where it was perhaps not properly understood. Because of that I must say that I regret very much to have to rise today and express myself as being extremely disappointed with the measure the government is presenting to this house at a time of emergency, a time of serious unemployment, and with what the government is proposing to meet that situation. It should not be lost on this house that the unemployment condition throughout this country is so serious, that, when the government brought down this measure and asked that we postpone discussion on the address in order to allow the measure to go through, we readily agreed to do so. But let me tell the house that the measure now before us does not begin to meet the needs of the present unemployment situation. Whatever it does-and I am accepting it and will support it as a forward step-it will not prevent unemployment. It will not meet the need of those who are now unemployed; in my opinion, it will not meet the need of even the majority of those who are now unemployed. When the government asks the members of this house to clear the way for legislation of this kind, surely they should have something better to present than what is now before us.
A report in the newspaper the other day on the unemployment situation gave the number of unemployed as 375,600. In two sections of the country the percentage of the labour force unemployed had reached what is considered to be the danger point; that is, where even the present Unemployment Insurance Act, over an extended period of time, would not be able to cope with it. In the maritime provinces the percentage of the labour force unemployed is 10 -2 and in British Columbia it is 15-8. I should just like to tell the minister that the people in my province are disturbed about the unemployment situation. Along with other members of parliament from the greater Vancouver area, I met with labour organizations, veterans' organizations, and attended several meetings called by the Vancouver city council. They are all disturbed about this situation, and I am quite satisfied


that they will still be disturbed about the situation after they have seen the provisions for meeting it in this measure.
Let me briefly go over what is proposed to be done. It is proposed to amend the Unemployment Insurance Act, 1940, to provide for supplementary benefits during the winter months; and I understand that the winter months as defined by these amendments are from January 1 to March 31. Ordinarily, in my part of the country, those are the winter months. But that is not so in other parts of Canada and it was not the case in my province this winter. In British Columbia there was a tremendous amount of unemployment in November and December and, as I shall show the minister and the house shortly, there was a large amount of unemployment across the dominion in October of last year. It is also proposed to provide for additional insurance coverage. That is all to the good and I shall have more to say about that point later. Those are the two points in the resolution that will in any way help the unemployed; and when I say that, I am not leaving out of consideration the explanations made by the minister.
There is provision for some other matters such as simplification of rates of contribution, increase in the membership of the advisory committee from six to eight, and that members of the national employment committee shall receive the same remuneration as the members of the advisory committee. All that, however, is of no particular importance to those who are now unemployed.
This measure stems from the government's fallacious belief that the present large scale unemployment is seasonal or temporary, owing to weather conditions and circumstances of that kind. Unfortunately, in my opinion, that is not so. Unemployment is as natural to the capitalist system as is profit. As a matter of fact, the strongest supporters of the capitalist system insist that a certain amount of unemployment is essential to the proper functioning of the system and that it is bad only when it goes beyond a certain point.
The government should have taken the trouble to inform itself of the ups and downs in employment in this country during the last thirty years. If the government had informed itself and was prepared to act in accordance with what it found, it would not present such a measure as this to deal with an unemployment condition of the magnitude that now confronts us. Let me direct attention to -an item in the seventh report of the unemployment insurance commission for the fiscal year 1947-48, at page 27:
Statistics for the past thirty years show that in fifteen of them unemployment in certain months has

been greater than 10 per cent of the working force. That would have been high enough to deplete the fund. In five of these years unemployment was very serious, rising to over 21 per cent in 1931, and to a figure as high as 26 per cent in certain months of 1933, a condition that would deplete any unemployment insurance fund. While no one wishes to contemplate a recurrence of unemployment on that scale, it is only sound to make provision for an unemployment insurance fund based on past experience.
Of course we do not want to contemplate unemployment on the scale on which we had it in the 1930's. But if we have the same conditions as prevailed in the 1930's, or if we have the conditions that prevailed in the 1920's out of which developed the conditions of the 1930's, then we shall contemplate it or we shall face unprepared the conditions that we then faced; and we are not going to meet them with a measure such as this.
A realization of the present stiuation could have been obtained by careful attention to the developing unemployment during the last two years, and a perusal of the budget speeches of the Minister of Finance (Mr. Abbott), when he was consistently and continually drawing attention to the fact that, despite the large financial resources that were in the hands of the people at the end of the war, by 1947 these had been practically used up and people were not only using their current earnings but were going into debt.
These are things that the government should be aware of, and should have in mind, when bringing in legislation of this kind for the approval of parliament. During the second session of 1949 I put certain questions regarding unemployment on the order paper, and received answers from the Department of Labour. In my first question I asked for the number of persons receiving unemployment insurance in the months of September and October, 1948, and the number receiving unemployment insurance in the same months of 1949. Here are the figures:
1948	1949
September	
44,761	83,525October	
55,384	105,064My next question was how many	persons
made application for unemployment insurance in the same two months of 1948 and 1949. Here is the answer:
1948	1949
September	
28,143	51,935October	
38,104	69,349
Surely the government could see the trend. That growing unemployment was not a result of conditions of weather; that it was the result of declining employment at a time when employment is normally at its peak.
In my last question I asked the number of unplaced applicants registered in 1948 and
Unemployment Insurance 1949. The information I received is as follows:	October, 1948, 101,622; October, 1949,
156,106. In view of these facts, the government should be bringing before this House of Commons a measure to provide employment. It is employment that the workers of Canada want. They know already by experience, and indeed by experience over many years, what kind of subsistence doles and even unemployment insurance will provide. Let us take cognizance of the fact, and keep it always in our minds, that unemployment insurance is a device to carry workers over short periods of unemployment, that is, from the time they lose one job until they find another. It is not supposed to be something to carry them over a long period of time.
There is one other thing that we should ask of this government, and it is not something that should have been left until now. I think there has been too much higgling between the dominion government and the provinces as to whose responsibility it is to care for the employable unemployed. I claim that the full responsibility for all the employable unemployed in Canada rests on the federal government. I have a logical, and I believe a legal and constitutional, basis for that assertion.
The hon. member for Peel (Mr. Graydon) mentioned the Unemployment Insurance Act that was passed in 1935. That act was referred to the courts by the government that followed the government of Mr. Bennett. It was declared ultra vires the powers of the federal government. Then in 1940 the federal government asked for. an amendment to the British North America Act. The amendment to the British North America Act was to make unemployment insurance one of the matters that came exclusively under the jurisdiction of the federal authorities, as enumerated in section 91 of the British North America Act. That means that either the federal government is responsible for all of the employable unemployed or it means, that the federal government says it will take care, of those who can be actuarially insured by contributions of the employee and the employer and a small contribution by the government; and the provinces must take care of those who cannot be insured under such conditions. The thing is just absolute nonsense. The provinces are debarred from going into the unemployment insurance field; and consequently if we insist that there is any responsibility at all on the provinces for unemployment we must say that they will provide the money out of the consolidated revenue fund of the provinces. I do not see any other way by which they can provide it.
162

Unemployment Insurance On the other hand, in looking after unemployment this government will get the money from contributions under the Unemployment Insurance Act, as they are getting it now. The time has come when we should get away from that idea, and have it made clear beyond possibility of all doubt who is responsible for the employees of those concerns that do not lend themselves to unemployment insurance principles.
I said at the beginning, Mr. Speaker, I regretted that I had to approach this legislation in the critical manner that I have. I am not really criticizing the legislation for what it proposes to do; I am criticizing the government for bringing in a measure of this kind to solve a problem that a measure such as this cannot solve. Apart from that, Mr. Speaker, I shall facilitate the passage of this legislation through the house to the best of my ability.


Mr. F. D. Shaw (Red Deer):: Mr. Speaker, this afternoon my colleagues and I listened intently to the statement made in the house by the Acting Minister of Labour. I must confess that it was a bit difficult to hear him upon certain occasions during his remarks, but on the basis of what we thought we heard we are prepared to assert at the moment that we shall find it possible to give our support to the proposed amendments to the Unemployment Insurance Act.
When the Unemployment Insurance Act was brought before the house in 1940 we expressed certain vqry definite convictions which we held with respect to it. Some of the convictions we held at that time have been referred to by other speakers here today. In 1940 we stressed that we could not for a moment either consider or accept unemployment insurance as a substitute for a balanced economy, wherein our national affairs are managed in such a way as to ensure an opportunity for a decent income to each Canadian. We stressed another point on that occasion, namely that we could foresee a condition such as this arising, where the buoyancy of the national income might not be the same as it has been during the past few years. We emphasized that the employer's share which he contributes toward the unemployment insurance fund reduces his current purchasing power by that amount. Moreover the contribution paid by the employer is in many, probably in most instances charged in the price of the commodities he sells to the employee. Thus it reduces the value of his dollar by that amount.
In the third place, we stressed that the government's contribution is derived from


taxation, most of which is taken from the pockets of employees. So, in the final analysis the employee pays the whole shot. If times are not reasonably buoyant and if his income is fairly low we can see that the act itself, by virtue of its operation, could make his lot an extremely difficult one.
We pointed out, too, that if we are faced at any time with an abnormally large body of unemployed, this fund could be rapidly depleted. That would simply mean that the government would be setting in operation a glorified form of dole, which it would not be obliged to call relief, and which therefore politically could be considered as better than a straight relief program.
We also took exception to certain sections of the act, such as those which stated that if a man paid over a long period of time, and then became unemployed as a consequence of becoming unemployable, he had no recourse whatsover to the fund for assistance. We stated further that we doubted the wisdom of that section in the act which gave the board, or whatever the body is called, the right to ship a man, forcibly if necessary, from one part of the country to another.
Further we could not see a great deal of reason in that section wherein an employer, if firing an employee, would put him in a position where-and this has happened in many instances-he would not be able to procure benefits under the act. I am not suggesting for one moment that all such persons should; but certainly I know of a number of instances where such employees should have had the benefit of the dohbt.
What I have said does not mean that we are opposed to the Unemployment Insurance Act. I hope it will be understood however that I am re-emphasizing what I said at the commencement of my remarks, namely that we cannot accept unemployment insurance in any form as a substitute for a balanced economy, wherein our national affairs are managed in such a way as to ensure our people of an opportunity for a decent standard of income.
I entered the House of Commons in 1940, after the election in March of that year. After entering the house I was chagrined to find that much of our discussion still centred around such subjects as one will find listed in the index to Hansard for that year. These include unemployment and agricultural relief, unemployment relief and assistance, agricultural aid, relief legislation and homeless transient men.
After all, we had been at war for nine months, but we were still faced with a serious unemployment problem within our

country. The minister of labour of that day, speaking in the house, asserted on June 17, 1940, as reported at page 824 of Hansard:
After all, It is a vital problem.
The "it" refers to unemployment.
It is a problem which has baffled us.
I want to underline the word "baffled" because I propose to come back to it.
It is one for which every member of this committee, certainly including myself, would like, if possible, to find a panacea, a solution, a cure-all.
That statement was made in reply to a question which had been asked by the hon. member for Macleod (Mr. Hansell). The minister then went on to point out, as reported at page 825:
May I add that I am not putting these figures on Hansard with any great pride of achievement; they are too large; I am first to recognize and realize that, and I state it quite frankly.
These are the revised figures. The total number in receipt of material aid in some form or another in March-
Remember, that was 1940.
-was 772,542. I know it is no answer to say that this figure is 25 per cent less than that for the same month last year. The question is why there should be any at all.
It appears that 80-4 per cent of the heads of families unemployed at that time were reported by the minister as being employable persons. It has been said in the house already this session that anyone bringing the question of unemployment before the house, especially if he does it forcefully, will be accused of being a gloomster or a pessimist. I would say no, we are not gloomsters. The gloom has already been spread; all we are endeavouring to do is to pierce a hole through it so a little light may come in to give some comfort and encouragement to those thousands who are now without employment.
Every time I turn over in my mind this figure of 375,000 registered persons, I am shocked. I agree firmly with the previous speaker that it undoubtedly falls far short of the actual number of unemployed persons in Canada today. Yet such a condition of unemployment is described as temporary, regional, spotty, pockets and the like. It seems to me those words are used in order to lull the people of Canada into a false sense of security, so far as this acute and growing problem is concerned. It would appear that the government of Canada has now come to the view that all it has to do is say to the people of Canada, "All is well" and all must be well. We heard a lot of that from the Minister of Agriculture (Mr. Gardiner) last spring, and what an eye-opener we got a little later on!
Unemployment Insurance
In his observations in the house the Prime Minister (Mr. St. Laurent) did an extremely neat job of beclouding the issue, if I may use that term. As far as the unemployed are concerned, this problem is upon us now. It is serious and it is slight comfort to them to try to secure any consolation from the assertion that unemployment is spotty or regional, that it is only in pockets or temporary.
A moment ago I referred to those who accuse us of being spreaders of gloom, who tell us that we should be optimistic, that we should endeavour to paint these things in the most glowing colours possible. Those admonitions came from the government itself. As a result I went back to 1935 to find out if the Liberals at that time could possibly have been spreaders of gloom and I found a most interesting broadcast on this subject that had been made by the former prime minister, the Right Hon. Mr. King. Here are a few of the phrases that I picked out of just one broadcast: Terrifying problem, cruel privations, physical suffering, a condition of despair, an appalling situation, menacing shadows, terror stalks the land, a prevailing and hazardous situation, privation and suffering, human anguish, mental anxiety. Those were all in one broadcast and I dare say I missed more than I got. That was an impassioned1 appeal. I agree that there was much terror in the land. I agree that there was much anguish and that there was a great deal of privation and suffering. There was no question about it. But were I to coin those same phrases today I would be accused immediately of being a pessimist, of being unrealistic in my outlook, of being a spreader of gloom. In fact I would be accused of exaggerating the condition.
Let me point out that the conditions were not entirely parallel. By 1935 we had passed through a number of years of depression and unemployment. However, who can stand on the floor of this house today and say that five years hence we will be able to say that we have not passed through a similar five-year period? The record of the Liberal party is none too good between 1935 and the outbreak of war, and I shall refer to a few figures covering those years. Then following that I am going to give several quotations from that broadcast because, as far as the appeal which the Liberals made to the people in 1935 was concerned, there was no question about their ability to meet and solve this problem. In fact they even named several things which they could and would do. I want to emphasize that we were never out of the depression until the outbreak of war in 1939.
When the former prime minister made that broadcast and used that collection of choice phrases he estimated the unemployed in
55946-11J
164	HOUSE OF
Unemployment Insurance Canada at that time as being 400,000. He said that he might be conservative, that he personally thought the figure was 500,000, but he was going to work on the figure of 400,000. We have 375,000 unemployed at the present time, plus a number more who are not registered.
I should like to quote some figures from the bureau of statistics and in passing I want to pay my respects to the employees of that branch who show such generous co-operation when requested by members of parliament to assist in the procurement of information. Here are the unemployment figures:
1936		 434,300
1937		 340,400
1938		 411,100
Then here are the figures for 1939, the war year:
January	 485,000
February	 491,000
March	 494,000
April	 473,000


An hon. Member:: The war was on.


Frederick Davis Shaw: No, the war had not broken out yet, but I will come to that. They were supposed to be getting ready for it. The figures follow:
May	   395,000
June	 369,000
July	 352,000
August	 332,000
September	 300,000
October	 283,000
November	 296,000
December	 364,000
Only a few moments ago I gave the figure for March of the following year. After asserting in 1935 that unemployment was the hardest cross which any man had to bear, the former leader of the Liberal party went on to say, and he emphasized that he was speaking in the name of Liberalism:
A solution of the unemployment problem must be sought in two directions. Long-range policies and permanent measures must be instituted which, through the revival of trade and industry, will serve to bring about a measure of prosperity. This, of itself, by providing employment, will more effectively than anything else reduce unemployment.
It makes one wonder when he stops to consider what the Liberal party has brought upon us in the field of international trade.


Mr. Kickham:: Give us the figures for unemployment while Bennett was in power.


Frederick Davis Shaw: May I suggest that I am not a Conservative nor am I defending any Conservative administration. I have often described on the public platform the period 193035 as being one of the bleakest and most dreary five-year periods Canada had ever experienced outside a war period.


Mr. Browne (Si. John's West):: And every other country too.
IMr. Maclnnis.l


Mr. Gardiner:: You are not right with regard to the Liberal period in spite of the fact that you say that.


Frederick Davis Shaw: The mere fact that the Minister of Agriculture makes that assertion does not alter fact. I still remember the first six months of 1949 and the assertions he made in various parts of the country. I quote again from that same broadcast in which the former prime minister said, and I ask hon. members to listen to this:
Only by removing the restrictions which have strangled the movement of goods into and out of the country and through persistent and persuasive endeavour to regain markets which have been closed against us, can there be a revival of trade and business, and the return of work for the men and women of our land.


James Garfield Gardiner: Give us the figures.


Frederick Davis Shaw: All one has to do is to recall that between 1936 and 1939 we were still in the throes of a depression. We still had unemployment at that time and this whole speech was designed to give assurance to the electors that the Liberals if elected would by the application of those policies correct the situation which existed at that time.


James Garfield Gardiner: Mr. Speaker, may I ask my friend to permit me to say that during the period he is speaking of trade went up from 50 per cent to 100 per cent and unemployment went down by 50 per cent.


Frederick Davis Shaw: The former prime minister used the figure 400,000 on August 5, 1935, when he delivered this memorable broadcast, the text of which I now have here between two red covers. He was working on those figures. In 1938, according to the bureau of statistics, we had 411,100 registered unemployed.


James Garfield Gardiner: Take the bureau of statistics figures for both periods.


Frederick Davis Shaw: They are bureau of statistics figures.


Julian Harcourt Ferguson: You cannot believe even the Liberal figures.


Frederick Davis Shaw: Is the minister implying that the leader of the opposition, as he was at that time, could not possibly be right in his figures?


James Garfield Gardiner: I am not saying that.


Julian Harcourt Ferguson: The Liberal government is wrong again on the figures.


James Garfield Gardiner: Take his figures for both periods and I will still be right. Take either one or the other.


Frederick Davis Shaw: All I have to do is to emphasize that it takes more than an assertion on the part of the Minister of Agriculture (Mr. FEBRUARY 23, 1950
Gardiner) to establish proof in my mind. I quote again, and this is an interesting one also:
Relief from, rather than an increase in the burden of the cost of government, reductions rather than increases in taxation . . . must be delivered, if commerce and) industry are to revive.
I shall hurry on to another one or two. This is an interesting one because he refers to world war I. It is as follows:
Who, with a knowledge of what was accomplished in the years of war, and in the years of strain, and stress which immediately followed, will venture to say that a government with vision and determination will not be able to effect, in*-times of peace, a nation-wide co-operative effort equal to any previously achieved? . . . Are privations and sufferings, the loss of occupation, and the inability to secure employment, not just as great, where they arise from economic causes in our own country?
Then he goes on to refer to the many projects. They were even going to paint farmers' fences for them. The excerpt reads:
. . . The country would welcome, above all else, a comprehensive scheme of urban and rural improvements. Such a scheme would appropriately include the clearance of slum areas, housing programs, the painting and repair of buildings and fences, both in cities and the country; and of scenic development, which would serve to make all Canada a country second1 to none for tourists.


Julian Harcourt Ferguson: Whitewash themselves.


Frederick Davis Shaw: It continues:
Indeed all projects might readily be made to contribute to these ends.
History records, Mr. Speaker, that in October of that year the Conservatives were swept out of office and the Liberals were swept in, but history also records the statistics to which I have referred. History records that in 1939 we were catapulted into war, and we were not far advanced into that period of war, a couple of years-the Minister of Agriculture may not agree with that and I may be out two or three days-


James Garfield Gardiner: You are always out a little.


Frederick Davis Shaw: -when there was created a terrific demand, as has been so often pointed out in this house by the hon. member for Acadia (Mr. Quelch), for almost everything that we were capable of producing, and manpower suddenly became an asset instead of a liability. The war ended in 1945. There was still a seller's market in the country, and a backlog of demand for capital and consumer goods. People still had their accumulated savings. Money was being paid out for reconversion, and foreign credits in the form of money we had loaned were being expended in Canada for goods which were shipped abroad. Marshall aid dollars were also being spent here. That was 1945. This is 1950. In other words, this is where we left off in 1939.
Unemployment Insurance There is almost the same number of unemployed today as there was at that time. It was not the record of the Liberal government in this field which put them into office, nor was it, I dare say, their record in any other field. It was not their record that enabled them to win the succeeding elections. The next one will be the test.


Mr. Hatfield:: A different story.


Frederick Davis Shaw: They will not be faced with the situations that existed in 1939, 1945 and 1949.


James Garfield Gardiner: You have made that suggestion every session since I have been here.


Frederick Davis Shaw: It is rather unfortunate that one should have had to continue coming back for ten years in order to keep reminding the government that these suggestions will still have to be made.


An hon. Member:: Twenty-five dollars a month.


An hon. Member:: Give us a solution.


Frederick Davis Shaw: It is a tragic thing when it takes a war to bring us out of such a condition as that which we suffered from in the ten years prior to the outbreak of war. Booms and depressions, with a war thrown in here and there, seem to me essential and necessary to enable policies such as those pursued by this government to work, at least in a measure. Before I left home to come down here for the present session I could not help hearing the grumblings that were rising throughout parts of the country. Farmers were becoming acutely disturbed as a consequence of the future facing the industry reflected through what has happened in our trade relations. It was pointed out to me that in the local employment office at Red Deer they had 609 registered unemployed in January. They were fearful because they could see coming upon us the shape of things which were upon us prior to the outbreak of the last war.
So far as the present legislation is concerned it will provide a certain amount of assistance to a great many workers. I admit that, but it is a drop in the bucket, as someone has said. Take the prevailing prices today for food, clothing and shelter, take the cheque which a man with a wife and three or four kiddies receives from the unemployment insurance fund when he becomes unemployed, try to draw up a budget for him, and see how far you will get. Moreover, the fund is certainly exhaustible, and the benefit is definitely limited.
We will support the measure in the absence of sound concrete policies which, as we have asserted time and again, must be put into operation if a balanced economy is ever to

Unemployment Insurance be established in the Dominion of Canada. We repeat also that, without the establishment of such a balanced economy, it is utterly impossible for Canada to lay down a sound, realistic and workable foreign trade policy. A country such as Canada will always depend to a certain measure, and possibly to a very great measure, upon a workable policy for exchanging the real surpluses produced within the country.


Mr. Daniel Mclvor (Fori William):: Mr. Speaker, I should like to add a few words to this discussion, though I will have some further questions to ask when we get into committee. I agree with some of those who have spoken that it is the duty of governments, federal, municipal and provincial, to aim at full employment. However, I do not believe there has ever been full employment in any country, because there are always some men who by their conduct unfit themselves for work.
This legislation is welcomed by the workers and employers at the lakehead; and I think it comes as the result of information that has been supplied to the department by officials there, among others. There were many people who could not qualify for unemployment insurance on the basis of 180 days, but who could qualify with 90 days. I do not agree with the acting leader of the opposition (Mr. Graydon) that we have to wait for war in order to find a remedy.


Gordon Graydon: I did not say that.


Daniel (Dan) McIvor: We have the same brains that enabled us to do our part in winning the war. If those brains could do that; if they could convert our war workers into industrial workers, we should be able to do better now, because we should be wiser. The government did not wait for war before bringing in unemployment insurance or the family allowance. Compare the unemployment insurance cheques and the family allowance cheques that are being received now with what was coming in back in 1930, when the unemployed received sweet nothing. That, I think, is worth considering; and these amendments will help a great deal more.
We have unemployment at the lakehead. A person would have to be dishonest or blind not to see that. I expect that as long as we have seasons, which I suppose will be as long as we live, we shall have some unemployment there. The seasons affect employment on the lakes; they affect employment in the elevators and on the railroads. All three are affected when shipping is shut down. The weather also affects employment there. This winter we had some weather during which it would have been impossible for men


to work, especially in the bush. I know that in other years our seven or more big pulp and paper mills had to overcut their needs because of the budworm pest; and because they overcut their needs they did not need to cut so much this year. Another reason we have unemployment at the lakehead is that nearly all our saw mills were shut down through a lack of saw logs. Perhaps I should not mention this, since it is a provincial matter; but when it affects employment I think I have a right to touch upon it. I believe the premier of Ontario is going to remedy that situation; so we will give him credit for it ahead of time.
There is one further change I should like to see made. When a man quits work he should not have to wait any time at all before receiving unemployment insurance. Multiply one day, two days or three days by his salary, and see how much less he is going to have with which to buy groceries. I believe unemployment insurance should start immediately. If it takes a week to put through an application, the insurance should be made retroactive. Ninety days is a great improvement over 180 days, and I am sure we all commend the department on the way they have thought this out. I believe these changes will help in another way. They will help keep money in circulation, and even the Social Crediters tell us that the more money you keep in circulation the more employment you create.


Gordon Graydon: I suppose there is no one in the house who would be less likely intentionally to misrepresent statements made by another member than the hon. member for Fort William (Mr. Mclvor); and I am sure he could not have understood the purport of my remarks when he made the statement he did. I did not say we should wait for a war to cure unemployment. I said we should not have to wait for a war for unemployment to be cured. I think when the hon. member reads my remarks he will realize that.


Daniel (Dan) McIvor: If I did not hear the hon. member correctly, I ask him to forgive me. I understood him to say what others have said, that we must wait for a war before we get full employment. If the hon. member did not say that, he has more sense than I thought he had.


John George Diefenbaker: Mr. Speaker, I have one or two suggestions to offer the Acting Minister of Labour (Mr. Martin) in connection with this resolution. I am not going to enter into the controversy over the question of unemployment, for there will be other occasions on which that subject may be discussed.

Very little remains to be said from this side of the house, in view of the remarks made by the hon. member for Peel (Mr. Graydon), who set out generally the viewpoint of the opposition. As the hon. member said, we intend to support these changes in the Unemployment Insurance Act, while at the same time taking the stand that what is being done is merely a driblet or makeshift to meet the present situation, and in no way constitutes a solution to the problem facing this country.
The problem is one which this parliament will have to face and solve if it is fully to discharge its responsibilities. Today in this country some 375,000 people have registered as being out of work; and that is an unemployment picture of challenging proportions. I realize that there has been a material increase in both the population and the working force of this country since the depression years of which we in this party have heard so much for so long. I would point out, however, that during the period from 1932 to 1934 the number of unemployed in Canada- and it was the total number of unemployed, not a selected list based on registrations under the Unemployment Insurance Act-ranged from 497,133 to 402,760. In my opinion, if consideration is taken of those who did not register, the number of unemployed now exceeds the number in 1934. Indeed, according to such information as I am able to obtain, the figures supplied by the department in connection with unemployment insurance are at least twenty-five per cent below the actual number of unemployed in this country. I [DOT] am not going into the question as to who is responsible, but my mind goes back-


Paul Joseph James Martin: My hon. friend says the department admits that.


John George Diefenbaker: No, I certainly did not say it was admitted. Indeed, I do not quite understand why, a few short weeks ago, the Department of Labour made an order preventing the figures as to unemployment from being given out month by month. Economists agree, even though the Department of Labour may not agree, that the figures given by the unemployment insurance commission are at best twenty-five per cent below the actual unemployment figure.
I am not going to enter into a controversy as to who is responsible, and I am not going to rehash the government promises of recent months and recent years. The problem is a national one; and all of us in this house must endeavour to make our contribution to the end that this parliament will effectively meet the situation.
That was not the attitude of the opposition during the years 1930 to 1935. There was in
Unemployment Insurance the dictionary no word of opprobrium that could be used which was not used at that time by those then in opposition, who now sit on the government side of the house, when they held the then administration responsible for what was taking place. We who believe in and espouse private enterprise and its preservation must meet this problem and provide a solution for it.	[DOT]
Unless in the days and months that lie ahead this problem is solved and not by solutions such as those which were referred to the other day by the Prime Minister (Mr. St. Laurent) as makeshift, haphazard and, ad hoc, our failure to meet the situation and to assure jobs will in fact mean that those who advocate the destruction of private enterprise will have their innings in this country.
You say to me that these amendments are not in their nature a makeshift proposition.
I will read from what the Prime Minister said, speaking in the House of Commons, as reported at page 60 of Hansard. He refers in general to measures that will be introduced, and he says this:
That is why the measures which the government will take to deal with our economic problems this year will of necessity be flexible, be selective and be designed to meet special situations rather than anything in the nature of a grandiose over-all blueprint for the general economy of the nation.
The amendments are merely a temporary measure, not a solution, to meet the unemployment situation that exists; and the success of the action being taken is entirely dependent on whether unemployment is merely seasonal. For if it is permanent unemployment that this country faces and not seasonal unemployment dependent on climatic conditions, the legislation being introduced will afford no solution and will be merely a temporary stopgap.
The hon. member for Vancouver East (Mr. Maclnnis) in his speech indicated that unemployment is the result of private enterprise and is part of the capitalistic system. I challenge that statement. Is there any member in this house, regardless of whether he believes in private enterprise or not, who wants to see unemployment? The hon. member went so far as to suggest that unemployment is necessary to the proper functioning of private enterprise. That statement also, which is easy to make, is in fact without foundation. My hope is that we are approaching the day when we shall ultimately solve the problem of depressions and the ups and downs in the economic field. I am not a pessimist, and I am not looking at this matter from the point of view of a Conservative trying to take advantage of the situation. I am looking at it from the point of view of those who believe
in private enterprise in this country. We must

Unemployment Insurance either find a solution for these problems, or we must in fact admit defeat and the justice of the criticism so often levelled against the system of free enterprise.
I am encouraged in my view that a solution will be found by the statistics which I obtained while the Minister of National Health and Welfare (Mr. Martin) was speaking. During the half century between 1850 and 1900, when industrial development was first taking place on a modern and major scale, there were six depressions totalling 195 months. In the fifty-year period from 1900 to 1950 there were periods of depression, but the number was reduced to five and totalled 102 months. I should like to see the unemployment situation met with a declaration of government policy in regard to trade. After all, a considerable proportion of unemployment is due to the fact that our markets have been lost within the last year and a half. What has the government to say? What is its plan? I should like to see an over-all trade plan enunciated instead of a piecemeal plan for unemployment. What legislation is to be placed before this house to increase jobs and employment? Men and women out of work are not asking for unemployment insurance, except as a temporary measure. They are asking for jobs.
Surely this house has the right to know whether the government intends to bring in a plan of public works such as the development of irrigation plans to increase productivity and assure the certainty of production.
I know of no better time than the present one, with incipient unemployment as evident as it is, for the commencement in this country of irrigation developments such as the one envisaged in the South Saskatchewan river development plan; and there are many others. Three years ago I asked the appropriate minister: What are the government plans when unemployment comes? Two years ago I asked: When the Marshall plan ceases to operate, what were the government plans? Parliament is in the dark, as it has been during the past several years, as to what if anything the government intends to do in order to provide jobs through the establishment and inauguration of public development schemes. Surely parliament has the right to know what plans, if any, the government has, and what is to be done to meet unemployment where it is not seasonal. It would be most helpful if, in addition to the very complete statement of the Minister of National Health and Welfare with regard to these amendments, the government had also placed before the house its over-all plans, its ideas and its conception of what must be done in order to 

assure employment and to put back to work the half million who are unemployed in this country.
I come now to one further matter, and I bring it to the attention of the minister. The act is being amended. These amendments reveal a very adroit manner or plan to increase contributions, namely, by raising the level of the salary limit from $3,120 to $4,800. That is a novel and indirect taxation of those with salaries over $3,120. It brings in 90,000 other workers, most of whom in that salary list are executives. Certainly those with salaries over $4,000 are mainly executives. It provides a system whereby another tax will be imposed to meet the extra costs of the proposed amendments.
In view of the fact that 90,000 more are going to contribute, may I suggest to the minister an additional amendment to the existing law. I am asking hon. members in other parts of the house to join me in this. The law now provides for unemployment insurance benefits being paid under the following conditions. Section 27, subsection 1, reads:
Every person who, being insured under this act, proves that he is
(a)	unemployed:
(b)	capable of and available for work; and
(c)	unable to obtain suitable employment, . . . be entitled to receive payments.
There are men and women everywhere who have paid unemployment insurance contributions over the years, and who finally as a result of illness striking them are unemployed. These people are denied unemployment insurance benefits. I have one instance in mind of an employee of a railroad who was employed for 17 years. During the period that he could contribute since the act was in effect he contributed to unemployment insurance. A year ago he was stricken with an incurable disease. He is not entitled to unemployment insurance for the contributions that he has made. The only persons who are entitled are those unemployed who are "capable of and available for work". Now that the act is being revamped would it not be possible to add, as those who should be entitled to receive benefits under this act, such persons who having contributed for the requisite number of months, are by reason of accident or disease unable to work, and therefore are not capable of or available for work? They should be included as eligible and qualified for entitlement.
I know another man who has contributed since 1941. Six weeks ago that man became disabled but not as a result of accident, and therefore does not come within the provisions of the Workmen's Compensation Act. That man has nothing to look forward to but fear,

alleviated by the uncertainty of charity, and yet for a period of years he has contributed. According to the figures I have received, to include those I have mentioned would not add more than a quarter of a million dollars to the expenditures under the act. To include them would be fair; it would be just; it would , mean that these men who find themselves unemployed in consequence of illness and unable to work through no fault of their own would at least be assured of consideration.
I think too of the many employees in banks and other such institutions who are required to make their contributions and who under normal or even abnormal circumstances will never conceivably qualify for payment. I think that those who make payment of their contributions under classifications to which entitlement never, or seldom if ever, comes, should be placed in a category where for their contributions they would receive benefits for unemployment while unable to work for the statutory period.
I listened to the Minister of National Health and Welfare analysing the amendments to the act. It occurred to me that here was one provision that every hon. member in the house would support, and one that deserves the support of all of us who believe that those who contribute should have the opportunity of securing some benefit for the contribution that they make.


Stanley Howard Knowles: Mr. Speaker, it is not my purpose to take time to repeat the arguments already put forward in this debate. Rather I rise to contribute something which I feel has not yet been done. Before I do so I want to say that I support wholeheartedly the position taken by the hon. member for Vancouver East (Mr. Maclnnis) and expressed by others who have taken part in this debate, namely, that the real issue facing this country and this parliament, and particularly this government, is the finding of ways and means to provide employment. What I shall say will, I think, highlight particularly the need for taking steps in that direction at the earliest possible date.
The job that I should like to do for a few moments is this. I should like to analyse in terms of dollars and cents, in terms of days and weeks, what it is that is being provided for our unemployed people by the measure that has been introduced by the Acting Minister of Labour (Mr. Martin).
The minister gave us certain figures. Naturally we have no printed document before us, but I took the notes down. He gave them quite clearly, and I think I have them down fairly well.
Unemployment Insurance


Paul Joseph James Martin: Would it not be better to
wait?


Stanley Howard Knowles: I think it should be done
right away.


Paul Joseph James Martin: You have not the bill or anything before you.


Stanley Howard Knowles: I have my own notes on the speech that the minister made; and in this parliamentary institution of ours one has always the hope that, by arguing on the resolution stage for things that ought to be in the bill, the government might reconsider and improve the bill before it introduces it.
I want to point out that the minister said that the supplementary benefits to be paid would amount to only 80 per cent of the normal benefits for which the unemployed person would otherwise qualify. Please note what that means. It means that an unemployed person who comes under the usual categories in the act, and who was earning $35 a week, would normally qualify for benefits to the extent of $18.30 a week. That is a man with one or more dependents. But under the supplementary provisions being brought in by the minister that person will be entitled to only $14.64 per week by way of a so-called supplementary benefit.


Paul Joseph James Martin: You see, that shows the undesirability of drawing deductions without having the facts. The conclusion the hon. member has drawn with regard to the class to which he has referred is not accurate. When the bill is before the house I think the hon. member will see at once that, with regard to class one, what he has said is not so.


Stanley Howard Knowles: I am talking about class
eight.
Mr Martin:	There is no class eight.


Stanley Howard Knowles: At the present time, according to the act as I have it, a person with a dependent paying 36 cents a week is in class seven and is entitled to a benefit of $18.30 a week, if he meets the statutory conditions. The minister has said the new provision will provide 80 per cent of that; and 80 per cent of $18.30 is $14.64 a week.
Similarly a person, with dependents, earning $30'a week will be entitled to a benefit to the extent of 80 per cent of $15.60, which is only $12.48 a week. Likewise a person whose income is $25 a week, with a dependent or dependents, will be entitled to 80 per cent of $12.90, which is only $10.32 a week.
Mr. Speaker, relief rates in my city are better than that. I say again that to bring forward a measure like this at this critical time does only one thing: it underlines the
170	HOUSE OF
Unemployment Insurance fact that what is really needed is not an improvement in the Unemployment Insurance Act but a policy to provide employment.
May I point out also, if the minister will permit me to do so, that the details, of which he gave us a forecast in. his speech, indicate that for large numbers of people who will have to get along on supplementary amounts at these low rates, even these rates will not be available to them for the whole period of their unemployment. It will be available to them only for such number of days as they can qualify. In no case can they draw these supplementary benefits beyond April 15 of this year or March 31 of any other year.
But the House of Commons must not assume that these 70,000, or so, referred to, or the other 25,000, are going to receive even those low rates I have quoted up until April 15 of this year. They will get them only for the number of days for which they can qualify under the new part being added to the act.
The minister has said that there would be four classes. The first class would be the person who has qualified for benefits and has been drawing benefits, but whose period of qualification has been exhausted. He will be entitled to these low rates I have indicated for a period equal to the period for which he qualified previously. That previous period might be only 36 days, which is one-fifth of the minimum requirement of 180 days of work. Thus there is no guarantee that he will get even these low rates for the full time he is unemployed.
In class two we have reference to those who cannot meet the requirements of 180 days in the last two years. They will be permitted to qualify if they have had 90 days since March 31 last. But the person who meets that minimum qualification will get the low rates I have quoted for a period of only 18 days. Well, 18 days at those weekly rates will not see an unemployed person and his family through a winter in this country.
The same applies to class three. Those in lumbering and logging who previously were in excepted occupations can now qualify, provided they have had 90 days' employment in the last twelve months. But the person who meets that minimum requirement would be able to get this so-called supplementary benefit at the low rate I have quoted for a period of only 18 days, or one-fifth of that 90-day period.
The same applies to those in class four, who are engaged in employment that has been brought into a state of insurability within the last twelve months.
I know the government becomes impatient with our forever finding that every time


they take a small step forward they do not go far enough. But if ever that criticism was justified, then certainly it is with respect to this measure. This is a pitiably small amount of relief offered, as I say, at rates lower than those paid by the public welfare department in the city from which I come; and it is no credit at all to the government [DOT] to bring it in at this time.
I felt when the minister was reading the statement the impression was being gained in some parts of the house-"Well, here is something pretty good; here is something that will at least provide some dollars and cents for these people." The hon. member for Fort William (Mr. Mclvor) talked about the money that will be put into circulation, the purchasing power. But please note that the people who cannot meet these new qualifications do not qualify at all; those who have been unemployed too long and need it the worst do not get anything out of this legislation. In other words, any notion that this additional part of the act, with these supplementary benefits, is going to provide even a kind of living sufficient to tide people over, these hundreds of thousands of unemployed in this country at the present time, is completely false and erroneous.
While I am speaking on this subject let me say it seems to me there is something strange about the way in which daily premiums are to be increased. If I understood the minister correctly he said it was [DOT] to be one cent a day. Well, I shall wait until we have the details before us; but I hope he did not mean one cent a day across the board. Because, if he did, that is an increase of 50 per cent in the amount to be paid by those in the lower brackets and an increase of only 14-2/7 per cent on the part of those in the upper brackets.
Here again we have a case of this government's paying so little on the dollar. They are a great organization to make promises and then, years later, to come through with just a portion of what they promised. I hold in my hand a copy of a document frequently quoted in the house, the report of the dominion-provincial conference of 1945 and 1946. I find at page 387 that the prime minister of that day, the Right Hon. W. L. Mackenzie King, making his statement summing up the government's proposals, said this about unemployment assistance:
In addition, to unemployment insurance, the dominion will set up a system of unemployment assistance under which it will pay benefits equal to 85 per cent of unemployment insurance benefits, to unemployed persons able and willing to work who are not entitled, or who have ceased to be entitled, to unemployment insurance benefits. This assistance will be limited to two years of continuous

assistance, but a person will again become eligible for this assistance following an approved period of employment.
That was the proposal in 1945-85 per cent of the normal rate over a period of two years. Now, when we really have a crisis so far as unemployment is concerned, we have an offer of 80 per cent over a maximum period of three months; and it is likely to be much less, depending upon the new qualifications laid down.
I will agree with the minister to this extent, that any further examination of the minute details of the program will have to wait until we have the bill before us. However, I am willing to submit the analysis I have made to the scrutiny of hon. members, after they receive the bill; because I am not unfamiliar with this act, and I paid pretty close attention to what the minister said.
My submission is that when the unemployed people in this country really figure out what they will receive in terms of dollars and cents and in terms of the number of days for which they will get it, they will not be very grateful to the government for bringing in a measure of so meagre description.
There is one other point I should like to bring up before sitting down. It has to do with the whole question of getting to the root of the problem, of creating employment rather than fiddling around with these less than relief rates. I quote again from the report of the dominion-provincial conference of 1945, this time from page 386 where Mr. King is speaking and is reported to have said:
3. Dominion program:	The dominion will extend
its natural resources development and conservation projects, and research program, as soon as the situation respecting labour and materials will permit.
What is the government waiting for? "As soon as the situation respecting labour will permit"-that was the promise-the government will go in for public investment and for the launching of its share of a public works program. I continue:
These activities, where possible, will be varied in execution in accordance with the general employment and economic situation.
If the general employment and economic situation today does not call for the immediate implementation of the program this government has been talking about, then what is the government waiting for? The previous paragraph in this report reads:
2. Timing grants:	The dominion will contribute
to provincial and, through the provincial government, to municipal public investment projects on a scale and to an amount to be determined by the dominion and to be announced in January of any year in which in the light of the general employment and economic situation the dominion considers such assistance to be desirable.
Unemployment Insurance
I know that many municipalities and cities across this country took those words at their face value when they were enunciated a few years ago and prepared blueprints of public works and schools and hospitals that needed to be built. Those blueprints and plans are waiting now for the government "when the labour situation permits"-and certainly it permits today-to launch them. Instead, we find that the whole idea of a shelf of public works seems to have been completely forgotten.
When the Prime Minister (Mr. St. Laurent) was talking about this matter the other night he just tossed the ball back to the provinces, back to the municipalities and back to private enterprise. That is not the way the government talked when the Minister of Trade and Commerce (Mr. Howe) published his white paper in April of 1945. That is not the way they talked when this dominion-provincial conference was held. That is not the way they pictured it to the people of this country in the election of 1945 and again in 1949.
At that time we saw great posters on the billboards across the country, reading, "Jobs for all". I have a sample of that poster in my office and one of these days I shall have to bring it down. Apparently it did the trick in 1945 because they repeated it in 1949 and we again saw the same posters, "Jobs for all". They said they had a program composed of public investment with high levels of employment and over-all social security. Surely the time has come to go ahead with that program.
I stress very strongly the two things I have been saying. The measure before us is only a half measure. It does not provide anything at all for many people who need it. For those for whom it does rrtake provision, it will not provide it for the time they need it and the rates suggested will be utterly insufficient in the light of present-day costs of living. We will have to support it because we could not think of doing anything less, but the government need not expect to get from the unemployed or the working people of this country any thanks for this measure. The other point I want to emphasize, which this measure will not settle, is the extreme need for immediate action and a comprehensive program designed to bring about increased employment and real security for our people.


Mr. Clarence Gillis (Cape Breton South):: Mr. Speaker, ordinarily I would not take up any time discussing a resolution because I generally like to wait for the bill itself, but like the hon. member who has just taken his seat I listened carefully to the Minister of National Health and Welfare (Mr. Martin)

Unemployment Insurance make his statement this afternoon. I took notes and I got exactly the same impression of his proposal as did the hon. member for Winnipeg North Centre (Mr. Knowles). I do not think a bill based upon the recommendations contained in the statement of the minister should be accepted by this house at this time as a measure to relieve the present crisis in employment. I am sorry to see the Minister of National Health and Welfare mixed up in this because I have a high regard for him. The minister who blundered his way into this thing is the Minister of Labour (Mr. Mitchell) and he should be present here in the house.


Paul Joseph James Martin: Wait until you see the bill.


Clarence Gillis: Before he closes this discussion I should like the minister to tell us whether the unemployment insurance advisory committee have examined these proposals and recommended them to the minister. I cannot conceive of the labour representatives on that committee putting their O.K. on this kind of proposal.
If the circumstances were ordinary, if we did not have a crisis in employment, if the minister came in with this as a straight suggestion to improve the Unemployment Insurance Act, I would say that it was all right, that they were just taking a step to advance the thing. I cannot think that these proposals have been brought into the house for the purpose of curing the present unemployment situation, but I judge that the hon. member for Fort William (Mr. Mclvor) is speaking for the members on the' other side of the house when he accepts it as such.
The matter is serious because there are
375,000	people in this country who are without jobs today. They are looking to this house for a solution of their problem. If this is the only solution there is going to be cold comfort for them. If the bill is to be based upon this resolution then it means exactly what the hon. member for Winnipeg North Centre said it means. It will provide practically no relief to the men who are unemployed today.


Paul Joseph James Martin: That is not true.


Clarence Gillis: There are at least 17 per cent of the unemployed who will not come under these benefits because they are not in receipt of unemployment insurance. Seventeen per cent of 375,000 is a lot of people. A large percentage of that group is composed of people over 40 years of age. We know from recent discussions in this house that industry in this country has taken the position that they will not hire anyone over 40 years of age. A large percentage of the men on the 

streets today are in that age group and will not come under these benefits no matter how high you jack them up.
There is absolutely no solution being offered, and I am particularly concerned. The hon. member for Winnipeg North Centre is fortunate because he said his welfare department have a better scale of relief, but in the section of the country from which I come unemployment is not regional, it is not seasonal

it is permanent. According to the last figures I received from the unemployment insurance commission there are
59,000	people unemployed in the maritimes and there is no relief for them under this legislation. At least 30 per cent-we are higher than the national figure-of those who are unemployed will receive no benefits because they have gone years beyond the time when they could receive unemployment insurance. Many of them have never had employment.
This legislation does them no good. I am getting up at this time because I do not want the people I represent to think that I am accepting this kind of legislation as a cure for the situation that exists at this time.


Paul Joseph James Martin: It is not offered for that purpose.


Clarence Gillis: The figures indicate that there are 21,000 unemployed in the city of Toronto and soup kitchens and missions are operating. This legislation will benefit very few of those people. If the minister will tell us that this is not designed to cure the present emergent unemployment problem, that it is simply a step the government is taking to extend and throw around the benefits under the act, then that is all right. Before you can get these things operating to benefit the men who are on the street you will have to bring in a bill. Then you write regulations which must go back to the unemployment insurance commission. Then they are sent across the country. It will be a year from now before you will be ready to put this into operation and in the meantime the unemployed are shivering on the streets.
I also think, as has been said by almost every hon. member who has risen to speak, that what the government wants is a planned program of public investment in order to take up the slack. The Minister of Transport (Mr. Chevrier) is not in his seat now, but he is doing the right thing. He is going to build a bridge in Nova Scotia which will cost $13 million, and he is putting an item in his estimates for it. That is the kind of thing the Minister of National Health and Welfare (Mr. Martin) should be recommending

this afternoon. If he could say that in addition to these feeble steps they are taking to bring a little relief-


Paul Joseph James Martin: Let us get this first.


Clarence Gillis: -we are going to have a public works program, we will drag along until May with this and then we are going to put people to work, it would be helpful. A lot of the members are new, but I can remember sitting here and listening to the previous prime minister stand up in his place in 1944 and tell the house how much Canada owed to the men who were then fighting the war. We all agreed with him. He said: When they come back to this country this time they have got to come back to a brand-new order, a new order of society. Those were his actual words. I remember them very well. Now he is over on Laurier Avenue watching the unemployment figures and the brand-new world that the boys came back to. When he reads the complicated and twisted statement made this afternoon by the minister, who really fooled the hon. member for Fort William (Mr. Mclvor)-


Paul Joseph James Martin: Apparently you understand it.


Clarence Gillis: Certainly I understand it. I
understand exactly as the hon. member for Winnipeg North Centre (Mr. Knowles) understands it. That is why I am standing up on my feet. A lot of the new members on the other side of the house probably are fooled. If the minister will admit to the house that this measure is not designed to take care of the present unemployment emergency and is merely a step forward in the unemployment insurance legislation to bring in loggers and so on, and also a readjustment of the rates, then I am quite prepared to let it go through, but tomorrow or the next day we want someone over there to get up and tell us what they are doing to meet the emergency. We want them to get up and tell us that they are making enough money available to the city of Toronto to help look after the 21,000 unemployed there, and also in these other regions where there is a concentration of unemployed. In Windsor, the minister's own city, there are approximately 9,000, and in St. Catharines and Hamilton-


Paul Joseph James Martin: The figures my hon. friend has are not accurate.


Clarence Gillis: Are they not? They are taken from an Ottawa dispatch dated the 17'th of February and reading as follows:
The labour department today issued1 the following table on the unemployment situation . . .
Then there is a break-down and they segregate the various centres where unemployment is most aggravated. For the information of
Unemployment Insurance the minister the figures I have here are: Hamilton, 8,023; Kingston, 1,200; London, 2,340; Ottawa,. 4,991; St. Catharines, 2,465; Sudbury, 1,910; Toronto, 21,493 and Windsor, 5,803.


Paul Joseph James Martin: That is not the figure you gave a while ago.


Clarence Gillis: I said approximately 9,000. I was only out a few. If the minister is prepared to accept this measure as I have indicated we are prepared to accept it-


Paul Joseph James Martin: Admit that was my strike.


Clarence Gillis: If the minister will say that he is going to do something to give immediate relief, particularly to those centres where there is a concentration of unemployment, then we are quite prepared to go along with him and let the measure pass.


Mr. J. W. Noseworthy (York South):: Mr. Speaker, I shall not delay the house long, but there are a few things that I want to say on this question. First of all I am sure it is most disappointing to a great many members of the house to find the government offering this resolution as a solution of the present unemployment situation.


Paul Joseph James Martin: My hon. friend is repeating what is obviously not true. This measure is intended to do exactly what I said. This is a measure, in so far as supplementary benefits are concerned, to supplement the provisions based on an actuarial basis in respect of insurance payments. That is all the measure is. No one has said that it was any more than that, but to the extent I have indicated it is a matter of great significance.


Stanley Howard Knowles: It is your answer to the emergency.


Joseph William Noseworthy: We are very happy to have that statement from the minister, and within a few days we shall expect a statement as to just what the government intends to do to meet the unemployment situation. Regardless of what the minister has just said1, the impression has gone abroad and has been created by government speakers that this amendment to the Unemployment Insurance Act is being made for the purpose of meeting the present unemployment situation. It has been accepted as the government's proposal to meet the problem.
I certainly want to emphasize again-and this has already been done-that an increase in unemployment insurance is no substitute for work. If it is the government's policy for meeting unemployment then it is a complete reversal of their policy for the post-war years. From finance minister after finance minister we have heard year after year that the government's policy to meet unemployment was

Unemployment Insurance to provide a shelf of public works which could be put into operation whenever unemployment became serious. I submit that the time has come for the implementation of that policy. The Prime Minister (Mr. St. Laurent), speaking particularly of the construction industry, was quoted in one of the Toronto daily papers on February 17 as follows:
Activity in the construction industry is still as buoyant as it has been since the end of the war, but it may be that we will shortly be moving into a new phase in which demand will not be quite so insistent.
That may not be altogether a bad thing. I am sure that many of you must have felt in recent years that a period of consolidation would have to come; that the spiral of increasing costs could not continue; and that, in the long run, everyone in the community, including your own industry, would benefit by the return of some pressure for higher productivity and somewhat lower production costs.
I take this statement to mean that it is the accepted policy of the government to invite such a period of unemployment as we have at the present time in order to provide a surplus of workers, so that costs of production may be reduced and productivity increased.
I think we should accept as a fact that the unemployment situation as it exists in Canada today is the responsibility of the federal government. In 1945 and 1949 the Liberal party took credit for the number of jobs that were available and for the general prosperity of the country. That, they told us from billboards and in other advertising, was the result of the policies of the Liberal government. By the same token, if they are going to take credit for the prosperity that existed during those years, they must take responsibility for the lack of jobs that is developing today. Whether or not the federal government should assume the financial responsibility in connection with providing jobs, certainly it is up to the federal government to take the initiative in bringing together governments at various levels so that when unemployment does strike us, as it is striking us today, public works programs will be available. Today we are actually back where we were before the war, as far as the unemployment situation is concerned. The federal government is passing the buck to the provincial governments; the provincial governments are passing it to the municipalities. The municipalities are coming back to the provincial governments and the federal government, and there has been practically no improvement in the last ten years, though it was realized that some steps should be taken to co-ordinate the efforts of governments at the three levels in order to meet this situation. Not until this fall are we to have a dominion-provincial conference to deal with responsibility of governments at various levels in regard to such social measures. For years opposition groups and

others have been clamouring for the government to bring together provincial and municipal authorities and take the initiative in bringing about some agreement so that when such situations develop we may be prepared for them.
Reference has been made to the fact that unemployment insurance, even as it may be improved by these amendments, will still provide less than the amount of relief paid in some of our municipalities. Unemployment insurance was never intended to take the place of employment. It was never intended to do more than tide a worker over the period of transition between losing one job and finding another; and we should never come to look upon unemployment insurance as a substitute for employment itself. From what I can gather the average married man receiving unemployment insurance gets something like $16 a week. In the case of a man with three or four children $16 a week, even if he were getting it for a period of time, would not be sufficient to maintain his family. In York township we pay in relief to a family of three $60.88 a month, plus rent; to a family of four, $84 a month plus rent; to a family of five, $92 a month, plus rent; and to a family of seven $125, plus rent. Unemployment insurance does not begin to maintain a family with five or six children, and can in no circumstances be expected to take the place of a weekly pay cheque.
Now there are one or two questions I want to ask the minister before I conclude. Within the last hour I have been informed by a member of the unemployment advisory committee that the amendments brought in this afternoon have not come before that committee, and that they have not been before the representatives of employees and employers who form that advisory committee.


Paul Joseph James Martin: Why not ask your questions later, on the bill, and let us get along?


Joseph William Noseworthy: I have been informed that recommendations to the government by the advisory committee have been ignored in the measure now before the house. Further, I should like to know why the public hearing which was advertised for next Friday, having to do with bringing hospitals and public charitable institutions under the act, has been cancelled; and why no mention is made of that matter in this amendment.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


Some hon. Members:: Six o'clock.


Paul Joseph James Martin: Could we not report the resolution? I think we are all agreed on it.


Some hon. Members:: Six o'clock.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Mr. Green:: I should like to ask the minister to give a little further explanation about the effect of these amendments. In order to put the question, I must refer to the situation in my own city of Vancouver. We have had extensive unemployment there; it has been as bad there perhaps as anywhere in Canada in recent weeks. As I understood the minister this afternoon, the only groups who would be helped by these amendments to the Unemployment Insurance Act are those whose benefits have been exhausted or those who would be eligible for unemployment insurance if they had made further contributions. Then there is to be provision for two new groups who have not been making contributions; and as I understood1 it, they are groups which will be brought under the act eventually. But is any provision whatever being made for those people who do not come under any one of the four groups?
For example, although I do not know how many are involved, quite a few of the men who are unemployed in Vancouver this winter would not be in any of these four categories. A great many of them are younger men, and in many cases I think they have drifted to the coast with the belief that we always have a mild winter there. No doubt a good many of them came there with that belief in mind, but I am afraid they have been sadly disillusioned this winter. The situation, however, is tragic. These young men cannot be cared for either by the province or by the city, because they are employable. The city and the province will care only for those people who are not able to work. The result is that there is this large group who can get food only by going to the Salvation Army or to one or other of the churches. These agencies have done excellent work during the winter weeks, but that situation simply cannot go on. These men are considered, by the provincial authorities and by the municipal authorities, to be the sole responsibility of the dominion. Rightly or wrongly, that is the belief; and action is based on that belief. There is a good reason too for that belief, because the dominion, in making its proposals in 1945, said that it would undertake the responsibility for all the employables in Canada.
Will the minister tell the committee just what can be done for these men? Their plight is tragic. There is a gap there which must be filled, and I believe it must be filled by the dominion government. It is unfortunate that action has not already been taken to do something about that particular group. Will
Unemployment Insurance the minister tell the committee now whether they can be helped in any way at all under these proposed amendments to the act?


Paul Joseph James Martin: My hon. friend has raised a larger question that is not envisaged by the amendments or by the Unemployment Insurance Act. We must keep before us what we are seeking to do in this measure, although we may have our views about its adequacy or inadequacy. What we are dealing with here now are amendments to the existing Unemployment Insurance Act which provide for supplementary benefit payments in the case of four different classes of workers. Admittedly these amendments will not cover all the workers, but they will cover those who come within the ambit of the four classes I have mentioned.
With regard to the question as to the responsibility for unemployed employables, that is not germane to this particular bill. I do not wish by any means to depreciate the importance of that matter, but this is not the place to discuss it; we would be out of order. Admittedly it is a problem that exists, but we can deal now only with the amendments to the Unemployment Insurance Act.
As I pointed out in my statement this afternoon, what we have done is this. We have observed the principles underlying the Unemployment Insurance Act itself, we have recognized the actuarial basis of that act, we have recognized the insurance aspects of that act, and have provided supplemental payments for those who come within its ambit during a certain period. First there are the individuals who have exhausted their benefits after March 31. Second, those who have not made the required 180 contributions but who made 90 contributions within the period after March 31 before the moment of claim. Such people will be covered as well as those who, if they have not made any contributions, have worked for a period of 90 days within the last twelve months of an eighteen-month period in lumbering and logging. And then another group who work in newly insured industries for 90 days. The amendment is to cover those. We are seeking to deal with those four classes; and the extent to which we deal with those four classes is a matter that alone is germane to the discussion at the moment, in my opinion, without in any way failing to appreciate the quality and the character of the general problem which does not come within the ambit of this measure.


Howard Charles Green: Will the minister explain in what way the third and fourth groups come into the insurable categories? I do not think he has made that clear.
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Unemployment Insurance


Paul Joseph James Martin: I shall be very glad to do that. The third class deals with a person who, for not less than ninety days within a period of twelve months falling within an eighteen-month period immediately preceding the time he makes his claim, was employed in lumbering and logging in any province other than British Columbia-my hon. friend will appreciate why we say "other than British Columbia". Logging in British Columbia many months ago was made one of the groups that are covered as fully insured groups under the Unemployment Insurance Act-and in any insurable employment in any place. The man might be engaged for part of the year in an insurable employment, or he might be engaged in eastern Canada in logging, a non-insurable occupation. If he comes within both of these categories he will be required to work for ninety days, with the qualifications that I have mentioned. The fourth group-


Howard Charles Green: Ninety days at logging?


Paul Joseph James Martin: Ninety days at logging or any insurable employment. The fourth class is a person who, for not less than ninety days subsequent to the 31st day of March immediately preceding the day on which he makes a claim for a supplementary benefit, was employed in (1) employment that was made insurable employment at any time during the twelve months immediately preceding the day on which he makes a claim for supplementary benefit. Take a concrete case. Let us say that on the 26th of December a man is engaged in an uninsurable employment which is made insurable, under the general powers given the commission under the act, let us say, on the 28th of December. He obviously has had no prior opportunity to make contributions under the Unemployment Insurance Act, but nevertheless he will not on that account suffer. In this fourth class he will be deemed to have been in, provided he has worked for ninety days since March 31. The other subdivision in that class is the person who has worked ninety days since March 31 and is in any occupation in the group that I have already described and as well in insurable employment. These are the four classes we are seeking to cover and which we say will embrace at least a hundred thousand persons.


Mr. Lesage:: May I ask the minister a question about class 3. Does he mean that in order to obtain benefits a person engaged in logging in eastern Canada must have worked in another insurable trade for ninety consecutive days during the last eighteen months? Must the two conditions be put together? Must he have worked in any insurable trade
tMr. Green.]

for ninety consecutive days in the last eighteen months, or can he get benefits if he worked for ninety consecutive days in logging work?


Paul Joseph James Martin: Either logging or insured.


Joseph Arthur Lesage: Either?


Paul Joseph James Martin: Either one. I may say I hope tomorrow to be able to make an announcement about eastern logging. It will be put down at a later date.


Mr. MacDougall:: I feel that hon. members in this house ought to be acquainted with the situation that developed on the Pacific coast. Hon. members of all parties from the greater riding areas of Vancouver, together with the hon. member for New Westminster and the hon. member for Burnaby-Richmond, took it upon themselves, at the invitation of the city council and also a general invitation of the trades and labour council and the Canadian Legion in that area, to do what we felt would be a benefit in an endeavour to solve this emergency of unemployment, which we had on the Pacific coast this year to an unprecedented extent, of some 12-9 per cent. All of these hon. members whom I have mentioned attended all or some of these meetings. The hon. member for Vancouver-Quadra, I think, as well as myself, had the honour of attending all of these meetings.
I am perfectly content with this legislation as it has been presented, because in large measure, perhaps to the extent of 90 per cent, it embraces the needs and requirements of the spokesmen of labour at these various meetings we attended in the labour temple in Vancouver during the months of December and January last.
The bringing in of these additional groups is, in my opinion, a farsighted and humanitarian legislative enactment by the government, and for that I give them full marks, despite any derogatory remarks that may be made to the contrary before this legislation receives its final readings. But in that regard no one can possibly conceive of the Unemployment Insurance Act as a complete payment over a long-extended period in lieu of employment. It was never so intended, and I do not believe any government in Canada will at any time endeavour to make it of that type; but it does cover the emergency conditions which come to the various parts of Canada at different times. It is also now embracing a large field that was not subject to benefits and which, in my opinion, it was justifiably entitled to. This legislation brings it to a consummation.
I cannot look upon this legislation as other than a great step forward. This afternoon reference was made to the fact that we are

not developing employment by amendments to the Unemployment Insurance Act. That is quite true. But, in heaven's name, we are dealing with the Unemployment Insurance Act, and the amendments are not measures designed to bring about continuous and full employment for all.
A question was raised this afternoon by hon. members who I am quite sure are better acquainted with the legislative program contained in this legislation than I am, because they have been here longer than I have been. When they said that this legislation does not create jobs, I agreed with them. Certainly, it does not create jobs, and it never was intended to create jobs. It is a cushion and a barrier against continuing unemployment caused through emergencies or seasonal operations, and nothing more.
We ought to stick to the principles of the legislation rather than run foul of it, in connection with suggestions about creation of jobs. If we stick to the principles of the Unemployment Insurance Act I believe that we will all be able to go back to our constituencies-I for one will be, and I am quite sure this will apply to all the Vancouver members-and be proud of the legislation that is proposed in these amendments.
In my riding of Vancouver-Burrard there are possibly as great a number of those who will benefit from the bill, and who had previously been excluded from benefiting under the act, as there are in any riding in British Columbia. I shall be proud to go back to that riding of workmen, men and women who are, I am quite sure, going to be extremely satisfied with the amendments introduced to the Unemployment Insurance Act by the acting minister, the Minister of National Health and Welfare.


Mr. Croll:: My understanding of the government's position is that they do not for a moment suggest that unemployment insurance is a way of life. What they are saying to the committee is that the act has been on the statute books for a period of almost ten years-nine years, I believe, to be exact. Now, in the light of experience, that act has been tested and in some respects found wanting. So today we are tailoring it to the needs of the country.
To my mind that seems reasonable. The problem troubling me at the moment is not what is contained in the amendments, but rather what is not contained in them. We are doing something for people who have not been covered previously. I do not know how that will work out, but I am prepared to wait and see. At the moment it seems acceptable to me.
Unemployment Insurance
At this time let me deal with those people who have been covered by the act for many years, by asking this question:	Did the
minister give consideration to one of the sections causing great hardship, a section which in my opinion is unfair, namely the one which makes provision for the nine-day waiting period?
Those people who have been covered by the act for a considerable length of time feel that this is too long a time, and that it is a provision which imposes great hardship upon them. They believe it does not serve any useful purpose. It would seem to me that if actuarially it is possible to cut down the waiting period from 180 days to 90 days under certain circumstances, then the most which people should be expected to wait is the ordinary working week-seven days at the outside.
That would seem reasonable to me. It is pointed out by the hon. member for Fort William and by all members in all quarters of the house that that is one of the great weaknesses in the bill. It seems to me that in coming to the house at this time to ask amendments, something should be done along these lines.


The Chairman:: Order. We are not yet discussing the bill.


David Arnold Croll: I was referring to the resolution.


Joseph-Alfred Dion: I believe that is a matter which comes up in the bill.


David Arnold Croll: Is it contained in the bill?


Joseph-Alfred Dion: I do not know; we shall see.


David Arnold Croll: I was referring to the act. When I said "bill" I' meant "act". Perhaps I am somewhat premature in my question. Nevertheless I am asking the acting minister now whether consideration has been given to that section, and if any decision has been made.


Paul Joseph James Martin: I am glad the hon. member has spoken because, while I may not be able to answer his question at the moment, it does give me an opportunity to say something which possibly I should have said at eight o'clock, and that is that the resolution before the committee is, in its very nature, lacking in the generalities that often attend resolutions introduced prior to the introduction of money bills. On that account there is some difficulty, obviously, because of the particularities of the resolution, rather than the fact that it does not declare or contain one general principle.
The question the hon. member has asked is one to which I should like to address myself, and I believe that question as well as others which have already been put might
178	HOUSE OF
Unemployment Insurance more appropriately be put and, I believe, with perhaps better appreciation, when the bill is actually before us, so that we may see what is involved, instead of being put on the resolution stage when the bill is not before us, and when I am precluded under the rules of the house from giving all the information I should like to give.
It seems to me, if I might make the suggestion, that we should proceed from the committee stage, have first reading of the bill and distribution of it, so that we may have adequate discussion on second reading and in committee, at which time all these questions could be put and I would have a fair opportunity to reply.


Some hon. Members:: Hear, hear.


Stanley Howard Knowles: Before the applause becomes too voluminous may I remind hon. members of the experience we have frequently. We have these measures brought before us, and we attempt to discuss the details by asking questions such as that asked by the hon. member for Spadina. We are told not to raise the question now, when the discussion is general, but to leave it until we reach committee stage of the bill. Then, what happens when we get into committee? We are restricted to a discussion of those points contained within the actual clauses of the bill.
It seems to me we would gain time in the long run if we were to have some of the discussion right now, and have some of the general questions cleared up.


Mr. Fulton:: In the preparation of the bill was any consideration given to reducing the waiting period? In common with other members, I have had brought to my attention the fact that while the benefits when paid are found most welcome, as naturally they would be, nevertheless when a person is suddenly faced with unemployment, because of seasonal hazards, harsh winter conditions or the like, the waiting period of nine days imposes a great hardship.
I know of cases where men have been unable to provide properly for their families in the matter of fuel and food, and would have suffered unduly had it not been for the charity of institutions which have already been mentioned. Sometimes the condition has been aggravated by delays in adjudication.
This would seem to be a pressing point, and I would be grateful if the minister would say whether consideration was given to it, and whether it is possible that the waiting period might be reviewed.


Paul Joseph James Martin: I shall be glad to go into that when we reach committee stage.


Mr. Hansell:: Mr. Chairman, I feel the time is opportune to make suggestions as to what should or should not be in the bill. We have all experienced the difficulty of making changes, once bills are brought down.
I am not rising either to extol or to condemn the bill. Some changes are necessary. Neither do I rise to depict the serious unemployment situation, but simply to ask a question or two which I hope the minister will see fit to answer before the bill is introduced.
I have not had an opportunity to digest the minister's speech delivered this afternoon, and it is possible that he may have made some observations which I did not hear. I am sure all of us have had some communications or representations from certain classes of labour which are not now included under the provisions of the Unemployment Insurance Act. I would refer particularly to hospital employees. I am not going to take the time to make an extended speech on that, but are we to believe now that those employees are about to be included in the act?


Paul Joseph James Martin: No.


Ernest George Hansell: That is a definite answer. That being the case, I can resume my seat with some degree of comfort. I am sure that the hospitals, many of which are run by municipalities and governments, many of which are almost charitable institutions, will feel as comfortable as I from now on.


John George Diefenbaker: Is the minister in a position to deal with the suggestion I made regarding the inclusion in the act of those who are unemployed by reason of illness but who have contributed to the fund? Can the minister advise what attitude the government will take with regard to the inclusion of those people within the amendments to the act?


Paul Joseph James Martin: I listened this afternoon with great interest to what the hon. member had to say and I appreciate the significance of his remarks. The cash sickness benefits principle which he defends is not covered by the amendments. I would not want that answer to be taken as meaning that consideration and study are not being given to that problem.


John George Diefenbaker: I had hoped that more would have been done in view of the fact that the act is being amended. The class that I mentioned are now being denied any benefits under the act. It seems to be most unjust and unfair that those who have contributed to the act should be denied any benefits when they are unemployed by reason of illness. There must be a great number of people in this

country in occupations to which unemployment does not come as a rule. I refer particularly to banking. Those engaged in banking pay into the fund over the years and in my experience I have heard of no case where anyone so engaged has been able to qualify himself for payments under the act.
We have always taken the stand that one should not be taxed without advantage, particularly when it is taxation of the individual. However, in view of the statement of the minister, there is nothing one can do about this as amendments such as that can be introduced only by the executive.
I should like to secure some information with regard to one statement made this afternoon by the minister. If I took his words down correctly he stated that the fund is guaranteed against loss until 1952. He was dealing with the inclusion of certain new groups and he seemed to indicate that the additional revenue, or taxation if you will, that would be derived from the inclusion of
90,000	more employees whose salaries range from $3,120 to $4,800 would be sufficient to meet the demands of those who are now being included in the act.
Is the minister in a position to give an estimate of the extra payments that may be expected to be made from the fund, and of the additional revenue incident to the inclusion of these 90,000 employees with a salary range from $3,120 to $4,800? I think the committee is entitled to that information. Only a few moments ago the minister said that all these amendments recognize that there must be an actuarial basis for the fund; yet this afternoon he made the statement that should there in fact be a shortage in the fund between now and 1952 it will be made up in some other manner, apparently by the state as a whole contributing to the fund.


Paul Joseph James Martin: I am advised by the officers of the commission and the department that it is not possible to make a satisfactory estimate of the cost such as one could responsibly make. The general situation is that there will be one cent per day premium imposed upon the employer and the employee with the government underwriting the balance until 1952 so as to avoid impairment of the fund. It is thought that the totality of the premiums paid by the employers and the employees in their accumulated quality will be sufficient to take care of the situation. If the situation should be otherwise, it would then have to be reviewed.


John George Diefenbaker: The minister must have information as to the anticipated contributions from the 90,000 with salaries between $3,120 and $4,800 because statistics showing
Unemployment Insurance the various categories of salaries and the numbers receiving such salaries must be available. The government has been able to estimate that 90,000 will be added to those contributing to the fund and it must also have-


Paul Joseph James Martin: The figure of 90,000 referred to the increased coverage.


John George Diefenbaker: But the increased coverage implies that there are 90,000 with salaries of between $3,120 and $4,800 who will be included. Surely the department could estimate the contributions that those 90,000 will make so that the committee would have some knowledge of the amount that will be received in consequence of their inclusion? The minister cannot say that they have no information in that regard because the statistics I am talking about are available.


Paul Joseph James Martin: If any modification is required in the answer I have given already I will make it at a later date. I shall have the matter looked into carefully.


Heber Harold Hatfield: I should like to inquire about the man who worked in a war plant during the war and paid into the unemployment fund, who went to other employment, perhaps farming, when the war plant was shut down, and is now unemployed. Can such a man draw unemployment insurance when he has paid into the fund for perhaps five years?


Paul Joseph James Martin: This is an insurance act. The risks are there and it would all depend upon the particular case. If the man had made 180 contributions within two years he might get some benefits. This is exactly what it says; it is an unemployment insurance act.


Edmund Davie Fulton: Would the minister give a further explanation as to category No. 4, I think it was, among those who are going to receive additional coverage, or perhaps among the recommendations made by the unemployment advisory committee having to do with the reduction in the number of non-compensable days? I was not able to follow him as he made his statement this afternoon.


Mr. Mariin:: Persons covered in clause 4 would be ones who have not less than ninety days-


Edmund Davie Fulton: The minister has not understood me. It was No. 4 of the recommendations made by the unemployment advisory committee having to do with the reduction, as I understood it, in the number of noncompensable days.
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Unemployment Insurance


Paul Joseph James Martin: Would you mind leaving that until we come to the bill? The details are not right before me.


Edmund Davie Fulton: The minister made a statement on it this afternoon.


Paul Joseph James Martin: Yes, I made a general statement, but when we come to the bill I will be able to explain in greater detail. I may say that we have accepted the recommendation of the advisory committee.


Edmund Davie Fulton: If the minister will not give me further details I must ask my question without benefit of full knowledge of the amendment proposed. What I wanted to ask, following the explanation, was whether this adjustment will have any effect on the nine-day waiting period.


Paul Joseph James Martin: Yes.


Edmund Davie Fulton: What will that effect be?


Paul Joseph James Martin: It just reduces it; that is all.


Edmund Davie Fulton: I think there are a number of members who are interested, and who would appreciate it if the minister would1 give us an answer to the question so that we can understand1 the situation.


An hon. Member:: He does not know.


Paul Joseph James Martin: I am sorry if I did1 not make myself clear. That is the difficulty we get into when we do not have the details of the bill before us. I think it will be better all round if we wait until we have the actual bill before us. We will deal with that particular item in the bill, and I think you will find it more satisfactory for all purposes.


Edmund Davie Fulton: I hope you will allow a latitude of discussion on that.


Paul Joseph James Martin: I shall be glad to hear it.


Stanley Howard Knowles: There are one or two questions I want to ask, but before I ask them I should like to make this comment. During the discussion today we have made criticisms of the bill from this side of the house as to its inadequacy, and the hon. member for Vancouver-Burrard, the minister and others, have replied that this measure is not the answer to the unemployment problem, that it is just a case of further tailoring of the Unemployment Insurance Act. May I remind the minister, and those who have said this sort of thing, that the only reference in the program of the government for this session- in other words, in the speech from the throne -to anything it proposes to do about unemployment is to the effect that changes are to be made with respect to unemployment insurance. These members have said that this is not the solution to the unemployment problem, and in that respect they agree with us.


Well then, what is the government's solution? When do we get some answer to this pressing problem? If we are not getting that, surely we are only doing our duty to point out the gross inadequacies of this measure in terms of the small amounts workers are to receive, the small number who will receive them, and the limited! period of time for which they will receive these benefits.
The question I want to put to the minister was put to him perhaps more than once during the discussion this afternoon. Did the unemployment insurance advisory committee have a chance to consider these proposals? I mean the major ones, the ones having to do with these four new classes, the fact that there is to be only an 80 per cent benefit for a certain number of days, and so on. Did the committee have these proposals before them and did they concur in the proposals that are now in this measure?


Paul Joseph James Martin: I cannot tell my hon. friend what the committee did. I know that the chairman of the committee was a member of an interdepartmental group and, along with the members of the unemployment insurance commission, sat in while there was a discussion about the principle of supplementary benefit payments.


Stanley Howard Knowles: The minister knows as well as I do -that is not a very satisfying answer. It is getting around the question without answering it yes or no. He also knows, if he has followed these matters in the house, that in discussing unemployment insurance matters we have made suggestions such as the one the hon. member for Lake Centre made this afternoon having to do with people who pay in for years and do not get any benefit when they are unemployed due to illness, and other suggestions about people who are sick after they go on benefit. The reply we always get from the Minister of Labour is that these matters will have to be referred to the unemployment insurance advisory committee. They are an important body when you have some hot potato you want to get rid of, but now wheni the government has a proposal to bring in that is inadequate it is pretty obvious they were -not consulted at all.


Mr. Brooks:: Unfortunately I was not here this afternoon, and I am not altogether clear on some points. This question may have been answered in my absence. As the minister knows, unemployment is perhaps worse in the province of New Brunswick than in any other part of Canada. It is in the lumber woods that we are having most of our difficulty. As I understand the minister, unless a man employed in the lumber woods was employed for ninety days previous to that in some insurable employment he would

not receive unemployment insurance. Suppose he had only worked in the lumber woods for a month or a month and a half; unless he had ninety days employment in some insurable employment before that he would not receive the insurance. Is that correct?


Paul Joseph James Martin: I think I have already explained that two or three times. There is an implication in my hon. friend's question as to what we are going to do about eastern logging. I have said already that tomorrow I hope to be able to make a statement to the house in that connection.


An hon. Member:: He does not know now.


Paul Joseph James Martin: I cannot let my hon. friend know now. There are four classes of people who will benefit from this supplementary benefit arrangement. One of these classes will be those who have exhausted their benefits. Although they have paid 180 contributions they have exhausted their benefits after March 31 last. Another group consists of those who have only made ninety contributions since March 31 last prior to making claim. Then there is another group who have worked ninety days within the last twelve months of the eighteen-month period, and then there is the group who have worked ninety days in a group just recently made insurable. Many of the persons whom my hon. friend has in mind would be covered by this measure.


Alfred Johnson Brooks: I should like to ask the minister about the case of a young man, for instance, who is employed in the fishing industry for ninety days. As is the custom in our province, fishermen and farmers work at seasonal employment in the woods. These men are not going to receive the benefits of this insurance at all. When the bill is considered it would seem to me that these are points as to which we could very well have new amendments. We are trying to suggest to the minister now some of the weaknesses of the act. I think matters of that sort should be taken under consideration because the present measure is going to be of very little benefit, so far as I can see, in helping the unemployment situation in the province of New Brunswick. I know it is not in the act, but it seems to me when we bring in a bill of this kind to assist men who are out of employment we should prepare a bill which will be of benefit to the men who really need it. That is the point I wish to make.


Paul Joseph James Martin: I can only say that under the first schedule of part II of the act my hon. friend will find that fishing is one of the excepted groups along with agriculture and other groups.
Unemployment Insurance


Angus MacInnis: I want to ask the minister one or two questions about the advisory committee, but before I do so I wish to say a word about the insurance feature of the Unemployment Insurance Act. I think if we insist upon saying that everyone who contributes towards the fund must get something out of it, we are just being unrealistic. This is insurance against unemployment. If a person contributes to the act for thirty years and does not have to call upon the fund for benefits, it seems to me that it is his good fortune. It is a social arrangement where the fortunate person who continues in employment helps out the person who is not so fortunate. So much for that part of it.
We should always try to make sure that, when a person has paid into the unemployment insurance fund and then leaves that employment and goes into uninsurable employment, without a period of unemployment, then the insurance fund he has accumulated during the time he was contributing should not be lost to him. He should be able to take advantage of it at some other time. I do not know to what extent the contributor is protected against such an eventuality. I think we should see that he is protected so far as possible.
I should like to ask a question about the advisory committee. Who are the members of the advisory committee? What interests will the two new members represent? I understand that the members on the advisory committee represent either employer or employee interests, and I was wondering whether the minister could give that information. Is the advisory committee not important enough to refer amendments of this kind to it for its decision? If it is not that important, why should the advisory committee be enlarged?


Paul Joseph James Martin: My hon. friend asks a perfectly reasonable question. The purpose of the enlargement, I may say offhand, is to take in representatives of the railroad brotherhoods. At the moment, I cannot give the personnel of the committee. I could give the name of Mr. George Burt, and I know Mr. Mackintosh is the chairman. There are several others, and I have sent for a list of the names.
The advisory committee is a body which seeks to advise the commission in respect of the act. It is exactly what its name implies. It deals largely with the ways and means of improving the existing provisions of the act. For instance, it deals with such questions as the waiting day period. Quite a number of the amendments that are going to be introduced are amendments to the existing act which have been considered by the existing advisory committee and, in most instances, unanimously approved.

Unemployment Insurance
The supplementary benefit is an entirely new procedure. It is not something that arises out of the existing act, but is something that is supplementary to it. It is the sort of matter for which the government, after consideration by an interdepartmental committee-at which time the commission had an opportunity of making its point of view known-has to accept the responsibility, which responsibility the government is accepting.


Gordon Graydon: I should like to ask the minister a question about the contributions which are now being increased for certain insured classes. During the time the Unemployment Insurance Act was being considered in committee, a good deal of stress was laid on the actuarial position of the unemployment insurance fund. As the minister will perhaps recall, there were a number of alternate proposals which the government declined to accept, because they were trying to put the fund on what was known as a proper actuarial foundation. I am only speaking from memory now, but I think my memory is fairly clear, when I say that was one of the reasons advanced at one sitting for not including certain special groups in the original plan. It was felt it would disturb the actuarial soundness of the fund.
I take it that now the government has stepped into the picture it has, in some way, destroyed the actuarial position in which the fund was. When I say that, I am not suggesting I am opposed to it, because at this time I think that is essential. I do believe, however, if we are going to disturb the actuarial basis-


Paul Joseph James Martin: There is not going to be any disturbance whatsoever of this fund. The supplementary benefit payments will be taken care of in the way I have indicated, by premiums imposed on the employee and the employer, and the difference will be provided for out of the consolidated fund. The insurance fund now amounts to $589,642,210.67, and will not in any way be depreciated.


Gordon Graydon: I do not think the minister understands my point. Perhaps I did not state it clearly. It seems to me the very fact that the government has now decided to guarantee the fund indicates that the actuarial position will be changed. One thing that disturbed me particularly about the bill, as described by the minister in the resolution stage, was that the workers are now going to have to pay one cent a day more than they were paying before; that would apply to industry as well. If the unemployment situation increases as it has, and becomes general, I am wondering whether or not the government is fair in asking the worker to put up


that extra money to cover a nation-wide condition, instead of having the government take care of that by guaranteeing the fund. If the actuarial position is being disturbed, then it seems to me that the government is going a long way in asking the workingmen of Canada to put up another cent to cover a condition for which I think this federal government has some responsibility.


Paul Joseph James Martin: I can only repeat, because it is important that I should repeat, that the actuarial soundness of the fund, in the opinion of those who are by training and experience qualified to judge

I mention no less a person than Mr. Watson, the actuary, and others- is not being disturbed in any way.
In regard to the other question raised by the hon. member about imposing a cent a day on the worker and employer, all we are doing is simply maintaining the insurance principle. Upon reflection, I think the hon. member will agree that is the thing to do.


Mr. Johnston:: I should like to direct a question to the minister, but it is one that has already been asked by the hon. member for Vancouver East. Where a man has been employed in an insurable job, and has been paying into the unemployment insurance fund for a number of years, and then takes a noninsurable position or starts to work for himself, what protection is there for this man's investment? He may have contributed for four or five years, and then finds himself in a non-insurable job. Is there any protection of the money he has paid into the fund?


Paul Joseph James Martin: That man has been buying insurance, and that is what he has obtained. I believe that sort of person is in the fortunate position mentioned by the hon. member for Vancouver East; he did not have to use the unemployment insurance fund, but he was protected.


Mr. Harris (Danforth):: I just wanted to make an observation with regard to the actuarial position which has just been mentioned. I think the minister will agree with me that it is not precisely the same as it was when this plan was inaugurated. In other words, what I am trying to say is this. The moneys that your employees put into that fund find their way into the consolidated revenue fund. The Minister of National Revenue shakes his head, saying no. I hope he is right. Even if it does, it would be on a sound basis. I should like to see tabled in this house a statement showing where this $589,642,210.67 actually is, not that I am afraid that it will not be immediately available when it is called on, but if the record is checked carefully-


Paul Joseph James Martin: I think it is in the public accounts.


Joseph Henry Harris: Yes, it is in the public accounts; that is quite true. Our good triend, Mr. Graham Towers, whom I should like to call as a witness, made sure it went into the public accounts. But the public accounts, when they are all added together, show overwhelming surpluses. Let us remember that $589,630,000 of this money does not belong to the government of Canada. Let us be ordinary practical bookkeepers. It belongs not to the government of Canada but to our employees. Some day, and I hope it is not too soon, it will have to be paid back to those of us who have served industry and what not. Perhaps that day may not be too far distant. It will be paid back rapidly, and when the public accounts are dissipated to the extent of half a billion dollars or more we and the people of Canada, on looking at the financial statement of Canada's affairs, will not be quite as happy as we are today, with revenues which are so high. I do not mention this matter particularly to be critical. I mention it merely that we might be sensible about the position in which we find ourselves. I do not want in any way to detract from the necessity of unemployment insurance; but our bookkeeping system should be of a kind that would show the exact position, so that we would not be carried away by the almost overwhelming, I would say, superfluity of funds, some of which, to the extent of $589 million, is not our money. It belongs to those of our employees who each week have had so much deducted from them. I think the minister could explain to the house that with the advent of Graham Towers our bookkeeping system was changed just a little bit. A great number of members of this chamber have a wrong idea with regard to the surpluses that we, on the whole, have in Canada. We have a bad habit of carrying into those surpluses some of the moneys that belong to some of our employees, in the same way as many men perhaps carry some of the money which belongs to their wives in their own account. I think we should tell the public the position and be quite frank about it. I think we should tell them that that is not our money, but that it belongs to those who have served industry and otherwise since the advent of the Unemployment Insurance Act.


Paul Joseph James Martin: I am sure my hon. friend would be the last one who would want to convey the impression that the situation was otherwise. This is a trust account.


Joseph Henry Harris: Quite so.
Unemployment Insurance


Paul Joseph James Martin: It is administered by three trustees.


Joseph Henry Harris: Quite so.


Paul Joseph James Martin: The trustees are the deputy minister of finance, the governor of the Bank of Canada and Mr. M. M. Maclean.


Joseph Henry Harris: Quite so.


Paul Joseph James Martin: My information is that there is about $17 million in cash, for obvious purposes, and that the rest is in government securities. That is a trust account. That is the way it should be. That is the way the act provides it should be, and there is no intention on the part of anyone that it should be treated otherwise. That money belongs to those for whom it is held in trust; and I know that no one would want to give the impression that the situation is not as I have stated it.


Joseph Henry Harris: I merely rose to emphasize the fact that the money does not belong to the government but belongs to those who have served industry.


Gordon Graydon: May I direct one question to the minister, arising out of the practical arrangements to be made for payment of these additional amounts on March 1, as I understand the intention to be.


Paul Joseph James Martin: As quickly as possible.


Gordon Graydon: What notice have the unemployment insurance offices all over Canada received with respect to the government's intention to make this change? It will be a tremendous burden upon the offices unless sufficient notice has been given by the government of the intention to make the change, and I am hoping that it has not just been given within the last few days; because, if it has, then of course the difficulty with respect to the men getting the cheques will be just that much greater.


Murdo William Martin: We could not say what parliament would do. That decision depends upon the decision of this house. But preparatory steps have been taken to minimize any delay.


Gordon Graydon: Does the minister expect that the first cheques will be issued under the new scheme on March 1?


Murdo William Martin: Just as quickly as possible. I would not want to specify a date.
Resolution reported, read the second time and concurred in.
Mr. Mariin thereupon moved for leave to introduce Bill No. 8, to amend the Unemployment Insurance Act, 1940.
Motion agreed to and bill read the first time.

The Address-Mr. Knight


Mr. Speaker:: When shall the bill be read a second time?


Some hon. Members:: Now.


Stanley Howard Knowles: Next sitting.


Paul Joseph James Martin: I wonder if we could proceed with the bill now?


Stanley Howard Knowles: The hon. member for Peel (Mr. Graydon) and I, if not others, had a conversation with the Prime Minister (Mr. St. Laurent) last night in which he agreed that, with all these technical details, it would not be unreasonable for us to ask that the rules be observed at this point. Let us get the bill printed and into our hands before we are asked to proceed further.


Paul Joseph James Martin: Tomorrow, then. My hon. friend is very helpful, and I recognize that fact.


Mr. Speaker:: Next sitting of the house.



SPEECH FROM THE THRONE


[Stage Direction]
The house resumed, from Wednesday, February 22, consideration of the motion of Mr. F. H. Larson for an address to His Excellency the Governor General in reply to his speech at the opening of the session, and the amendment thereto of Mr. Drew, and the amendment to the amendment of Mr. Coldwell.
Mr. R. R. Knight (Saskatoon):: Mr. Speaker, may I join those who have spoken in this debate in congratulation of the mover (Mr. Larson) and the seconder (Mr. Dumas) of the address. In addition I venture to congratulate the leaders of the various parties in this house upon the excellent speeches which they have made on this occasion. I was particularly pleased that the hon. member for Peace River (Mr. Low) spent a good portion of the time allotted to him in advocating federal aid for education, a cause to which I have myself in the past given some time and effort, and one which I hope to promote further in the future. But it is not with that subject that I wish to deal tonight.
The speech from the throne was just what one would have expected. Its failings have been advanced by various opposition speakers who have preceded me. To me it was a vague admission that the state of things in the nation was not quite as it should be, and the pious hope that the deterioration would not continue. Apparently we must wait and see. We are, forsooth, not the masters of our own destiny, but rather its victims. There is little sign of action on the part of the government to guide it.


I hope to say a word or two on foreign affairs. After the speech of the Secretary of State for External Affairs (Mr. Pearson), one feels somewhat diffident in approaching that subject; but my courage is bolstered by the fact that, as I have been thinking, it is no mean thing to be a free member of a free parliament possessing a right equal to that given to all others, to express freely one's own ideas in this House of Commons, whether those ideas may be considered right or wrong.
It has often occurred to me that a very small proportion of the members in this house do discuss foreign affairs, or in fact many matters outside our own boundaries, even when these matters pertain to our own affairs and have a direct bearing upon them. The average member appears to shun such debates. I have sought in my own mind for a reason for that. Is it perhaps a relic of the long period in which our international diplomacy was handled almost entirely by the mother country, Great Britain? Can it be that, awed by the wealth and power of our immediate neighbour, we are diffident about advancing independent views on international matters, letting the United States speak to some extent for us? Is it perhaps an insularity produced by our geographical position and the fact of our remoteness from the ferment of Europe and of Asia and of being surrounded, as we are, by two great oceans? Well, sir, insularity in these days is a difficult position to maintain. The impact of world affairs must be felt even by those who would avoid them or who have no interest in them. World problems have become our problems.
I have said that there is little discussion of international affairs in this house. Such debate as there is is largely in the form of pronouncements made by the Secretary of State for External Affairs. We listen with an awe invoked perhaps by envy, or perhaps to some degree by the recognition of his greater opportunities to obtain information upon those particular subjects. But let me say, sir, that we must not, with all due respect to the minister, leave the evolution of Canada's foreign policy to the mind of one man, however brilliant that mind or that man may be.
The recent speech of the Secretary of State for External Affairs was to me a disappointment. I have no doubt that it was a disappointment too to the diplomats who crowded into the galleries to hear him. It was a delightful and interesting travelogue by a genial globe traveller. It might just as well

have been given by the Minister of Fisheries (Mr. Mayhew), who shared the minister's journeyings.
A moment ago I spoke of the minister's speeches as pronouncements. Well, in this speech there was certainly no pronouncement, no announcement of a firm decision, no statements of government policies. Are these decisions, if any have been made, to be clothed in that same cloak of secrecy in which the government has been so successful in wrapping certain other matters? Or could it be that this Canada has perhaps no independent foreign policy and must wait until that policy is formulated for her by other governments? We would have liked to hear what decision has been made in regard to the recognition or the non-recognition of China, upon which an early statement had been promised. We would have liked to be given a gleam of hope for betterment in what we call the cold war situation, and to have been told that some action had been taken by the government upon which such a hope could have been based.
Throughout the speech there was one welcome note. The minister said that he and the government realized the need for supporting with sympathy and with material aid1 the new nations of the East to the end that they may preserve their independence and their freedom, and here I might suggest investment of sterling which we can obtain for our surplus products and which we could invest in those countries. But again apparently no firm decisions have been made or at least announced as to the amount of our commitment in that direction.
The minister made the point that our commitments in the East would necessarily be limited by the fact of our commitment in the Atlantic sphere. In the light of the minister's statement that the centre of gravity of world affairs has moved now to eastern Asia, one might ask if there had been any review of commitments in the western sphere. We should like to have heard how successful in that sphere we have been in promoting the objects for which those commitments were given.
There are feelings of unease in the country in regard to that. The government's opinion, and the opinion I think of the great majority of Canadians, is that those commitments were necessary as a security measure against possible aggression, and as an active step towards promotion of economic co-operation and world peace. There is a small body of opinion -and I am glad that it is small-which would oppose any co-operation, through their desire to aid a foreign power. Their numbers, as I have said, are fortunately few. Then there
The Address-Mr. Knight is a third and honest and loyal group of thinking people who are worried lest our commitments may involve us, not in co-operation and in human understanding, but in a struggle not necessarily based upon ideologies, but upon the rivalry of two powerful nationalistic and sovereign states. We would have liked some reassurances which might have been for us a renewal of our faith. So much for the speech of the Secretary of State for External Affairs.
The speech from the throne too was disappointing, in that it lacked any constructive proposal for the improvement of what we call loosely the international situation. An absence of expressed optimism is easy to understand. For indeed the situation there does continue, if one may accept the opinion of the press, to deteriorate. We as a nation seem to have no solution, and we are pinning a shaky faith to an increased and crippling program of defence.
The minds of the peoples of the world, sir, are possessed with deadly fear, the fear of war. This fear is shared equally by the people of my constituency and of my province. The people of England are thinking about the same thing. Mr. Churchill knew that very well when he introduced into one of his election speeches the other day a promise that if he were elected he would try to do something about bringing about a cessation of these war preparations which presage disaster. He would have been the last man to have suggested discussions with the Soviet union at the highest level, unless he had known that there was in the hearts of the people a response to that desire and that call for peace. The people of England have much to fear from another war. They know that in such an event their little island will simply be an advance air station, an advance depot and air base for one of the two mighty antagonists; and as such they can be only a target of the life-destroying missiles of the other.
Dare one in these times, in this nation and in this assembly, lift up his voice in the cause of peace, without having his motives misunderstood? Dare one suggest the truism that war settles nothing permanently? Dare one warn this house that, with the atomic bomb and the hydrogen bomb extant, war would be the ultimate disaster? Dare one say that it would promote the spread of the very scourge which we now by our every effort oppose? To me it is an awful thing that men can even contemplate the use of the destructive weapons which they have under their hand. We are not in these days training great armies of fighting men. They have become obsolete. War has been robbed of any of the manly attributes that it might ever have had.

The Address-Mr. Knight No, we do not train infantry soldiers any more; we put our faith in scientists and technicians. And by that very fact we are admitting that war in the future is to lose those manly attributes, if it ever could be said to have had any, and become a conflict as to which side can destroy first and most completely the civilian populations of unarmed men, women and little children.
Sir, these are gruesome things to contemplate, but I think once in a while the truth about them should be said. I have pictured to the house Hiroshima to the nth degree. The survivors will be the winners and there might not be too many of them to get ready for the next contest.
Someone, I have forgotten who, upoh being asked what would be the weapons in the ;hird world war, said that he did not know what the weapons of the third world war would be, but he did think that the weapons of the fourth world war would likely be bows and arrow*.
Somehow or other the people of the world will have to get together and solve this problem. Somehow or other mutual distrust and misunderstanding, among peoples and among nations, will have to be dispelled. I am familiar, as we all are, with the attempts which we have made in that direction. I make no excuse for any government that has been the means of blocking those attempts, nations that indeed have shut off their populations from intercourse with the rest of the peoples of the world.
I, myself, believe in freedom of communication, freedom of discussion, freedom to choose for ourselves any form of government that we wish. In short, I believe in democracy-political, social and economic. But my whole life-and this has been the experience of most hon. members in the house-has consisted of two great cycles, each composed of three parts. Each of those parts has been induced by the one which has preceded it. They are all interdependent, one upon the other. Two great cycles, I say, or a series of the three states-depression, war and prosperity. And each of them is the cause of the one which follows upon it.
At what stage of that cycle do we now find ourselves? Well, hon. members will have to decide that for themselves. But the year 1912 and the year 1929 keep intruding themselves upon my own thinking as corresponding to the present time. We must somehow or other learn to break that cycle. It would be a disastrous thing if people were to accept such a cycle as necessary and inevitable. And it would be a greater tragedy if our young people were to accept war as a necessary prelude to the good life, to the extent that

when faced with a state of depression they might become reconciled to accepting, in the course of things, war as an alternative.
The problem of peace, at the moment apparently insoluble, must be solved. I know not what such a solution may involve. It may involve some sacrifice of national sovereignty. It may ultimately involve some form of world government. We have been called upon many times and oft to make sacrifices in the cause of war. Someone, somewhere, somehow- probably some nation-may be called upon to make sacrifices in the cause of peace. And when I speak of peace I do not do so in any sentimental or emotional way. I do not mean peace at any price. I am well aware that a state of peace can be a state of uneasy mistrust and suspicion.
The peace which I hope for must be based upon law and order, and that will have to be on an international level. I should like to ask Canada to take some initiative in the pursuit of a peace of that kind.
There are many people in this country who think that the diplomacy of our own Department of External Affairs is guided by the corresponding government department in the United States. The fact that we are allied with the United States for purposes of defence certainly does not, nor should it, imply that we should follow the lead of that nation in all matters, nor that we should imitate it slavishly in its decisions upon international relations. Personally I have no wish that Canada should become, either in peace or in war, the tail of the American comet. Perhaps it may sound ridiculous that I, in my humble place, should'pass judgment upon a nation of 180 million people; but I venture the suggestion that the United States has given evidence of some naivete in its foreign policy which has not been evident in the foreign policy of other nations-and I am thinking notably of Great Britain. I am thinking of how Great Britain handled the problem of India, bowing to the inevitable, and at the right time and, may I say, under circumstances which left little if any of the old bitterness as between what had been master country and colony, but rather left a feeling of friendship and co-operation for the years to come.
I am considering, and I am sure the Asiatic nations, too, have been considering, the support by the United States of the unscrupulous regime of Chiang Kai-shek. I do not know whether the influence of the United States has prevented, us in any way up to the present time from recognizing the government of China. I think we have been mistaken in postponing so long such recognition. I do not know whether the government even now

is prepared to recognize the Chinese government, ' and a pronouncement from our Secretary of State for External Affairs (Mr. Pearson) is in my opinion long overdue.
While the revolution in China is communist-led, in my opinion it is not a communist revolution as such. A friend of mine who was in a position to follow closely and to judge what has happened returned recently from that country and he tells me that until a short time ago there were groups representing distinct divisions in Chinese governmental opinion and there was a possibility that one of those divisions might lead the government of China away from Stalinist affiliation. The picture from the democratic standpoint seems to have been darkened in recent days by the news that a comprehensive trade treaty has been signed by the Chinese with a group of iron curtain nations. I wonder if our tardiness in the recognition of the government of China has had anything to do with the opportunity which another great power has grasped to make a treaty of that sort. Perhaps once again it is a case of being too late. Perhaps we have played into the hands of Moscow.
My friends will tell me that I do not know anything about it. Admittedly, I do not know much about it, and I can only use such judgment as I have and apply it to the facts which I can ascertain. So far as this government is concerned, the matter of external affairs has not been one about which we have been taken into its confidence.
The white and western races of the world have been none too wise in their treatment of Asiatics. We have looked upon them consistently as being people to whom we could sell something or from whom we could extract cheap labour. Up to the present time we have not devoted our energies to sharing with them a better life. If we are honest with ourselves we must admit that never in our own minds have we granted to them the status of equality.
Now the western world is in a different position. The western world is now under the cool and critical scrutiny of the millions in the east. They have looked upon our support of the oppressor in China. They are considering our refusal to recognize that government. They know of the tardiness in making a permanent settlement with the great country of Japan. Many of the eastern races have won their fight against foreign domination and now they are at the crossroads and they have to decide which way they are to go. They have to decide what they are going to do with their new-found freedom.
The Address-Mr. Knight
India, Indo-China, Pakistan, Burma, Malaya: they are all looking on. They are studying democracy as we practise it. This democracy of ours is under the scrutiny of people who have never had an opportunity to practise it, who have never known its blessings and its satisfactions, and can judge it only by its effect. They want to know if it feeds the hungry. They want to know if it uplifts the downtrodden, if it cares for the sick, if it guarantees an equality of opportunity to its adherents. Let us hope that we have not been tried and found wanting, for it may be later than we think.
We have better weapons than the atom bomb with which to deal with people. We have better weapons than the hydrogen bomb with which to handle communism, which nearly always is the result of poverty, hunger, misery and social injustice. Perhaps even at this late date we can set out to win the friendship, respect and gratitude of the eastern people. Either we shall do that or we shall continue to drive them into the arms of Soviet Russia.
Asia looks at our attempts to solve the problem of surpluses of food and other material wealth, and our general acceptance up to now of the idea that the waste of war is necessary to do away with embarrassing surpluses. They can tell us how to put those surpluses to better use. How will they look upon the proposals being made in many quarters that the production of consumer goods, particularly of agricultural foodstuffs, shall be curtailed? How will they look upon proposals for the curtailment of production while their children, and perhaps some of ours, are starving for lack of the necessities of life?
I noted what the leader of the opposition (Mr. Drew) had to say the other day in his speech when he advocated the promotion of schemes within this country designed to increase that same consumer production. One of the things which he was advocating was irrigation. Irrigation will produce foodstuffs in great abundance, but the leader of the opposition did not suggest how any surpluses were to be got rid of in a world which is already beginning to be cluttered up with surpluses.
The dividing line between poverty and plenty always appears quite suddenly; there is no space between the extremes. We come through a period when we are all short of goods, and then suddenly, just like that, we have more goods than we know what to do with. They are there upon the shelves and the only solution to that particular problem we have evolved up to the present is to destroy as many of them as possible in the process of war, or to substitute for those
188	HOUSE OF
The Address-Mr. Knight unsalable consumer goods weapons which are destroyed but which absorb the human energy of the worker.
I take it that the leader of the opposition is not prepared to oiler a solution for the disposal of this increased production. It is an unfortunate fact that every country in the world, even those not so highly industrialized as our own, under, the queer economic set-up now extant wants to sell and on the other hand no one is willing to buy or has the money, or the right kind of money, with which to make purchases. Our own refusal to accept money or goods has forced Europe into the uneconomic production of grain and other foodstuffs. Every government in western Europe, and for all I know in eastern Europe as well, although it is difficult to obtain information from that source, at the moment is subsidizing its own farming industry. They are helping the farmers with free chemical fertilizers, with farm loans, with advice from the extension departments in their universities. This is being done for one particular purpose, so that the countries in question may become as nearly as possible self-sustaining in the matter of food supplies. These people have not forgotten the hunger of the last war; they have not forgotten the devastation that fell from the skies upon their fields, and they are not unaware of the threat of war that overshadows them now. All this forms the main impetus for the process which I have just described.
Thus it is that the production of grain, notably wheat, dairy products, eggs and meat is climbing steadily and the need for imports is decreasing proportionately. Some of those countries which will be self-sustaining before very long, and are almost self-sustaining now, are Denmark-notably Denmark-Belgium, France, Holland, Sweden and Eire and last but not least Britain herself. If you think of these countries you will remember that some of them have been the best markets for some of our own products. I am afraid that they will be so no longer. To whom shall we sell our goods? Nobody seems to know. The purchasing power of our own people is diminishing because of unemployment. The people of the United States normally produce surpluses of the very things which we produce ourselves. That nation, instead of becoming our purchasing customer, is becoming our rival in the sale of the things which we have available for export.
I take it that our United States friends are often misquoted, or perhaps the sensational journalism to which we have become accustomed quotes those sayings of public men in any country which are startling and dramatic. Thus I am in no position to judge whether or


not United States opinion is correctly reflected in the reported outbursts of some of its public men. Some of them seem to hold opinions which I hope the government leaders of our country do not share. The secretary of defence of the United States, Mr. Johnson, is reported to have stated on a recent occasion, in language more vigorous than judicious, that "we should' lick hell out of the Russians." Granting provocation, and I do grant provocation, I suggest that is a type of bravado in which one should not indulge. I do not want to lick hell out of the Russians and I do not want anyone to lick hell out of me. May I respectfully suggest that licking hell out of anybody is not the way to defeat communism. I suppose we licked hell out of Germany. I would ask you, sir, whether the fact that we licked hell out of Germany has decreased the number of communists in that country or has increased them.
What has been the over-all result of trying to lick communism by force in Germany or elsewhere in the world? What kind of people become communists?


An hon. Member:: C.C.F.'ers.


Robert Ross (Roy) Knight: I will tell you about that in a minute. My hon. Liberal friends from Saskatchewan can never forget that one thing which occupies their every moment asleep and awake. I should like to speak seriously for a moment if I may. What kind of people become communists? It is precisely the people who take a licking, whether that licking be spiritual, economic or physical. Communism is the result of poverty, social injustice, hunger and despair. You will see why I am discussing this in connection witih foreign affairs, and I am thinking now particularly of the eastern nations to which I referred at the beginning of my remarks. War produces those very conditions, does it not? It is to be hoped that the discovery five or six months ago that the Russians have atomic bombs in their possession, and that the general realization of the awfulness of the latest weapon of total extermination, the hydrogen bomb, will bring about a new approach to the matter of the international control of such weapons. When we find Einstein declaring, as he did in New York a week or two ago, that if the H-bomb is developed annihilation of any life on earth is within the range of technical possibility, then it is time to do some thinking and to act upon the thought.
The possession of the hydrogen bomb will give no security to the United States, Canada or anyone else. The United States people either have not now or will not long continue to have a monopoly of that particular weapon. Its creation is a menace to all the peoples of the earth, and efforts should be renewed to

have it and all weapons of that degree of frightfulness-you can include them all so far as I am concerned-outlawed by all nations by United Nations organization agreement.
Might I urge the Canadian government that it might well initiate, or support, if it has been initiated, a new approach or any approach to this problem which might have a chance of a successful conclusion. Inspection and control of weapons, within the machinery of the United Nations, would seem to be implicit in any agreement, and by a successful conclusion I mean one which would accomplish the aim of making it impossible for either side in this particular struggle to use such weapons as I have been discussing.
The other day a former United States secretary of state, James F. Byrnes, declared that socialism and communism are identical perils. Perhaps I will now answer indirectly the interjections of my hon. friends on my right but who are to the left of Mr. Speaker. Muddy thinking of that type as evidenced by the statement of Mr. Byrnes, the secretary of state, who declared that socialism and communism are identical perils, muddy thinking of that type on the part of North American leaders will ill serve them in their professed attempt to save western Europe from communism, a Europe in which there remains hardly a capitalist nation and only one fascist nation of any importance. The only political force active at this moment against communism between the iron curtain and the Atlantic coast of Spain is the socialism of the democratic socialist nations such as Belgium, Norway, Sweden and Great Britain. Such socialist nations stand on guard for democracy in the Europe of today. I doubt if there is a member in the house who can deny that. I mean an intelligent member who is prepared to face the issue and debate it intelligently.
The communism of Moscow has never practised democratic socialist principles and has suppressed them everywhere in the territory which it has overrun. There is a real danger that we are going to miss the boat again. There is a real danger that the people of the United States may be no better informed than is their former secretary of state, and they might consent to an isolation of themselves from these groups which up to the present have succeeded in retaining their freedom. Withdrawal of the support of the North American nations from these groups would be disastrous to the cause in which we are all involved.
Neither the United States government of the day, nor the Canadian government of the day, may agree with the political philosophy of the majority of the people in those
The Address-Mr. Knight countries, but what is the alternative to socialism in those countries? Do we desire that alternative? One of the best ways to bring about that alternative, is to belittle and neglect the friends and potential allies who are organized to oppose it. One thing that those countries need is hope. As the Secretary of State for External Affairs (Mr. Pearson) said yesterday, and I use his words, most of all they need hope. They need friends even more than they need American dollars.
The existence of these misunderstandings, such as has been illustrated by the interjection of the hon. member and such as have been shown by the former United States secretary of state, might well provide a mission and a challenge for our own Secretary of State for External Affairs. The correction of these blunders, the interpretation of the ideas of various people to men of different political philosophies, but united by a passionate desire for political freedom, might well present a challenge to him.
The other day I read that a slogan had been adopted by a group of Republicans in the United States. It was this, "Liberty versus socialism". It is the same kind of thing that one might hear from my hon. friend. It is the same kind of thing you might see in an election pamphlet, but that you would not take very seriously.
Where is Britain today? Where is the Britain who has proven on many blood-soaked battlefields her love of liberty and the willingness of her sons to die for it? In the aftermath of the last holocaust, Britain adopted democratic socialism as the only method of preserving the liberty of her people. I fancy she is doing it again tonight, as her election returns come in. Irrespective of the result of the election which took place today, I say that by so doing she was able to accomplish that object at that time, and since then has advanced some distance at least along the path of freedom, social, political and economic.
It has been the great genius of the British people that they were able to reconcile that love of liberty, that love of freedom, with the attainment of social and material benefit over the last five years. That these advances are of a permanent nature is generally conceded; indeed, that fact is admitted by all, even by those who would form a government in England alternative to the present one. At the moment, the likelihood of that alternate government being formed is not very great. I say that even if there had been a Conservative government elected in England today, that government would not

The Address-Mr. Quelch dare to ask England, in her present mood, to take onfe retrograde step upon the path of progress which she has been pursuing.


Victor Quelch: Mr. Speaker, I was surprised and disappointed when the Minister of Veterans Affairs (Mr. Gregg) yesterday stated that it was not his intention to set up a special committee on veterans' affairs at this session. During the past fifteen years that I have been in this house, it has always been the custom to set up that committee during the first session of each new parliament. That was the case in 1936, 194041 and 1945-46. I believe there will be a good deal of resentment amongst the veterans when they hear that this committee is not to be set up. They were taking it for granted that the committee would be set up at this session to deal with a number of their problems. They will wonder why the government should now consider their problems of less importance than they have been considered in the past.
I believe that anyone reading the speech from the throne, and the speeches of a number of Liberal members who have spoken in the house this session, might easily come to the conclusion that the blame for the loss of Canadian markets in Europe rests outside Canada. I would say that anyone who will face this situation with an unbiased mind must admit that a large share of the blame rests squarely on the shoulders of the Canadian government. I was surprised to hear the hon. member for Yorkton (Mr. Stewart) yesterday blame the loss of markets upon the devaluation of sterling by Britain. I do not want to be charged with misrepresenting what he said, so I shall quote his words, which are to be found on page 146 of Hansard:
As hon. members know, the markets were lost in England to a certain extent not by the action of this government but by the action of the British government itself, and by an action which Sir Stafford Cripps on many occasions said he would not take; I refer to the devaluing of the pound. That is why the markets were lost. There is no question about that. Why then try to pass the buck to the government?
Well, Mr. Speaker, there is a very large question, because that is not a statement of fact. If the hon. member will read a speech that was made by the Minister of Agriculture (Mr. Gardiner) before the Canadian chamber of commerce in London, England, in 1948, he will find that the Minister of Agriculture was complaining over the fact that our contracts were being cut down; we were losing markets. That was nine months
(Mr. Knight.]

before devaluation, so it cannot be charged that devaluation had anything to do with that.
Neither can it be charged that Sir Stafford Cripps voluntarily brought about devaluation. Time and again he had stated he did not intend to bring about devaluation, but what happened? For over a year in the United States, and to a lesser extent in Canada, and by the international monetary fund, a strong campaign of propaganda was carried on to make people believe that devaluation was inevitable. People were told that the only way Britain could expand her exports to the dollar areas was by reducing the price of her goods. It was stated that the price of British goods was so high they could not get into the United States market and, therefore, Britain would have to devalue the pound. After some time people believed that the 'thing was inevitable, that devaluation was bound to come about. Consequently, many of the great importing firms deferred their purchases from Britain waiting for the day when this devaluation would come about. That, of course, accentuated the dollar shortage and created a crisis in Britain which finally forced devaluation. By no stretch of the imagination, therefore, can it be charged that the loss of markets is due to Great Britain's action in devaluing sterling.
During the last session of parliament the Minister of Trade and Commerce (Mr. Howe) charged that many of us on this side of the house who were asking for a more realistic approach to international trade problems were adopting a pessimistic attitude. He said we were confusing realism with pessimism. I believe that the past few months have shown that our fears were well founded, and that the minister was either indulging in wishful thinking or living in a fool's paradise.
If that is not evident to the minister or to the government, I may say that it is quite evident to the farm organizations and to the farmers who, as a result of the loss of markets, are facing quite a drastic reduction in income. Today, with unemployment figures climbing and the income of agriculture being reduced as a result of the loss of markets, discontent and fear is spreading throughout the country; that fear is with regard to what is going to happen in the future. I would say that the speeches that have recently been made by the parliamentary assistant to the Minister of Agriculture (Mr. McCubbin) and the parliamentary assistant to the Minister of Veterans Affairs (Mr. Mutch) have not helped to create confidence; they have merely added insult to injury.

With the world becoming divided into two armed camps we cannot afford to allow fear and discontent to undermine the morale of the people in the western camp, as a result of poverty expanding in the face of potential plenty. The situation would be different if there were an actual lack of resources in the world to provide for its needs. But today we are faced with this situation. Certain countries are talking about cutting down their production because of the lack of markets while at the same time people of many countries are facing starvation. It seems to me that the tragedy of this whole question is that back in the years 1944 and 1945 it was crystal clear that the international financial policies that this government were supporting were bound to lead to the present situation of a so-called dollar crisis. Plenty of warnings were sounded, by various organizations in this country and others, as to what would happen if we continued to follow that road. Certainly this group in this house in 1945 did everything in their power to convince the government that, if they followed out the policies they were sponsoring at that time, the inevitable result would be a falling off in production as a result of the loss of foreign markets.
At the end of the war we were faced with two main problems. First of all, there was the need to bring about the reconversion of wartime industries to peacetime production and also the need of rehabilitation of the devastated areas. In the second place, there was the need to provide for the distribution of the production of nations, once reconversion and rehabilitation had taken place. I think everybody would agree that, as to the first problem, we have made good progress. Production in this country is up to a high level, and even in Europe I understand that production is about 20 per cent higher than it was prior to the war. But we have not made any progress whatsoever in solving the other problem, that of getting surplus production to people who need it. It is exactly the same problem we faced between the two wars, during the hungry thirties. We failed to solve the problem at that time, and we had to wait until the war came along, when large markets were created, to be able to get out of that situation. But today our problem is far greater than it was in the years between the two wars, because our powers of production today have greatly increased.
I do not want to labour this point, but just let me remind the house of the post-war financial program that was not only supported but actually sponsored by this government. In 1944 certain international
The Address-Mr. Quelch financial proposals for financing the post-war period were presented before the reconstruction committee of this house. In 1945 the Bretton Woods agreement was placed before this house, that is the proposal to set up the international monetary fund and the international bank for reconstruction and development. Since that time I have heard many people state that it was not the purpose of these institutions to provide for the entire financial needs of international trade in the post-war period but that they were set up only to provide a breathing spell. It is interesting to note what John W. Snyder, secretary of the treasury of the United States and chairman of the board of governors of the international bank for reconstruction and development, stated at the first session in 1946. His words were as follows:
The fund and bank were designed to meet both the immediate post-war and the longer-term monetary and financial needs of the world.
That was the purpose as stated by Mr. Snyder. I think that everybody would admit today that those two institutions have failed to provide, for the monetary needs of the world; not only have they failed, but they have failed miserably.
In 1945 we criticized the international monetary fund on the ground that it had a definite 'pro-creditor bias. It was supposed to provide for the stabilization and the balancing of trade in the world, but it placed on the debtor nation the full responsibility for bringing about that balance of trade and placed absolutely no responsibility or obligation upon the creditor nation to play its part. It is true that a debtor nation that is unable to meet its payments can obtain foreign exchange from the international monetary fund in exchange for its own currency. But if that nation is unable to redeem its currency that is held by the fund in excess of its quota, that country is obliged to pay an expanding rate of interest. The rate of interest increases every year until it reaches the figure of 5 per cent. Once the rate of interest reaches 5 per cent, the international monetary fund is permitted to charge that country any rate of interest it likes.
I wonder how any member in this house would like to sign an agreement whereby he guarantees to pay any rate of interest his creditor names in the future, if he is not able to meet his commitments. I do not think any member of this house would be prepared to sign an agreement of that kind. Many nations in the soft currency area were not anxious to sign it, but they were forced to do so, as the Bretton Woods agreement was made the price of help given to them by the

The Address-Mr. Quelch United States of America. There would not be the same danger involved in a nation's incurring a debt to the fund if some obligation was placed upon the creditor nation to buy goods from the importing nation. The importing nation would then be able to secure the foreign exchange necessary to redeem the holdings of its currency held by the fund. But in view of the fact that no obligation is placed on the creditor nation to buy goods from the importing nation, the debtor nation is therefore in an uncertain and unfortunate position.
We therefore repeatedly warned that the implementation of the Bretton Woods agreement would breed a program of self-sufficiency within the soft-currency countries; and of course that is exactly what is happening today. In an endeavour to balance their trade, the soft-currency countries are steadily curtailing their imports from the dollar area. They have no other alternative. We today urge, as we have consistently urged in the past, that we recognize that the true purpose of international trade is the exchange of goods and services as between nations on a basis of mutual advantage. Therefore, since the only currency required to buy the exports of the sterling area is sterling, we should accept that in payment of our exports.
We have also advocated the setting up of an international clearing house, upon which credits held in one country could be exchanged for credits in another. It is interesting to note that today there are many organizations now advocating a somewhat similar procedure. The London chamber of commerce of England, probably one of the oldest institutions of its kind, an organization that has had more experience in international trade probably than any other organization in the world, have for long advocated such a procedure. Now we find that farm organizations in Canada, in the United States, and in other countries are advocating a somewhat similar procedure. The international federation of agriculture producers and the Canadian Federation of Agriculture and the commodity experts of FAO are now advocating the setting up of an international commodity clearing house, which in many respects is similar to the international exchange which we have been advocating in the past.
In his speech the Secretary of State for External Affairs referred to the sterling situation. I want to quote his remarks, which are found at page 135 of Hansard:
We have always contended, however, that the sterling area as we know it today should be regarded as a transitional stage on the way to a trading system where currencies will be convertible and where exchange controls and quantitative restrictions will be drastically reduced.


I would say that the achievement of that goal can only be brought about by the dollar area being willing to accept exports from the sterling area in payment for their exports. I would say that that is the only long-term solution. True, the United States of America and Canada can make foreign investments in soft-currency countries but that would be a short-term solution. I say it cannot be regarded as a long-term solution, because finally we shall have to accept exports from the sterling area to pay the interest on our investments in addition to their exports in payment for our exports. Therefore on the long-term basis it merely aggravates the situation because we would then have to accept an unfavourable balance of trade in order to make it possible for the sterling area to balance their payments.
I was very much interested in the statement of the Prime Minister (Mr. St. Laurent), because I think he dealt with this thing in a very straightforward and frank way when referring to the question of the convertibility of currency. I quote his statement, which is to be found on page 51 of Hansard:
The leader of the opposition (Mr. Drew) talked today about the reasonableness of making currency convertible. The difficulty is not with respect to the converting of currency, but is rather with respect to the exchange of goods. Trade is not the passing of pieces of paper from one person to another. Trade resolves itself into the exchange of commodities; and the difficulties about the nonconvertibility of exchange arise from the fact that there have not been commodities which could be delivered to us in exchange for our commodities exported to the United Kingdom.
I agree entirely with the first part of the statement. Of course the second part is not entirely correct in so far as the present situation is concerned. It was true in regard to the situation immediately after the war; but it is not correct today to say the reason that Britain has an unfavourable balance of trade is that she has not got goods to export to us. There are many goods that Britain is able to export to us, but we are not prepared to accept them. Furthermore, let me point out that it' has not always been the policy of this government to accept exports from Britain in payment for our exports. Our policy in the past has been to insist that Britain pay for our exports in dollars. In order that there be no doubt about that let me quote from a debate that took place back in 1946 when Mr. Ilsley was Minister of Finance. At that time we were discussing our loan to Britain. At page 764 of Hansard of that year Mr. Ilsley said:
We must be able to use the proceeds of our exports to the United Kingdom and the continent of Europe in paying our own bills and debts in the United States.

In other words, we must be permitted to demand payment for our exports to Britain in dollars in order that we may pass these dollars on to the United States to make up our deficit. Then I asked Mr. Ilsley this question, which may be found at page 919 of Hansard:
Will Canada be prepared to accept goods from the United Kingdom in payment of loans? How will the United Kingdom maintain convertibility of the pound if Canada and the United States do not provide the United Kingdom with dollars by purchasing British goods to the extent of the British credit?
I had pointed out that in view of the fact that we were making loans to Britain then, in the future not only would Britain have to export to us goods to pay for our exports, but, in addition, would have to export to us goods to pay interest; so the net result would be that we would have to be willing to accept an unfavourable balance of trade in the future. Mr. Ilsley replied:
It is not necessary that there should be adverse balance of payments between Canada and the United Kingdom in order to enable the United Kingdom to repay the loan. She can pay for Canadian goods by exports to other countries as well as to Canada. Under a multilateral trading system and convertible currencies-
I would like to hear Mr. Ilsley's opinion on that statement today. It is true that prior to the last war Britain had large-scale foreign investments in other countries. She received interest on some of those investments in the form of dollars. She was able to transfer those dollars to her creditors in the dollar area. That is not the situation today. Many of those nations in which she had large investments prior to the war are today Britain's creditors, for instance, India, Pakistan, Egypt. I noticed from a debate in the House of Commons in England that today 40 per cent of the exports from Britain go to pay debts incurred during the last war.
The minister says that she can sell goods for dollars to other nations. What nations? In view of the fact that the United States of America has a favourable balance of trade with the sterling area of over $6 billion, it must mean that there is a deficit of around $6 billion as between the sterling area and the dollar countries. Certainly, Britain will not be able to get a surplus of dollars by exporting goods to the United States of America, and therefore naturally in the final analysis if we want to get paid by Britain on account of her indebtedness to us, and if we want Britain to buy goods from us, then we must be prepared to provide her with dollars by buying her exports. There is no other alternative, because Britain is apparently making it quite clear to the world today that she is not prepared to continue to go into unrepayable debt. Therefore I would say
The Address-Mr. Quelch that the policy that we have insisted in pursuing is very largely responsible for our loss of markets today.
I want to deal specifically with the question of markets for farm products. We hear a lot of talk about surpluses; we hear a lot of talk about lack of markets; and we are starting to hear talk about the need to curtail production, owing to the fact that markets are shrinking. But when we hear that kind of talk we should also recall what the Secretary of State for External Affairs (Mr. Pearson) told us yesterday concerning the tremendous degree of poverty in many parts of Asia, where people are suffering from a very low standard of living, and are desirous of obtaining goods from other countries.
Also the Minister of Agriculture (Mr. Gardiner), speaking before the FAO, referred to the need for expanding production to meet the needs of the world. A quotation from his speech as it appears in Foreign Trade is as follows:
Although agricultural production throughout the world has regained pre-war levels, it has not kept up with the increasing population of the world. Supplies available on a per capita basis are therefore still below pre-war levels.
He also went on to say that:
Monetary difficulties are threatening to prevent freedom of movement of foods and other necessary products from "surplus" to "deficit" areas. This might lead to a slackening of the productive effort in some countries and an increase in costs which might deny food to the people of other countries.
He goes on:
Our monetary difficulties today threaten to reproduce the situation which existed twenty years ago, a lack of that free movement of food from those with food to spare to those in want.
And he continued:
Unless some way can be found of solving this problem, we cannot hope for that "all-out" effort by exporting countries that is needed, if the people of the whole world are to be adequately fed.
Therefore I think all members will agree that, that being the situation, it would be an act of criminal folly on the part of any government to reduce production at a time when that production is so direly needed in other parts of the world.
The Minister of Agriculture has frankly admitted that this is a monetary problem. I think that the Canadian Federation of Agriculture and the International Federation of Agricultural Producers are to be warmly commended for the research work they have done in connection with this question, and the proposals that they have put forward for a commodity clearing house.
I attended the annual convention of the Canadian Federation of Agriculture held at

The Address-Mr. Quelch
Niagara Falls last month, and was greatly struck by the unanimity reached by the delegates from both east and west in Canada on all problems coming before the convention. That has not always been the case. I think it augurs well today, when great problems are arising, to see that eastern and western farmers are able to work together in complete accord.
At that convention a speech was delivered by Professor J. K. Galbraith, professor of economics at Harvard university. He delivered a most thought-provoking speech on the subject of international trade and foreign markets. May I quote briefly from one part of his speech which struck me as being of special interest. He said:
It is still our common faith that somehow we are going to work out of the present unbalance in international trade. To that 1 subscribe. It is our common illusion, however, unconscious but real, that in doing so we shall re-establish the flow of agricultural products, of food and foodstuffs, from this continent to Europe, through the ordinary channels of trade. That I doubt. Anyone who honestly examines the trend must reach an exactly opposite conclusion.
And then he goes on:
First we must abandon the notion that 1952 is the day of decision to balancing the trade accounts. So long as it remains so, we must expect that the balance will be achieved largely at the expense of our agricultural exports. Western European countries need to be given assurance that we in this hemisphere will reciprocate their efforts with assistance. This does not necessarily mean a continuation of the Marshall plan in its present form or with some skilfully contrived pseudonym. It does mean an assurance that western Europe can purchase food and fibre from this hemisphere beyond 1952 and that help in doing so will be forthcoming if necessary. It was partly such an assurance that the proposed International Commodity Clearing House of the FAO was designed to offer.
I think it was a great tragedy that the conference of FAO turned down the proposal for the setting up of an international commodity clearing house. I wish to analyse briefly the reasons given by the conference for turning these proposals down. First of all, however, I should like to give a brief summary of the functions of this international commodity clearing house.
In June 1949 the International Federation of Agricultural Producers presented their proposals for the stabilization of prices and the distribution of surpluses of agricultural products to the council of FAO. These proposals embodied the idea of an international commodity clearing house. Then the director of FAO appointed a committee of six commodity experts to prepare a report on commodity problems for the FAO conference to be held in November of 1949. These experts proposed the setting up of an international
	.

commodity clearing house, and this was supported by the Canadian Federation of Agriculture, the International Federation of Agricultural Producers, and farm organizations throughout the United States. However, as I said, the FAO conference turned the proposal down.
Before discussing the reasons why this proposal was turned down I should like briefly to summarize the functions of this institution. I have made the summary from the IFAP Bulletin of October, 1949.
Functions of ICCH would include the following:
1.	Subject to provisions outlined below the purchase of stocks of commodities that are in surplus in the country in which those stocks appear.
2.	The negotiation of sales in inconvertible currencies in order to assist in maintaining the flow of trade during periods of exchange disequilibrium; such payments being guaranteed by the buying countries against losses from exchange depreciation.
3.	The negotiation of sales at special prices below the market to countries in need, under strictly defined conditions of use, for example, for relief purposes, special nutritional programs, or for development projects.
4.	As a long run function, the holding of stocks acquired in periods of surplus as reserves to protect the interests of consumers in periods of shortage.
5. The negotiation of bilateral or multilateral trading agreements, or exchanges of commodities on a barter basis.
6.	The co-ordination of the negotiating and administration of international commodity agreements and arrangements pending final disposition of these functions by the economic and social council after the charter of ITO has entered into force.
7.	The organization of consultations between governments and other institutions in respect of commodity policies, agreement^ and transactions, and in respect of the readjustment of the uses of land and other national resources in order to implement such policies, agreements and transactions, and to meet the changing structure of world demand and world supply.
It is clear from the report that the committee considers the long range functions of ICCH should be left to later experience but in the short run ICCH would use mainly two methods for constructive disposal of surpluses. Using wheat as an example ICCH would operate in the following ways:
(1)	The exporting country would sell surplus wheat to ICCH at full market price and the purchases would be financed by the exporter contributing the value of the wheat to ICCH as additional capital. ICCH would then sell quantities of wheat to the importing country in addition to and not as a substitute for its usual purchases. ICCH would take in payment the currency of the importing country, even if it were, at the time, inconvertible. The importing country would guarantee against loss by currency devaluation. ICCH would hold this currency to the credit of the exporting country until enlarged trade or restored currency convertibility permitted clearing the account.
(2)	The exporter would sell surplus wheat to ICCH at a reduced price if the payment were in an immediately acceptable (presumably convertible) currency and provided that the quantity of wheat went to some special use in addition to regular consumption by the importing country. Such transactions would be financed from the revolving fund of ICCH, established by the initially paid-in twenty per cent of capital, but would not normally involve any loss to ICCH.

The reasons given by the FAO conference for turning down those proposals are, to say the least, somewhat peculiar. I should like to summarize a few of them. In rejecting the short-term trading functions of the ICCH, the conference observed that the accumulation of inconvertible currency would represent additional indebtedness by the deficit countries involving the burden of eventual repayment in terms of additional exports of goods and services and would have the effect of delaying the general convertibility.
I would say that anyone reading that statement would be justified in doubting the sincerity of the people who wrote that paragraph. What is the purpose of these proposals? The purpose is to get surplus goods to the people who need them. Yet we are told here that this might delay convertibility and therefore the proposal should be turned down. I think it is quite obvious that that body confused the means with the end and the shadow with the substance.
We are often told that convertibility will facilitate the expansion of trade, but here we have a situation where surpluses are accumulating and a proposal is made whereby they can be got to people who need them but it is said that that might delay convertibility. X am satisfied that the people of the world are more interested in getting surplus goods to people who need them than they are in restoring convertibility. If we do not take steps by which these surplus goods can be got to the people who need them, what happens? Production will be reduced and we will not then have the goods available to meet the needs of the people. That, mind you, is suggested in the name of convertibility.
The next reason for rejecting the proposals was this:
The expenditure of such accumulations on purchases in the soft-currency areas would, in the main, be for the purchase of commodities which would ordinarily earn hard currency.
The ICCH only proposes to sell goods that would not be sold through the ordinary channels of trade and therefore there could be no fear of the ICCH proposals interfering with the ordinary channels of trade. Goods going through the ordinary channels of trade as a result of the exchange of goods would continue to move in that way, but to the extent the exporting nation was not able to dispose of its exports the international commodity clearing house would provide a means by which those goods could be got to the people who needed them.
Then the conference suggested that the financial functions proposed for the ICCH could be performed by the governments directly involved. I was very much interested
The Address-Mr. Quelch in the stand taken by the Minister of Agriculture (Mr. Gardiner). Here is a proposal by which we can get our surplus products to the country that needs them and the Minister of Agriculture says, We do not need that, we can do it ourselves. The government has now stated that they can get surplus goods to other nations, so there will be absolutely no excuse in the future for this government saying they are not able to sell our surplus production. They have turned down a suggestion that would have made it possible on the ground that they can do it without that suggestion. The farmers will be waiting to see the government take action in the immediate future to dispose of our surplus products. I hope we will not have any more talk about not being able to export our goods to other countries.
Then the conference decided to establish an FAO committee on commodity problems which would work under the supervision of and be responsible to the council. I do not think that that committee is going to be very enthusiastic. The committee of six experts drafted the ICCH proposals which were turned down because it was claimed they would interfere with the normal methods of financing international trade. All this committee will be able to do is to make proposals that will not interfere in any way with the recognized methods of financing international trade.
I think the most interesting statement made by the conference was in connection with financial facilities, and I quote:
The conference called attention to the fact that although existing national economic development plans required international funds far in excess of those currently available, international financial institutions have not received a sufficient number of well-documented loan applications. The conference instructed the director-general of FAO to strengthen co-operation with the international bank for reconstruction and the international monetary fund and to propose specific arrangements with those organizations.
I think you have there the real reason why the conference turned down the proposal of the ICCH. It is quite evident that representatives of the international monetary fund and the international bank for reconstruction and development were at that conference and advised against the adoption of this proposal. Not only have the international monetary fund and the international bank for reconstruction failed, and failed miserably, to devise methods by which our international trade can be financed; but they are now blocking other measures that might take their place.
I noticed that when the Minister of Agriculture was speaking with reference to the Agricultural Prices Support Act he stated

The Address-Mr. Quelch that that act was no alternative to markets. I think everybody will agree with that and I think the farmers realize that only too well. But the farmers will remember also that the Minister of Agriculture has turned down a proposal which would have made it possible to export our surplus commodities to other countries on the ground that the government can do what this international commodity clearing house would do. The farmers will feel that the obtaining , of markets is a responsibility of the federal government and the Minister of Agriculture need not make any excuse in the future that the federal government is not able to dispose of farm surpluses. I was interested in a report appearing in the press as to a statement by the Minister of Agriculture (Mr. Gardiner). The heading of the article is:
Gardiner charges some people making food distribution difficult.
The article reads:
He said some people are making it difficult to move these surpluses to the areas where they can be consumed.
Then the press dispatch goes on:
Mr. Gardiner did not identify these persons. However, it appeared to be a reference to the Canadian proposal for establishment of an international commodity clearing house, turned down by the United Nations food and agricultural organization.
Obviously the press statement is wrong because Mr. Gardiner was one of those who opposed an international commodity clearing house. I think the house has the right to expect the Minister of Agriculture to tell it who these individuals are who are making it hard for Canada to dispose of its surplus products to nations that need them. I have a pretty good idea who they may be because I recall that, when he spoke before the
Canadian chamber of commerce in London in December, 1948, he blamed our troubles on a bunch of what he called financial crackpots who call themselves economists. He still did not name them but we know very well who the men are who control our international financial policy. They are largely the men who control the international monetary fund, the international bank for reconstruction, institutions for which Mr. Gardiner himself voted in 1945.
In conclusion, Mr. Speaker, I would say this. When people ask who is to blame for Canada not being able to dispose of her agricultural products, let us place that blame where it fairly belongs, fairly and squarely upon the shoulders of this government, because up to the present time they have insisted upon policies which make it impossible for the sterling area to buy from us, by insisting that they must pay us in dollars instead of our being willing to accept payment in goods.


Mr. Sluder:: Mr. Speaker, in view of the lateness of the hour and the fact that many members would like to listen to the interesting news on the radio this evening, I should like to move the adjournment of the debate.
Motion agreed to and debate adjourned.



BUSINESS OF THE HOUSE

Alphonse Fournier: As understood, tomorrow we will take up as the first item the bill to amend the Unemployment Insurance Act, and then we will continue with the debate on the address in reply to the speech from the throne.
On motion of Mr. Fournier (Hull) the house adjourned at 10.45 p.m.

Friday, February 24, 1950