1950-04-04

Right Hon. C. D. Howe (Acting Prime Minister):: I desire to lay on the table order in council P.C. 1675, of March 31, 1950, which transfers to the deputy minister of resources and development the powers, duties and functions vested in the deputy minister of reconstruction as a director of Central Mortgage and Housing Corporation.
Section 6 of the Central Mortgage and Housing Corporation Act provides that the deputy minister of reconstruction shall be one of the directors of the corporation. As the department of reconstruction has now passed out of existence, it is necessary that the powers, duties and functions of the deputy minister of reconstruction under section 6 be transferred to the deputy minister of resources and development. The deputy minister of justice has expressed the view that the transfer is necessary.



RAILWAYS AND SHIPPING

[Stage Direction]
Second report of special committee on railways and shipping owned, operated and controlled by the government.-Mr. Cleaver.


Hon. L. B. Pearson (Secretary of Stale for External Affairs):: On March 27 last the hon. member for Vancouver-Quadra (Mr. Green) inquired whether it would be possible to have tabled a copy of the convention for the extension of port privileges on the Pacific coast of the United States and Canada, signed in Ottawa on March 24 last. I promised that the convention would be tabled as soon as it was mimeographed and translated. Accordingly, I should like to table a copy now.



CANADIAN NATIONAL RAILWAYS


Hon. Lionel Chevrier (Minister of Transport):: I should like to move, seconded by the Minister of National Health and Welfare (Mr. Martin):
That items 493, 494, 558 and 559 of the estimates for 1950-51, approved and reported upon on Tuesday, April 4, 1950, by the special committee on railways and shipping owned, operated and controlled by the government, be referred to the committee of supply.


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


Mr. Isnor:: Before the motion is carried I should like to ask the Minister of Transport whether-


Mr. Speaker:: Order. I do not think it is
customary to debate motions of this kind. The motion is that these items be referred to the committee of supply.


Gordon Benjamin Isnor: I understand that the report was made today, Mr. Speaker, and I am raising a question with regard to the report.


Mr. Speaker:: The motion is not to approve the report. The motion is to refer certain items to the committee of supply. I do not think it is customary to debate that matter in the house. I have no objection to the question being asked if the house would like to permit it.


Gordon Benjamin Isnor: Then I shall wait until the report is before the house.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Gordon Benjamin Isnor: Mr. Speaker, I think I am now in order to ask the questions which I intended to ask the Minister of Transport. But perhaps I should bring to your attention, Mr. Speaker, what I consider to be the correct interpretation of standing order 38, debatable motions. I have particular reference to subsection (k),
1514	HOUSE OF
Inquiries of the Ministry "for reference to a committee of a report or any return laid on the table of the house." That is what the Minister of Transport did. He brought in a report and moved that certain items of the estimates be referred to the committee of supply. Because of that I felt justified in asking the questions which I now intend to ask. It refers to a matter which I brought up on the floor of the house concerning coal prices. Not receiving the answer on the floor I took the matter to the committee and placed in writing before the chairman of the committee a question on prices and quantities of coal supplied to the Canadian National Railways by certain Nova Scotia producers. My first question is whether that information is contained in the report. My second question has to do with the running time of the Ocean Limited, starting at a later hour and arriving in Montreal one hour later to save three hours running time from the maritimes.


Lionel Chevrier: With deference I should like to correct my hon. friend in his interpretation of the motion that I made a moment ago. I did not make a motion recommending or concerning the report. The motion that was made was to return to the committee of supply certain items of the estimates that had been taken from that committee and referred to the committee on railways and shipping, because these items had been passed by that committee. The motion therefore was simply one referring back to the committee of supply those items which had been withdrawn from it.
With reference to whether or not the information to which my hon. friend refers is contained in the report, the answer would unquestionably depend upon what is in the report when it is presented to the house.
I understand that the report has not yet been made, because the committee is still sitting. So far as the second question is concerned, I think the same answer can be given to it. In fact I am informed that a complete answer to the second question has been given to my hon. friend already.


Gordon Benjamin Isnor: Mr. Speaker, would you be good enough to give an interpretation of the standing order?


Mr. Speaker:: I have ruled that a motion to refer certain estimates to the committee of supply at this time is not debatable.
It is a procedural motion. If I understand it correctly, the estimates were withdrawn from the committee of supply and referred to a special committee. They are now back in the house, and it is necessary for them to go again to the committee of supply. It is a procedure which must be carried out, and
'Mr. Isnor.]

it is not customary to debate a motion of this kind.


ATOMIC ENERGY
[Stage Direction]
On the orders of the day:
Mr. George A. Drew (Leader of the Opposition):: Mr. Speaker, I should like to draw the attention of the Minister of Trade and Commerce to a report which appears in today's Montreal Gazette-I have not given him notice of the question, because the matter was drawn to my attention just as I came into the chamber-with respect to a statement of one of the atomic scientists working at Chalk River. The report contains this paragraph:
The Chalk River project "is at the crossroads." The people must decide, through parliament, whether "Canada should ante up with money and men and stay" in the race or whether "we should let our little fire run its course and flicker out."
I should like to ask the minister this question. In view of the statement of one of the scientists at Chalk River, is he prepared to reconsider the earlier decision as to the setting up of a committee on atomic energy?


Clarence Decatur Howe: Mr. Speaker, I read this morning the article referred to. I was surprised to find one of our scientists discussing financial problems. I may say that last year the committee reported on that particular subject, at which time the committee recommended that further development take place. It seems to me that a second report made a few months after the last committee has reported on the subject would hardly clarify matters, and I see no reason for setting up the committee on atomic energy again.



POTATOES


[Stage Direction]
On the orders of the day:
Mr. H. H. Hatfield (Victoria-Carlefon):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. I should like to ask whether the report from Geneva is correct, that the contracting parties to the Geneva general agreement on tariffs and trade agreed unanimously to let the United States take measures to restrict the flow of imports of Canadian potatoes. Did Canada have a representative at this conference? The report says that Canada agreed in advance.


Clarence Decatur Howe: I shall be glad to get the information and answer the question at a later time.



NATIONAL FILM BOARD


[Stage Direction]
On the orders of the day:
Mr. G. K. Fraser (Peterborough West):: I should like to direct a question to the Minister of Resources and Development. Is the article appearing in this month's New Liberty magazine, on page 7, correct, in which it is stated that Mr. Irwin, the new director of the national film board-


Mr. Speaker:: Order.


Gordon Knapman Fraser: -drove a hard bargain with the Prime Minister-


Mr. Speaker:: Order. I must insist that when the Speaker rises and calls order, the hon. member who is then speaking should resume his seat.


Gordon Knapman Fraser: Mr. Speaker, may I be allowed to continue my question?


Mr. Speaker:: Order. The hon. member should not continue to read a newspaper or magazine article when the Speaker rises. I will allow the hon. member to ask his question, but I would ask him not to quote the article.


Gordon Knapman Fraser: My question is this: Is the article correct when it states that Mr. Irwin, the new director of the national film board, drove a hard bargain with the Prime Minister and the Secretary of State for External Affairs-


Some hon. Members:: Order.


Mr. Speaker:: Order. The hon. member can ask his question without reading the article.


Gordon Knapman Fraser: I was not reading it. I was reading from my notes.


Mr. Speaker:: But I think the note the hon. member was reading was taken from the article. It is a direct citation of the article.


Gordon Knapman Fraser: No, it is not.


Mr. Speaker:: I will allow the hon. member to ask his question. May I ask hon. members-and I am not directing my remarks particularly to the hon. member for Peterborough West-to try to observe the rules of procedure when asking questions on the orders of the day. Quite frequently in the house hon. members will rise to ask questions and in doing so will read1 telegrams, articles from newspapers, or letters. This is contrary to the rules of the house. I am sure hon. members can ask their questions without quoting newspaper articles or telegrams.
Inquiries of the Ministry


Gordon Knapman Fraser: I was not quoting from the article itself. I was just stating what was in the article.


Mr. Speaker:: As I said, I was not directing my remarks to the hon. member particularly.


Gordon Knapman Fraser: I would like to ask the minister to say whether a hard bargain was driven by Mr. Irwin in regard to his position with the film board, and whether, as the report states, there is an embassy post for him within three years.


Mr. McCann:: No.


Hon. Robert H. Winters (Minister of Resources and Development):: No.



ASSISTANCE TO B.C. AND N.S. GROWERS- PAYMENTS UNDER STATUTE

[Stage Direction]
On the orders of the day:
Mr. E. D. Fulton (Kamloops):: Mr. Speaker, I should like to ask a question of the parliamentary assistant to the Minister of Agriculture, and in doing so I shall try to keep within the confines of the rule to which you have referred.


Some hon. Members:: Question.


Edmund Davie Fulton: In view of statements which have appeared in the press regarding the announcement as to assistance to apple growers in British Columbia and Nova Scotia, will the parliamentary assistant say whether the growers in both those provinces will be eligible for normal payments under other acts, such as the Agricultural Prices Support Act?


Mr. Abboit:: That was answered yesterday.


Mr. Robert McCubbin (Parliamentary Assistant to the Minister of Agriculture):: Mr. Speaker, I believe I answered that yesterday.


Edmund Davie Fulton: If I may be permitted, the answer given yesterday related to growers in Nova Scotia. I am asking the parliamentary assistant if he will make it clear whether the growers of both provinces are entitled to these continued benefits.


Douglas Charles Abbott: We treat all Canadians alike.


Robert McCubbin: When an act is brought down it applies to the whole of Canada, not just one part.


Mr. Graydon:: Do I take it that any legislation which is brought down will apply to Ontario the same as any other part of Canada?


Mr. Wright:: Mr. Speaker, in view of the answer given by the parliamentary assistant to the hon. member for Kamloops (Mr. Fulton), in which he said that when an act is passed in the house it applies to all of Canada-

Inquiries of the Ministry


Some hon. Members:: Order.


Percy Ellis Wright: -will the parliamentary assistant say why, in connection with the floor price on potatoes three years ago, it was made to apply to a designated area in New Brunswick and Prince Edward Island, and did not apply to all of Canada?


Robert McCubbin: Mr. Speaker-


Mr. Speaker:: Order. It seems to me that the question is out of order. It might be asked more properly when the estimates of the Department of Agriculture are under consideration.


George Alexander Drew: Mr. Speaker, this is not something that is being brought up unnecessarily. There is a perfectly good reason for asking the question.


An hon. Member:: Political.


George Alexander Drew: Well, you should know the basis for yesterday's answer. The question asked yesterday was directed to one of the provinces, and the answer given by the parliamentary assistant referred to Nova Scotia. The question is whether this should apply to British Columbia. The answer given by the parliamentary assistant, that it applied to every part of Canada, is obviously incorrect. He must be aware that the question referred to special assistance for British Columbia and Nova Scotia.
Mr. Abbot!: The answer related to the Agricultural Prices Support Act.


George Alexander Drew: The question asked was not as to the Agricultural Prices Support Act, but whether-


Douglas Charles Abbott: Yes, it was.


George Alexander Drew: Mr. Speaker, may I be permitted to ask my question?


Douglas Charles Abbott: Yes, ask your question. It is out of order, anyway.


Mr. Speaker:: Order.


George Alexander Drew: The question was directed to the interpretation of the Agricultural Prices Support Act, and whether that act applied as well to the special arrangements that had been made. It would clear up any doubt if the parliamentary assistant would make it clear that it applies in both cases.


Mr. Speaker:: My suggestion that the question should be asked when the estimates of the Department of Agriculture were under consideration referred to the question asked by the hon. member for Melfort (Mr. Wright). The hon. member asked why an act which had been in force a number of years ago had not applied generally. In my opinion that is not a question that should be asked now, but

a question with regard to the application of the order which was made a few days ago respecting Nova Scotia apples is in order. As I understand it, the parliamentary assistant to the Minister of Agriculture was asked whether that order applied also to British Columbia.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. Jean Francois Pouliot (Temiscouata):: Mr. Speaker, I always comply with the standing orders, and I follow your rulings, sir. I would ask the Minister of National Defence if he is aware of the fact that ex-private Romeo Santerre, who wishes to enlist again in the army, has the support of Mr. A. J. Wickens, K.C., of Moose Jaw, dominion president of the Army, Navy and Air Force Veterans of Canada?


Hon. Brooke Claxton (Minister of National Defence):: I am made aware of it now for the first time.


Jean-François Pouliot: Then I shall give a copy of Mr. Wickens' letter to the minister. And if the house is interested in knowing the contents of the letter, I shall read it.


Some hon. Members:: Order.


Some hon. Members:: Unanimous consent.


Some hon. Members:: No.


Jean-François Pouliot: I shall read it only with unanimous consent.


Some hon. Members:: Unanimous consent.


Jean-François Pouliot: It states-


Mr. Speaker:: Is it the unanimous wish of of the house that the hon. member have leave?


Some hon. Members:: No.


Some hon. Members:: Yes.


Mr. Speaker:: In view of the fact that the house is not unanimous on the subject, the article should not be read.


Brooke Claxton: I have the letter.


Mr. Maclnnis:: On a point of order, I do not know why we should lose considerable time in shouting down certain members who wish to read something in asking a question, and then give someone else unanimous consent to do that very thing.


Mr. Speaker:: There must have been some misunderstanding in the mind of the hon. member. Unanimous consent was not given.


Jean-François Pouliot: My hon. friend is a strong advocate of the brass hats.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Gordon Graydon: Mr. Speaker, before the orders of the day are called I should like to ask a question of the Secretary of State for External Affairs. Having in mind part of the report last session of the standing committee on external affairs, which recommended that there be some amendment of the Department of External Affairs Act, is it his intention or that of the government to bring in such legislation at this session?


Lester Bowles Pearson: If I recall correctly the discussion we had last session in the committee, it was suggested, I believe, without any disagreement, that it might be desirable to amend the act so as to alter the title of the Secretary of State for External Affairs to that of Minister of External Affairs. That was the amendment to which the committee agreed. We have also been considering the possibility of making further amendments to the act. This being so, before any decision is reached by the government, I should like to take up with the external affairs committee the possibility of such further amendments.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Would the Minister of Labour tell the house, either today or tomorrow, what progress is being made in the negotiations between the railway employees and the companies with respect to wage increases, the five-day week and related matters?


Hon. Humphrey Mitchell (Minister of Labour):: I do not need to wait until tomorrow. May I say to my hon. friend that the railway workers organizations and the railway companies are quite capable of negotiating agreements without questions being asked on the floor of this house.



FOREIGN EXCHANGE CONTROL


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: should like to ask the Minister of Justice whether there is to be an appeal from the sentence imposed recently on a hotel owner
55946-97i
4,	1950	1517
The Budget-Mr. J. M. Macdonnell for various infractions of the Foreign Exchange Control Act on the ground that uniformity should be reasonably maintained.


Hon. Stuart S. Garson (Minister of Justice):: I thank my hon. friend for having given me yesterday oral notice of this question. The foreign exchange control board has written to the counsel who handled this case, asking for a report. Until that report is received, no decision will be reached with regard to appealing the sentence.



PARLIAMENTARY GUIDE


[Stage Direction]
On the orders of the day:
Gordon Graydon: I do not know to which minister I should direct the question I want to ask, but I am going to direct it to a usually reliable source of general governmental information, the Minister of Public Works. Can the minister tell the house when the 1950 edition of that valuable publication, the Parliamentary Guide, will be available to members of this house?


Hon. Alphonse Fournier (Minister of Public Works):: My hon. friend and I are of the same mind. Yesterday afternoon I realized that I did not have the latest Parliamentary Guide. I inquired of the Clerk of the House as to when we might expect it, and he told me we would have it within a few days.


Gordon Graydon: After the Easter recess?



THE BUDGET


[Stage Direction]
The house resumed, from Tuesday, March 28, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
Mr. J. M. Macdonnell (Greenwood):: Mr. Speaker, when I made a few remarks the other evening following immediately on the speech of the minister I began by saying that I doubted if the minister had enjoyed delivering his speech as much as he had the previous one. Now that I have had a better chance to study the budget speech I am inclined to think that that was a gross understatement. Indeed I feel confident that the minister must have experienced acute pain because of some of the things he found it necessary to say, and I am surprised that at some point he did not actually hold his nose.


Douglas Charles Abbott: Too big.


Mr, Macdonnell (Greenwood):: It is a difficult speech to criticize, because after all it is

The Budget-Mr. J. M. Macdonnell merely a kind of mixture of toilet soap and ice cream, which provides a most slippery surface from which to launch an attack. In some ways I find it something like trying to make a dent in a rubber ball.
That view was very widely held at the outset. Many hon. members may have seen the cartoon which appeared in the Globe and Mail. Incidentally I hope the minister has a scrapbook for these various cartoons, because I feel sure they would prove most interesting for his descendants. This cartoon depicts the minister as a small figure, but I think the artist has done well by him; the picture shows that mixture of good humour and earnestness with which we are familiar. The minister is shown as being mounted on the back of a big elephant, and the cartoon is entitled "The Budget Parade". One sees the people looking on, and one gentleman is rushing up to see the minister, who unfortunately has just gone by on the big elephant. As this gentleman is wearing a tail coat, I assume that the artist intended to depict him as a large tax payer. A policeman is holding up his hand to hold him back, and is saying, "You didn't miss a thing; you saw it all last year".
I suppose there is a certain virtue in that. Last year I saw a cartoon depicting the minister as a gunman, and I suppose there are many other ways in which he has been depicted. I hope that one day he will be depicted as the undertaker of the Liberal party.


Douglas Charles Abbott: No chance of that.


James MacKerras Macdonnell: At first there was a disposition to pooh-pooh this budget speech, as if it did not amount to much; but on second thought people had a different feeling. In spite of the negative quality of the speech, or perhaps because of it, I think people have come to feel that the speech is worthy of serious attention. Let us look at the story which it tells.
Hon. members will recall that last year the minister was able to give tax reductions of $323 million, although we were quick to point out that that was just election pump-priming. Nevertheless the reduction was given, and of course the people liked to get it. The saints liked to get it, just as much as the sinners; everybody liked to get it. As the hon. member for Fraser Valley (Mr. Cruickshank) would say if he were here, and as he did say the other night, it did a good election job.
Now we come to grips with the figures for this year. There is an estimated revenue of $2,430 million and estimated expenditures of $2,410 million, giving a surplus of $20 million.


Stanley Howard Knowles: Thirty.


James MacKerras Macdonnell: Twenty. The hon. member for Winnipeg North Centre (Mr. Knowles) I think is unrivalled in his knowledge of the rules of the house, but apparently his arithmetic is not quite so good. I agree that it is a microscopic surplus which might disappear at any time the minister is not looking. I doubt if the minister thinks much of it himself, because he used rather doleful words about the situation. The minister told us plainly that we must "cope somehow"-I call your attention to the word "somehow"- "with a continuing level of expenditure of $2,400 million, even in the absence of large-scale economic difficulties or widespread unemployment." I take it these last phrases mean that we must spend that amount even if times are good. Even if there is no special drain on us the best we can hope for is $2,400 million. Of course if there were unemployment or economic difficulties, presumably that figure would increase and the $20 million would be gone before you could say "knife".
It is true that the minister adds-I quote from Hansard at page 1215:
Naturally we hope to reduce expenditures by improved efficiency in operation, and by economies in administration.
The minister is a rather cheerful chap. In spite of an obviously gloomy budget, the cheerfulness breaks in from time to time; but in the next minute he is uttering another dirge and he warns us that:
It is only by reducing government activities or social security payments that any major reductions can be made.
I think as we go on we may find that is only too true. At any rate, it is only too true so long as the present attitude of the government remains. There is not much inspiration in that. There is not much sense of urgency. There is no real suggestion that this problem is going to be attacked. The minister seems to be on the defensive, and perhaps it would not be unfair to add that there is a little note of defeatism in what he says. He rather underlined that note of defeatism; and later we find that the minister says again:
But we should not delude ourselves with the belief that we can significantly alter the scale of the budget in this way.
By the phrase "in this way" he means by making economies. It is only fair to say that we have had, as the minister points out, a substantial increase in defence and social security services, and one would be unfair enough not to recognize the burden which the minister has had to carry.
Finally we come to something in the minister's speech which really sounds to me like a signal of distress. He says, at page 1216:
Unless we are prepared to reduce the scope or scale of government activities, we must now expect $2,400 million budgets in future years. Nor can we

escape the tax implications of this conclusion. We must have a tax system that will at least balance the budget in good years . . .
I will draw your attention to that again in a moment.
.	.	. otherwise we should slide quickly into
inflation.
Remember again that we are told, and I think correctly, that 1949 was a good year. The estimate of the gross national income for the current year, if I remember correctly, is $300 million above 1949, which itself was $500 million above 1948. Therefore it is forecast as a big year. We have now come a long way from the "substantial surpluses" which the minister assured us not so long ago should be characteristic of good years so as to prepare for years not so good. In other words, the best that can be said, even in this year that we expect will be good, is that if unemployment does not rise too much and trade does not go down too much we may break even. If that is the best in good times, then what about bad times? The minister does not mention that, but I think it is a reasonable question to ask, and I think we can answer it for ourselves. I think every reasonable person expects that expenditures will have to go up, and will go up, unless very drastic economies can be made; because, after all, does anyone believe that the government can squirm out of all its social security promises? Surely something will have to be done there, and surely that will lead us into a deficit unless one of two things happens: either we bring down our expenses substantially, or we are able to raise our income substantially.
In other words, in this period of high prosperity the minister has very little comfort to give us. If there is any setback, we have a deficit. We can really go further and say, as I said a moment ago, that it is extremely hard to believe that increases in expenditure will not take place. Without economies or increased output we will certainly have a deficit or increased taxation. We should be grateful to the minister for his candour. He certainly has given us fair warning, but we do not need to follow him in what I have called defeatism. I am not primarily interested in trying to criticize the minister. What I want to do is to try to get at what seems to be the reality of the situation. The minister's picture is grave enough, although, as I said, cheerfulness breaks through and occasionally distracts us from the seriousness of what he said.
In order to try to make this simple, real, and everyday, I should like to picture the situation in terms of the life of the ordinary man, and, let us say, of a co-operative. I would say that our financial position,
4, 1950
The Budget-Mr. J. M. Macdonnell expressed in terms of the affairs of an ordinary individual, is like that of a person who has had an unexpectedly large income for some years. He has been able to pay off some debts, but he is now living right up to his income, and unless his income remains at that level he has no right to expect he must look forward to anything except a shortage.
Let me now give the illustration of a cooperative of which all citizens are members. All active citizens contribute and they all receive services. In good years they hope to get dividends also; in other words, a rebate on their payments. They have been told that the coming year will be a good year, like other years in which they sometimes have had dividends. They hoped at the worst to break even, but they now find that their contributions in the coming year at the very best will enable them to break even, and may easily do worse than that. They have been told that expenditures cannot come down, and they believe it is quite likely that expenditures will go up and income will come down. In those circumstances they will face either a deficit or an additional levy. The only hope of avoiding this is, on the one hand, a substantial reduction of expenditures, or, on the other hand, a substantial increase in income.
I need not point the moral of this in terms of our own national life. I need not labour the point. I have suggested that today citizens of Canada are like members of a co-operative, and that they face the difficulty which I have endeavoured to describe. In passing let me say that, whereas the minister has naturally been proud to tell us in the past about payments made in reduction of the debt, payment on the debt this year makes a very small and insignificant story. If I read the figures correctly, we have paid off some $497 million, but of that amount only $67 million came from income. The rest came from realization of capital assets.
This situation would be serious enough if we were operating at a moderate level and with plenty of room for expansion, but at the present moment there seems to be nothing to warrant that. There is no particular reason to think that our trade will improve; on the contrary there is a good deal of reason to think that the present shrinkage will continue. I shall have more to say about that later.
I should also like to point out that the attitude of the government towards trade- and I am quite sure that our trade commissioners have been doing their best and all that sort of thing-has been negative, barren and un-co-operative. They are just hoping and waiting for something to turn up.

The Budget-Mr. J. M. Macdonnell As I said, anyone who expects the present high level oi trade to remain undisturbed is really doing the ostrich act. I propose to say something about that later, and particularly about what I regard as the antediluvian method we follow in this house in dealing with our accounts.
I want to say a word about trade. There is widespread uneasiness about trade. Last Friday the Minister of Trade and Commerce (Mr. Howe) gave us a picture in which he painted practically a new heaven and a new earth; nevertheless there is widespread uneasiness, and before going further with the budget I should like to give a few facts and then make one or two comments on what the minister stated last Friday.
Our domestic exports since August of last year have shown a tendency to decline. I do not propose to detain the house with many figures, but I would like to give the figures for the months since then, showing our domestic exports to all countries, excluding gold:
(mlltlons of dollars) 1948	1949	1950September	
283	228October	
307	269November	
293-9	292December	
216	285January	
237	221February	
205	189
It will be noted that in December, 1949, the trend was reversed, no doubt because of some special reasons about which the minister could tell us. However, those figures show the trend since last August.
I want to digress for a moment to say a word on what the minister said about Marshall aid. He rather pooh-poohed it, and I think it worth while to remind the house of the figures and of the great help it has been to us in the past, because we cannot face the future intelligently without knowing what has come to us through Marshall aid in the past. The total amount of Marshall aid in 1948 and 1949 was $7,850 million, of which $1,036 million was earmarked for Canada, and for Canada and the United States altogether, $6,527 million. While only $1,036 million was earmarked for Canada, that does not give the full extent of the effect of this aid, because, after all, the large dollar advances which other countries obtained under Marshall aid would certainly set free other dollar resources which they possessed; so it is perfectly reasonable to assume that the benefit we obtained from Marshall aid was far in excess of the amount actually earmarked for us.
I should like to direct attention briefly to what seem to be one or two essential features
(Mr. Macdonnell (Greenwood).]

of the trade situation in the last few years. In 1947 two significant events took place: first, the Geneva trade agreement was concluded; second, the attempt to make the British pound convertible at $4.03 failed, and of course that failure had a devastating effect upon the Geneva agreement. That agreement, as we all remember, had escape clauses under which nations could withhold the tariff advantages they had agreed to give if in fact their balance of payments was out of scale. In plain words this means that as a result of foreign exchange control and the turmoil of the exchanges, the nations were forced into the position where, with the exception of the United States, they very largely departed from the terms of the agreement, which became more or less inoperative. It was a frustrated effort.
From the point of view of tariff negotiators the Geneva agreement was a dream. They got tariffs down below where they had been for a generation; but the paralysing hand of controls came down upon them and spoiled the effect.
There were other escape clauses of an entirely different nature whereby nations could suspend the operation of the agreement if their own industries were going to be injured. This has been important only in the case of the United States, where there have been six such applications. Five of these have been turned down. The sixth, concerning aluminum, is now under consideration. I understand the board which reviews these applications is strictly political, being composed of three Democrats and three Republicans. Therefore I think we may have a good deal of hope that this application will be turned down also, because there will be no majority in favour of giving effect to the request. In the case of the United Kingdom, where tariffs were low and tariff reductions were not really matters of importance, their place was taken with unhappy effectiveness by import regulations of all kinds, so in that way the United Kingdom has made use of balance of payment difficulties to escape the effects which otherwise would have followed.
Now I should like to point out, in fact to repeat, that if in 1947 our financial experts had been able to do as satisfactory a job as our tariff experts, we would have had a very different situation. We know what has happened. We know they were not able to do that satisfactory job. We know what has been the turmoil of the exchanges since that time. We know that just the other day we were notified that the United Kingdom is cutting back its purchases by some twenty-six per cent, I think it is, which I am informed

is the result of the discussions and negotiations that took place last year, to which the minister referred.
I spoke of the turmoil of the exchanges. I spoke of the devaluation last autumn, to which the minister has also referred. Britain has made progress since then. Apparently it has been able to increase its exports to this country so that they earn the same amount of dollars they did before. Hon. members will bear in mind, of course, that with the pound depreciated the British have to export just that much more goods in order to get the same amount of dollars. But in spite of their progress he would be a bold man who would today predict that before the end of Marshall aid they will be able to span the gap, which is already large. I believe there is only one solution to the problem which offers any hope. It is a solution I have put to this house before; that is, a move toward the freeing of the exchanges. I have no intention of repeating my speech on exchange control, but what is happening every day in my view underlines the position we in this party have taken.
Let us see what is happening. In his speech last week the minister said at page 1208:
... it already seems clear that the action we took in September last has, under the conditions now prevailing, improved our trading position.
Well, I mention in passing that this hardly seems to square with the figures I gave a few moments ago, but the minister might reply by saying that if it had not been for what they did last September things might have been worse. Then let us see what has happened since last September. On the 19th of that month the minister said, as reported at page 56 of Hansard, second session, 1949:
For some time it has been clear that a fairly radical realignment of some currencies was a necessary element in the readjustments required to balance international trade.
The minister is certainly right. That had been clear, except for those people whose hands and minds were fast in strait-jackets. We all remember the case of Cripps, the British chancellor of the exchequer, who kept repeating that he would not and could not devalue, and then of course had to do it; like the old saw, "saying he would ne'er consent, consented." We can sympathize with him, moving from one crisis to another because of his fanatical adherence to the system of controls and his apparent unwillingness to take any step away from them.
On September 19-and I think this is important-referring to the discussion he had had with the United Kingdom and the United States the minister said, again at page 56:
Each of the participants was keenly and deeply aware of the consequences of failure. Unless the trend could be reversed, the free world would,
The Budget-Mr. J. M. Macdonnell through the force of events, divide itself into two economic blocs. With this division there could not be a sound or lasting basis for political co-operation and security.
I think we will all agree with that. Let us see what has happened. As I told you a few minutes ago, the minister says the situation has improved. That, however, seems to me to be a doubtful proposition. Let us call the Secretary of State for External Affairs (Mr. Pearson) to give evidence on that point as to whether these blocs are becoming less sharply defined. Speaking after his return from Colombo, as reported at page 135 of Hansard of February 22, the minister said they had
. . . highly qualified experts at these talks.
Further on he says:
They-
That is, the talks.
-concerned in the main the present position and future prospects of the sterling area. The Canadian position with respect to participation in talks of this kind was, if I may say so, a little equivocal.
I was surprised at that word "equivocal". I looked it up to see what the dictionary had to say about it; and it says, "capable of double interpretation." There are those in this house who would say that things of that kind have been said by this government, capable of double or perhaps even triple interpretations. But I do not think this was one of them because I think, as a matter of fact, the minister's attitude was only too clear, and I quote again from what he said. He says:
It-
That is, the Canadian position.
-certainly was not the same as that of the other participating representatives, who, without exception, came from the sterling areas. In fact our role at those talks, if I may put it that way, was that of a persistent but very friendly dollar gadfly.
In other words, our only objective was to sting others into action but apparently not to do much ourselves. That point became underlined when an amendment was moved in this house suggesting a commonwealth conference and when the Minister of Finance, while not saying that the conference might not be of value, and while saying that if we were invited we would of course go, nevertheless was not prepared to take any initiative in summoning it.
I wish to make reference to one other thing the Minister of Trade and Commerce said the other afternoon which interested me a good deal. He referred to his hope that convertibility might come in the near future inside Europe. If I understood the minister correctly, he seemed to regard that with great satisfaction; and on the face of it, one would be inclined to regard it with satisfaction. On

The Budget-Mr. J. M. Macdonnell the other hand, I raise this question, Mr. Speaker. If we stand aside and allow Europe and presumably Britain-because the minister hoped that Britain would be included; and if Britain comes in, that means the sterling area, I take it-to make an arrangement, or if we stand by while all that part of the world reaches an arrangement as to convertibility, I wonder if that may not work greatly to our disadvantage. I am not prepared to dogmatize on that. I put it forward as a matter which I think is worthy of serious consideration. However that may be, my own feeling is that, so far as devaluation is concerned, so far as moving forward into freedom is concerned-and I have never suggested it should be done in any helter-skelter or ill-considered manner-it seems to me that we are not prepared to do it at all. We are standing pat. We are not moving forward. It is a kind of wait-and-see policy. I should like to remind the house of words which I read to it not so long ago, written by a highly respected publication, the London Economist, with regard to the British step taken last September, whereby they moved the pound down to a new fixed value. There was no loosening of the controls at all; they were just as tightly fastened as ever, except at a new figure. This is what the Economist says, and these words were written I think in the middle of October:
It is now clear that the opportunity of devaluation has been missed. Abroad there has been much disappointment, mixed with amazement that so sharp a reduction in the exchange value of the pound sterling was not accompanied by any relaxation whatsoever of the restrictions that keep the pound so tightly inconvertible. "Devaluation," says one experienced continental commentator, "is usually the price paid for getting rid of exchange control. To pay so high a price and get none of the rewards is a very bad business."
Meanwhile, Mr. Speaker, we are preparing for another trade conference at Torquay. You will remember that, following the one at Geneva, there was one last year at Annecy. Now we are to have one at Torquay. I raise the question whether we are going to have another frustration following on the two previous ones; because it seems to me that it will be in the highest degree unfortunate and lamentable if we do.
If I might digress for a moment, I should like to say that, when people survey what is going on now, when they realize the number of bilateral or two-sided trading arrangements which are being made-particularly, I am afraid, by the United Kingdom-and when they realize how important it is for us that we should have multilateral or many-sided trading agreements, it is not surprising that thoughtless people should be arguing for barter. Apparently there are some who think that barter is some strange, new, brilliant discovery of the twentieth century. They talk

about it really as though it were a substitute for the freedom which brought us where we are. They do not seem to realize that it is stepping back into a situation that we stepped out of generations ago. The other day I read an article apparently holding up to admiration a company-and indeed the company was entitled to admiration-which I think was in the lamp business, and which was selling lamps hither and yon throughout the world and taking goods in exchange: barter. One of the things I remember was that they got goat's hair in Turkey. That company undoubtedly deserves credit for its enterprise, but what I am commenting on is the state of affairs which thrust them into that kind of business. What it meant was that a man who was expert in the selling of lamps but who knew nothing about goat's hair had to try to learn about the business of selling goat's hair. It is just reverting to the situation which we should have got away from years and years ago.
What bothers me is that, from our good friend the minister down, I cannot find any sign of concern about the continuation of these controls. I often wonder if people forget that these were invented less than twenty years ago by the notorious Dr. Schacht as a totalitarian instrument. That is what they were. We took them over, at first with the hope that we would use them only for a short time and then get rid of them. I sometimes wonder whether people forget that it is freedom that has brought us as far as we have come, until just a few years ago. But to my great regret I find that instead of these controls being regarded as evil, unnatural and temporary, a good many people-and not only those who are using those implements-are coming to regard them as beneficent, natural and, if not permanent, at any rate quite indefinite. Those responsible I think admit that they probably will some day disappear, but there is no sense of urgency. Indeed, on the contrary, there is rather a sense of pride.
I do not think we need to be surprised at that. As to men who are using these powerful instruments-because consider the enormous power put in the hands of men by foreign exchange control-and, I think, using them skilfully, how can you expect that they will want to toss them away? Of course they think they are good. As I undertook to say a while ago, men who have been using them, particularly young men, would have to jump out of their intellectual skins to believe that these controls are not good. I would remonstrate with the minister however who comes out, not without some feeling of pride-indeed I think that was the only part of the budget which gave him much satisfaction-and tells us about the exchange reserve they were building up. I would remind him of two or

three things there. First of all, they only build up this reserve by controlling us this way and that, by shutting out this and by shutting out that and, as I said on another occasion, by turning off the tap and turning it on again.
Secondly, I would remind the minister that he has gone part of the way I have suggested to him repeatedly. Notwithstanding that the Prime Minister (Mr. St. Laurent) said that devaluation would bring chaos-that, of course, was during the election-notwithstanding that the Prime Minister assured us that devaluation would bring chaos, we have had devaluation. Of course I know the minister will say: "Oh, yes, we only did it because other people did it." But what I am suggesting to the minister is that we are strong enough to go on our own.
The other thing I want to point out to the minister-not that I want to take away whatever little pleasure he may get out of the budget-is this. I want to remind him that a great deal of the satisfaction which he has had in the building up of his reserves has come about by entirely fortuitous circumstances. Alberta oil has been the right bower. I hold in my hand an advertisement from today's Ottawa Citizen, which points out that western oil is saving 100 million scarce United States dollars this year. If that is an accurate statement, if it is actually saving 100 million scarce United States dollars which formerly we had to pay for oil, it is only the beginning of what it is doing for the exchange problem, because it is also bringing large investments of United States dollars, which are also helping the exchange situation.
I am not going to elaborate this further; but I do think that as we go on with this instrument which we have discovered, as we persist in this evil course, which is not a healthful one for the economy but unhealthful, we seem to be like a man who has found a cure for drunkenness. He says: "It is all right for me to drink now because I have the cure in my own hand, and I can keep the situation in hand."
I just want to summarize briefly what I have been saying about trade and about exchange control in connection with it. This division into economic blocs is going to do us endless harm. I should like again to refer to a quotation which I gave on a previous occasion from the international monetary fund report, pointing out that there are risks in accepting the more competitive conditions that come from freeing the exchanges and freeing controls. But they say:
Unless these risks are accepted, the improvement in the world economic situation made thus far may be replaced by deterioration.
The Budget-Mr. J. M. Macdonnell
That is the end of the quotation from the international monetary fund report of last year, but I should like to suggest that instead of the word "may" we had better put in the word "will", and that we can see the signs of it before us. In passing I should also like to mention what I think is often overlooked, namely, that as long as these fixed exchange rates remain they cut the nerve of international investment. I know we will be told that there has been much United States investment here. That is perfectly true. The lure of oil, and perhaps other lures have brought in large amounts, but nothing in the world like what could come if exchanges were free. Take a look at the condition of England and see what might happen to them if they were able to get freedom and with it international investment, the only thing that can enable them to bridge the dollar gap.
I want to remind the house of the meaning of the word "convertible". In plain words I would describe it as permitting you to spend anywhere money which you received for goods sold anywhere. In other words, that your money is convertible and can be used up and down the world. Incidentally, if we could reach that happy day, Mr. Speaker, the dollar problem by that time would have disappeared. There would be no dollar problem because money could circulate freely.
I am not suggesting that that could be done without some disturbances here and there; but I am suggesting that we in Canada by happy accident are in a position where we could do it with the minimum of disturbance. All the evidence is that our dollar, on whatever free market there is, has hovered within a fraction of a cent of the fixed rate for several months.
I would remind the minister again of the modesty of my request. I recognize that the treasury department might wish to begin by making the dollar convertible only on current account. They might think they had to begin in that partial way.
I would repeat that we in Canada are rather fond of holding ourselves out as examples in this or that department of life. I think it is good that we can, but I suggest that here would be the best place of all to hold ourselves out as an example, and to strike a blow for freedom. I say again that if the controls remain we may find in all likelihood that Torquay will be abortive, just as to a very large extent Geneva and Annecy were abortive.
One other point on this division into two economic blocs. It may be that the tremendous oil discoveries, tremendous iron ore discoveries and other discoveries burgeoning to an extent that we cannot see now, conceivably
1524	HOUSE OF
The Budget-Mr. J. M. Macdonnell may solve our own exchange problem; but I want to ask, what is going to happen to many primary producers in this country if we really are going to be cut off for any extended time from the sterling area.
I hope, Mr. Speaker, that the period of watchful waiting is near an end, and that we may be coming to a period of action.
I want to say a word about economy. The minister's warning underlined economy. But I have the feeling that the minister might have said a little more than he did, might have given us a little more lead in the matter. He said, as reported at page 1213 of Hansard:
The government became aware several months ago of these revenue prospects . . .
He had just been referring to the revenue.
The government became aware several months ago of these revenue prospects and of the desirability of keeping our expenditures this next year within the total revenue that we could foresee in the economic conditions I have described. We decided that we should plan to do this.
I am sure the minister did not think it was a very original idea to try to plan to cover expenditures, but at any rate he did have this idea. The minister says that they all got busy. The minister, the treasury board and the cabinet got busy. Then we have the minister's word for it that they made substantial reductions in the estimates before they came down. Of course we are left to imagine what they were before they came down; and one might ask the government whether it was only because of this emergency that they really grappled seriously with the problem of economy. It would be interesting to know what the new method was, how it worked, and how much they did cut down. But of course in the state in which we now find ourselves we would never expect to have information of that kind, because we find it exceedingly difficult to get even information to which we are fully entitled. Therefore the door will be banged, barred and bolted at that stage, and we shall have only what the minister tells us.
I think the ordinary citizen will feel that it is just not reasonable that you cannot economize a lot when you are spending $2,400 million. I think that is what he will feel, and he will not be very sympathetic when the minister says that only $310 million of it is civil service salaries. He will be inclined to say:	"Does the minister think
the other $2,100 million are sacred? Is nothing to be done about that?" Is the minister suffering from a kind of fatalism? Are these other $2,100 million like interest on debt or statutory commitments? Incidentally, many of them are, of course. They will agree I think with what the minister said further, namely, that "if we want services we must 

pay for them." That is a very fair observation, but it leads me to say this: Most of us in this house-in fact, nearly all of us-are unable to take the necessary steps to find out whether these services really are necessary. No hon. member in the house, apart from the minister and his close associates, has any true knowledge except through an interpreter. Of course all that the minister as an interpreter gives us is what might be called the end result. We hear nothing of what has gone on before. It reminds me of an incident that happened with an interpreter in a court in Toronto one day. There was a Chinese witness and a Chinese interpreter. The interpreter asked the witness quite a long question which perhaps took a minute to put. The witness answered also at considerable length,, let us say, almost a minute. At the end of the answer the interpreter turned to the court and said:	"He say 'no.' "
That was all the court got out of the long account, and I am sure that that is all we ever get from the minister. We get yes or no, the bare statement.
There are one or two items to which I should like to draw attention. For instance, we have the Department of Agriculture which apparently shows $7 million down. But, apart from the savings on western freight, which was down $12 million, we find that the estimates are really $5 million up.
There are decreases in the Department of Trade and Commerce; but on the other hand there is an increase of $1,170,000 in the national research council, which is the special child of the Minister of Trade and Commerce (Mr. Howe). I do not know whether he calls it his, as he called the Polymer Corporation yesterday. In any event he has a great interest in it-and we may be very glad that he has.
All I have to say about these things is that they are good. But how good are they? How are we going to know how good they are, and whether we need to bear this great expense, unless we have some better method of informing the House of Commons, unless some better method is devised?
For instance, I saw the other day a beautiful little booklet describing one of the provinces. It was beautiful, and it must have been very expensive to produce. Someone has told me that there was a good deal of inaccuracy in it, but I have no comment to make on that. All I am saying is that that is done, and it must have cost a pretty penny. Yet there is no opportunity to discuss a thing of that kind, or to find out whether it was necessary or not. I submit the present system is really contrary to common sense. Indeed, I support the view expressed more than twenty

years ago by the former prime minister, the Right Hon. W. L. Mackenzie King, in which he said one or two things which I suggest are of some importance, and to which I hope hon. members will listen. He said this:
My hon. friend, the leader of the opposition, will recall that at the beginning of the session, I discussed with him the advisability of the different parties in the house adopting some more effective method of scrutinizing the supply requested by the government, some method which would enable members to hear what the officials of the departments had to say with respect to the several items included in the estimates.
And later he said:
Speaking for the government, I would say that we would welcome a change in the present method -a change which would not only afford fuller opportunity for discussion, but which would carry with it an obligation on the part of the heads of different branches of the public service to appear before a committee of the house and explain fully the reasons which have occasioned the recommendations which find their place in the estimates submitted to the house.
That is what was said by Mr. King in June of 1928.
Mr. Speaker, I point out to you and to hon. members that that is exactly the kind of thing we have been asking for; but, with the exception of the Department of External Affairs, we have no chance whatever of getting it.
If time permitted I would like to make further reference to the searching comment made by the auditor general, Mr. Sellar. However, I shall content myself with one further bit of evidence, this time from Great Britain, showing the extent to which they go in their effort to come to grips with these matters. This is evidence which was given before a select committee of the British house, and which is contained in. a report tabled in 1946. This describes the methods used by a certain committee to satisfy itself as to the propriety of certain expenditures. This is the information given by the clerk of committees:
It is true, of course, that they asked for any evidence that they thought would assist them in the inquiry that any sub-committee was engaged in.
If they were examining the expenditure, they not only went down to factories, but they had up as witnesses people who were actually engaged in this particular task in some form or other. I
I am not going to pursue this matter further than to say that, whatever is to be done, the present situation is unsatisfactory, and indeed contrary to common sense. No one in this house has ever seen a dollar struck off the estimates. All that happens is that we have a long talk which we hope our constituents will read, and then nothing is done.
When that statement was made twenty-two years ago by Mr. King our expenditures were about $366 million. They are now $2,400 55946-981
The Budget-Mr. J. M. Macdonnell million. I suggest that if our conduct was foolish then, it is seven times as foolish now, because we are spending seven times as much.
I should like to review the budget situation briefly, and then come to a conclusion. I have tried to show the house that the situation is clear, that the best we can do, even if things are good in the coming year, is to break even. The minister has assured us-and he may be lamentably right-that we need not expect expenditures below $2,400 million. Then, in the third place, he said that the government had buckled down to the task of keeping down the estimates-and he wants a good mark for that. Fourth, he said that in good years-and he does not refer to bad years-that in good years we must balance. My comment on that is that I think it is widely believed that expenditures are going to go up, and that it is widely feared that trade will come down.
I have pointed out that I think the minister's attitude is too negative, and summed up by saying that, failing conditions favourable beyond expectation, it is a case of either deficits or higher taxation.
In these circumstances one might have expected something like a clarion call from the government. However, I suggest to the minister that all we have had has been a quavering and uncertain sound-occasionally a dirge, then cheerfulness breaking in, but no clear lead.
True, there was reference to a shelf of public works to give support; but relief works are not a solution. There must be a relief works program for any emergency. What is needed is something more than that. The government must create a climate favourable to enterprise, and lead the way.
What are they doing? Well, if I may digress I shall refer to one special matter, which I think is of some importance, in which they are doing what I think is apt to have an adverse effect upon enterprise. Apparently the Department of National Revenue is now beginning to make use of the provision in the Income Tax Act whereby the officials of the department have the authority to force corporations to pay dividends which those corporations do not want to pay.
Let me say at once that I sympathize with with the department in its desire to prevent any tax evasion, and I am inclined to believe that they ought to have enough skill and astuteness in their ranks to do that.
But I also wish to say that for members of the department to step in and to overrule the decision of a company's executive as to what the proper reserve inside a company should be is verging-and I do not like to use a strong term-is verging on unwisdom

The Budget-Mr. J. M. Macdonnell of the most extreme kind. If there is any matter in connection with which the executive of a company ought to have the right to decide, I should think it would be on the extent of reserves.
May I underline that by placing on record some figures which astonished me. These are American figures, but I suggest the circumstances are sufficiently similar in this country to make them significant here. These figures disclose that it is estimated that this year in the United States ninety-two per cent of capital expenditures will come from depreciation and retained surplus. I do not say that it is all retained surplus; I say it is depreciation and retained surplus. That ninety-two per cent is coming from inside the revenues of the various corporations concerned. I point out that these surplus funds will be an absolute sheet anchor for investment, particularly if we run into times of slackened activity when we will wish to have expenditures made.
I cannot find words to express my feeling that interference of that kind is in the highest degree unwise. The natural inclination of companies is to pay dividends-except in respect of private companies which may be dealt with specially. The fact is that the ordinary company manager likes to pay a dividend. That is what the shareholders want, and his whole inclination will be to do it. To force him to use money which, in his discretion, he has set aside, and which will be available for the improvement of the company's plant and extension and all that sort of thing is, as I say, in the highest degree unwise.
I am not going to ask the minister to answer this question now as I will put it to him later on, but the rumour is that warnings have been given in many cases, and there are a few well authenticated cases, that there is a campaign on hand to try to clean out company surpluses. The men who are doing that are either very unwise or enemies of the system of private enterprise, because that should be one of the sheet anchors whereby private enterprise can prove its worth when the time comes to provide employment.
I am glad to be able to congratulate the minister on doing something-I hope it will turn out to be something substantial-to assist companies with small earnings. The minister promised last autumn that he would do that and I am glad to see that steps are being taken which I hope will prove to be effective.
I said a moment ago that we needed a clear call from the government, that we needed a climate favourable to enterprise,


that the government should take steps to help the people to help themselves. The government should get off the people's backs and give them a lead. In October, 1948, our party went on record as being in favour of the following policy:
In co-operation with the provinces to assist in the convention and development of our natural resources, and as one of the means to that end. to establish a national development advisory council.
Such a council would be made up of representatives of the provinces, of labour, of industry and of agriculture. At present we have merely an uncertain sound of helplessness and hopelessness and equally uncertain optimism instead of something of this kind. Such a council would have at its disposal the accumulated knowledge of its various members.
As an illustration of how the government can best co-operate with private initiative I would point out the mining industry. There you have the government giving a lead. The government makes surveys and provides information. The government suggests that such and such areas are likely to be fruitful and then the private individual comes along with his energy and initiative and steam and goes and does the job. Of course, the government should regulate and should tax, but the government should be the regulator and not the mainspring of the watch.
If we consider the possibilities in Canada today we look first of all at the western provinces where we have large resources. I was amazed to see a list of them the other day, things that I had never dreamed of. There we have resources of base metals which with the nearby coal and oil are capable of great expansion. The day has gone when we can regard the three prairie provinces as being merely agricultural. Alberta is already transformed and Saskatchewan may be well on the way. What is true of the prairie provinces can be true of the maritimes, and indeed true of every place.
It is unfortunately true that for strategic reasons we should strengthen ourselves in every way possible on the industrial side. This chimes in with the United States; partly because of their own defence program they will have a great need for the basic materials that we have. What a wonderful chance this offers for a true policy of "Canada first", a policy that could well redound to the benefit of other countries also so that we would have that best of all business arrangements where both sides are benefited.
On the other hand, if there is a failure to act we may find that we have missed the bus. The appearance of unemployment underlines the urgency of the need of action. Another

thing that is present in the minds of us all is the inescapable and overwhelming need of the democratic nations making it clear to all the world, particularly to that part which is in doubt and which is on balance as between democracy and communism, that we can provide a better way of life, not only in spiritual but in material things, than communism can ever do. It is obvious of course that if such a plan were carried out it would ease the tax burden by increasing the national income.
The minister concluded with what I thought was a rather odd note when he said:
If at some future time we have to face serious difficulties, we shall find that we have never been better equipped and prepared to resolve them.
That sounds all right, but I point out again that it is a defensive note. I doubt if any serious person will believe that our difficulties will occur at some future time. He would realize that they are here now. Therefore I say that the appropriate attitude of the government is not to end on this defensive note but to take the initiative, go out and meet these difficulties. I have suggested some ways in which I think it can all be done.
This party, even though in opposition, would support such an effort to the utmost of its capacity.
Mr. Speaker, I move, seconded by the hon. member for Vancouver-Quadra (Mr. Green):
That all the words after "that" to the end of the question be deleted and the following be substituted therefor:
"This house regrets that the policies of the government, as announced by the Minister of Finance,
(1)	make higher taxation inevitable:
(2)	make no adequate attempt to eliminate extravagance and avoid unnecessary expenditure; and
(3)	make no provision for a program of national development, without which there can be no hope of a reduction of taxation and the present high cost of living."


Mr. M. J. Coldwell (Roseiown-Biggar):: Mr. Speaker, my first word will be to pay tribute to the Minister of Finance (Mr. Abbott) for the presentation he made of the budget last Tuesday. In former years when he presented budgets to the house he made notable explanations of the measures he proposed, and last Tuesday's performance was no exception to the rule he established.
Before I go on to discuss the budget I should like to correct an error which appears at page 1389 of Hansard of March 30, 1950, the fourth line from the bottom, where the figure "$800 million" is reported. I understand that the hon. member for Moose Jaw (Mr. Thatcher) corrected this in Hansard before he left for home this week end but certain newspapers, particularly the Winnipeg Free Press and its subsidiaries, the
The Budget-Mr. Coldwell Regina Leader-Post and the Saskatoon Star-Phoenix, have been using this figure and saying there is some rift in the C.C.F. with regard to social security and unemployment. There is no rift.
Of course, the figure should be about $660 million as outlined in the government's statistics and statements. I hope that the newspapers which have erroneously taken this figure as being authentic will correct it accordingly. But a mistake of nearly $200 million is a substantial error.
There is one other matter about which I wish to say something before I proceed with a discussion of the budget. Yesterday, following the statement of the Minister of National Defence (Mr. Claxton) on the arrangements at The Hague last week, I asked him a question as to the extent to which similar steps to integrate economic arrangements had been taken under article 2 of the Atlantic treaty in order to eliminate conflict in international economic policies and to encourage immediately collaboration among members of the North Atlantic alliance. The minister's reply indicated that Canada had taken a keen interest in this article and had -and I know this is true-contributed a good deal to its acceptance in its present form. It is quite apparent, however, that nothing has been done yet in this regard.
We think that article 2 of the North Atlantic treaty is of vital importance in the maintenance of peace. As we have often said, while the world situation unfortunately demands close defensive arrangements among the western democracies, totalitarianism will not be stopped by military arrangements alone. It is essential that economic conditions shall be so arranged that rapid improvements in standards of living throughout the world shall be made. Surely we have learned the lesson that dictatorships are prone to arise among people who are oppressed and who suffer poverty, misery and want. The removal of the causes of poverty, misery and want must be a major consideration of the democratic nations. We believe that only in this way can the threat to democratic freedom be removed. We therefore urge Canada to press for the immediate implementation of article 2 of the North Atlantic treaty.
Turning to the budget, obviously the 1950 budget marks the end of an era in the eyes of the government. The post-war boom, kept going by the necessity of aiding in European reconstruction as well as by the endeavour of private business to re-tool and convert from war to peace, is apparently drawing to a close. I think this is a fair interpretation to put upon the considerations advanced by the
1528	HOUSE OF
The Budget-Mr. Coldwell Minister of Finance (Mr. Abbott) in his budget speech. The tremendous wartime and postwar capital investment programs undertaken by industry have largely been responsible for the soaring prices and much of the inflation we have experienced since the war. Public and private expenditures have risen year by year to a phenomenal level with the result that until recently there was not only full employment but actually a shortage of manpower as well as many vital materials.
The high level of business activity and the huge capital expenditure program have resulted also in unprecedented business profits. I do not propose to deal with that aspect of our economy as I have done usually in discussing budgets on former occasions. Obviously the recession in labour demand this past winter and the diminution in the volume of our overseas trade have caused the government to introduce this year a budget that is very different indeed from the one introduced last year. I say it appears therefore that we are witnessing the end of the post-war inflationary period, and consequently now is the appropriate time to do some stock-taking. That is what I propose to do this afternoon rather , than to go into a detailed analysis of the budget.
My main criticism of the new budget is that the government seems prepared to accept whatever levels of production, employment and economic activity the uncontrolled, undirected and unplanned operations of the private enterprise system may bring to us. This was apparent when the minister gave us his forecast of revenue and expenditure for 1950-51. He stated that it was his expectation:
. . . that in general our national employment and income will be sustained at approximately the present level ...
He then went on to express the opinion that:
Should conditions be better than this-as they could be if everything goes well-my forecast will be more than realized. Should economic conditions deteriorate, as they could, our revenue will fall off and our expenditure increase, as compared with the figures I am now putting forward.
In other words, Mr. Speaker, the government seems content to float along with the tide and the winds of fine or foul weather, the ebb and flow of economic activity, if you like. There is no suggestion that the ship of state will be set on a more favourable tack or that the auxiliary engines will be used if she runs into adverse winds or a strong ebb tide. The government has set no other course than that of taking the gamble that the winds will be favourable, the economic tide with us, and the weather clear. Therefore the minister


budgets for a surplus. The economic uncertainty about which he warned us was underlined when he said:
I should like to emphasize that our tax structure now is such that it is very sensitive to changes in employment and incomes, and relatively modest changes in these can have a more than proportionate effect upon our revenue.
I take it that every hon. member will agree with this statement, but in our view changes in employment and income need not, and indeed should not, remain beyond our control. It is at this point that we of the C.C.F. part company with the government, and indeed with all those who believe that we must leave our economic welfare to the chance decisions of individuals and corporations who occupy key positions in the economy of the nation.
The minister made it quite clear that in his opinion the central government should play an extremely limited role in promoting full employment and maximum production. He described the role of the government as fourfold. The first point he made was the creation of a favourable climate for enterprise, whatever that may mean. I noticed that the hon. member for Greenwood (Mr. Macdonnell), who resumed his seat a few moments ago, also took the point of view that the extent of the duty of the government was to create a favourable climate. The second point the minister made was in regard to the planning of the timing and placing of public works expenditures. Apparently, from recent statements made by the Prime Minister (Mr. St. Laurent), this should be done only when the municipalities and the provinces cannot cope with the pressing problem of unemployment. Only then should the federal government be asked to assist. I might remark that this is a return to the same kind of psychology that we knew in the 1930's when the central government took the view that the initiative must first come from the municipalities and then from the provinces. The third point was that the government should accept some special responsibility for the promotion and development of our basic primary industries. Well, I think the budget makes provision for certain primary industries, in a sense. What the minister means, I take it, is that such tax concessions as those given to the mining and oil industries should be continued and indeed expanded; and again I find that the hon. member for Greenwood (Mr. Macdonnell) is in full accord with that point of view.
The fourth point is that the budget makes some vague reference to readiness to co-operate with other governments, municipal and provincial, in meeting regional problems that threaten nation-wide economic repercussions.

I draw attention particularly to the qualification "regional problems". There is no indication on the part of the government that it is prepared to accept responsibility for either the maintenance of full employment or agricultural prosperity, and in our view that kind of responsibility must be accepted by democratic governments. I want to say as emphatically as I can that in this way only can the challenge of totalitarianism be met by free peoples. What I think the government fails to recognize, and what many hon. members of this house may not have recognized yet, is that the world is moving toward new forms of economic and social associations. That is, we are making a transition from the old to the new, and we of the C.C.F. believe that in doing this we must take every step we can to conserve that which is good in our present social relationship, while we consciously plan to assist in the evolution of the new. The precious rights of free association, free expression, freedom of worship and so on must be maintained; for these, I think in the view of all hon. members of this house, are among the fundamentals of a free society.
But let me add immediately that even in our own country these freedoms cannot be freely exercised by all. 'The man who fears loss of employment, the man who holds minority views, sometimes religious, sometimes political, is not always free to express his views. Nor are the thousands of farmers and workers who fear loss of markets for their produce or who fear unemployment, nor the businessmen who fear a business recession, completely free. For them and because of them-and they represent the vast majority of our constituents from one end of this country to the other-the planning of our economic resources and activities should be the first consideration of a democratic government.
Now I want to say very clearly and distinctly that in our view such planning does not require the establishment of an all-powerful state, nor does it require regimentation. Indeed, in our present society we have a great deal of planning by nation-wide corporations, which sometimes are monopolies in their own fields. They plan in their own, and often conflicting, interests which from time to time prove injurious to the nation as a whole. So I say it is not a question of planning or not planning our economic activities; rather the question is in whose interests we shall plan, and by what agencies it shall be undertaken. There is no indication in the budget speech or in statements by the government that any conscious attempt is contemplated to maintain maximum production and full employment;
The Budget-Mr. Coldwell and I suggest that there is no other institution or agency in our democratic society qualified to undertake those tasks but this parliament or bodies set up under its authority and responsible to it. Last spring the government and its supporters across the country promised to maintain both full employment and maximum production and prosperity. That promise was made in 1945 as well. I ask them to say now, flatly and in plain English, whether or not they are prepared to fulfil the pre-election pledges made to the Canadian people in this respect. If so, in formulating the budget proposals the government should have placed before this house its plans for the maintenance, and indeed the expansion, of production and employment. Instead of this, what did the minister say? He hoped and expected that employment and income would be sustained at present levels, but warned that economic conditions might deteriorate. There was no suggestion that the government itself had a responsibility to maintain the one or prevent the other; nor indeed, as far as this house knows, has it any plans to do so, except the willingness already mentioned to co-operate with municipal or provincial governments in meeting regional problems, and again only if they threaten nation-wide economic repercussions. I would remind hon. members that the government refused this winter to present plans to give employment to the four hundred thousand who were seeking work at the time.
We hear talk of accumulating surpluses in some manufacturing industries, as well as in agriculture; as the Minister of Agriculture (Mr. Gardiner) put it, a little bit of cheese, a little bit of butter, and some honey. That was the way he put it before the actual figures were revealed; and those figures were rather disturbing. In some industries such as clothing and footwear, the manufacture of washing machines and in hardware sales, there is a falling off in the volume of business. Not long ago I read the speeches of the presidents of two of our largest farm implement companies, Massey-Harris and Cockshutt. Both stated that their sales in 1950 might be less than in 1949. That was the warning they gave their shareholders.
The trouble is that private enterprise or capitalism, if you prefer to call it so, is an economy which functions fairly well only when goods are being used up rapidly, as in war or in reconstruction, and generally in times of scarcity. As soon as capital construction and the tooling of factories are complete, and goods appear in abundance, purchasing power slackens and production slows down, sometimes ceasing altogether. Consequently in the last hundred years or so

The Budget-Mr. Coldwell we have seen periods of prosperity during wartime, followed by shorter or longer periods of activity and prosperity in the postwar interval, and then almost inevitably a slump. Abundance presents private enterprise capitalism with an insoluble problem which no financial juggling can hide or cure.
We are convinced that this need not be, that we are endowed with sufficient intelligence to be able to plan to meet these ups and downs, these booms and depressions, and to give measures of security such as the world has not known, at least in recent times. So we say plans should be made to guarantee the maintenance of full production as long as people anywhere in the world lack food, clothing, and homes. I say that, until these elementary requirements both in our land and elsewhere have been met, there should be no talk of curtailing production, no talk indeed of impending recession or depression. On the contrary, there should be a continuous expansion. The proper use of our manpower, our machines, and our resources should be organized and planned to provide a standard of living and security for all our people such as we can only dream about today.
I noticed that the hon. member for Greenwood brought a new note to the fore in his address this afternoon when he referred to the resolution of the Progressive Conservative party in the fall of 1948 when some idea of planning was involved in the resolution to which he drew the attention of the house. I say that by planning the proper use of our manpower, our machines and our resources we could provide a high standard of living for all our people, and create surpluses with which we could help raise living standards throughout the world, such as we can only dream of today.
I remember that prior to the war, during the depression, I made a statement in which I said that if our resources, our machines and our manpower were fully employed, we could produce the equivalent of $4,000 per year for every family of five in Canada. At the time this statement was ridiculed, though I neither said nor implied-indeed, I said the opposite -that all this production would be available for consumption goods, or that it could be divided thus equally, or that it could not be. But in the excellent speech he made on his estimates last Friday the Minister of Trade and Commerce (Mr. Howe), stated that our national production in 1948 was equal to an average of $1,200 per capita or, putting it as I did before the war, in terms of a family of five, exactly $6,000 per family.
With proper planning of production and of trade we believe that figure could be further

increased and the standard of living of most people vastly improved. In our opinion this will not be achieved by trusting to automatic adjustments in an unplanned economy. Experience has shown that there is no automatic tendency in the present economic system, capitalism, for spending to keep up to output. Sometimes spending runs ahead of output and we get high prices and inflation. At other times spending lags far behind output and we get depression, business bankruptcy and unemployment. In our opinion this is accounted for, first, because profit margins diminish as capital becomes plentiful and hence private industry lacks incentive to expand; and second, because the unequal distribution of wealth gives some people less than they need to spend and others more than they can manage to spend. Years ago it was a good thing for society for people to have much more than they could manage to spend; for when machines were few and production was slow, there was a problem of saving sufficient for capital expansion, from which industry could borrow from the savings of thousands of people. Today I heard the hon. member for Greenwood complain about the income tax department attacking the undistributed profits of corporations. As a matter of fact, today one of the difficulties in the present phase of capitalistic society is that the savings of the ordinary people cannot find suitable places for investment largely because large corporations are accumulating reserves out of which they can make their own expansion without public borrowing. Consequently our banking and lending system is becoming far less important to industry than it was in days gone by.
I should add that now the principle, widely accepted by many economists, is that the level of spending needs to be planned and maintained if slumps are to be avoided. I think that was the lesson which we were taught in the 1930's. But in spite of some storm signals which may or may not foreshadow a storm during this current year, the government's budget includes no plan to meet any threat to our economy. The erratic fluctuations of private capital are a prime cause of boom and of depression. It is, in our opinion, the task of government so to plan the economy that the amount of spending by government, by business, and by consumers is in the aggregate sufficient to buy all we can produce or obtain in exchange for the things we produce, including of course provision for capital goods and expansion. This, surely, is the central problem of economic stability to which democratic governments must give attention if we are to withstand and to defeat the threats of totalitarian communism or equally the threat of

some form of totalitarian fascism. Not only this, but we have always to remember that our social welfare program depends upon the maintenance of a sound economic foundation. Such a program of social security must be enlarged substantially if the Canadian people are to be assured of that national health and social security system which modern democracies expect as of right. This I say is another reason why we should give attention to the intelligent planning of our economic activities.
The government should therefore, in its budgetary proposals, present a plan for the maximum employment of our manpower, our industries, our resources, and for the maximum production of goods. This the budget does not do. A great British Liberal economist-and I draw the attention of the house to the fact that he is a Liberal economist-Sir William Beveridge, now Lord Beveridge, put this well a few years ago when he wrote:
Adoption of a national policy of full employment means a revolution in national finance-a new type of budget . . . What is the essence of this new budgetary policy? It is that the budget is made with reference to available manpower, not to money; that it becomes, in Mr. Bevin's phrase, a "human budget". Manpower is a datum; it cannot be altered by state action; to take anything else as a datum and to try to fit use bf manpower to it is to risk mass unemployment or mass fatigue. It follows that the minister of national finance has to take each year one cardinal decision; after estimating how much, assuming full employment and under the taxation which he proposes, private citizens may be expected to lay out that year on consumption and private investment, he must propose for that year public outlay sufficient, with this estimated private outlay, to employ the whole manpower* of the country, that is to say sufficient to make the assumption of full employment come true. This cardinal decision involves a break with the two main principles which have governed the state budgets of the past; first, that state expenditure should be kept down to the minimum necessary to meet inescapable needs; second, that state income and expenditure should balance each year.
Then he went on to suggest some means by which total spending or outlay should be controlled; and if I may be permitted to summarize what he implies, and what I think is pretty sound, it is this: First, consumers' expenditure can be raised or lowered by changes in taxation and by the social security policies of the government. Second, private capital expenditure can be influenced by credit policy and by the rate of interest influenced by our central banking policy. As I have already indicated, private capital expenditure is the most unstable element in our economy. That is why the C.C.F. advocates that some of our great key industries should be publicly-owned to give the government a greater measure of direct control over the capital expenditures in this vital sector of the economy. Then, of course,
The Budget-Mr. Coldwell capital expenditure by the government and by various government agencies, for example, crown and other public corporations, can be directly regulated and changes in capital expenditure in this sector can be used to some extent to offset fluctuations in the private sector. Therefore in a mixed economy the public sector can be used to protect the economy against the fluctuations in the private sector. The greater the degree of public ownership the easier it will be to take effective action to prevent a major slump.
The planning I have outlined would, of course, require the organization of a national planning commission or national investment board responsible through the government to parliament. I want to say here that it does not involve setting up a sort of super cabinet; and that such a body should be representative of a number of interests in the community, namely, government, labour, agriculture, industry, co-operative societies and so on, and in each of these the consumers' interests would be represented. The proposals of the national planning board or commission established under the authority of parliament would be brought here in broad outline for approval. That would be the function of parliament. This is not a new principle, and indeed it is not necessarily a socialist idea. For anyone who will read that profound study of finance and economy by the late Lord Keynes, "The General Theory of Employment, Interest and Money", will find that he suggests that, in the next phase of social progress, that kind of thing will have to be undertaken.


James MacKerras Macdonnell: I do not think that his sway is as absolute as it used to be.


Major James William Coldwell: No; I quite agree that Lord Keynes' sway may not be as absolute as it used to be; world thinking has passed beyond the point at which it was when Lord Keynes wrote this particular study of employment, interest and money and the other books that he wrote outlining his theory. I think we have passed beyond that. I said that there would also have to be development programs and other projects to meet the specific problems of regional unemployment. Let us not forget that the Canadian economy is particularly vulnerable to seasonal unemployment, and specific measures will have to be planned to stimulate employment in our slack periods when there is seasonal unemployment.
Our vital export trade must be protected through long-term contracts and other beneficial controls so that we do not suffer more than is absolutely necessary from slumps in other countries which endeavour to export their domestic unemployment, in the form of goods which they are prepared to dump upon

The Budget-Mr. Coldwell the world market. Our external markets must be made as secure as possible and we must not shrink from the controls necessary to achieve that objective. We do not believe in controls for the sake of exercising control; but we do believe that certain beneficial controls in the interest of most of the people should be put into effect by the government when such controls are necessary to protect the great masses of the people of our country. We have seen what the recent lifting of controls has done in the field of rent. Many people have been unable to compete with those who have longer purses for the accommodation that they need. Our external markets must be made as secure as possible, as I have said before, and we must not shrink from anything that is necessary today to protect those markets. I say that Lord Keynes' ideas may be somewhat out of date now, but nevertheless a study of what he has to say in this connection would be quite interesting.
Furthermore, we are convinced, as I have indicated, that the government must socialize some of our major industries in order to permit the degree of planning necessary to achieve and maintain full employment and maximum production. There will always be severe limitations on our democracies as long as great economic power remains in the hands of small private minorities. So, Mr. Speaker, this afternoon what I have tried to do is to advocate a new approach to our national budgeting. I believe that with a full and proper use of our resources and manpower we can provide a rising standard of living and a comprehensive social security system from the cradle to the grave for all our Canadian people. In a growing community such as Canada is, where so many things need doing, there should always be more jobs available than there are workers to fill them.
I should like to add one last word, for my time is almost up. As I said at the outset,
I believe the world is witnessing a transition from the economy of private production for private gain to one of public enterprise for the common good. The problem of modern statesmanship in all the western nations, so it appears to us, is how best, how speedily, and with the least dislocation in bringing this about, the maximum distribution of volumes of commodities can be secured.
Time may not be on the side of the slow-moving democracies. Millions are demanding the right to a sufficiency of food, clothing and shelter. If dictatorships, while denying, to those who have never enjoyed them, those precious freedoms of thought, speech, association and worship we take for granted-if,

I say, dictatorships can provide that social and economic welfare which we could provide so much better but do not, then we shall lose the battle for real democracy and freedom.
And so, Mr. Speaker, in order to place our views more clearly on the record I wish to move, seconded by the hon. member for Vancouver East (Mr. Maclnnis):
That the amendment be amended by deleting therefrom all the words after the words "Minister of Finance" and by inserting instead thereof the following words:
(1)	indicate that the government is prepared to accept the present level of production as adequate for this country and as placing a limit on the services and security to be provided for our people; and
(2)	make no provision for increased national production through economic planning, public control of investment, public ownership of monopolistic industries, and the full and proper development and use of our resources, so as to ensure a rising standard of living and comprehensive social security for the Canadian people.
Before resuming my seat 1 should like to read the amendment as it will appear when amended, thus making it more intelligible. It would then read:
This house regrets that the policies of the government, as announced by the Minister of Finance,
(1)	indicate that the government is prepared to accept the present level of production as adequate for this country and as placing a limit on the services and security to be provided for our people; and
(2)	make no provision for increased national production through economic planning, public control of investment, public ownership of monopolistic industries, and the full and proper development and use of our resources, so as to ensure a rising standard of living and comprehensive social security for the Canadian people.


Mr. Solon E. Low (Peace River):: Mr. Speaker, my first words must be words of congratulation to the minister on the presentation of his budget. I suppose the stylish and popular thing for me to do would be to think up a good many nasty things to say about it. However, I do not think that I shall waste my energies in an effort to do any such thing. I would prefer to think of it in another way, and use my energies to put before the house some constructive criticism.
I know many Canadians are very much disappointed because the minister did not provide further relief from taxation this year. In particular they feel the sales tax should have been abolished. In the light of what I shall have to say later, I think there is no good reason why their desire should not have been granted this year. Goodness knows, they have been asking for it long enough, and for the major reason that the sales tax does contribute so much to the high cost of living.

The government, of course, appear to think that they have the right to tell the people of Canada what they are going to get. That brings me to a phase of the budget, in the statement the minister made the other day, which I think will be of interest to all Canadians, and that is the question as to what should be the functions of a national government.
The last issue of The Montrealer says this:
There are some badly distorted ideas around today about just what the functions of a national government should be. Basically, the government is an organization set up by the people to run the affairs of the country for the benefit of the people. However, when the government attempts to become the master of the people by making the people dependent upon it, then the people and their very country are in grave danger.
I think we can all pretty well agree on that -at least I agree with it. However, in his budget speech, after a brief discussion of the unemployment in the past winter, the minister reminded the house that a central government cannot and, indeed, should not attempt to assume responsibility for all these regional problems. Then he attempted to define what he thought the role of a central government should be. His views are set out at page 5(a) of the mimeographed document he placed in the hand's of the leaders of the different parties immediately prior to presenting his budget. He did outline the four factors which make up what he said was the role of the central government.
I am not going to read those into the record, because they have already been dealt with by previous speakers. I noticed, however, that he omitted what I thought were two of the most important functions of government. These are, first, to conduct government in accordance with the will of the people and in their interests-not in the interests of those who sit on the front benches of a political party-not at all. The second thing which I consider a very important role of central government is the removal of all those barriers and artificial restrictions which deprive individual Canadians of the opportunity to achieve for themselves and their families economic security and freedom. If those two things were included in the minister's concept of the role of central government, I feel that I could go a long way with him. No central government with authority over financial policies can possibly divest itself of these responsibilities which I have mentioned, and still be called democratic. So the people, I am sure, will call the minister and his colleagues to account for neglecting to include these two all-important things in their concept of the role of a central government.
I have another compliment for the minister. I like him, as I have said many times before.
The Budget-Mr. Low
I think he is a young man of great ability. One of these days he is going to have a new approach to financial policy; and when he does I am satisfied that he will have the courage to do his budgeting along those lines.
The compliment I wish to pay to the minister at this stage is this: I do not believe any government in modern times, at least within my knowledge, here in Ottawa, has succeeded in estimating so closely expenditures and revenues. That is an achievement, in a day like this when our budget runs between $2,400 million and $2,500 million. That is a real achievement. I wish to congratulate the minister upon having scrutinized the financial affairs of this country, and having appraised them so closely.
I believe at this stage I should say one thing, perhaps not by way of criticism, but by way of suggestion. It has already been mentioned by the hon. member for Greenwood (Mr. Macdonnell). I do believe that members of the House of Commons could be of greater help to the government, and certainly could discharge their responsibilities to the people of Canada better, if the estimates of expenditures were to be sent to committees set up for the purpose of giving them careful scrutiny and study.
I have had some experience in the committee on external affairs, in the last five years. During each of those years we have studied in a detailed manner the estimates for that department. After meetings of that committee I have felt as if we had come to grips with the details and with the facts. We were able to call before us experts from the department and we asked them all the questions we could think of. We got from them the reasons why this or that expenditure was necessary. In other words, we assured ourselves that there was a real need for everything that was proposed. When we came back into the house we felt as if we had done something like our duty. That is impossible under our present system of studying estimates in the house. It is utterly impossible with a committee as large as we have to apply ourselves diligently to that matter. As you well know, the tendency in this chamber is to give speeches and not to get down too much to fine details of consideration.
I urge the government to consider dividing the house into committees for at least a preliminary study of the estimates so that we may feel as though we are discharging our responsibilities to the people of Canada, and so that we can go back to them and say that we have given these things careful study and have assured ourselves that the government is following a policy of real economy; so that we can say that we know that because

The Budget-Mr. Low
we have gone into the details. That is the assurance I would like to be able to give my people. There are a great many advantages in this but I have not time to deal with them today.
In his budget address the minister forecast a national product of some sixteen and a quarter billion dollars in 1950-51. In 1948-49 we produced $16,000 million worth of goods and services. Those are staggering figures and they seem all the more remarkable when we remember that the total production for 1937-38 was $3,500 million. When we contemplate the huge increase in our actual yearly production during the past ten years we must all feel proud of our country. To produce in a year enough material wealth so that each family, as the hon. member for Rosetown-Biggar (Mr. Coldwell) said, may enjoy in the aggregate $6,000 worth or, to reduce it to consumer goods available, more than $4,600 worth a year, is a real achievement. That is exactly what we did in 1948-49.
What is more, we have not reached anything like the peak of our productive ability. It is not inconceivable, at least to me, that if our farms and our factories and other enterprises were operated to their optimum capacity we could produce $20,000 million worth of available goods and services in this country, and that with very little change in the organization of our enterprises.
But the question I am led to ask when I contemplate that staggering volume is this: Can we distribute it? That is a matter for serious consideration. That is the biggest question we face today. Judging from the experience of the past I doubt greatly whether Canada's distribution mechanism could possibly place these wanted goods and services in the hands of the consumers so that they could be used and enjoyed. When I say "enjoyed" I am taking a different stand on this whole problem of economics from the hon. member for Rosetown-Biggar. We in this group do not lay stress on full employment, we say there should be full enjoyment. Surely our Canadian people are more entitled to a fair distribution of the leisure time made possible by mechanization and the introduction of laboursaving devices than they are to being kept with their noses to the grindstone for a specific period, I do not care what it may be.


Major James William Coldwell: We do not disagree with that.


Solon Earl Low: The hon. member for Rosetown-Biggar interpolates that he does not disagree with that. I am glad he does not. Hon. members of the house would do well to give serious consideration to something the hon. member for Acadia (Mr. Quelch) placed on the record the other day, to be found at pages 1380 and 1381 of Hansard of March 30, 1950.

The facts and figures there set out should be studied by earnest people everywhere, and I especially commend them to those who have had some experience in accounting.
There is a widespread habit among Canadians of looking upon the terms "gross national production" and "national income" as being one and the same thing. I have heard cabinet ministers and other hon. members speaking as though they believed the market value of the national product and the national income were synonymous. That is not so. The national income invariably is less than the market value of our total production. That is true of Canada and I think it may be said to be true of all highly industrialized nations. Because the national income in any period is always less than the gross national product, surpluses accumulate.
If those surpluses are allowed to grow you will have either the destruction of valuable goods or the reduction of production. I think the reduction of production in a day like this would be a crime against society. If production is curtailed an increase in unemployment is inevitable, you reduce the standard of living for the masses of the people, and there is a serious shrinkage in income tax base.
The Minister of Finance (Mr. Abbott) must realize that if the base for income tax assessment becomes much smaller he will simply not be able out of taxation to maintain a level of expenditure of $2,400 million which he said we must somehow continue to cope with even in the absence of large scale economic difficulties or widespread unemployment. I think the minister must have had a few bad moments when he contemplated that statement that he wrote into his budget and from which I have just quoted his own words. Not many sentences further on he said:
In years when economic conditions are adverse we must expect not only lower revenues but higher expenditures to assist in overcoming those economic difficulties and to maintain satisfactory levels of employment and income.
Those words would indicate to me a sober burst of realism, but what the minister failed to tell us was how he would finance higher expenditures out of a seriously shrunken tax base. For instance, how will he extract $530 million of income tax from individual Canadians if the total money income of the people is allowed to shrink during what the minister may call adverse years? That calls for serious contemplation and I think when the minister presents his rebuttal he ought to make clear to us how he would in times of adverse economic conditions get the money with which to keep expenditures up to a level of $2,400 million a year, which it would appear we have pretty well committed ourselves to spend.

I do not believe the minister has access to authentic information about all those factors in our economy which might bring on adverse economic conditions. We have never had competent technicians investigate and report on the potential productive capacity of Canada and the factors which make our national money income insufficient to move the gross national product of Canada. In this respect we have lagged away behind our neighbour the United States. We cannot afford to face the future without all the authentic facts we can possibly get from the fullest possible scientific investigation. The people of Canada certainly are entitled to have those facts.
The minister and his colleagues should think back to 1934 when President Hoover's administration appointed sixty engineers, technicians and economists to make a survey of the potential productive capacity of the United States as well as of those factors which obviously were making the national money income unable to move the gross national product. This body of experts under the chairmanship of Dr. Harold Loeb made a thorough analysis of the relationship between the national income and the national product. They issued their report in 1935 and it was published under the title, "The Chart of Plenty." You may not like to listen to what I say, and of course I would not blame you at all for that, but this report made by sixty technicians, engineers and economists of the United States is something that no one in this country can afford to ignore at a time like this. I want to quote three short excerpts from the conclusions that this investigating committee reached after a most intensive study of the situation in the United States. Turning first to page 71 I find this conclusion:
The budget line shown in heavy dots on the chart by its (general) location to the left of the capacity line clearly shows the destitution of the American people was due in 1929 to poverty and not to scarcity. The majority of the commodities listed could have been produced in desired amounts but could not have been sold at asked or profitable prices. The total national monetary income in 1929 did not equal the total price asked for the goods which could have been produced by the plant then existing. But instead of dropping prices until monetary income was able to command full production (which is the classical answer to this situation), prices were maintained and production was restricted. Consequently, national monetary income did not in 1929, nor does it today, command the full production of our industrial plant. Which is another way of saying that the national income was not what it should have been. In fact, since 1929 the national monetary income has been commanding an ever-decreasing volume of consumer goods and the actual national income has become but a fraction of the possible national income.
That calls for serious consideration. I should also like to refer to a short statement made by this committee on page 159 of their report. The statement that I am about to
The Budget-Mr. Low
read from the report was made after the committee had set up a chart showing that the average dollar value of goods produced per worker in the United States increased from $1,648 in 1869 to $6,533 in 1932, and that during the same sixty-odd year period average wages income per worker rose from $302 to only $1,096. After contemplating that and making a careful study of the reason why, they had this to say in their report:
Thus it is clearly evident . . . that the increasing productivity per worker in the past sixty years has not been translated into a proportionate increase in the standard of living of the population. It would seem that under the open market system this increased productivity per worker is prevented from effecting the improved living level one would expect by the related alternative measures of: (a) preparing for and waging war; (b) excessive reconstruction and expansion of plant, an orgy of saving made possible by the practice of creating money for purposes of private profit by means of the bank-credit mechanism.
Again on page 161 there is this very terse conclusion:
Since the present economic system has no means of distributing goods and services in excess of an amount which provides little more than subsistence for those possessing no property income, either the present system of rewarding labour must be discarded, or the plant and personnel must be operated at two-thirds' speed, or one-third unneeded productivity must be diverted into waging war, preparing for war, or some new large-scale speculative undertaking whose nature has not yet been envisaged.
This is the dilemma of society as exposed by the study of the national survey of potential product capacity. It would seem that the simple and obvious way out, that of giving a buying power adequate to procure desired goods and services to the limit of our ability to produce them, might well be tried.
I emphasize that.
Mr. Cold well: May I ask what the title of the book is?


Solon Earl Low: This book is "The Chart of Plenty" which was issued by the committee set up by the Hoover administration to investigate the whole of the United States economy and report on it. I want to repeat that last portion:
This is the dilemma of society as exposed by the study of the national survey of potential product capacity. It would seem that the simple and obvious way out, that of giving a buying power adequate to procure desired goods and services to the limit cf our ability to produce them, might well be tried.
As I say, Mr. Speaker, hon. members probably would not like simply to listen to me, but they cannot afford to laugh off the serious conclusions of men of the calibre of those who were on that committee, conclusions which were made after very careful study of the whole situation in the United States. The main conclusions of the committee of experts appointed by the Hoover administration have been confirmed in more

The Budget-Mr. Low
recent times than 1935 toy a good many first-ranking economists. I only have time to refer briefly to one of them now. As I said before, you may not feel inclined to listen to me, but I say with humility that I 'have prepared nearly three times the number of budgets that the minister has, I have presented them in parliament, and I have defended them, so that I have learned a few realities about sources of supply, tax bases, and attempting to balance a budget within the limits of our present system. We had better take cognizance of what thinking men are saying.
I want to refer now to one particularly whom we cannot afford to disregard. I refer to none other than Professor C. E. Ayres who for eighteen years has headed the department of economics at Texas university. A man who has held the chair of economics in a large university for over eighteen years must have something on the ball. Professor Ayres undertook an independent study along the same lines as that pursued in 1934 and 1935 by the committee to which I have referred, which was appointed by President Hoover. In 1946 Professor Ayres issued his report under the title of "The Divine Right of Capital". At page 33 of the book he has this to say, by way of conclusion to the portion of the work covered up to that point:
What we have learned as a result now seems obvious indeed.
He means as a result of his studies since 1929.
The economic heretics have been trying all along to make us see it. No economy could swing back and forth so wildly from one extreme to the other without there being something very wrong about it. There is indeed something very wrong with ours. It, fails to distribute mass-consumer purchasing power in sufficient quantity to permit the entire product of industry to be purchased. This failure exists at all times under capitalism and is noxious at all times.
There is nothing at all equivocal about that. Then he sums up his solution, or at least an answer to it, on page 95 in these terse words:
What we require, and all we require, to make the industrial economy work is a flow of mass-consumer purchasing power sufficient to absorb the entire product of industry at whatever level of production we may be able to achieve. This would not bring Utopia. It would not solve all problems. On the contrary, it would solve only one problem, the crisis into which we have been thrust by the institutions and dogmas of absolute capitalism. But this problem is the most important one we face today in this sense. If we solve this problem, then we shall have an opportunity to tackle others. If we do not, all our present problems will merge in the general collapse of the present structure of western society.
It seems to me those are words of gravity, which should serve as a warning to the people today. There you have the problem,

Mr. Speaker, and in a general way the answer. But I notice a complacent attitude on the part of many hon. members who seem to think that social services, especially the payment of family allowances, will close the gap between the national income and the gross national product. This is not so, as long as family allowances depend upon taxation. They are paid with money taken out of an already inadequate national income, through taxation. Family allowances are desirable, and in a measure they do help to keep up consumer demand for our production. But it must be clear to anyone who thinks about it that paying family allowances by taxing the money from the people is merely redistributing part of the national income that we have shown is already far too small to distribute our total production. And what aggravates the situation is that our present system of taxation makes it possible for practically the whole taxation burden to be shifted to the ordinary consumer with the lower income. He pays the shot principally through tax-inflated prices of the things he has to purchase in order to live. Therefore family allowances, under the present technique of getting the money to pay them, do not_ and cannot possibly close the gap between national income and national production. Surpluses of vitally needed goods will continue to pile up to embarrass our economy, throw men out of work, and bring us face to face with depression and suffering, unless we can do something fundamentally sound to take care of those surpluses.
Already the United States is facing serious economic problems. Already in that country vast surpluses of food and other materials have accumulated that cannot be moved into the hands of consumers; yet large sections of the population are not getting enough to eat. The last two issues of Life magazine, which I am sure most hon. members have seen, have brought home to us all the fact that huge surpluses do exist there and that unemployment and privation in some areas are present in serious proportions. Therefore poverty in the midst of plenty is again rearing its head. What is happening in the United States could happen here, because our economic and financial techniques are similar, and conditions in that country do have a strong influence on our own country.
It is gratifying, however, to see that some prominent thinkers in the country to the south are applying themselves to this great problem of making the national income equal to its task of distributing equitably the gross national production. The articles in Life magazine are a good indication of this concern. I was interested also in a United Press article which appeared in the Montreal Star

under the dateline Washington, March 31. I should like to quote it, because it is a good example of the kind of constructive thinking that is going on among at least some prominent officials. It is headed "Feed U.S., Senator urges", and reads:
Senator George D. Aiken, R., Vermont, said today that government subsidies should be used to provide extra food for the more than ten million Americans who don't get enough to eat.
Think of that; ten million of them.
He said his plan of government "food allotments" for low income families would solve the "twin-problem" of malnutrition and mounting food surpluses.
Aiken, ranking G.O.P. member of the senate agriculture committee, said his plan wouldn't cost much more, if any, than is being spent now to keep food off the market.
He also opposed the government's controversial Brannan plan for direct subsidy payments as unworkable and too costly.
In a speech prepared for a thirteen-state dairy conference, Aiken estimated that farm supports now cost about $1 billion a year.
"With mounting surpluses and increasing unemployment there is no time to be lost in meeting the challenge head on," he said.
This would indicate that there are people who are beginning to take more cognizance of the situation. On many occasions my colleagues and I have reminded hon. members that during the war of 1939-1945 spokesmen for the government time and again declared to this chamber that they would let no financial restrictions interfere with the war effort. The only thing we had to consider during wartime was whether we had the manpower and the material resources necessary for an all-out war effort. Canada did not hesitate to produce ships and guns and planes and tanks and shells to the utmost of our physical capacity; and for what? For destruction. Financial cost was of little or no concern. The government saw to it that what was physically possible was made financially possible; but they took ways of doing it that hung a millstone around the necks of the Canadian people. This is not quite one hundred per cent true, however, for I am reminded of something revealed by Professor A. F. W. Plumptre of Toronto university, who wrote an article which appeared in the Financial Post of October 5, 1940, under the title "Putting over the next war loan." I quote a brief excerpt from the article:
There are some general matters of theory which must be kept in mind in preparing for the next war loan. It must be remembered, primarily and seemingly paradoxically, that the government's object is not to get money but merely to reduce the public's spending . .	.
Then he went on:
The government can always "get money" because it may, as an alternative to borrowing or even taxation, create the required funds. This it can
The Budget-Mr. Low
easily do nowadays through the leadership of the central bank and the co-operation of the chartered banks. In this way $200 million were created in this fashion last autumn.
What for? For the war effort; not to take care of the unemployed, not to offer social security, not to close the gap between the national product and the national income, but for destructive purposes. Well, I claim that this statement, based upon facts that were brought to light in the banking and commerce committee of this house in 1939, certainly should serve to silence those critics of ours who are constantly making the assertion that the government can get money only from taxation or borrowing.
I see it is six o'clock, Mr. Speaker. I did not get started until twenty-five minutes after five, and if you would permit me just two or three minutes more I can finish.


Douglas Charles Abbott: Go ahead.


Solon Earl Low: Thank you very much; I do not like to ask favours. It is clear that when Canada is faced with adverse economic conditions and the minister's tax base begins to shrink, then he ought to have the facts of the whole situation before him. He ought to know that no matter how heavily he taxes he cannot get money out of surpluses of our production that people cannot buy and use. It is only when people can buy and use goods that the minister can get taxation. That is clear. If we are to avoid economic troubles the minister will have to know exactly the relationship between the national income, which is the sum of all the money incomes of the people, and the gross national production of goods and services. He must be able to see clearly the factors and forces that are at work in our economy that produce that relationship; and he and the government need to have ready sound techniques which they can apply at once when adverse conditions begin to appear, in order to prevent further trouble.
I appeal to the government, therefore, to gather together and appoint a group of technicians, engineers, economists and businessmen. There should be not less than forty in all; have more if you wish, but forty would be able to do a good job in a reasonable time. Call them a national survey commission, or whatever you like. Charge them with the duty of investigating two main things in detail: first, the real and potential productive capacity of Canada; second, the relationship between our national income and our gross national production. These men should be kept absolutely free from political interference and they must, in my judgment, be given a free hand at all times and all the time they need to investigate fully and to
1538	HOUSE OF
Prairie Transmission Lines publicly report on the true state of affairs within this country, in the manner of the Hoover committee for the survey of potential product capacity in the United States.
I urge upon the government that they lose no time in the appointment of such a group of technicians. It is true that our economy is buoyant today; and the minister presented the other night what I thought was a buoyant and optimistic forecast for the year 1950-51. I think he was right. I think I can agree with him. But danger signs have appeared, more particularly in the United States. As I have said already, what happens in the United States to bring on adverse conditions is bound to affect our own economy. Not only that, but there are in Canada today many people on the borderline of poverty, such as pensioners, unemployables, and so on; and there are a good many too who are unemployed who could be making use of our surpluses right now. When things are buoyant, men are often too optimistic to see the danger signs until it is too late. So let us have the survey made now and the report that will be presented to us so that we can make some adequate provision for the days ahead while there is yet time to do it.
May I thank you, Mr. Speaker, for your indulgence in giving me this little bit of extra time in order to round out what I wanted to say.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.


[Stage Direction]
The house resumed, from Monday, April 3, consideration of the motion of Mr. Beni-dickson for the second reading of Bill No. 9, to incorporate Prairie Transmission Lines, Limited, and the motion of Mr. Macdonald (Edmonton East): "That this question be now put."
Mr. Speaker:: The hon. member for Royal adjourned the debate.


Mr. Brooks:: This is not the same bill.


Stanley Howard Knowles: The hon. member for Winnipeg South Centre (Mr. Maybank) adjourned the debate on this bill and said he wanted to speak on it.


Mr. Maybank:: Mr. Speaker, I am just like a woman; I can change my mind.


Mr. Speaker:: Is the house ready for the question?


Some hon. Members:: Question.


Alfred Johnson Brooks: Mr. Speaker, since the hon. member for Winnipeg South Centre is like a woman and has changed his mind, I should like to make a few remarks on this bill.


Ralph Maybank: Take all the time you like.


Alfred Johnson Brooks: Thank you. At eleven o'clock last night we were discussing Bill No. 7. Now we have gone back to Bill No. 9. It is confusing and difficult to know just where we are on these pipe-line bills, because we keep changing from one to the other. However, as the principles in both bills are practically the same, the remarks which I intended to make on Bill No. 7 will be appropriate to Bill No. 9.


Stanley Howard Knowles: And vice versa.


Alfred Johnson Brooks: And vice versa, as the hon. member for Winnipeg North Centre says. I believe that this debate has been more than justified by the information that we have obtained in the house regarding the proposed pipe lines from the oil and gas fields of Alberta to the Pacific coast.
I have listened to the arguments that have been presented by the different members for and against the different routes. I must say that the arguments have been mostly for the proposed line going through the Dominion of Canada and not down through the United States, as has been feared would be the result if these bills went through. What has impressed me most has been the attitude of the people who are most concerned in the construction of the pipe lines. I refer particularly to the legislature of British Columbia, which, as I understand, voted unanimously in favour of the pipe line going through the province of British Columbia. As all hon. members know, the legislature of British Columbia is composed of members from three different parties, namely, Conservatives, Liberals and the G.C.F., the Conservatives and the Liberals forming a coalition government and the C.C.F. the opposition. My information is that *the legislature of British Columbia voted a hundred per cent in favour of a pipe line through that province.
I have also been impressed, Mr. Speaker, by the fact that the city council of Vancouver, the city which is most interested, of course, in these pipe lines, is very much in favour of an all-Canadian route. The boards of trade of the different towns and cities throughout British Columbia, as well as labour organizations and many other bodies, have expressed the view that a pipe line, if and when constructed, should be constructed through the province of British Columbia.
As I said at the outset, these are facts, Mr. Speaker, which should impress not only the

people of western Canada, but all Canadians who are not only interested in the development of their own part of the country but anxious to see the development of the west as well as the centre and the east. If the legislature of British Columbia had voted against the pipe line going through that province, or if there had been any split in the legislature, their vote would not have been effective. If there was any great difference of opinion in these other organizations that I have mentioned then we might feel that there was some reason for a divergence or difference of opinion in this House of Commons; but such is not the case. The people who are most concerned, the people who would benefit the most, are practically unanimous in their desire that this pipe line go through the province of British Columbia.
Perhaps there was not as much interest in other parts of Canada in this pipe line a few weeks ago. That is understandable. Canada is a vast country. We in the maritime provinces, for instance, are a long way from British Columbia or' Alberta. Unless the public's attention is called to these things they do not create the interest in other sections that they do when the people learn the facts. But since this debate started I have been amazed that no matter in what part of the country you live you find that across this country today the newspapers are very much concerned and interested in this matter of the development of pipe lines in western Canada. They are very anxious that this pipe line should be constructed so that we in Canada, regardless of the part from which we come, will develop our own country first.
Some might ask, and I have been asked the question: What interest have you in New Brunswick in a line that is pumping gas in western Canada or in the western United States? Surely you have problems of your own in the maritime provinces. These are the problems which should concern you most.
We have problems. In the maritime provinces we have many problems. I have mentioned them in this house at different times, as have other hon. members from my own province and from other parts of the maritime provinces. For instance, we have oeen pressing for the Chignecto canal. We have been pressing for more hydroelectric power and for the development of the Quoddy project in New Brunswick. I have asked the Minister of Trade and Commerce (Mr. Howe) to see if something could not be done to increase the sale of pit props in New Brunswick, which mean so much to the economy of our province and to the living conditions of our people. These are things that do concern us. But I wish to assure
Prairie Transmission Lines hon. members that we are not concerned, nor do we intend to be concerned, only with those things which are of particular interest to our section of the country.
Last night, in the few minutes I was speaking, I mentioned the fact that we are a little envious, perhaps, of the prospective prosperity-yes, and the real prosperity-of the people of Alberta and other parts of western Canada. But while we are envious we are pleased indeed that in Canada there is this great development. We believe that by developing the resources of our country, no matter what part of Canada we may come from, in that development the best interests of our country in general are being served.
This afternoon the hon. member for Greenwood (Mr. Macdonnell), in his very excellent address on the budget, mentioned an advertisement, which he had seen in one of the papers, regarding Alberta oil. I too had seen it, and I believe it expresses the ideas regarding this development which are uppermost in the minds of many people. The advertisement says:
Alberta oil has changed his future.
By "his future" they mean the future of a young boy pictured in the advertisement. Then it goes on to say:
The boy does not know It yet. Many a grown-up does not realize it, but the new oil fields of Alberta brighten Canada's future.
There is no question about that, in western Canada, in central Canada, the whole of Canada.
Western oil is saving $100 million scarce United States dollars this year-dollars we do not have to pay out for oil imports. This means money to buy other imports we need, things which cannot be grown or made in Canada. Next year Alberta oil should save $145 million United States dollars.
Those are reasons, as I said a moment ago, that we, no matter from what part of Canada we may come, make no apology for being interested in the oil fields of Alberta, or what happens to those oil fields, or those gas fields. Then-
The search for oil is making a big, new market in Alberta ... In the prairies, petroleum product prices are lower than they would have been if oil had not been found. Prairie consumers saved more than $30 million last year. Anything that helps prairie prosperity helps all Canada.
That is good advertising-"anything that helps prairie prosperity helps all Canada". I am sure we all agree with that sentiment.
Oil is important to us all. More oil means a higher standard of living.
Then it goes on to say:
The search for oil is unending, a costly business, often disappointing; but the job is pressing forward.

Prairie Transmission Lines
I was very much interested to learn that while a few years ago Canada produced less than a tenth of the oil she used, today, with the development of the western oil fields, there has been a great advance in that percentage.
I believe, as I said a moment ago, that that advertisement speaks volumes for the future prosperity of that great section of the Dominion of Canada. We in New Brunswick have had an oil field for many years. This may be news to a great many hon. members. True, it was very small; but it has been producing oil for the last 35 to 40 years.
We have also had gas in New Brunswick. The city of Moncton has been developed on gas which it obtained from this gas field located not far from Moncton. Cheap fuel, cheap gas, has meant much to the development of that city. I am very sorry to say that at the present time the gas field in Albert county of New Brunswick is becoming depleted, and the people in the city of Moncton and surrounding area are very much concerned in that respect. But, as this advertisement states, the search for oil is an unending and a costly business, often disappointing. This has proved to be so in our own province, and also in Prince Edward Island and Nova Scotia. The Shell Oil Company for the last two or three years has been boring holes throughout the maritime provinces, hoping to discover more oil along the Atlantic coast. It has been costly, and very disappointing. I am sorry to say that that company has now given up its search for oil in the maritime provinces.


Mr. Smith (Calgary West):: Spent over $2 million trying.	[DOT]


Alfred Johnson Brooks: Yes, they spent over $2 million, I have not the slightest doubt. They employed large crews of men for a long time.
Last year there was in the house a discussion respecting an oil pipe line. I took no part in that discussion because, for one thing, at that time I felt that it was a matter of greater concern to the western part of Canada, and to Ontario. There were a good many differences of opinion. I listened to the arguments on both sides; many convincing arguments were offered as to why the oil pipe line should go to Fort William, the home of the hon. member for Fort William (Mr. Mclvor). At the same time there were quite logical arguments in favour of its going down to Superior, at the end of lake Superior. But oil is different from gas. Oil transported by pipe line can later on be shipped out in tank cars or oil tankers to other parts of the country. Gas, on the other hand, is different in
LMr. Brooks.]
that respect. Once a gas pipe line is built, the gas cannot be shipped in any other way. If the pipe line goes through the United States it means that the people of that country are the ones who will reap the benefit of having that gas. If it goes through Canada it will mean that the people of Canada or, in this instance, those of British Columbia, will benefit.
Pipe lines are today a means of transportation. We have had many different kinds of transportation in our country. First we had our rivers and canals and railways. Pipe lines are something new. Today, however, they are becoming a means of transportation. The people who pioneered in this country endeavoured to build our railways not to the north and south, so that the products of this country would be moving to the south, but rather east and west. They had vision, and built our railways east and west, so that our country would be bound together, and so that we would be a united people.
We have had some experience with building a railway to the south. The Grand Trunk was built from Montreal down to Portland, and other seaports in the state of Maine. We in New Brunswick, and the people of Nova Scotia, know what that meant to the economy of our provinces. The city of Saint John lost millions of dollars in freight charges which otherwise she would have had, if the line had not been built to Portland and other Atlantic ports of the United States. Employment was lost for thousands of longshoremen. One reason why Saint John is not larger today is that in the early days a railroad was built which siphoned off business from Quebec and other parts of Canada down into Maine and the other New England states, business that should have come to Halifax and Saint John. The same thing will happen in connection with these pipe lines if a natural resource like gas and oil is shipped into the United States rather than through Canada. The people of Canada will be the ones who will suffer.
We in the maritimes have a special interest in Saskatchewan and Alberta. Nova Scotia and New Brunswick, along with Quebec and Ontario, were the four partners in confederation in 1867. There were great open spaces in western Canada and in the regions north of Quebec and Ontario. Deals were made, one with the Hudson's Bay Company, by which this public domain was taken over by the Dominion of Canada. We in the maritime provinces helped to pay for that territory, part of which afterwards became Alberta and Saskatchewan. Other parts were added to Ontario and Quebec.

The unfortunate part is that we were the only section of Canada that did not benefit from the development that took place. Circumscribed as we were by water, it was impossible for us to expand. Great mineral resources were given to the province of Quebec when its boundaries were extended some years ago, and the same is true of Ontario. Great sections in the north were added to Saskatchewan and Alberta and it is from these sections that millions of dollars' worth of oil are being produced. As I said before, the provinces of New Brunswick and Nova Scotia helped to purchase that territory years ago and therefore we have an interest in the development that is taking place.
At times we hear what almost amounts to sneers at the suggestion of a "Canada first policy. If we were in the United States I am sure we would favour a "United States first" policy. If we were in any other country in the world we would be ready .to favour a policy that was first for that particular country. In the early days when there were few people in the country we depended upon our natural resources. We sold our furs and raw materials and our people lived from the returns of those sales. But as the country developed it was expected that there would be a similar development in manufacturing. We hoped that the raw materials would be manufactured here and that the dream of the fathers of confederation would be realized, that by 1940 we would have 40 million people in this country. Such is not the case and we may ask ourselves: Why?
It is well known that the population of any country which exports its raw materials does not grow. The people follow the raw materials. This has been true of the maritime provinces. We have been sending our raw materials to the United States and our people have followed by thousands. What is tiue of the maritime provinces is true of other parts of Canada. If you read the history of the United States before she got her independence you will find that the New England colonies got almost all their manufactured goods from Great Britain. One reason why the United States sought independence was that they wanted to manufacture in their own country. They realized that they could never build up their country as long as they bought their manufactured goods from other parts of the world, particularly from England.
The southern states have always been considered the backward states. When you ask a southerner why it is that that part of the United States has not developed as the northern part has, he will reply, "We sold our raw cotton and other raw materials to the north; our people left and we became simply hewers
Prairie Transmission Lines of wood and pickers of cotton". The great development occurred in the northern part of the country, but today the situation is being changed. Canada has suffered from the same condition of affairs. When we mention a policy of Canada first we mean that the raw materials which we have in abundance and which are today being shipped out to the value of millions of dollars should be manufactured in this country so that we can keep our people here.
The other day the Minister of Trade and Commerce (Mr. Howe) said that we had great trade with the United States. That is true because it is only natural that two nations side by side should be great traders. But what do we find when we analyse our trade with the United States? We find that the bulk of what we ship to the United States is made up of what might be called raw materials or semi-processed goods that could have been manufactured in this country. What are the United States sending to us? Practically one hundred per cent of the imports from the United States are made up of goods that have been manufactured and perfected in that country. That is why the United States is the great, rich country she is today. As I said a moment ago, the people follow the raw materials. This has been the history of every country in the world.
As long as we persist in letting some other country take our raw materials and manufacture them, so long will the people of this country leave and go where the manufacturing industries are located. No part of Canada has suffered more in this connection than the maritime provinces. Last night the hon. member for Danforth (Mr. Harris) said that there are more Canadians in the United States than there are in Canada. There are more maritimers in and around the New England states and Boston than there are in the maritime provinces. There is hardly a family in those three provinces that has not sons and daughters or relatives in the manufacturing towns and cities of those states. We have no objection to the United States whose people are kindly, but our objective should be the same as theirs-not to build up a foreign country, but to build up our own country with our own industry and resources.
We hope that the time will come when the boys and girls of the maritimes will be able to stay in those provinces. If that is not possible I think the great majority of the people of those provinces would sooner see our boys and girls go to some other part of Canada, to Alberta and British Columbia if you will, than to the United States or some foreign country to help to build it up.

Prairie Transmission Lines
We of the maritimes are not boastful, but I think anyone who reads the history of the Dominion of Canada will realize that we have made a great contribution. I could mention to my good friends from the province of British Columbia-and I do so simply to show the type of men we have been losing from our province-that we have given two premiers to the province of British Columbia. Two British Columbia members of the Senate came originally from my own constituency in our province. The chief justice of the province of British Columbia is a native of New Brunswick. When they wanted a man to look after the great forests of British Columbia they chose as their first chief forester a man from New Brunswick. The present forester is also a man from the province of New Brunswick. As I said a moment ago, we do not wish to boast about these things.


Mr. Sinnoti:: What about the pipe lines?


Alfred Johnson Brooks: I can tell my friend from the province of Manitoba about the men we have sent there. I think his ancestors came from the province of New Brunswick, and we are proud of that.


John Sylvester Aloysius Sinnott: You are wrong there.


Alfred Johnson Brooks: The first lieutenant-governor of the province of Alberta, Governor Bulyea, came from the little village where I was born. If there is anyone here from Alberta I think he will remember that name. I could mention men like Bonar Law, Beaverbrook, and many others, but I will not take the time of the house to do so. The point I wish to make-


An hon. Member:: And Mr. Bennett.


Alfred Johnson Brooks: Mr. Bennett came from the province of New Brunswick and we are very proud of the fact. We have just reason to be because I do not think there has ever been a man in Canada with greater ability than R. B. Bennett. There are many small men who cannot understand big men and who are anxious and willing to cast sneers at men whose boots they are not fit to lace.


John Sylvester Aloysius Sinnott: Why didn't he stay here?


Alfred Johnson Brooks: You are one of them. As I said a moment ago, it is not my intention to mention any more names. It would take me too long, but we are proud of these men. We are anxious for the development of Canada. We are concerned about the development of our respective provinces, but if our own particular provinces cannot be developed and we must lose young men such as I have mentioned we want these young men to go to some other part of Canada to help to build up this great country, and not to go by the thousand to the

United States as they have done under policies which I believe are not in the best interests of Canada.


John Sylvester Aloysius Sinnott: They left because of Mr. Bennett.


Mr. McGregor:: Oh, go to sleep.


Mr. Speaker:: Order.


Alfred Johnson Brooks: I do not think it worth while to pay any attention to that hon. gentleman. I think, Mr. Speaker, that through these pipe lines we have a chance to develop a certain part of the Dominion of Canada. I believe that by putting these pipe lines through Canadian territory we shall do more to develop the western part of Canada. We are talking about unemployment. It will take many thousands of men to build a pipe line in western Canada from Alberta through to the coast. Would it not be better for Canadian men to receive employment than to provide employment for thousands of men in the states of Washington and Oregon? When engineers and technical experts are needed, would it not be better to employ Canadian men? When they need all the necessary materials-and they will need millions of dollars' worth-would it not be better if the materials were bought and used in the Dominion of Canada than in the United States? It is not my intention to take any more time. I think we have an opportunity to do a great job for our own country, and I hope we shall have vision enough to do it.


Mr. Daniel Mclvor (Fort William):: Mr. Speaker, I rise again to correct what I think is a misconception in the minds of some hon. members in the opposition.


Robert Henry McGregor: It cannot be done.


Daniel (Dan) McIvor: I thank the hon. member for even using my name, but if he or anybody else has the idea that I supported the building of the pipe line to Superior then they are absolutely wrong.


Mr. Green:: You did not oppose it.


Mr. Speaker:: Order.


Daniel (Dan) McIvor: You wait until I am through. At the beginning of the last session I was just like the young man who was going to get married and who said, "I will be boss or I will know the reason why." A few days after the wedding ceremony his companions met him and they said, "How is it?" He said, "I know the reason why."


An hon. Member:: What has that got to do with pipe lines?


Daniel (Dan) McIvor: There is no one who would be more interested in having a pipe line constructed to Fort William than the local member. The Port Arthur representatives on the

joint committee, who were political opponents of the Minister of Trade and Commerce (Mr. Howe), went along for a while until one alderman rose in council and stated the case. At the next meeting of the committee the Port Arthur representatives did not turn up.


Robert Henry McGregor: Changed their minds.


Daniel (Dan) McIvor: As I said, I came down here to find out whether the pipe line would go to Fort William, and if not, I wanted to know the reason why.


Donald MacInnis: You knew the reason why.


Daniel (Dan) McIvor: There is not one of you more interested in having it go to Fort William than I am, but we were taking a lot for granted. We had no promise of any smelter or any line to go to Fort William. What I found out-and I think I went to the right place to find it out, as I said last night-was that the extra cost to go through that rocky, swampy district would be $10 million with an annual expense of $500,000.


Mr. Cardiff:: They misled you.


Daniel (Dan) McIvor: I was told that definitely, and I expect that the Minister of Trade and Commerce was told that if the pipe line had to go to the lakehead it would not be built.


Robert Henry McGregor: You have been gypped.


Daniel (Dan) McIvor: I do not believe I am the type of small-town thinker who would say that if we cannot get it we will not let anybody else have it. The next best thing we got was the big tank which is pretty well on its way, and the oil will be shipped from Superior to Sarnia until Sarnia has enough. I heard the hon. member for Rosetown-Biggar (Mr. Cold-well) make a dandy speech today. He told us that we should utilize the resources of our country and that there should be production. What do we want? We want our lands, minerals, gas and oil developed for Canada first.


Some hon. Members:: Hear, hear.


Howard Charles Green: Why didn't you say so last year?


Daniel (Dan) McIvor: I am a member of the committee. Do you think the committee will put it over on me?


Howard Charles Green: Why didn't you say so last year?


Daniel (Dan) McIvor: Do you think the committee will tell me what I am going to do? We have two companies that are willing to spend $100 million to develop our resources, but we want to talk out the measures. The trouble with the opposition is that they will not trust a committee of their house.


Arthur Leroy Smith: Why should we with a Grit majority on it like you?
Prairie Transmission Lines


Daniel (Dan) McIvor: I like to hear the hon. member for Calgary West (Mr. Smith). He is a kind of decent fellow. He used to try to play football, as I did. Sometimes he would score and sometimes he would not, depending upon the opposition. I think the opposition to this bill should cease now in order that we might have the vote.


Mr. O. L. Jones (Yale):: Mr. Speaker, I rise tonight to correct one or two statements that have been made, and also to reply to the hon. gentleman who has just spoken. He believes the answer to our problem lies in the hands of a committee, that all we have to do is turn it over to a committee. I should like to ask him who will eventually control the route of this pipe line. That is something I and many other hon. members would like to know. One day we had a definite, distinct statement by the Minister of Trade and Commerce (Mr. Howe) that the route is to go through Canada. Therefore we might presume that he knows about it, and in some way has control of that route. Later we were told in the house that the matter of the route must be discussed by the committee. We checked up on that and found the committee would have no power to do more than merely discuss the question of the route. Then we were told that the people who eventually would decide on the route were the board of transport commissioners; that when this application went before that board it would be accompanied by a map, on which would be delineated the route to be followed. I presume the people who made that statement were correct; but in looking over the history of our natural resources and the development that has taken place already in connection with pipe lines I find that both Saskatchewan and Alberta-and quite rightly so, from their point of view-claim they have the sole right to determine where their gas shall go and how it shall go. So if the hon. member for Fort William (Mr. Mclvor) is so certain this committee can remedy the fault I would like him to prove it, because I do not see how that statement can be correct.
I believe the dominion parliament is the body that should have that control. However, we have turned it over to an appointed body who, while presumably the servants of parliament, cannot be told what to do. We cannot dictate to them; we must take their findings and hope they will work for the benefit of Canada. In other words we are discussing a matter over which we have no control or direction. We cannot change it; it is not of our making. It is not even of the government's making, and we have no choice. It is not even a matter of take it or leave it; we have to take it. We do not have the

Prairie Transmission Lines choice that the ordinary man is expected to have when he is asked to decide on anything. We have delegated our authority to others.
Previous speakers have mentioned the intense interest of British Columbia in this pipe-line bill. I can assure hon. members that in speaking to this matter I am doing so in behalf of ninety per cent of the people of that province. They are conscious of the need for this development; they are anxious to have it go through their own province. Municipal councils, boards of trade, the Canadian Legion, trade unions and all the other organized groups of that province are pleading with their members of parliament to see that this pipe line is routed through our province.
Before going further I should like to make a correction. Speaking in this house on the 14th of March I made the statement that no Canadian university offers a course in petroleum engineering. I made that statement in good faith, on the word of a United States petroleum engineer. Since then I have been corrected by someone from Alberta who is an authority on this matter, and who has drawn to my attention the fact that two years ago the university of Alberta established such a course. So far they have had no graduates, but they expect some early in the present year. I should like to compliment the university of Alberta on what they have done, and in doing so 1 should like to read a short quotation:
For the first time in the forty-five year history of Alberta as a province, a home-grown crop of petroleum engineers will be turned out into the oil industry employment market in the spring. Keeping pace with the fastest growing industry in Canada, the university of Alberta two years ago created a full degree course in petroleum engineering, the first in Canada. A group of about sixteen students will be the "charter" graduates, the class of '50.
The petroleum engineering course is the result of a couple of years of patient and painstaking research and study of curricula elsewhere in close consultation with leading representatives of all branches of the Alberta oil industry.
Then this article goes on to give reasons why they started this course. The background is that for a number of years postgraduate students from the university of Alberta who wanted to get into the oil business had been going to American universities for their post-graduate courses and, as the previous speaker said, staying there.
There were inquiries for special courses at the home university, but the university authorities did not feel that the need was sufficient for a complete petroleum course until the post-war boom in oil exploration in Alberta.
Even before the Leduc discovery, the association of professional engineers of Alberta made strong representations to the Alberta government to have a course instituted. Developments during the academic year 1946-47 made the urgency of the need apparent. The board of governors decided to
 .	.
establish a curriculum. Dean R. M. Hardy of the engineering faculty was authorized to appoint a committee of four to study and report on what was needed.
I merely refer to that in fairness to one university that is conscious of the vast wealth that is available from this great resource. At page 792 of Hansard the Minister of Trade and Commerce, replying to the hon. member for Yorkton (Mr. Stewart), said he had no knowledge of any representations from the province of Saskatchewan as far as the export of oil and gas from Alberta was concerned. I should like to point out that the first application for a gas pipe line charter from Alberta was made by Western Pipe Lines in 1948. At that time the Saskatchewan government was indirectly responsible for drawing to the attention of the house the implications of that application. In its brief to the Senate committee on transport it made the proposal that control of the lines should be given to the board of transport commissioners, and subsequently that proposal was acted upon by the federal government. That brief was printed two or three years ago, though the minister may not be aware of it. I should like to quote from it, because to my mind it is excellently prepared and in keeping with what we are trying to do today:
Few questions are of more fundamental importance to the economic life of any region than its source of heat, light and power. For this reason the government of Saskatchewan is in favour of a pipe line designed to carry natural gas across the provinces of Alberta, Saskatchewan and Manitoba. By providing more abundant and less costly energy and fuel, the natural gas reserves of western Canada, properly developed and utilized, can prove to be a great boon to the people of the prairies.
Then it goes on to deal in detail with the Saskatchewan power commission, who presumably would take over control of'the route and service to the various towns within the province.
There is one part of the submission that I should like to place on the record, seeing that the minister is not aware of it. It is this:
Before dealing with the specific problems to which the bill gives rise, it should be indicated that the government of Saskatchewan regards the lack of a dominion statute regulating, in a general way, the activities of natural gas pipe lines, as a serious impediment to any measure of effective control of the proposed! company, in the public interest. It is difficult to import adequate principles of public control into a private bill; it is practically impossible to establish machinery capable of effecting such control in a private bill. In the opinion of the Saskatchewan government, a comprehensive dominion statute designed to regulate the activities of a public utility of the nature contemplated, is necessary if abuses are to be avoided. The United States has found federal control of interstate transportation organizations such as this to be necessary, if exploitation both of producers and consumers is to be avoided.

While there exists a sufficiently wide field for provincial control over pipe line companies operating wholly within a single province, effective control over an interprovincial pipe line is impossible without dominion participation. Conversely, the dominion acting alone lacks authority to deal effectively with the operations of such organizations. Joint legislation of a general character by the dominion and the provinces concerned, however, is capable of effecting the measures of control desirable and necessary in the public interest. The government of Saskatchewan, therefore, submits that, concurrently with the enactment of this bill, a statute, modelled upon corresponding provincial statutes and upon The Natural Gas Act of the United States, should be prepared by the dominion government and presented to parliament. At the same time, it states its own willingness to cooperate with any appropriate dominion agency for the purpose of effecting a fair and reasonable policy of direction and control in the public interest.
Rather than not having made a statement, Mr. Speaker, I claim that Saskatchewan gave an excellent lead and gave the answer to what we are seeking today, a joint control by the province and the dominion government; not by a board of transport, not by a committee, not by charters to any given company for a given route but a joint control by the province concerned and the dominion government, which we have not got and which apparently we are not seeking.
There is another thing I should like to mention also. The hon. member for Skeena (Mr. Applewhaite) the other night said that nothing could be a greater-


Mr. Applewhaite:: On a point of order, Mr. Speaker, the hon. member for Skeena has not spoken in this debate and therefore I do not think he can be quoted.


Mr. Bryce:: He did not say you spoke in this debate.


Owen Lewis Jones: I did not say that the hon. member spoke in this debate, but he spoke on a matter that I mentioned before in another debate.


Edward Turney Applewhaite: On the point of order, Mr. Speaker, if I read citation 246 correctly, one of the things which an hon. member cannot do in a debate is to refer to another debate of the same session on any question not then under discussion.


Some hon. Members:: Oh, no.


Mr. Ferguson:: Turn over the page and it will be different.


Edward Turney Applewhaite: This bill was not under discussion when the hon. member for Skeena spoke the other night.


Mr. Speaker:: Probably the hon. member for Yale will not refer to the debate in this session on another subject.
Prairie Transmission Lines


Owen Lewis Jones: I will not, Mr. Speaker; but I should like to mention that a thought occurred, not in the last debate but in this, that small communities would not get cheap gas. It is true that these communities are small. I am not questioning that fact. But they are doomed to remain small if we cannot give them some power, and some chance to grow big. All the towns that are now large at one time were small. I am concerned that these towns cease to be small, and that they be given a break so that they may become large. That is the only answer I have to any comment that small towns cannot consume natural gas.
We should actually concentrate on and develop the small towns in every possible way. I believe we should build our industries in the smaller towns in the interior of British Columbia rather than at the coast, particularly if there is danger of a war or if war should break out. They are too vulnerable at the coast and they would be far safer and far better protected in the interior of British Columbia. So would the population that would gather round these industries be far better protected in the interior than at the coast.
I cannot agree with any reasoning that small towns should be cut out and that large towns only justify the existence of the natural gas route. That would mean but one route through the United States. They have the large cities, whereas the number of large cities in British Columbia is limited. Possibly you could mention New Westminster, Vancouver and Victoria as centres with over
20,000	population. Beyond that, we have not many. But even so, at one time those were small towns. Even Vancouver, not many generations ago, was known as gas town, a tiny town. If the port had not been developed, if ships had not come there, if the C.P.R. had not had its terminal there, gas town would still be gas town and nothing else. I want to impress upon the members of the house the fact that we are asking them to exercise a little vision in the development of this project. Look at those little towns scattered throughout our province, with a future as great big towns such as gas town has in the modern Vancouver.
I should also like to mention one of the communities or areas in my particular riding that would benefit greatly by having this potential power or cheap power. That is the Princeton area where the mineralization is extremely high. They have practically all known minerals in abundance, such as gold, copper, silver, coal, platinum; in fact, everything. The whole area is highly mineralized. But they lack this cheap power and they lack

The Budget-Mr. Lesage it badly. Industries could be developed in connection with these metals, base metals, coal tars, dyes and so on, in that particular area quite a distance from the coast and accessible by rail to Vancouver.
One hon. member mentioned the cost to the consumer, and emphasized the fact that the extra cost of the pipe line would mean a great deal more to the consumer if it went by one route rather than another. But there is no argument there at all. To me it is a lot of hooey, because it is not a question of cost to the consumer. It is a question whether the person is going to be a consumer or not. As to the people in the interior of British Columbia, it is not a question of whether they are going to pay a dollar for a certain quantity of gas or whether they are going to pay ten dollars. The question is whether they are going to have the gas or not. That is the question we are concerned about, not the price.


Some hon. Members:: Nine o'clock.


Owen Lewis Jones: May I move the adjournment of the debate.


Mr. Speaker:: It being nine o'clock, the house will resume the business that was interrupted at six o'clock.



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
Mr. Jean Lesage (Monlmagny-L'Islel):: When I congratulate the Minister of Finance, Mr. Speaker, I am in accord with the three spokesmen from the other parties whom we heard this afternoon. When I congratulate him on his budget, I have the feeling that I am still with that group because, after all, there was not much criticism in their remarks. Since it looks to me as though there is not to be much discussion on the budget itself, I wish to take advantage of the opportunity to refer to some remarks that have been made by my good friend the hon. member for Moose Jaw (Mr. Thatcher) on the income tax paid by the Quebec farmers. On March 16-


Stanley Howard Knowles: I rise, Mr. Speaker, to the same point of order that was raised a moment ago by the hon. member for Skeena (Mr. Applewhaite). Perhaps it is better to raise it before the member proceeds to do what is not permitted. The hon. member for Montmagny-L'Islet (Mr. Lesage) is about to refer to a speech made by the hon. member


for Moose Jaw in the course of the debate on the address in reply to the speech from the throne.


Jean Lesage: Yes. And I submit very respectfully, Mr. Speaker, that I am right in doing so because there is a difference. The debate on the speech from the throne is not a debate on a given subject. It is not my fault if the hon. member for Moose Jaw chose to speak about income tax on the debate on the speech from the throne, when he should have talked about it on the budget debate. I believe I am right in talking about income tax and in referring to anything that has been said in this house when the question that was discussed in the previous debate was not exactly and particularly income tax.


Stanley Howard Knowles: Further on the point of order, there is no doubt as to the hon. member's right to talk about income tax matters. My point is that he has no right to pick up the remarks made in another debate by the hon. member for Moose Jaw and comment on them now. His argument that the hon. member for Moose Jaw made the remarks that he did in a previous debate, and that this is his first opportunity to answer them, is not valid because he could have got in on that debate. Citation 246 (a), which the hon. member for Skeena (Mr. Applewhaite) mentioned a few minutes ago, is very clear. It reads:
Besides the prohibitions contained in standing order 41, it has been sanctioned by usage both in England and in Canada, that a member, while speaking, must not:
(a) refer to any debate of the same session on any question not then under discussion.


Mr. Speaker:: I might say that I have always had some difficulty in interpreting this reference. As has been stated several times tonight, the reference is to the effect that a member should not refer to any debate of the same session on any question not then under discussion. The difficulty I have is in deciding whether it is a question of income tax which was under discussion or the speech from the throne. The rule has not been strictly interpreted in the past. I have noticed from time to time hon. members refer to debates on the same subject. The hon. member who now has the floor is debating the income tax. I must decide whether he can refer to the statement that was made on the income tax during this session. It is a rather difficult question. At the moment I can say that no injustice is being done to the hon. member who discussed the income tax. If I allowed the hon. member for Montmagny-L'Islet to continue, I would allow him to refer only to the remarks that were made regarding the income tax.


Donald MacInnis: Mr. Speaker, I think we had an instance this evening. A short time ago we were discussing a private bill. We have been discussing two similar bills, both of them dealing with exactly the same matter. Tonight the hon. member for Yale wanted to refer to the debate on one of these bills, not the bill we were discussing tonight, but the bill we were discussing on another occasion. He was ruled out of order on the strength of this very citation that the hon. member for Winnipeg North Centre has cited.


John Sylvester Aloysius Sinnott: The hon. member has not yet been ruled out of order.


Donald MacInnis: The hon. member for Yale was ruled out of order.


John Sylvester Aloysius Sinnott: No.


Donald MacInnis: I wish the hon. member for Springfield would get some sense into his head because there is not enough in it to make sufficient noise to be heard over here. May I say that this citation is quite explicit. It says that an hon. member may not refer to any debate of the same session on any question not then under discussion. If an hon. member can be ruled out of order for referring to a debate so similar as the debate on the two pipe-lines bills, surely there is no other question on which an hon. member can be allowed to speak and refer to a debate that has already taken place during this session. I suggest, Your Honour, that you consider your ruling very carefully before you make it, because if you do not I would say that an injustice has been done to the hon. member for Yale.


Jean Lesage: Mr. Speaker, -


Mr. Speaker:: Order. Is this a point of order?


Jean Lesage: Yes. May I be permitted to point out that if my hon. friends were right it would mean that when a specific question has been debated on the address in reply to the speech from the throne, when a discussion on that same specific subject comes to the house nobody can refer to what the Prime Minister, for instance, has said on the matter. I believe it is useful to refer to what the Prime Minister and the Leader of the Opposition have said in the debate on the address in reply to the speech from the throne on any matter which is afterwards discussed on a particular bill.


Donald MacInnis: That is not the point.


Mr. Speaker:: The question raised by the hon. member for Vancouver East (Mr. Maclnnis) was in connection with a private bill. I think private bills are in a different category from public bills. It was contended
The Budget-Mr. Lesage that what an hon. member said on one private bill should not be referred to by another hon. member on another private bill.
When that question was raised a few moments ago in the house we were discussing a private bill. I merely suggested to the hon. member for Yale that he do not refer to what was said by the hon. member for Skeena because the hon. member for Skeena took exception to it. At the present time we are discussing the budget. I think the purpose of citation 246 (a) is to prevent the revival of debates which have been closed. Section 245 of Beauchesne's third edition reads in part as follows:
It is a wholesome restraint upon members that they cannot revive a debate already concluded.
If I thought the hon. member for Mont-magny-L'Islet was reviving a debate which had been concluded I would not allow him to continue his remarks. But I think we should give a broad interpretation to citation 246 (a). If the hon. member is speaking on a subject, I think he should be allowed to refer to that subject if an hon. member has referred to it during the present session. The hon. member who is raising the question must not by so doing revive another debate. I do not think that the hon. member for Montmagny-L'Islet, now speaking on the income tax and referring to what some other hon. member said on the income tax on the address in reply to the speech from the throne, is reviving a debate. I am inclined to think that I should allow him to continue.


Major James William Coldwell: Mr. Speaker, is not the decision that the hon. member may discuss income tax. He may talk about taxes paid by the farmers of Quebec and the farmers of Saskatchewan; but as long as he does not discuss the remarks of an hon. member made in a previous debate he is perfectly in order. Is not that the situation? But if he refers specifically to remarks of an hon. member in a previous debate, and quotes him specifically, then he transgresses the rule. I think he could discuss the question without transgressing the rules.


Mr. Speaker:: I doubt if the hon. member is transgressing the rules, so long as he is speaking on the same subject.


Major James William Coldwell: So long as he does not refer to what the other member said.


Mr. Speaker:: Should he not be allowed to refer to what another member said on that subject?


Major James William Coldwell: I think the rule covers-


Jean Lesage: On the point of order, I shall not refer to what the hon. member for Moose

The Budget-Mr. Lesage Jaw (Mr. Thatcher) said, but I shall refer to the question he put on the order paper, and the return he obtained.


Major James William Coldwell: That is all right.


Jean Lesage: The questions put by the hon. member for Moose Jaw were so put that they implied that the Quebec farmers were not paying income tax, and that Saskatchewan farmers were discriminated against by the Department of National Revenue because they were prosecuted by the income tax branch.
1 do not take exception to the figures which were mentioned in the return, and I accept them as accurate. But it is to the interpretation that one may give to those figures that we must object. Naturally, just reading the figures one would be tempted to jump to conclusions, as quickly as some have done. But it is clear that those who do jump to conclusions so quickly do not go to the bottom of the question, and do not ask themselves the reason why such a situation exists; It has always been said that comparisons are odious. Such is the case when one tries to compare the condition of the farmers of Quebec with that of Saskatchewan and the other western provinces.
Farms in Saskatchewan are cultivated on a highly commercialized or even in an industrialized way. They are very large farms, where wheat and other grains are grown, and then marketed through the pool agencies. In Saskatchewan farming is an industry: In Quebec it is a way of life. Farmers are engaged in mixed farming. Farms are relatively small, and their character is that of family organizations.
Quebec farmers have practically no employees. They work with their sons, and do not pay them wages. They keep whatever they give to them as "in trust", to buy them new farms upon which they may be established. Our farmers lead very frugal lives. Their profits and their cash income are very limited; and if they have good-looking farms it is because they have improved them with their own hands, and with the help of their families.


Major James William Coldwell: May I ask the hon. member a question?


Jean Lesage: Yes.


Major James William Coldwell: Have you been in Saskatchewan and seen where farmers have homesteaded, and built up their family farms?


Jean Lesage: Yes, I have. But I shall come to figures which will show, for instance, that in 1941 there were 121,000 farmers in Saskatchewan, and 62,000 farm labourers.


That is to say, there was one farm labourer for every two farmers. In Quebec there are practically no farm labourers-practically none. In Quebec, as we shall see later, the average population per family on a farm is 5-3, while the average population per family in Saskatchewan is 3-7. I believe that is a complete answer to my hon. friend's interruption.
But let us come back to the Quebec farmer. The farmer of Quebec, as everyone knows, works from four o'clock in the morning, or perhaps five o'clock, until late at night, day in and day out. They have very few mechanized units and in some cases none. Every day they must look after their livestock. I do not believe I am exaggerating when I say -and if you have lived with them you know it is true-that if success is to be achieved it must be as the result of the co-operative efforts of the family unit.
Let us come back to the figures obtained by the hon. member for Moose Jaw, in his return. Those figures, I suggest, show that only a small number of Quebec farmers paid income tax in 1947. I believe the figure is 540.


An hon. Member:: Very successful.


Jean Lesage: Wait until you hear the figures, and then you will know why more did not pay.
I repeat, one must know the conditions of the farmers in Quebec before intimating that practically all of them are trying to escape, or are in fact escaping from the provisions of the income tax law, or that they are receiving more favourable treatment from the taxing authorities.
Now, listen to the figures, because they speak for themselves:	The total number of
farmers in Quebec in 1941 stood at 131,406. This number, according to the information I gathered from the provincial department of agriculture in Quebec, has increased. One hon. member has said that the number of farmers in Quebec in 1947 was 155,000. I do not know, and I suggest no one knows, the exact figure. But I believe that that figure is a little high. It will be noticed, however, as I go along, that for the purposes of my calculation the higher the figure the more it will serve my case. So, for the sake of argument, let us say that the number in 1947 was approximately 140,000. Now, the net ' farm income of the province of Quebec in 1947, according to the dominion bureau of statistics, was $190,300,000. If one divides that income by the number of farmers, taking the figure at approximately 140,000, one will find that the average net income in Quebec for the farmer, in 1947, was $1,350.

I do not wish to have anyone believe that I imply that Quebec farmers live in a state of poverty. One must take into consideration the fact that in Quebec the farm is a family enterprise, and that Quebec farmers work steadily and maintain their farms by their own personal work, and by the work of their families.
Their cash income is very limited; I repeat that. One may refer to their prosperous dairy industry. Well, that is all very well for the western farmer; but one should hear the complaints made by eastern farmers-not only those of Quebec, but those of eastern Ontario-about the price of feed grains from the west.
I am serious in saying that if the federal government had not paid a subsidy on transportation costs, not only would those eastern farmers obtain no profit from their dairy industry, but they would spend on it profits coming from other sources. The work done by the Quebec farmer engaged in the dairy industry provides no profit, but gives him an hourly wage that no labourer would accept. This is all due to the cost of production, in which one of the main items is the very high price of feed grains which come, alas! for the Quebec farmer, at a high cost, but which give to the western farmer some of the profits the eastern farmer should expect from his dairy farm.
Let us return to the figures I have before me. I said the average net income of the Quebec farmer was $1,350 per year. In 1947 the income  tax exemption for a married couple was $1,500. For a married man with three children of family allowance age the exemption was $1,800. For a man with three children, one over sixteen years and two of family allowance age, the exemption was $2,000. I repeat that the average rural family in Quebec is 5'3 persons. How could anyone expect the Quebec farmer to be subject to income tax in 1947 when his average exemption was around and above $2,000 with an average net income of about $1,350? With the figures I have given I think it will be agreed that the great majority of Quebec farmers do not have to file income tax returns because it is taken for granted, and rightly so, that they are not liable to income tax.
It should not be said that the Quebec farmers have not been investigated by the Department of National Revenue. The contrary is the case. The inspectors of the department visited the secretary-treasurers of the municipalities of Quebec and examined the books which showed the value of the farms in the municipalities. They inquired about the value of the cattle and the farms and when those values were a certain figure
The Budget-Mr. Lesage the farmers were asked to file returns. They did so with very few exceptions. A great proportion of the farmers who did file returns were able to show quite easily that they were not subject to income tax. When it became evident to the inspector of the department that these farmers with their small income and numerous dependents were not subject to the tax their names were taken off the tax roll. That was the only sensible thing to do especially when one considers that since 1946 exemptions have been increased three times.
I am not saying that the Quebec farmer lives in a state of poverty, but I repeat that he lives a frugal life. He is richer in courage than in cash income. I would be only too glad, and I am sure the Quebec farmers would be quite satisfied, if their income were raised to such an extent that practically all had to pay an income tax. If some hon. members of this house knew what I know of their condition they would be the last ones to contend that the farmers of Quebec have received special treatment in this regard.
Without making any undue comparison, let me turn now to the Saskatchewan farmer. As I have said already, the farms in Saskatchewan are highly commercialized and industrialized.


An hon. Member:: Not all of them.


Jean Lesage: No, but a good part of them are mechanized anyway. The farms are large and mostly it is a one-crop operation.


An hon. Member:: Not all.


Jean Lesage: Not all, but a great part. In good years the Saskatchewan farmers may expect a high cash income from their operations. In 1941 the number of farmers and stock raisers in Saskatchewan was 121,194. The prairies census of 1946 showed a reduction in, that figure down to 114,899. Let us agree that in 1947 the number of farmers in Saskatchewan was around 115,000. The net farm income for that year in Saskatchewan was $260 million, which would give an average of approximately $2,300 per farmer. Remember the average income of the Quebec farmer was $1,350. The basic income tax exemption for 1947 was $1,500, as I have said already. The average rural family in Saskatchewan was 3-7 persons. One can see that on the average, and even on the whole, the basic exemption for the Saskatchewan farmer was below $2,000, with an average net income of $2,300.
According to the figures quoted by the hon. member for Moose Jaw (Mr. Thatcher), and taken from the taxation statistics, 16,893 Saskatchewan farmers, out of the total of
115,000	which I have just mentioned, paid income tax in that year. With all due respect
1550	HOUSE OF
The Budget-Mr. Lesage to my hon. friend, may I say that it is no wonder the Department of National Revenue felt it its duty to carry on so many prosecutions in that province. My hon. friend, as we say in French, "a perdu une belle occasion de se taire", because he has taken on his own shoulders the responsibility of proving- with my help of course-first, that there is nothing extraordinary in the fact that only a few Quebec farmers had to pay income tax in 1947 and, secondly, that it was the duty of the Department of National Revenue to see that more Saskatchewan farmers paid their taxes.
Of course, I would not like the Saskatchewan farmers to believe that I have anything against them because the contrary is the fact. But since the hon. member for Moose Jaw has posed as their champion at the expense of the Quebec farmers, I thought it was time that the facts came to light. Long experience has taught people that it is both unwise and dangerous to defend oneself by accusing another. In attempting to do so the hon. member for Moose Jaw has rendered a poor service to those whom he meant, in good faith, to defend.


William Scottie Bryce: Did the hon. member state at the beginning of his remarks that there were many farmers in Quebec who did not pay wages to their sons but gave them farms later on?


Jean Lesage: No, that is not exactly what I said. It is a family enterprise in Quebec, and instead of paying wages to their sons many farmers will keep those wages in trust in order to buy them new farms on which to establish themselves.


William Scottie Bryce: We have men in Manitoba who do that.


Jean Lesage: I am glad it is done there.


William Scottie Bryce: But at the same time they have to pay income tax on the value of the farm.


Jean Lesage: Not if they pay their sons.


William Scottie Bryce: They did not pay their sons but instead gave them farms and then they had to pay on the value of the farm.


Jean Lesage: That is not the same thing.


William Scottie Bryce: I can give my hon. friend concrete cases.


Jean Lesage: That would be a gift tax.


William Scottie Bryce: There is no gift about it if it is given in lieu of wages.


Julian Harcourt Ferguson: Mr. Speaker, I rise to address the house on the budget which was recently delivered because I believe the budget speech is the principal message by the government to the people in


all walks of life and to industry as to how they should govern themselves for the years to come. I take a little different view on the amount of the budget, $2,430 million, than other hon. members. I would have been a little more pleased if the government had been going to spend $3 billion. The surplus of some $20 million would not have bothered me so much if I did not look back on the 1930's when world-wide developments affected the ordinary course of business in such a way that a surplus of $20 million would soon be eaten up.
In this undeveloped tremendously rich country, with a cabinet selected from a party which has the largest percentage of members that the House of Commons has ever known, the cabinet 'ministers are supposed to head individual departments such as agriculture, finance, trade and commerce, health, railways and immigration. The cabinet meets months before the budget is actually read by the Minister of Finance for the information of the people of Canada as a whole. Upon the decision of the cabinet as to the path they are going to follow and the light they are going to hold before the people of Canada, the amount of the budget is settled.
In the budget speech-and I studied it very carefully-there was not the slightest suggestion that the government of Canada should spend more money than they are now and still have a reduction in taxation and the cost of living. The bureau of statistics of the Dominion of Canada, under the control of the cabinet ministers of the government, has a better knowledge than anybody of the figures concerning the development of the iron ore of Labrador and Quebec and the development of oil and natural gas in the province of Alberta. There is no group of people in Canada that should know the potentialities of the development of the country in the next twelve months better than the cabinet.
The budget speech is the green light tor everybody. Manufacturers and industrialists all wait for it. On the basis of it the hardheaded developers of Canada decide what they should do in the coming twelve months. There was no enlightenment in the budget as to what any industry should do. There was nothing to guide them whether they should expand or curtail. There is no relief for the workingman who pays taxes, and there is no relief from the high cost of living. There can be no doubt or dispute that these things are clearly indicated by the budget presented to the people of Canada by the Minister of Finance.
It is almost time for the people of Canada to make up their minds whether we are going

to develop this country as a nation or whether we are going to become a part of the United States. From the actions of the government, and their lack of foresight and guidance as clearly depicted in the budget, we are heading in the direction of continuing to permit the development of our iron ore and natural gas and oil by United States interests. If we stop to reflect we will realize that the International Nickel Company is controlled by the United States, as is the American Can Company, Palmolive Soap Company and all of the automotive industry. All the leading oil companies of the Dominion of Canada are controlled today by the United States, and the kind of news we are constantly getting is United States financed, United States controlled.
The premier of Newfoundland held back the good news when he was bubbling over to tell what a great job some Canadians had done, that they had been successful in making available millions of dollars for the purchase and control of the assets of Canada by United States interests. In a recent newspaper article there is the following:
Price increases ranging from one-tenth to three-fifths of a cent on various oil products were announced for eastern Canada . . .
They were announced by Imperial Oil. I believe that the members of the cabinet are endowed with enough intelligence to get down to common sense. Each cabinet minister should send out word that we are going to start to develop Canada, that we are going to increase our annual budget, and that we are going to decrease taxation. There is no mystery about that procedure. There is only one method of increasing your budget, and that is by taking more money from fewer people. The people who have more money should pay more than they have paid, in previous years. At the same time the high cost of living would be reduced and we would be letting money remain in the pockets of Canadians so that they would have something to save over and above providing for the bare necessities of life.
I believe I am safe in saying that at the present time Canada is the greatest and wealthiest undeveloped country in the world, but who holds the reins? The people who have vision, the industrialists of Canada, are having their vision and desires curtailed because the budget would exercise a restraining influence on any wise-thinking board of directors. There is no reduction in taxation and we have a budget of $2,430 million. It seems that the position of the government is one of wait and see and pray to the Almighty that something will arise such as a war to bring about prosperity. I may be wrong, but I believe every member elected to the House of Commons is
The Budget-Mr. Ferguson elected because his constituents believe that he will contribute something towards the government of Canada by way of guidance and aid.


Mr. Laing:: That is what happened last year.


Julian Harcourt Ferguson: Of course that could be expected. It was anticipated before you arrived here because we knew there was an election coming in June. That was not news to the public; it was a foregone conclusion. That will always happen with a Liberal government prior to an election. Don't worry about that. When an election will not take place until four years from now the government reverts to its true form and a position of wait and see and pray to the Almighty. They take the position that we will not develop the resources of Canada, that we will continue to burden the people, that the people can tighten their belts and do without things they want but do not necessarily need. Nevertheless they want them just the same. This Liberal government says that there will be no reduction in taxation but that we will have social services. I am not advocating the curtailment of any social services. I wish I had more time; I would advocate greater social services.
There is a shipyard in the town of Colling-wood, where I live, which has produced some of the finest boats ever built. That shipyard produced the largest freighter ever built on the great lakes in peacetime, as well as the largest passenger boat. It produced some of the finest ships of war when called upon to do so in the two world wars. The men working there are willing and able workers, but what is their prospect today?. They have one oil tanker to build, and nothing else in sight. There has been a continual reduction of staff. They are faced with the possibility that they may have to leave the homes they have endeavoured to pay for over a period of twenty years. This may bring smiles to the faces of some of the Liberal members of this house, but the situation is serious for the welder, the riveter or the labourer in the shipyard, who returned to work only last month after living for four months on unemployment insurance. There is nothing to smirk at in a situation like that.
I am here to suggest and not to meanly criticize. This government, which has men such as the Minister of Public Works (Mr. Fournier) and others with great ability, certainly should be able to do something about the present situation. It may be necessary to issue bonds for certain national projects that will conserve our wealth, assure employment and cause immigration to come into this country. Surely we Canadians are sick and

The Budget-Mr. Ferguson tired of seeing a province like Saskatchewan with only seven or eight hundred thousand people, Alberta with about eight hundred thousand, Ontario with four million, Quebec with three and a half or four million, and a total population in this vast country, of only fourteen million. To the south we have a country of 150 million. That population did not get there through the wave of a wand. It is true that we have certain climatic handicaps they do not have; but offsetting our cold winter months we have riches untold which they do not have. But we leave them undeveloped, or wait for the Americans to develop them, and permit them to keep the reins in their hands.
I beseech the members of the cabinet to be fairer in their dealings with this house. Let them ask, "What must we do?" We should build a great nation here. We should treble our population, so that in the years to come taxation will be less on the individual and the small businessman. Look at the tremendous growth in our industry and natural resources caused by a war. Why should it be left to a war to bring about these developments? Cannot the men who are in positions of responsibility give the people of Canada a feeling of confidence, so that industrialists will say, "We are prepared to spend more money to expand our industries." The government will be able then to bring in bigger budgets than ever, with far less taxation on the individual person or firm.
I have mentioned a few industries that take most of the cream of our efforts out of this country. Do people stop to consider that annually millions of dollars go from this country to England in reinsurance, in premiums paid by the taxpayers of Canada? Not long ago I noticed the financial statement of a prominent United States insurance company which has several branches in Canada. It has invested in bonds of its own government some $45 million, while it has only a little more than $1 million in Canadian government bonds. The competition is so great that something must be done by this government. It is a bitter pill to swallow, but it is a fact that in the past, through subservience and necessity, much of the fruits of our labour went to other countries. Now Canadians find themselves in the position that something must be done to encourage Canadian capital to invest in our own country and develop our natural resources.	[DOT]
Let me give one example of what I mean. No ship can ply the coastal waters of the United States unless it was built in that country. What is the situation in Canada? About seventy per cent of the ships of Canadian registry plying our coastal waters were constructed in foreign countries. A Canadian


company can go to the United States, purchase a boat, bring it to Canada and operate it in our coastal waters; but our generous friends to the south have a sweet little law which says that no company there may buy a boat built in Canada and operate it in their United States water. How much longer must we wait before taking similar measures to develop our own country?
In a way I hate to see the government interfering with any business. I am not speaking only of this government; but from what I have seen in the past of governments, provincial and federal, they have made a holy mess of everything they have ever tackled in the line of business. Today, however, the situation is so grave that something must be done. The cabinet ministers of this government have had experience which should put them far ahead of any of their predecessors, as a group. So they should not skirt this problem, or close their eyes to it; they should recognize the problem and come to grips with it.
In his budget speech the Minister of Finance (Mr. Abbott) declared, "This is the budget. There is no relief." In other words he practically said, "I don't know what to do about it. Let us see what the outcome will be." That might be all right if we had reached the point where we had nothing more to develop. That might be all right if we had a population of 180 million people and did not have to rely upon export markets; but that is not all right with conditions as they are today. People pay $160 for a washing machine in Canada while the same machine sells in the United States for $60. We pay a third more for an automobile produced in this country than the same vehicle costs in the United States. The day may come when we have automobiles at a greater percentage per population than we have today, when we are able to buy these commodities with a certain degree of ease, and when the householders no longer look in the shop windows for twenty years and say, "My, wouldn't I like to own an automatic washing machine, but I can't afford it. The grocery bill, the meat bill, my rent, my clothing, take all I can possibly make. I must continue to break my back over an old-type washing machine." Or else pay, with eyes closed to the insurance premiums to protect the family in case of death, with eyes closed on the proper education of our children, buying a washing machine at a Canadian price which is ridiculous only owing to the fact that we have not a market in Canada to compare with the United States.
There is something radically wrong that we here find ourselves with fourteen million

people. There is no necessity for that. I do not advocate indiscriminate immigration; but the planners, the developers of Canada, who are the great private industries, should receive guidance from this government so that they will be compelled to bring additional labour from Europe in order to cope with the growing pains and the growth of Canada due to the development of natural resources and industry.
I think back thirty years, and each year I have hoped that Canadians would be able to receive, for the same effort and the same intelligence, approximately the same remuneration for their services as they would receive in the United States. But we continue here, year after year, to take as a foregone conclusion what is happening, and the stream of some of the finest boys and girls this country ever has raised continues annually to pour down into the United States-


Mr. Riley:: Check your figures on that one.


Julian Harcourt Ferguson: -where they will receive better compensation for their efforts. The statement that the stream continues will not tolerate any degree of accurate contradiction. That has been the case for years. Furthermore, there are hundreds of people in Canada who have to face the deplorable fact that, for the sake of receiving better money, they would like to go to the United States but they cannot go. Only recently a sailor in my home town asked that I help him get across the border. I said that it could not be done legally, that the Americans would not stand for it. He informed me that he would receive almost double the money in the United States, working on the same type of ship, the same type of cargo and over the same route on the great lakes. How much longer must we be satisfied with that situation? How much longer must we look at our children coming along and say, "Well, that is your cake from Canada. That is all you can look forward to." How ridiculous that is. If the government of Canada as a body would go over this country from coast to coast, would give up golf games, five o'clock teas, public receptions and political speeches and get right down to earth -yes, a little less running around the world and a little more examination of the undeveloped wealth of Canada-I believe we would have had a different budget from the one we have just had presented to us. You cannot be too emphatic about this situation. We are all here to help Canada. I am not maliciously or meanly criticizing this government. I am asking that something be done in the next twelve months, that whoever the minister of finance may be, he give out the sweet music to everybody's ears, "Your taxes have been reduced."
The Budget-Mr. Major
The budget is greater than ever before; the wealth of the country has expanded, making this possible. Surely the members of the Liberal party here in this house tonight cannot sit back and seriously say that they are satisfied with the budget speech which the people of Canada have to tolerate, the most uninformative speech ever delivered in the house. It was purely a case of "That is the money we need to run the country, and you can go on sweating and expect to receive the same paltry compensation that you have been receiving in the past"; and there will be no guidance from this government as to what we may expect in the future, how big our industries should grow within the next twelve months or four or five years.
A few nights ago I heard one man here make a statement with regard to the pipe line that is to be used in western Canada. He said that the Steel Company of Canada could make this steel pipe. The Steel Company of Canada, by the way, is owned by United States Steel. They have their hands on all the steel in the country. There is no doubt about that. This member of the house said it would cost $5 million to create that steel. What of it? This government should have been whispering in the ear of the Steel Company "Go ahead; we expect we shall be utilizing half a billion dollars' worth of steel at least." If the groundwork to produce this steel is going to cost $5 million, it is a mere fleabite when you consider that the money will all remain in Canada. It will be here to be used by Canadians. It will be here to develop Canada. Please let us have some semblance of encouragement so that Canadians will develop Canada, so that they will be relieved of excessive and unnecessary taxation, and so that the Dominion of Canada will be in a position to spend a far greater sum on its budget than it ever spent in its history before. Canada can stand it and so can Canadians.


Gordon Graydon: Canada first.


Mr. W. J. Major (Glengarry):: I did not
intend to speak on the budget, Mr. Speaker, but a matter of urgent importance to the farmers of eastern Ontario prompts me to avail myself of this opportunity to speak briefly, as the occasion may not again be available until after the Easter recess.
At this time the farmers are greatly disturbed over the abrupt increase in the price of grain they have to buy from western Canada. Feed wheat which was costing the farmer of my constituency $3.45 per hundred pounds on January 1, 1950, is now sold to him at $3.75 per hundred pounds or $2.25 per bushel, an increase of 8 per cent since January 1. Feed oats which was costing the farmer
1554	HOUSE OF COMMONS
The Budget-Mr. Bruneau $2.75 per hundred pounds on January 1, 1950, is now being sold to him at $3.70 per hundred pounds or $1.25 per bushel, an increase of 95 cents per hundred pounds, or 35 per cent since January 1, 1950.
These prices which I have just quoted are the prices that I, as a farmer, had to pay for grain delivered to me by my dealer. I am sure that there is no reason for this abrupt increase in the price of grain to the eastern Ontario farmer at this time, and it should be re-established at normal price immediately.
While the price of wheat is up 8 per cent, oats 35 per cent and feed rations accordingly, it must be remembered that cheese, hogs, and eggs have been reduced by 10 per cent.
Considering the increase in the price of grains and the decrease in the price that the farmer must take for his various farm products, you may be assured that he will be unable to pay this increased grain price and that he will be forced to discontinue the purchase of feed.
This in turn will mean decreased production to meet our cheese and bacon contracts and a still lesser production to meet what may be a seriously low supply of eggs this fall and followed with all its reaction to the consumer.
The fact that the farmer will be forced to discontinue his purchases of feed may also cause accumulated feed to remain in western Canada-a condition which I am sure our western farmers would not like to see created.
I know of only two ways to remedy this condition, Mr. Speaker: one would be the immediate reduction of the price of grain and the other an increase in the support price to offset the increase in grain price. Which shall it be?	[DOT]


Mr. Raymond Bruneau (Prescott):: Mr. Speaker, as the representative of a rural constituency where the majority of the electors belong to the farming class, I consider it my duty tonight, while debating on the budget under study at the present time, to congratulate this government on the passing of a bill in support of farm prices. In doing so, I have the sincere feeling that we are helping those who, through their work, endeavour and efforts, are striving towards achieving the development and progress of our country.
For quite a number of years now, cost of living bonuses have been granted to various working classes, but as yet no bonus has ever been allotted to the farmers except through this price support policy, and I believe it to be an essential one.
If we are to avoid unemployment and a standstill in industry, let us afford the man of the field the opportunity to sell at a decent

price. In this way we shall enable him to buy commodities and in doing so, enable the working class, the workman his brother, to produce the current commodities of life. As I stated at a meeting in Plantagenet, in my constituency of Prescott, some time ago, I will pledge myself to support any measure that will help our farming class. By thus ensuring their welfare we shall also ensure that of the labouring class and so promote that true prosperity towards which we all aspire.
I firmly believe, sir, that a good portion of the estimates in the budget under review will be well spent if it is directed in greater measure towards the implementation of the agricultural price-support policy.
I believe also that a great majority of the people of my constituency, and those of the neighbouring ridings, would welcome any estimates from the Department of Public Works which would be used in curbing the waters of one of the wickedest rivers in Canada, the Nation river.
Last Sunday afternoon I was invited to a meeting in St. Isidore de Prescott situated in the southwestern tip of my constituency, but at some distance past Plantagenet. Instead of rolling farm lands, there was a lake in front of me. The Nation river was flooding again. I hope that the Minister of Public Works (Mr. Fournier) will see that some of the estimates of his department are well spent on irrigation works or whatever program will enable the curbing of this yearly flood; and I hope that I shall not miss another annual meeting in that region because of the overflowing of that river.
While contemplating the possibilities of this budget, I would also like, in common with many colleagues in this house, to see the introduction in our social security program of a system of allowances to every person, without any sufficient income or means of support who, by reason of an injury, accident, congenital infirmity or incurable disease, is at a disadvantage in seeking or obtaining employment, or incapable of providing for his subsistence, and whose age prevents him from benefiting from the social security legislation now in force. Such a system is already proposed in a resolution tabled in this house. I believe a large percentage of the problems which are presented to the representatives of the people are those created by. circumstances facing such handicapped persons and I am sure, Mr. Speaker, that any legislation to that effect would certainly mean estimates well spent in our budget.
Should we also have an excess of money which we are not too sure what to do with, I wish to inform you, Mr. Speaker, that a

theatre group known as "Le Cercle Gascon", in my home town of Hawkesbury, recently won the Le Droit trophy in the recent dramatic festival held in Hull, last March 18, and it might have to compete in a coming dominion drama festival to be held in Calgary. A trip there would cost about $2,000.
I	believe it would be quite an encouragement to theatrical activities in Canada.
Such are the objectives I would like to see realized under the budget for the fiscal year 1950-51, and I am sure I voice here the views of a good majority of the members in this house.
(Translation):


Mr. Jules Gauthier (Lapointe):: Mr. Speaker, in rising for the first time to speak in this house, I deem it my duty at the outset to express the gratefulness of my constituents to the present government and especially to its leader-my leader-from whom it has received such competent and distinguished leadership. Indeed, the constituency of Lapointe did not exist prior to 1947.
The Representation Act, 1947, chapter 71,
II	George VI, states:
Lapointe, consisting of the city of Arvida and the towns of Kenogami and Jonquifere, together with that part of the county of Chicoutimi situated west of the western limits of the townships of Gagne, Tremblay, Chicoutimi, Laterriere, the western part of the townships of Lartigue and Lapointe situated west of the Boisvert river (Cyriac) together with the whole territory situated north of the townships of Falardeau, Begin, Labrecque, and west of a meridian line passing through the northeast angle of the township of Falardeau.
Such is the legal or detailed description, if I may use that term, of my constituency.
In fact, our section of the country has been most richly endowed by nature. Although relatively young-Jonquiere, the mother city of Kenogami and Arvida, was founded a little over a hundred years ago-our section of the province of Quebec is still one of the most important. Our unrivalled water power and basic industries have transformed my constituency into one of the vital parts of Canada. But above all our population is worthy of admiration. French-Canadian traditions that have been lauded, and rightly so, by historians, travellers and all those who have observed us objectively, have been fully preserved in my constituency.
Nowhere else in the country, though it is the size of a continent, have the working classes and the farm population shown a better spirit and a clearer understanding of their rights and obligations, done their duty in a more intelligent fashion or claimed their rights with more tranquil assurance.
The Budget-Mr. J. Gauthier
Our constituency can also set an example in other respects. Some of my electors, for instance, are English-speaking; yet I can state without fear of contradiction that, among us, no problems spring from racial or religious antagonism. Everyone lives in an atmosphere that has not been tainted by petty, narrow nationalism. Yet, our national life, in the best sense of the term, has had intensive development and flourishes in the best Canadian soil. Our relations are based on the respect of mutual rights. Commendable emulation exists among our French- and English-speaking fellow citizens. That is the keystone of our relations. I am therefore especially proud to mention it and to tender an invitation to those who wish to see how concrete action and achievements can be brought about in peace and harmony.
My love for truth, as well as my love for "my little country" and its incomparable people, compelled me to point out this state of affairs.
From the "management-labour" angle, many particular achievements and viewpoints should be drawn to the attention of the house.
We live in the centre of the aluminum industry, a fact known to all. As a matter of fact, one can find in Arvida the largest aluminum factory in the world, where aluminum is produced through the hydroelectric developments at Chute-a-Caron and Shipshaw, which produce more than a million horsepower and remain one of the most daring feats of engineering. I would be remiss in my duty if I failed to point out the leading part played by the Arvida plants during the second world war. The war material we supplied to the Canadian air force, as well as that of the United States and of our allies in general, became an essential element of victory. And in order to pay tribute to those concerned, I must mention a few names.
Had it not been for the leadership and boundless energy of one R. E. Powell and his immediate assistants, Messrs. J. B. White, Lamountain, Whittaker, Johnson and Farrell, we would have been much longer in achieving victory in the field. These men have shown themselves to be, not only great industrial leaders, but craftsmen to whom-it may be said without exaggeration-the allied nations as well as Canada are greatly indebted.
Our military leaders have been shown the gratitude they were entitled to and I associate myself wholeheartedly with all the words of praise which have been showered
1556	HOUSE OF
The Budget-Mr. J. Gauthier upon them. But not enough has been said,
I think, of the tremendous task accomplished by our industrial leaders with the help of their faithful workers. To my mind, their names should be inscribed upon the honour roll of our nation.
Mr. Speaker, in paying tribute to the people of my constituency and to the essential role they have played during the war,
I have obeyed no chauvinistic dictates. Besides, there are other reasons for calling Arvida a model city. Recently this progressive community won first place in fire prevention work throughout this country. On that occasion it was my privilege and pleasure to congratulate once more its officials whose efforts enabled our town to achieve top ranking in every field.
If I talk somewhat at length about our industries and our manufacturers I do so with pleasure and I know that all the people I represent will thank me for it.
Back home friendly relations between employees and employers are an old tradition. Management and workers have always looked upon each other as friends and fellow workers. If such a feeling prevails there it is due to a very large extent to the Price family who have set up their plants and their main industries at Jonquiere and Kenogami. When you talk about the Price people in the region you are bound to please all who have known the humble beginnings of that part of the country and its stupendous development. These employers were not satisfied to use honestly acquired capital and make it grow but they considered their employees as members of a family who, although their immediate interests are sometimes different, must work towards a common goal: the welfare of a hard-working people filled with the ambition and the legitimate pride to reach the top level in their particular activities.
My tribute to the two great industries located in my riding should arouse no suspicion; I have spoken nothing but the absolute truth. Private enterprise in its soundest aspects shall always find in me a true and reliable supporter. I do not fear to make that statement to the country at large.
In 1943, as mayor of the city of Jonquiere, I was chosen by the workers as their spokesman and mediator in the strikes at the Price plants. They showed me their gratitude for having championed their cause by entrusting me with the more important mandate of member for the riding of Lapointe. I may say quite frankly and quite honestly that the Price Company is conscious not only of its responsibilities in equity but also of its social respon-


sibilities towards its employees; the latter, on the other hand, besides being good technicians, are fully aware of all the responsibilities of the modern worker.
Unfortunately, Mr. Speaker, what I have to say is not all pleasant. Our country is immense. In size, it is a whole continent. It has intricate problems. During the war, thanks to the Liberal government, friction and internal strife were reduced to a minimum. I make this statement with a certain amount of pride since our country has been one of the few belligerent countries to retain a party government. This is undoubtedly due to the fact that we had a truly honest government and that the Liberal party became identified with the spirit which inspires any nation in those solemn hours when its very future is at stake.	.
We have had government controls. The wartime prices and trade board has not only proven- useful but it has won the admiration of many other countries. Why? Chiefly because its initial purpose was to serve public interest. In view of the shortcomings of human nature it was necessary to curb exaggerated profits, to protect the masses against abuses which, although understandable, are nevertheless objectionable. It was necessary to combine a sound, energetic, fearless and untainted control with free enterprise, the basis of our democratic system. We have had the wartime prices and trade board. It has exercised in fact an efficient control and the Liberal party deserves the credit.
By the way, may I congratulate my leader and the Minister of Transport (Mr. Chevrier) on the appointment of Mr. Gordon as president of the Canadian National Railways. That is, on Canada's part, an act of justice and of gratitude to a leading servant who will henceforth perform his duties with a foremost organization, that is our national system of railways. There is a man appointed to a job that was meant for him.
In my constituency, however, the wartime prices and trade board has made what I still consider a mistake. I point it out with the same frankness which has marked my preceding remarks.
During the summer of 1949, the rental division of the wartime prices and trade board decided to decontrol houses belonging to the Aluminum Company of Arvida. As a result, over 1,000 tenants in the city of Arvida had to pay substantial increases in rent. That step was unfair and unwarranted. At the

time I drew the matter to the attention of the Minister of Finance (Mr. Abbott). I was not the only one to express that opinion.
The election campaign was in full swing when we heard the surprising and strange news that rental accommodation was being decontrolled at Arvida. Mr. Lobley had taken that decision. After consulting my advisers, I concluded that such a step could not be justified. Controls could not so suddenly become objectionable. If they had been proved ineffective, why were they being abandoned at Arvida only?
Everyone must bear his own responsibilities. Nobody will convince me that at Arvidji rents should be tied to wages and that rents had also been decontrolled in other places where houses belonged to employers. At that time, a large number of property owners were in the same situation but they continued to come under government control.
In this respect, I made representations to the Minister of Finance but I am sorry to say that justice has not been done to Arvida tenants.
I do not claim that the rents paid the owners were adequate. I commend the Aluminum Company for having provided this housing accommodation at low rates which were insufficient in many cases. However, while other landlords in the same position were subject to rent control, those at Arvida were not affected by it and tenants of that city had to take the consequences. I point out to the Minister of Finance that I have not changed my mind. I believe that full justice, democratic and liberal justice, has not been done my constituents in Arvida.
I do not wish to involve anyone, but just the same it should be pointed out that the arbitrary course taken by Mr. Lobley, rental controls administrator, also surprised and astonished the hon. member for Outremont (Mr. Rinfret). As a matter of fact, the hon. Postmaster General gave me his unequivocal support during my electoral campaign when a rather bitter discussion took place at Arvida on rental controls. I thank him.
When my leader announced that the hon. Postmaster General had become a member of the government, I was delighted to hear of his appointment, which he had more than deserved. I was proud to have been supported by such a man and I want to express my sincere gratitude to him.
The Budget-Mr. J. Gauthier
Now, in any event, I formally repeat my wish that full justice should be given to my constituents in Arvida.
This is how the member for Lapointe constituency respects the promise made to his constituents and electors. Fearlessly, he claims from the house what he promised his constituents and he draws to the particular attention of his respected leader, of the right hon. the Minister of Finance and of the Right Hon. Mr. Howe this matter of national importance, since it is a matter of principle and justice.
Mr. Speaker, during the last session of parliament, my distinguished colleague, Mr. Andre Gauthier, member for Lake St. John, called the attention of this house and of the government to the fact that lumberjacks were not entitled to unemployment insurance benefits.
I wish to congratulate my hon. friend for this timely gesture, which may be found recorded in Hansard for October 25, 1949, at page 1144. Since then, the government has carried out the recommendations of my colleague from Lake St. John, which goes to show that from within the Liberal party may come suggestions towards the common good to which the government is ready to subscribe. I ask the Prime Minister and his distinguished colleagues to accept my personal thanks, as well as those of the electors of the constituency of Lapointe, among whom may be found several hundred lumberjacks, as well as the thanks of those who are of one mind with the member for Lake St. John and myself.
Mr. Speaker, I am firmly convinced that any suggestion, any recommendation, offered in this house in the interests of the people will' be acted upon by the government if it can be carried out. That is why I unhesitatingly suggest to the leaders of this country what I consider to be the policy to be followed with respect to old age pensions.
Inasmuch as industry and commerce obey the law of nature,-at least I hope they do,- they will not keep at work people who have reached 65 years of age. Personally, I am of the opinion that one is not disabled at this age but that, on the contrary, one can make one's employer profit by the intangible asset of experience, in addition to one's work. However, facts are facts and industry mercilessly lays off workers who have reached 65 years of age. That is the fateful age, the age which puts an end to a man's work but unfortunately does not put an end to his needs. They may not be as great as during the two or three preceding decades, but they still exist. Under our system, which is not faultless, but which we must accept with its
1558	HOUSE OF
The Budget-Mr. J. Gauthier advantages and deficiencies, it is the duty of the state to help wage earners when they reach the age of 65. I wish to make the following proposals:
1.	At 65, every Canadian citizen should be entitled to an old age pension, the amount of which shall be in relation with the cost of living, after an investigation has proved the need of such pension.
2.	Old age pensions should be paid automatically at the age of 70, to any person, man or woman.
My proposals have been carefully thought out and are the result of experience. My constituents belong to the working class. I solemnly declare to the government of this country, my government, that it is unfair, in my opinion, that working people should have to eke out a living and be the prey of anxiety, uncertainty and unhappiness for a period of five years, from 65 to 70.
Though I am a member of parliament, I do not forget that I have been and remain a notary. In that capacity, I can state that many people prematurely dispossess themselves of their property in order to get, once they reach 70, the old age pension on the basis it is paid at present in this country. As a result, the situation is, in many cases, abnormal. I believe it would be sound administrative policy on the part of the government to grant old age pensions to people 70 years old without the means test; in this way family allowances are paid, just as the sun, which is good in itself, sheds its beneficial rays irrespective of the merits of the recipients.
These ideas should surprise no one. In 1950, we no longer argue as we did in 1900 or 1867. I know that truth is eternal and unalterable. However, the relative truths encountered in administrative measures cannot be compared to absolute truth. They must adapt themselves to special needs and to various periods. Moreover, is it not the privilege of Liberalism to develop itself constantly? Its evolution, though, must be progressive and based on nothing but the possible and practicable happiness of the masses who know how to condition their rights by relating them to their duties.
Could it be that there are people who consider my remarks to be too bold? They do not know my leader. And they are not true Liberals since, essentially, it is the duty of a Liberal to honestly express a fair and honest thought, unmindful whether it runs counter to interests which, legitimate though they may be, are nonetheless private interests.
[Mr Gauthier (Lapointe).]

If I should be called upon to give a concrete example of my love for freedom of thought and speech, I would say that radical reforms should be made in the way our penal laws are enforced. I would say that a cause as worthy, just and reasonable as that which the Montreal Le Devoir has just espoused, with respect to public morals, should gain the support of public opinion and honest folk. When evidence is offered to the intelligence of common people and leading citizens alike that brings them to the necessary and objective conclusion that all is not well, that law-abiding people are not adequately protected, that the conscience of honest men cries for vengeance, I cannot but say and no one will prevent me from saying that morality laws are ill enforced, inasmuch as in a dispute which has arisen between leaders legally and legitimately chosen to do good- here again, is it these so called authorities that-but I do not care to mention the reasons

should prevent them from uniting for the eradication of evil?
Our Criminal Code must be enforced to the full, municipal police forces must co-operate to this end with provincial and federal forces and not remain inactive because of a jurisdictional dispute.
This brings me to express a few simple home truths, unpleasant though they may be.
Politics or, to be more exact, politicians are doing great damage to our country generally and, more particularly, to our beloved province of Quebec. A political dictatorship, organized or at least encouraged covertly by the provincial government of that province, is spreading its tentacles in the municipal, school administration and even parochial fields. This attitude robs life of its flavour and, in some cases, poisons it entirely.
It is more than ever high time to call a halt to our fratricidal struggles, as Mercier once did. However, peace must be achieved with dignity and not by surrendering unconditionally to an arbitrary power which, having menaced public order, seeks also the total and absolute ruin of those who, in good faith, and following the dictates of justice and reason, have fought against it and continue to do so.
Mr. Speaker, at the beginning of my speech I spoke about my constituency and my constituents, a subject naturally more pleasant than my last remarks.
Fortunately I have reserved these last moments to talk about my revered leader, the Right Hon. Louis St. Laurent. First of all I want to thank him for having chosen

as Deputy Speaker of the house a man as distinguished as the hon. member for Roberval, who is to a certain extent my political godfather. The county of Lapointe, the name of which recalls both Mgr. Eugene Lapointe and his namesake the former Minister of Justice, owes to him-at least to a great extent

its existence as a distinct unit. In that regard, I want to say that the Saguenay people were particularly happy to hear of the admission to the cabinet of the Hon. Hugues Lapointe. He fought with valour on the battlefields and the people in the county that bears his name rely on him also to uphold, in the councils of the nation, the democratic ideals which were, are and will remain common to the illustrious minister of justice that was Ernest Lapointe, to our distinguished and beloved Solicitor General, and to the modest but sincere member for Lapointe.
Great tasks await the Solicitor General and we can rest assured of his success just as he can count on our co-operation. I wish to thank him in particular for the gracious way in which he has received a delegation from Saguenay, which had come to acquaint him with the needs of our unemployed.
I know the government has done a great deal for our people. Unemployment insurance has shown that it was not only useful but necessary. More will have to be done, however.
As far as I am concerned, I have already had the privilege, as mayor of the city of Jonquiere, of making known to the premier of Quebec my views to the effect that municipalities, whose powers are derived exclusively from the provincial legislature, should first seek help from that body as being their immediate superior authority. As mayor of the most important city in the constituency of Lapointe, I offered the premier of Quebec my co-operation.
Though my offer dates from February 13 last, I have not yet had a reply. Our people, however, are still waiting, but there is a limit to their patience. The problem of unemployment must not become a political football. Provincial revenues, though smaller than those of the country as a whole, are nevertheless adequate, with the assistance currently given by the dominion government, who will increase it if necessary to provide jobs for our unemployed. Let us undertake the public works that are needed, those that were promised, for instance, during the last provincial elections in Quebec as well as those
The Budget-Mr. J. O. Gour for which $200 million were appropriated. That would greatly improve the situation.
I state without hesitation that the dominion government, having accomplished so much, must put forward a plan to alleviate unemployment. I must point out that the needs of my constituency are great. However, as the problem is one with which the government ought to deal with in part, I wish to state that my constituents have full confidence in our leaders and place all their trust in them. They know that if their efforts are supported as they should be by the provinces, for whom this is an imperative duty, there will be no undeserved hardship in a country so abundantly endowed by Providence.
(Text):


Mr. J. O. Gour (Russell):: Mr. Speaker, I join with members who have spoken before me, and particularly the hon. member for Glengarry (Mr. Major), in sincerely regretting the unjustified rise in the price of grain since the first of January. It has put eastern farmers in a bad position. It has discouraged them because, with prices of feed as they are now, there is no more chance for a net profit. The federal government gave great help by way of subsidies of $6 for freight on feed, $3.50 per 100 pounds on bacon and three cents per pound on cheese, but all this help is lost now, so far as eastern farmers are concerned, in view of the prices they are obliged to pay for feed. They will quit feeding. They will stop raising cattle, pigs and chickens. Therefore there will be little demand for the grain of the western provinces. In the near future there will be a surplus of grain and they will be obliged to sell it at a very low price. The same thing happened many years ago when wheat was as high as $2 and $2.25 a bushel. We all remember what happened.
Therefore I think it is my duty to urge our good friends, the grain growers of the western provinces, not to create such a bad situation for their friends, the farmers of the east, who after all are their best customers, because in the near future they will need them to buy their grain and it will be too late. Today the bulk car price for No. 3 C.W. oats is $76 a ton at stations in eastern Ontario less a subsidy of $6 per ton. Barley is about the same. At the present time farmers, dealers and co-operatives refuse to buy. It will mean less bacon, less cheese, less chickens, and so on. The quoted price for grain on July 31 last was $15 less per ton. Why do we not have the July price today? If we did, our farmers would buy, the western farmers would get their money more quickly, and the eastern farmers would keep on producing the food. It would not create this misunderstanding between eastern farmers who need

The Budget-Mr. Bryce the grain and western farmers. The western farmer needs the eastern farmer to buy his grain. We need the best friendship we can possibly have. Two years ago I had the good fortune to go to all the western provinces, and all the people I met were very nice. It is true that some farmers were well off, while others were not in such good shape, but that is so at all times. They received us very nicely; but while our eastern farmers like the western people, we hope they will not try to get too much money right now. That will make for misunderstanding; and if the eastern farmers stop raising cattle and stop buying their feed grain, it will be just too bad. I hope they will not ask again for more money from the government or that they will not refuse to deliver their grain. Perhaps it is only natural to want to get another ten or twenty-five cents a bushel, but sometimes too much ambition is not good for you.
We hear a good deal of talk about discrimination with respect to income tax as between the western and eastern farmers. Well, in my riding there is a tax collector, just as there is everywhere else. I am sure the eastern people, farmers and others, who have any revenue are subject to the same income tax that is applied in other parts of Canada. The regulations and the law are the same. I pray God that my farmers will all have the means to pay income tax, because that would show that they had the revenue; and my farmers do not refuse to pay if they make enough. Therefore I hope there will be no more of this trying to set the people of the west against the people of the east, or race against race, and so on. We are all alike, and we should be developing the very best possible friendship between provinces, classes, religions and races. I hope things will continue as they are now, with the good government we are getting, and that the good understanding we have may increase. I am sure all those on this side of the house and indeed those on the opposition side as well have the same hope.
In conclusion, Mr. Speaker, I repeat that something should be done by means of subsidies or in some other way to keep down these high prices, so that we may continue to be the best customers of the western farmers. We need the western people, as they need us. Therefore we should work together for the prosperity of this country.


William Scottie Bryce: Mr. Speaker, I can assure the hon. member for Russell (Mr. Gour) that I am delighted with what he has said. I would remind him of the age-old
alliance between Scotland and France, and assure him that it still exists as between the east and the west in Canada. Let no Frenchman ever think western Canada is against him.
My hon. friend complains about the price he has to pay for his grain, and he blames the western farmer. It is not the western farmer who is to blame. I disagree with the hon. gentleman when he speaks of the good government we have. Why, it is the government we have that makes him pay these prices. They are not set by the western farmers. Certainly they want to get as much as they possibly can; but my hon. friend was one of the first to complain about the controls imposed by the government, though those controls enabled him to get his grain at a fair price. When we went back to the speculative system, call it private enterprise or what you like, we were robbed right and left. My hon. friend over here cannot produce eggs any more because costs are too high. The poultry farmer in Manitoba is up against the same thing today, and so is the man feeding steers. So we are all in the same boat; but if my hon. friend wants to correct the situation let him come over here and help me fight this thing, instead of sitting over there. As long as he is on that side of the house they will not listen to him; he will be only crying in the wilderness. We must have controls to see that the middleman does not get in and make more profit than the man who is feeding the hens, because that is what is happening. That is the man to blame, not the western farmer. We know you are one of our best markets, that you are going to buy the feed grains we cannot use ourselves. We are not going to make the price one you cannot pay, because if you do not get something for your labour certainly you will not continue to buy our grain, and we do not want that to happen.
Well, Mr. Speaker, there is a holiday feeling in the air tonight, and I should like to adjourn the debate so I may go further into these matters when we meet after Easter.
On motion of Mr. Bryce the debate was adjourned.



BUSINESS OF THE HOUSE

Alphonse Fournier: the adjournment of the house.
He said: Tomorrow is private members' day, and we will follow the order set out in standing order 15.
Motion agreed to and the house adjourned at 10.50 p.m.

Wednesday, April 5, 1950