1950-04-26

[Stage Direction]
Mr. Hughes Cleaver (Hallon) presented the fourth report of the special committee on railways and shipping, owned, operated and controlled by the government, and moved that the report be concurred in.
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, before this report is concurred in, there is just a word or two I should like to say. I confess that part of what I want to say has been said already in the committee, but I was not a member of that committee. Coming as I do from the city of Winnipeg I feel that the protest which I have in mind should be repeated on the floor of this house.
I refer to the way in which a number of employees are being laid off at Winnipeg by the Trans-Canada Air Lines. All members of this house will recall the considerable feeling there was-


Some hon. Members:: Order.


Mr. Cleaver:: On a point of order, I think perhaps the hon. member did not hear the report read. It is simply a routine report in regard to printing. The final report of the committee will be presented later.


Stanley Howard Knowles: That is quite correct; I did not hear what was read by the assistant clerk. I shall reserve my remarks until the final report is presented.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Mr. L. Philippe Picard (Bellechasse)
presented the first report of the standing committee on public accounts, and moved that the report be concurred in.
Motion agreed to.


Mr. W. G. Weir (Porlage-Neepawa) moved: That the name of Mr. Macdonnell (Greenwood) be substituted for that of Mr. Fulton on the standing committee on public accounts.


[Stage Direction]
Motion agreed to.


Right Hon. J. G. Gardiner (Minister of Agriculture):: Mr. Speaker, I was asked yesterday if I was in a position to make a statement as to the government's decision concerning the price of butter. I stated that in all probability I would be able to do so today.
I am also in a position today to make a statement with regard to cheese, which I shall make at the same time.
I wish to announce that from May 1, 1950 to April 30, 1951, the agricultural prices support board will support the butter market by purchasing first grade creamery butter in carlots at a price of 53 cents per pound, basis delivery Saint John, Halifax, Montreal and Toronto, and 52J cents per pound, basis delivery Vancouver. The purchase program for the coming year will be similar to that of 1949-50.
The quantity of butter held by the government as at noon today is 19,429,929 pounds.
I wish to announce also that the agricultural prices support board's wholesale selling price for butter, effective the 1st of May, 1950, will be 53 cents per pound, delivery in Ontario and Quebec, with appropriate price differentials to other points in Canada.
I wish to announce that the cheddar cheese production in the provinces of Ontario and Quebec, beginning May 1,	1950, will be
requisitioned. The requisitioning of cheese was requested by the Ontario cheese producers' association and the dairy farmers of Canada in order to safeguard the filling of the contract to supply cheese to the British ministry of food during 1950. The contract calls for the delivery of up to 85 million pounds.
The government agrees that it is desirable that the maximum quantity of cheese be shipped to the United Kingdom this year, and that the contract be filled. Canada's ability to meet commitments in this regard is important from the standpoint of the future market for Canadian cheese in Britain.
It is also important that the domestic market be well supplied with cheese, and the stocks on hand are considered sufficient for these requirements. Stocks as at the 1st of

Dairy Industry
April were 34-9 million pounds, or approximately 10 million pounds in excess of one year ago. The government holds 17-4 million pounds, and the trade 17-5 million pounds.
The government's holdings of cheese at present are largely the result of the contract with the United Kingdom not being filled in 1948, and a heavy carry-over of cheese stocks into the 1949 season.


Mr. White (Hasiings-Peierborough):: I should like to address a question to the Minister of Agriculture arising out of the statement he has just made. When the minister said that, beginning on the 1st of May, cheese will be requisitioned, did he mean that it would be requisitioned until the contract is filled, or that it would be requisitioned for the entire output of 1950, and at what price?


James Garfield Gardiner: Cheese will be requisitioned at prices based on the 28 cents which was announced previously as being the price for cheese at Montreal. Requisitioning will continue as long as it is necessary to carry it on in order to secure supplies of cheese, for the British contract, provided there is sufficient produced to secure the supply.


George Stanley White: Does the minister mean that all cheese will be requisitioned? After all, we produce 200 million pounds.


James Garfield Gardiner: Two years ago we did not produce 100 million and we produced a little over 100 last year. We may produce more this year. It is our hope that with the 34-9 million pounds we are now carrying there will be enough produced to supply 85 million pounds to Great Britain, as well as supply our own requirements, but I cannot be sure of that. We will continue to requisition cheese as requested until we have what we consider to be sufficient.


Mr. Charlton:: Can the minister tell us how much cheese has already been shipped this year toward the filling of the British contract?


James Garfield Gardiner: There has been very little, if any, shipment up to now. As the hon. member knows, the cheese production season begins about the 1st of May, and up until that time there is only a limited amount.


Mr. Cardiff:: In view of what it costs to produce a pound of butter, what formula was used by the government in arriving at the price of 53 cents?


James Garfield Gardiner: The means by which we arrived at the figure of 53 cents was to consider carefully the records of the handling of butter in Canada over a long period. I may say there have only been four years since

1914 when the price was more than 53 cents. In all other years it has been lower. In the last two years it has been more than that. Therefore we think that 53 cents is a fairly favourable price in the light of price history. There is also the further fact that of necessity, the price in Canada, if we are to be able to carry on, must be somewhat higher than the price in most other areas. The experience we have had recently has been variously interpreted in the press and elsewhere as an effort made to sell butter. We did not make any great effort to sell it, but we did offer it at 50 cents. I think it has been fairly conclusively established that there is not much of a market for butter in the world at 50 cents. All our experiences have indicated that 53 cents is a fairly liberal price for butter in Canada at the present time.



QUESTIONS

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

Mr. Fulion:: 1.	What was the average number of Immigrants entering Canada monthly from Europe, including the United Kingdom, for the calendar year 1948?
2.	What was the average number of immigrants entering Canada monthly from Europe, including the United Kingdom, for the calendar year 1949?
3.	What is the present monthly average for the first three months of 1950?


Mr. Harris (Grey-Bruce):: 1.	9,352.
2.	6,966.
3.	4,823.


MOUNTED POLICE
Mr. Diefenbaker:: 1.	How many recruits have joined the Royal Canadian Mounted Police in each year beginning on the first day of January, 1.945, and to date?
2.	How many of them finished training?
3.	How many of them left the service at the end of (a) one year; (b) two years; (c) three years?


Mr. Garson:: 1.	During the year 1945 no recruiting took place, but the following recruits were engaged during the years mentioned:
1946-	47	
4391947-	48	
3221948-	49	
4661949-	50	
313Total	1,540
Note: Until new construction is completed there is a lack of accommodation, and engagements were temporarily suspended on the 8th of February, 1950.

3.	The following number left the force:
(a)	During first year of service .... 98
(b)	During second year of service ..	72
(c)	During third year of service ______ 44
(d)	During fourth year of service ...	1
Total	215


JAMES SMITH INDIAN RESERVE, SASKATCHEWAN   LANDS LEASED FOR CULTIVATION
Mr. Wright:: 1.	What lands have been withdrawn from the James Smith Indian reserve on the Saskatchewan river in the province of Saskatchewan for the purposes of leasing for cultivation during the years 1946 to 1949, inclusive?
2.	What are the terms of these leases?
3.	Will the Indian affairs department make any further leases from this reserve during 1950?
4.	If so, what will be the terms under which such leases will be made, and to whom should application be made to obtain such leases?
5.	Is there a limit to the amount of land which any one individual may lease?


Mr. Harris (Grey-Bruce):: 1.	1,440 acres under lease 1946 to 1949 inclusive, sections 3 and 4 and part of sections 9 and 10, in township 47, range 20, W. 2nd meridian.
2.	One-quarter share of crop, plus municipal taxes.
3.	Yes, 6,191 acres.
4.	Eight-year term; one-quarter share of crop, plus taxes, plus such cash bonus per acre as applicant may offer; lessee to break one-half of total area in 1950 and all arable balance in 1951; to superintendent N. J. McLeod at Duck Lake, Saskatchewan.
5.	No restriction is placed on the acreage that may be applied for by or given to any applicant.



INCOME TAX


Mr. Coyle:: 1.	How many farmers in Ontario filed income tax returns in each of the years 1947 and 1948?
2.	How many of these paid income tax?
3.	What was the total amount paid in each of the above years by such farmers?


Mr. McCann:: 1,	2 and 3.
For the 1947 taxation year, 10,991 farmers in Ontario filed income tax returns.
For the 1948 taxation year, 7,661 farmers in Ontario reported taxable incomes.
For the 1947 taxation year, the total amount of income tax declared by farmers in Ontario was $1,720,000.
Similar information in respect of the 1948 taxation year is not yet available.
Questions



ROYAL COMMISSION ON ARTS, LETTERS AND SCIENCES

Mr. Kirk (Anligonish-Guysborough):: 1.	How many members are there on the royal commission on arts, letters and sciences?
2.	What are their names, present and former addresses?
3.	Who is the chairman?
4.	By whom are they appointed?
5.	When were they appointed?
6.	What are their respective salaries, remuneration, and expense allowances?
7.	Has a member been appointed to this royal commission representative of any of the following provinces (a) Nova Scotia; (b) New Brunswick; (c) Prince Edward Island; (d) Newfoundland?
8.	If not, was consideration given to the appointment of such a representative?
9.	Are there any vacancies at present?


Mr. Sf. Laurent:: 1.	Five.
2.	Right Hon. Vincent Massey, P.C., C.H.; Laurentian building, Ottawa; Batterwood House, near Port Hope, Ontario.
Arthur Surveyer, Esq., B.A.Sc., C.E., D. Engn., LL.D.; Laurentian building, Ottawa; Montreal, P.Q.
Norman A. M. MacKenzie, Esq., C.M.G., K.C., LL.D., Laurentian building, Ottawa, university of British Columbia, Vancouver, B.C.
Most Reverend Georges-Henri Levesque,
O.P., D.Sc. Soc.; Laurentian building, Ottawa; Laval university, Quebec, P.Q.
Miss Hilda Neatby, M.A., Ph.D.; Laurentian building, Ottawa; university of Saskatchewan, Saskatoon, Sask.
3.	Right Hon. Vincent Massey, P.C., C.H.
4.	Governor in. council.
5.	April 8, 1949.
6.	Chairman, $50 per day when engaged on royal commission business; commissioners, $40 per day when engaged on royal commission business. In addition the commissioners receive reasonable travelling and living expenses when absent from their usual place of residence.
7 and 8. Dr. N. A. M. MacKenzie was born in Pugwash, Nova Scotia and was educated at Pictou academy and Dalhousie university. He was later president of the university of New Brunswick at Fredericton, N.B.
9. No.



TRADE WITH THE UNITED STATES

Mr. Isnor:: 1.	What was the value in dollars, in each of the first three months of 1950, of (a) our imports from the United States; (b) our exports to the United States?
2.	Have there been any increases in our export business to the United States during the above period over the corresponding period of 1949?
3.	If so, what increases by months?
Questions


Mr. Howe:: 1.	(a)
January, 1950.		154,473,063	
February, 1950		143,328,185	
March, 1950...		161,500,000	(estimated)
		Canadian	Foreign
1. (b)	produce	produceJanuary, 1950.	. .$	130,859,461	$ 2,064,645February, 1950.	128,837,906	1,505,052March, 1950. . .	154,310,521	2,868,7932. Yes.	Canadian	Foreign3.	produce	produceJanuary 	14,836,198	$ 568,559February ....	22,128,782	-24,170March 	31,892,415	1,247,148KENTVILLE,	N.S.,	DAILY MAIL	DELIVERY


Mr. Isnor:: 1.	Has a daily mail delivery service been inaugurated in the town of Kentville, Nova Scotia^
2.	If so, what was the date on which service was brought into effect?
3.	How many routes will be laid out?
4.	How many additional men will be employed at the Kentville post office because of the new service?
5.	Will these new men be appointed through the civil service commission?


Mr. Lapointe:: 1.	Yes.
2.	17th April, 1950.
3.	Five routes.
4.	Six letter carriers.
5.	Yes.



SALE OF CANADIAN WHEAT TO INDIA

Mr. Argue:: 1.	How much wheat of the present crop year has been purchased by India?
2.	How much wheat did India purchase from Canada in the same period during 1948, 1949 crop year?
3.	Did Prime Minister Pandit Nehru during his Canadian visit request a million bushels of seed wheat?
4.	If so, was the request denied, and for what reasons?


Mr. Howe:: 1.	None.
2.	11,315,099 bushels.
3.	No.
4.	Answered by No. 3.



PRAIRIE FARM ASSISTANCE

Mr. Kirk (Digby-Yarmouih):: 1.	What was the total of the assistance payments made to the provinces of Manitoba, Saskatchewan and Alberta for the year 1949?
2.	What amount to each province?


Mr. Sinclair:: I have spoken to the hon. member about the phrasing of this question. The phrase "assistance payments" is rather indefinite. The hon. member has agreed to drop the question and rephrase it.


Mr. Speaker:: Question dropped.



DUMPING DUTIES ON MOTOR VEHICLES FROM THE UNITED KINGDOM

Mr. Thatcher:: 1.	Have any representations been received by the government or any department thereof proposing the application of dumping duties against small English cars?
2.	If so, what disposal has been made of such requests?


Mr. McCann:: 1.	Yes.
2.	Matter under consideration.



QUESTION PASSED AS ORDER FOR RETURN


CENTRAL MORTGAGE AND HOUSING


Mr. Coldwell:: 1.	What steps has the government taken to make sure that the agreement between Colonial Corporation and Central Mortgage and Housing Corporation with respect to the property situated at 10820 Laval road, Ville St. Laurent, province of Quebec, will be adhered to?
2.	What increases in rents have been permitted by the rental administration of the wartime prices and trade board since the Colonial Corporation became the owner of the property in question?



MOTION FOR PAPERS


Mr. Goode:: For a copy of all correspondence exchanged between the minister and Tim Buck of the communist party of Canada in regard to passport applications, and a copy of the application for passport granted to this individual to allow him to proceed to a certain convention in Hungary.
The Secretary of State for External Affairs (Mr. Pearson) has been most helpful in this matter, and I ask permission to withdraw this motion.


Mr. Speaker:: Motion withdrawn. BUSINESS OF THE HOUSE



SUSPENSION OF STANDING ORDER 28 FOR SITTINGS OF APRIL 27 AND 28

[Stage Direction]
Right Hon. L. S. St. Laurent (Prime
Minister) moved:
That the provisions of standing order 28, in relation to Mr. Speaker leaving the chair without question put for the house to go into committee of ways and means, be suspended for the sittings of Thursday, April 27, and Friday, April 28, 1950,
Mr. Drew:: Will the Prime Minister explain the purpose of this motion?


Mr. St. Laurent:: It is our feeling that members of the house would not wish to have any of the resolutions appended to the budget discussed in committee until after the conclusion of the debate on the budget. Under standing order 28, if we proceed tomorrow with this matter Mr. Speaker would leave the chair without question put and we would be face to face with some of these resolutions before the completion of the general debate on the budget. We felt that that would not be the wish of the house, and in order to continue the debate on the budget it will be necessary to suspend that rule and not ask Mr. Speaker to leave the chair without question put.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. G. K. Fraser (Peterborough West):: should like to address a question to the Minister of Veterans Affairs. Can the minister tell the house whether there are any new regulations under the Veterans Land Act affecting men who served in the British armed forces? New regulations have been made effective as to their residence in Canada. Can the minister tell me what they are?


Hon. Milton F. Gregg (Minister of Veterans Affairs):: The regulations affecting the Veterans Land Act are being amended from time to time. I am not able to say offhand what new amendments have been made recently, but I shall be glad to answer any specific question put by the hon. member.



SIR BASIL BROOKE


[Stage Direction]
On the orders of the day:
Mr. Daniel Mclvor (Fort William):: Mr. Speaker, I should like to rise on a question of privilege. I do not think anybody can accuse me of being narrow, because on numerous occasions I have tried to keep fresh the memory of the pioneer missionary of Ireland, St. Patrick. Canada is about to be visited by another great Irishman, Sir Basil Brooke, a man who won the military cross in the first world war, who had three sons in the second world war, two of whom paid
Inquiries of the Ministry the supreme sacrifice, and the other is crippled for life. When suitable accommodation could not be found for the encampment of United States soldiers, Sir Basil Brooke opened up his place in that great county of the north of Ireland, and those soldiers were trained there to help defeat the enemy. In addition, to my knowledge Northern Ireland was the only country in the British commonwealth of nations in which the voluntary system of recruiting had to be abandoned, because otherwise there would have been a shortage of manpower.
The Prime Minister of Northern Ireland is to visit Canada. It may not be much of a reason, but I was born in the same district and my heart is warmed by the kindness of this great soldier and big-hearted Irishman. I would say that Canada would honour itself by honouring Sir Basil Brooke. I am wondering if something will be done.


Hon. L. B. Pearson (Secretary of Stale for External Affairs):: Mr. Speaker, in reply to the hon. member who has raised the question, I may say it is true that the Prime Minister of Northern Ireland is to visit Ottawa. I think he arrives on the 9th of May, and the government will naturally extend to him all the courtesies appropriate to his official position and his personal distinction.


Daniel (Dan) McIvor: Thank you.



OFFICIAL SECRETS ACT


[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinlon):: About a month ago I asked the Minister of Justice on the orders of the day if it was the intention of the government at this session to introduce a bill to amend the Official Secrets Act. At that time the Minister of Justice indicated that the matter was under consideration and that an announcement would be made later. May I ask the minister if he is now in a position to advise the house whether the government intends to introduce such a bill?


Hon. Stuart S. Garson (Minister of Justice):: I am in a position to say only that the matter is still under consideration, but no decision has yet been reached.



INQUIRY FOR RETURN


[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: In the
absence of the Secretary of State (Mr. Bradley) I should like to direct a question to
1906	HOUSE OF
Inquiries of the Ministry the Minister of Agriculture. On October 31, 1949, a motion for production of correspondence between the governments of Alberta and Saskatchewan with reference to irrigation was passed in my name. On March 8 last I asked for the production of this report, but so far I have not received it. Six months have gone by since the motion was first passed, and I wonder if it might not be brought down at an early day.


James Garfield Gardiner: I have been hopeful for about a month now that the correspondence would be completed and could be brought down in completed form. It is not quite ready yet, but just as soon as it is, it will be brought down. I can assure the hon. member that the delay does not mean that we are holding back anything.



FISHERIES


[Stage Direction]
On the orders of the day:	[DOT]
Mr.  W. Chester S. McLure@Queens: Mr. Speaker, my question arises out of letters and telegrams I have received, and I know that members on the other side of the house have also received them.


An hon. Member:: Reefer cars.


Mr. McLure:: No, not reefer cars. My question concerns a situation affecting the livelihood of a large number of fishermen and their families in the province of Prince Edward Island.
What action has the Minister of Fisheries taken to offset the action of the Department of National Defence in creating a restricted area for a bombing range off the north coast of Prince Edward Island? This restricted area, as reportedly planned, will result in a great loss to all the fishermen on the north shore.


Some hon. Members:: Order.


Hon. R. W. Mayhew (Minister of Fisheries):: I am sorry that the hon. member's telegrams and communications did not arrive soon enough for him to give me notice of the question. I believe my parliamentary assistant is prepared to answer the question.


Mr. J. W. MacNaught (Parliamentary Assistant to the Minister of Fisheries):: In reply to the junior member for Queens, Mr. Speaker,
I would say that such protests have been received by the department. Negotiations have been conducted between the Department of National Defence and the Department of Fisheries with a view to selecting a site for a bombing range along the north shore of Prince Edward Island, but no definite decision
[Mr. Argued

has yet been made. Before the site is selected, every precaution will be taken to see that the minimum amount of damage will be done to the fishing industry of Prince Edward Island.


Winfield Chester Scott McLure: Mr. Speaker, I believe the
fishermen should know before-


Mr. Speaker:: Order.



TRADE WITH BRITAIN


Mr. J. H. Harris (Danforth):: May I ask the
Minister of Trade and Commerce to give consideration to making a statement to the house about the relaxation of the dumping duties on certain commodities coming from the United Kingdom? Will he make that statement within the next week or ten days?-because all of us realize that relaxation is necessary because of the difficult dollar-sterling exchange situation.


Right Hon. C. D. Howe (Minister of Trade and Commerce):: I shall be glad to prepare
such a statement to make to the house.



THE BUDGET


[Stage Direction]
The house resumed, from Monday, April 24, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Greenwood), and the amendment to the amendment of Mr. Coldwell.
Mr. A. L. Smith (Calgary West):: Mr. Speaker, at the outset of my remarks last evening I assured the house that I would be brief. I now proceed to prove the truth of that statement because I intend to briefly discuss two matters; one, the position of the mounted police pensioners and the other, the question of the fiats which are required when one wishes to sue the crown.
I mentioned the first subject in the debate on the budget during the last session of the last parliament. What I had hoped, and what the members of the veterans association of the mounted police hoped, was that there might be some discussion of their problem by the members of the House of Commons. These men assured me, and I am quite sure they were correct, that they would receive sympathetic consideration from the members if a discussion were allowed. At the last session I discussed the problem with the Minister of Justice, and he was of the opinion,

as I was, that the better time to bring it up was on the discussion of his estimates. Some of you will remember that in the last two days of the last session the estimates of the Department of Justice were split, then deferred and not dealt with until the last day, at which time I was not here. Having lost that opportunity, the next thing I thought of was to bring the matter up by way of notice of motion of a resolution. The experience I have had has shown me that these private members' resolutions rarely get a hearing, so I discarded that method.
What am I seeking from the minister? I want to say this, so that no one will think there is anything political about it. The position taken by the government and the minister is essentially the same as the position taken by the late Lord Bennett when he was leading the government. I have read all the correspondence, certainly all that could be brought to my attention, including the last letter from the Minister of Justice, and what I think is wrong about the whole matter is that the government insists on treating the mounted police as civil servants. They are not that. They do not work only seven or eight hours a day. Let no one think I am criticizing those who do. No doubt those hours of work have been arrived at by negotiation between employee and the employer. In mentioning those hours of work per day I am not casting any aspersions on civil, servants. It is still true, however, that a member of the mounted police is on duty twenty-four hours a day, and that has been so ever since the North West Mounted Police was first formed.
In the session before last I was able to present a petition prepared by ex-members of the mounted police. I sent copies of it to every member and every senator, but the replies I received were not numerous; in fact, I did not get any at all. It looked like love's labour lost, so far as the correspondence was concerned. I am not asking the minister specifically for this or for that. He is well aware that in their petition the ex-members of the mounted police asked for three things. I agree that he was not in a position, for the reasons which he then gave, to grant all those requests. I am really asking for a reconsideration of the plight of these men. As a basis for that consideration, it should be borne in mind that the men in this organization are not civil servants. They really belong to a military organization. The problem of law enforcement under difficult circumstances makes that statement easily understood.
I am glad that the Minister of Agriculture (Mr. Gardiner) is in his place, because I am sure his memory is as clear as mine about the 55946-122
The Budget-Mr. A. L. Smith many brave and courageous services that have been performed by the men of this splendid organization, which is still excellently led by Commissioner Wood. Coming as we do from Regina or its neighbourhood, I am sure neither he nor I could have avoided an appreciation of the sympathetic consideration these men deserve. What I am asking now is something which I think might be done in an administrative way, without further motions or bills being passed by this parliament. It is a simple fact that a number of these men are now crippled and unable to earn a living. I refer to the men-perhaps the minister will recall them-who wore little pillbox hats; the men who patrolled the north by dog team in winter and by canoe and on horseback in the summer. As a result of that service many of these men-and I have one definitely in mind-after enduring the rigours of the climate, find themselves incapacitated. Some of the amazing trips which these men made read like an adventure story, and, as we all know, no saga of the north is complete without some mention of them.
Through their organization I endeavoured to get individual cases which I could bring to the attention of the government at this time. I want to be frank in saying that I failed in that attempt. I failed because these men said they would not permit themselves to be used as examples. They said they were getting along as best they could. It does seem to me that, even on an administrative basis, at least hospitalization could be provided for them. I am not speaking of a man who had a year or two in the service, but let us set a minimum of ten years' service. Some of them have had twenty-five or thirty years, and it seems to me that we might, through the generosity of our hearts, provide services for those men who served us so well when things were infinitely more difficult than they are today.
I wish to pay this tribute to that great force. For fourteen years I prosecuted in western Canada on their behalf. For a good many more than fourteen years I have been actively engaged in the criminal courts on the defence side. A short time ago I checked with those who were associated with me in my office, and only on one occasion in these hundreds of cases did I ever find it necessary to cross-examine a member of the mounted police on a point of credibility. As a practising lawyer I can pay no greater tribute to that force.
I am not going to ask the minister to specifically do this or that. The answer has been given by the Bennett government, by this government and by this minister, that to interfere with the pension arrangements for
1908	HOUSE OF
The Budget-Mr. A. L. Smith retired members of the mounted police would mean revamping the whole pension scheme for civil servants. Theoretically I would agree with that; tout if we consider the conditions under which the service was given by the mounted police in western Canada-because they were confined to that country when the Minister of Agriculture and I knew that part of the country some time ago-I would disagree. Those were the conditions under which they operated. They had no vacations; they had no fixed hours of work, because they were always on call.
In these days of motorcar accidents on the highways, these men are out again and again. It is true that there are road patrols, but there are not nearly enough of them. Perhaps it would not be wise police administration to increase those patrols, but when the ordinary fellow becomes involved in a motorcar accident he calls the nearest mounted police station. Those are the services which these men are rendering. I could go back to the early days. I remember them going off on the trail of ninety-eight to the Yukon by dog team-because it was a winter trip. I remember them going to the South African war. One can hunt our penitentiaries through and through, and so far as I know not a single ex-member of the mounted police will be found. It may be that, with the extension of their activities in modern times to include secret work in subversive organizations, some of us will not agree that that is a proper job for that force. People wiser than I am, however, have seen to it that they are undertaking that work, something along the lines of the work undertaken by the F.B.I. in the United States. Tremendous progress has been made by the mounted police. It may be news to many members in this house, but in the city of Regina they have research laboratories containing equipment to equal anything the F.B.I. has in Washington. The great strides this organization has made in the scientific detection of crime will be of benefit to this country.
I leave this subject with the reminder that you will not hear from these men about whom I am talking. They are too proud. I leave it to the consideration of the government, with the request that they base their thinking on the distinction between the sort of work these men do and that done by the ordinary civil servant.
I should like now to refer to the other subject I mentioned last evening, namely, the requirement that the citizen must procure a fiat from the crown before he can sue the crown. I brought this matter before the


house last year, and I remember the reply which the Minister of Justice gave. He said there was no necessity for a change, because a fiat had never been, or at least had been rarely, refused. Since that time I have had correspondence with many people. May I say that I am referring to the dominion government now, and not the provincial government, because it is necessary to obtain a fiat from the provincial government as well.
I believe the Minister of Justice, on the advice of his deputy, inadvertently overstated the situation. The information has come to me that insurance companies, who are involved through the insuring of persons who have been in accidents with crown corporation employees or dominion government employees, have practically given up asking for these fiats from the powers that be. I do not know whether it is the Solicitor General or the Minister of Justice who grants them. I put my request on much broader grounds than that. When a man has been injured by an action of the crown, or by a servant of the crown, or by a servant of a crown corporation, will anyone give me one single reason why he should not be able to go into a courthouse and press his claim, the same as one of us sitting here in this house would press his claim against another? I know it is an old right which has come down from early days when parliament did not amount to anything. In the growth of parliament many of these prerogatives have gone. That fiat is there because of the old statement that the king can do no wrong, even though he runs over you and your motorcar. That statement that the king can do no wrong is a poor answer to give you. Your leg is still broken, whether he can do no wrong or not; and you have no remedy unless the consent of the crown is given, by way of fiat, so that you may have the right to sue.	[DOT]
Let me be fair in this matter. Some few years ago in the place in which I live certain accidents took place. As a matter of fact, an aeroplane came right down in the centre of one section of the city and exploded, people were burned and that sort of thing. On that occasion the crown was good to me. I did not suggest suit, or anything of the kind, but I wrote to the Department of Justice and said:	"Under these
circumstances I think you will admit your liability." They admitted liability in the case of a little boy who was badly burned. Then they passed an order in council appointing an Alberta judge to settle the question of damages. In that way I obtained a fee from the government. I also obtained a very good judgment, but not too much, for this poor unfortunate crippled boy. I think the crown paid me $200 in costs, so that I was able to

turn over to these unfortunate people the whole sum which was granted by the court.
I am therefore not speaking from any personal pique or anything of the kind. I rest my case on the firm belief that no citizen, merely because of an old adage or something of the kind, should be debarred from suing the crown or the crown's agents. To place such a bar in his way shows a lack of regard for our courts by the Department of Justice itself. I do not mean the Department of Justice that we have in this year 1950; I mean the Department of Justice as it has existed over a long series of years. Why should the government, of all people, say to the courts: You cannot try this case unless we give a fiat to the person seeking to bring it before you. With respect, Mr. Speaker, I say that is all wrong. It has been wrong for scores of years.
It seems to me that the present minister will do himself honour and justice by simply tidying up that matter, because a criticism of the courts is inferred just as long as we say that the court cannot act until somebody m the department gives it permission so to do. As to all these stories about cases being settled beforehand, may I say that nine out of ten lawsuits with which the crown has nothing to do are settled. Few of them come into the courthouse.	I am merely
asking this government, through its Department of Justice, to take the same attitude toward our courts as private citizens are expected to take, and to put the citizens in the same position as the crown in bringing such actions as they please or as they are advised to bring so that they may be determined by the one great prop of our civilization, the judiciary, which, to a greater rl!nt,than ,the other two great estates, has " u [DOT] ufirm in a11 t*le difficulties through which this country and this world have passed.


Mr. Jean Frangois Pouliot (Temiscouala):: must pay a tribute, Mr. Speaker, to the Minister of Finance (Mr. Abbott) for the fine manner in which he delivered his budget speech. The budget represents an expenditure of $2,750 million a year. It is a considerable amount of money. Of that amount, approximately one-third is for war, as the minister has stated-one-half is for interest on the public debt incurred in two world wars, and another half for war expenditures. It is five years since the second world war ended, and we have to face tremendous war expenditures for the defence of this country.
I well remember that, when Mr. Dunning was minister of finance before 1930, I was looking at the budget figures with him; and the Liberal policy then was to reduce the
The Budget-Mr. Pouliot debt and reduce the taxes. He told me that if it had not been for the expenses of the first war, the budget would not have been higher at the time than it was when Sir Wilfrid Laurier was prime minister of Canada. The increase in taxes was due to the first war, and the expenditures during the second war were ten times what they were in the first war. Today therefore our problem is one of taxation due to war expenditures. We are all for the protection of this country, but it is surprising that after such a long time we still have to spend so much money for war purposes or for defence.
I remember that during the last war I opposed the policy of outright gifts to Great Britain. I also opposed the financing by the Canadian government of the sterling area, meaning by that the financing of the British empire. I recall that a member of the press gallery wrote that we could expect no gratitude from those whom we were trying to help by way of gifts.
During the recess I was fortunate enough to read the report of a speech delivered somewhere in India by the Secretary of State for External Affairs (Mr. Pearson) in which he indicated that he realized we had done too much during the last war. My chief, the Prime Minister (Mr. St. Laurent), spoke to the same effect in the debate on the address, and stated there would be no more outright gifts to any other country.
I remember well an occasion when an hon. member opposite was complaining about high taxation. I told him he had no right to complain because he had approved, with closed eyes, some of the expenditures made during the war against which some of my colleagues and I had protested. It was difficult to do that in those times. We were pointed at, because we were ahead of our time. Those things were said so long ago that when they are now repeated by people having greater authority one forgets who said them first.
It is always unpleasant to make such remarks; but they have to be made, because one must express one's opinion earnestly and fearlessly. What did we get from our war effort in the first world war or in the second world war? We got practically nothing. Today political difficulties have arisen between the provinces because of the war. There are also economic difficulties, particularly that of high taxation, which causes me to sympathize fully with the Minister of Finance (Mr. Abbott).
There are a certain number of people in Canada who believe that when an offensive or a war is in progress somewhere Canada should always take the lead. They have expressed that opinion many times. It is
.910	HOUSE OF
The Budget-Mr. Pouliot easy to answer them. Let us consider, for instance, the position of Ireland. She is close to Great Britain, which was so heavily bombarded during the war. Yet Ireland remained outside the war, and declared her neutrality.


Mr. Knight:: Southern Ireland-Eire.


Jean-François Pouliot: Yes, Eire. They declared themselves neutral, and they do not now have to face the same difficulties we face. We were told we should do certain things to support the sterling area and the British empire, expecting generosity in return. We have had none.
Let us consider the countries of South America, and particularly the Argentine, which has been trading so extensively with Great Britain. While the Argentine did not take part in the war, their business is now flourishing. On some other occasion I shall avail myself of the opportunity to mention the new constitution of the Argentine, which contains some provisions which might serve as an example of good legislation.
What is the conclusion? The conclusion is that the understanding of trade and commerce by our Minister of Trade and Commerce (Mr. Howe) is perfectly sound. He is going to different countries to promote Canadian trade. A few days ago it was refreshing for me to hear the Minister of Fisheries (Mr. Mayhew) refer to barter, which is another suggestion that came from a private member last year. I spoke many times about barter, when American dollars were so scarce.	_
It is extraordinary that we have to deal through New York and Washington to sell our products in other countries for American money. What was said by the Minister of Fisheries about barter sheds a ray of hope for the betterment of trade, and increasing trade among the nations of the world.
There are other things which are done and which help Canadian trade tremendously. I have in mind particularly the international trade fair which has been held in the last two years, and which is to be held again in Toronto at the end of this month. That trade fair gives other countries some idea of what Canada can sell. I have heard many people, including the Prime Minister, speak in favour of private initiative. This is the time to encourage private initiative, because the more people who lean on the government for help, the greater will be our taxation. Some reconsideration is necessary in matters of social security, and I hope the committee studying these matters will give that consideration. It is important to encourage our people to produce as much as they can, and to help them not only in production but in


the distribution of Canadian goods throughout the world. Help should be given farmers in the east so that they may obtain the produce of the west, and so that they may continue with the breeding of their cattle and the development of their farms.
I do not wish to speak at great length this afternoon. I did however wish to bring these matters to the attention of my colleagues, and to tell them that I regret very much my inability at times to listen to their speeches in the House of Commons. However, when I have the opportunity I read them in Hansard, and I am always interested to be informed of expressions of opinion from all parts of the house.
You, Mr. Speaker, and my colleagues have always been most kind to me. I appreciate that, and believe that we should co-operate in an effort to do our best for our own people.
There are a couple of things I should like to say. Some people are under the impression that the duty of a member of parliament consists in expressing opinions and that it is easy to tell some people that they should have more and more, et cetera, et cetera. The member of parliament has a painstaking task, but when he does his duty he has a certain satisfaction. One of the difficulties we face is the fact that there are certain people who are not responsible to parliament, who apparently have contempt for parliament, who surround themselves with an atmosphere of mystery at all times. I am not referring to those who are under the jurisdiction of a minister, because progress has been made in that respect; I refer to those employed by crown companies whose salaries it is impossible to find out about.
Many of them have been left over from the second war. We have kept them on and are paying fat salaries as well as travelling expenses. There they are in their ivory towers looking from on high on members of parliament. It is time they should be brought to reason. It is time we were told what is being paid to them. A fine-tooth comb should be used to clean up every one of these crown companies. I want my colleagues to be respected by all those in the public service. These people should not consider themselves as being masters; they are civil servants and they should respect the members of parliament.
I am giving a warning to these people. I do not know them personally, but I want them to give good service. I want them to respect our parliamentary institutions. I want them to respect my colleagues. I want them to understand that we are ready to co-operate with men of good will for the advantage of the Canadian people. For a long time I fought

hard for the Liberal party. That was in the dark and ungrateful years of the war when there was so much prejudice in the House of Commons. I was not alone as there were other hon. members who tried to save the face of the Liberal party so that it would fulfil our expectations and help the country at large and the Canadian people.
I am glad to see a new generation of members in the house who are full of good will and enthusiasm. They are an asset to the House of Commons. I pay special tribute to our colleagues from Newfoundland on both sides of the house who are doing so well. They are doing their best to make a useful contribution to the debates and I compliment them upon the -way they are fulfilling their parliamentary duties.
I shall not say any more because I hope the vote will be taken today. I hope that in the near future greater progress will be made in regard to Liberal policies as expounded by our leader and by all previous leaders of the party.


Stanley Howard Knowles: Mr. Speaker, as I see it the function of a nation's budget is threefold. In the first place I believe the function of a budget should be to stimulate the production of real wealth. Secondly, I see it as the function of a national budget to determine the portion of our national wealth that is to be collected each year and spent collectively on services for the good of the nation as a whole. In the third place I regard it as a function of the nation's budget to determine the basis on which that portion of the nation's wealth which is collected for collective spending is raised. In the present budget the government has failed on all three counts.
I know a great deal is being said by Liberal protagonists about the high value, at least in dollars, of Canadian production at the present time. We are given a figure of around $15 billion as being our gross national product. But I suggest that so long as there are unused and undeveloped natural resources, so long as there are large numbers of our people unemployed, so long as there are large numbers of our people living on small amounts of money such as old age pensioners, superannuated civil servants and certain other categories whom I might name, so long as there are people who are not receiving enough of the necessities of life, it can hardly be argued that the production of wealth has been stimulated to the level desirable for this nation. I submit that the purpose of the budget should be to put to work those
The Budget-Mr. Knowles thousands of our Canadians who are unemployed on our natural resources to produce additional goods and services to meet the needs of our people.
The figures as to the number of unemployed vary from 350,000 to close to 500,000, depending on who is giving the figures. However, it is somewhere in that range at the present time, and probably closer to the latter figure. At the present time our gross national product is in the neighbourhood of $15 billion and our working force is in the neighbourhood of five million. Hon. members will realize that I am using very rough figures, but I think it is fair to draw attention to the fact that approximately five million people at work are producing approximately $15 billion worth of wealth. That works out to about $3,000 worth of real wealth per year per person at work.
I know that some will say that the next statement I am going to make is altogether too simple, but I suggest that its simplicity does not detract from the fact that it is pretty close to the situation. I feel that what we should be doing is seeking to put to work the 350,000, 400,000 or 500,000 who are presently unemployed. If we could put
400,000	idle people to work to produce wealth on the basis of the present national average of $3,000 per person per year, we could be producing an additional volume of goods and services well in excess of a billion dollars. If we could do that we would solve some of the problems that we are worrying about in the field of social security, and it would also mean much to the standard of living of our people. Of necessity I'have talked in terms of dollars but I think what I have said makes it clear that I am really thinking in real terms, namely in terms of goods and services-food, clothing and shelter-the things our people need. I submit that until budget policy stimulates production to a level consonant with the number of our workers, our natural resources, our capacity to produce and the needs of our people, budget policy is inadequate, and I suggest that is the case at the present time.
My second statement as to the function of a national budget is that it determines the portion of the national production that we collect through the agency of government, which represents us all, and then spend collectively on purposes and services desired by the nation as a whole. I know that it is a popular indoor sport to complain about taxes and about the extent to which people have to work to provide funds for the government, but let us be realistic. What we do when we collect taxes to meet government expenditures, apart from the occasional

The Budget-Mr. Knowles extravagance or mistake that may be made, is in the main what I have just said, the setting aside of a portion of the national wealth that we produce year by year to spend on purposes that we nationally and collectively desire. These purposes range all the way from national defence to social security, the providing of health services, keeping the post office going, the building of wharves and docks, and a thousand and one other things that we would not do if we were just a collection of individuals and not a civilized nation. It is the fact that we act collectively that marks the democratic civilization that is ours.
Far from complaining about the amount of taxes collected, although I shall say something about the way in which they are collected, I feel that what matters is what we get for our taxes. In other words, it is the job of government to assess the situation in the country and to decide how much of the wealth we are producing should be gathered into a central pool and spent collectively on the things that all our people want. Some of them we have to have whether or not we want them. We all feel that way about a good deal of the money we spend on defence. We deplore having to spend the amount deemed appropriate for that purpose but as a nation our people are prepared to accept it as something that has to be done.
On the other hand, it is strange indeed the extent to which complaints are made about the alleged impossibility of financing the costs of a broader program of social security such as some of us advocate. When that complaint is made it is frequently suggested that a broader program of social security costing a certain large sum of money is unreasonable in relation to a national budget of $2,410 million. What we have to compare is not the cost of a program such as social security with the amount of money that comes in and goes out of the consolidated revenue fund. What we have to do is to compare that amount of money with the total production of wealth in the country as a whole. When we ask for an over-all social security program that may cost a billion dollars all told the thing to do is not to compare it with the amount of money that comes in and goes out of the consolidated revenue fund. The thing to do is to compare it with the $15 or $16 billion worth of wealth we are producing in the country this year, or with the $16 or $17 billion or more that we could produce if we had policies that stimulated full production.
That is my second complaint about budget policy. I do not feel that the government

assesses the whole situation and faces up to the overwhelming desire of our people for more collective spending in such fields as social security where our people want to see some real progress. What this involves is what some of us call a certain amount of redistribution of wealth. There is another phrase- creeping into budget phraseology that means the same thing, transfer payments. The justification for that is that a great many people who participate in the producing of wealth to an average of $3,000 per person per year do not get an income of anywhere near $3,000 per year. Because they have participated in it, it is only fair that we who represent the people should do our best to effect such redistribution as we can to get back to the people what they deserve. In other words, when we ask for increased transfer payments, when we ask for a broader measure of redistribution of wealth, when we ask for a broader program of social security, we are not asking that people be given something for nothing. We are not asking that they be given something they did not work for, that they did not produce, that they did not earn. We are simply asking (a) that they be given a chance to produce to the maximum; and (b) that they be given a chance to share fairly in the wealth that they have helped to produce.
My third point about the function of a budget is that it determines the basis upon which that portion of money which is raised and spent collectively is raised. In other words, the budget sets out the scale of income tax payments. The budget decides what proportion of federal money is to be raised on the basis of income, what proportion is to be raised on the basis of the sales tax, what proportion is to be raised on the basis of excise taxes, and so on. My complaint about budget policy in this respect is that too large a portion still comes from such indirect taxes as the sales tax, and that we have not moved far enough in the direction of raising as much of our national revenue as we possibly can on a basis such as that of the income tax which is the one tax based on ability to pay.
I feel the necessity of emphasizing that point at the present time because of the talk there is in the country about ways and means of financing any broader social security plan. When any financing scheme is brought in for such a plan I insist that it must not be like the sales tax. It must not be a flat tax that disregards the ability of people to pay. Rather it must be built into the one plan that is based upon ability to pay, namely, the income tax, with graduations going up steeply as you get into higher brackets.

I want to turn now for a moment to another matter which relates not to budget policy in the broad way in which I have been discussing it but rather to a practice being followed by the government which is referred to as legislating by means of votes in the estimates. This is a practice which has been growing for quite a number of years. I have raised the odd complaint about it in the past, but I feel that my protest against it has received' very strong support from a real authority in these matters. I should like to say a few words about it at this time.
First, I shall go back and say that on December 2 during the last session, when we were dealing with a bill to amend the Salaries Act, I asked the Prime Minister (Mr. St. Laurent) why it was that the estimates indicating the salary of each cabinet minister and his motorcar allowance were grouped together and marked "statutory". I was not complaining about the amounts of either of them but was just raising the technical point.
I pointed out that the $10,000 salary is clearly provided by statute, and I wondered where was the statute that provided for the $2,000 motorcar allowance, that made it possible for the government to group these two items together in the estimates and put opposite that item the letter (S), meaning statutory. On December 2 the Prime Minister (Mr. St. Laurent) replied, at pages 2605-06 of Hansard, as follows:
Yes, a provision was made in the estimates of 1931 for a motorcar allowance for any minister of the crown. I believe hon. members will find the reference in Hansard of August 1, 1931. The same question presented itself to me, and I asked to be assured that nothing else was necessary so that if and when any minister was appointed there would be the same provision for him as for any other member of the cabinet. I was shown a vote in August, 1931, which makes provision for the allowance of $2,000 for every member of the cabinet for that year and for future years.
I might add that the vote also included a $2,000 motorcar allowance for the leader of the opposition and $1,000 each for the Speaker of the house and the Speaker of the Senate. This was my reply on that occasion:


Stanley Howard Knowles: This may be only a technicality,
but I confess it puzzles me a bit. I think the Prime Minister understood the point I made before, namely, that the full $12,000 is listed in the estimates as statutory. In other words, both the salary of $10,000 and the motorcar allowance of $2,000 are provided by statute.


Mr. Abbott:: A vote is a statute.


Stanley Howard Knowles: There is no question about the
$10,000, but is the item of August 1, 1931, a statute? The Prime Minister called it an estimate.


Louis Stephen St-Laurent: It is a vote which is a statute
because it is voted in the schedule to which effect is given by the appropriate statute of that year.


Stanley Howard Knowles: I shall look it up some time.
The Budget-Mr. Knowles
Obviously I was a bit puzzled by the whole incident, and proceeded to look it up. I raised the matter again some eight days later, on December 10, 1949, when we were in supply on the estimates of the Minister of Finance. At that time I brought to the attention of the house the exact wording of the estimate which had been voted in the Appropriation Act No. 5 of the statutes of 1931, nineteen years ago. The vote was as follows:
352. To provide for payment annually from the consolidated revenue fund of the sum of $2,000 to each minister of the crown charged with the administration of a department, the solicitor general, and the leader of the opposition, and the sum of $1,000 each to the Speaker of the Senate and the Speaker of the House of Commons, in lieu of motorcars and their maintenance, including chauffeurs, the acceptance of such sums not to vacate their respective seats in parliament: and to authorize the governor in council to appoint any person now employed in the public service as a chauffeur of a passenger automobile at Ottawa, whose position ij abolished, to a vacant position in the public service, provided such chauffeur has been continuously employed as such for at least two years and that the appointment will be made at no higher remuneration than he is now receiving, $42,000.
My point at that time was that I found it difficult to understand how a vote of $42,000, bearing in mind that this was the limit placed upon the amount to be expended under that item passed back in 1931, could be used to keep on paying $36,000, $38,000 or $40,000 a year-or more-for all the years following. We had some debate about it on the floor of the house on December 10 of last year, in which I developed the point I have just made. At page 3123 Hansard for that date the Minister of Finance (Mr. Abbott) replied as follows:


Douglas Charles Abbott: As my hon. friend pursues these
purely legal questions I always follow his legal arguments with a great deal of interest.
After it was all over the minister almost offered me a job in his law office, but I could not qualify. I think he just wanted to get me out of here. The minister went on:
Perhaps it is not necessary for me to say that the Minister of Finance has received a formal opinion from the deputy minister of justice that this is what is known as a continuing vote. From year to year the estimates are filled with items of this kind, including a number of pension items, which are voted once in an appropriation bill but which continue as a statutory charge. I used to lecture in the law faculty of McGill before I entered public life, but I have given up that occupation for the time being. If my hon. friend would like further elucidation I am sure the deputy minister of justice would be only too happy to discuss it with him. I can assure him that there is appropriate legal authority for the continuing payment of this item from year to year.
Well, I am a persistent sort of so-and-so, and I did not let it drop there. I suppose someone will cay that I should have taken the minister's suggestion and got in touch with

The Budget-Mr. Knowles the deputy minister of justice, but I made my own decision in the matter; I wrote a letter to the Auditor General and called his attention to the statements as they appeared in Hansard of December 10, asking whether he cared to make any comment and also whether or not this matter had ever been the subject of comment in a report of the Auditor General. Well, the Auditor General, who after all is a servant of parliament and not of the government, quite properly replied to my letter and dealt with the points I had raised. He gave me his comments and enclosed a copy of one of his reports, also a copy of a memorandum he had prepared dealing with this particular question. I find that despite the assurance the Minister of Finance gave me that the deputy minister of justice was quite sure this was all right, the Auditor General does question the practice.


Douglas Charles Abbott: My hon. friend is aware that the Auditor General, though a very distinguished public servant, is not a member of the legal profession.


Stanley Howard Knowles: Dare I say that might be in his favour? At any rate the point I am making just now is that he is appointed as a servant of parliament; and his function, as he clearly says in one of his letters to me, is to make sure that the authority of parliament in the voting of money is not overridden. Mr. Sellar called my attention to the Auditor General's report of 1947-48, at pages 15 and 16, where he has a section of about four paragraphs under the heading "Legislating by appropriation acts." This is a bit lengthy and a bit technical, but the gist of it is that he questions the practice of legislating by means of putting items in the estimates. In the first part of this section he says:
Since this office was established seventy years ago attention has, from time to time, been drawn to problems associated with legislating by means of token items in annual appropriation acts. For example, the procedure by-passes normal parliamentary safeguards against hasty decisions with respect to public expenditure. Further, the practice tends to disturb constitutional usages with respect to money bills-both within the House of Commons and in relationships between the Senate and the house. An ancillary characteristic is that the practice presents difficulties to searchers for the authority for payments.
Then he goes on in a rather lengthy paragraph, No. 40, to deal with a certain incident having to do with annuity payments, pointing out that the Auditor General had withheld the audit certificate in a certain case because the vote in the estimates seemed to override the provisions of the act, and the result was that one item after another, differently worded, was put in until finally by that means the government got its way. Then in paragraph 41 he deals with the matter by

pointing out that an illustration of this business of legislating by items in the estimates is the motorcar allowance to ministers, the Speakers of both houses, and the leader of the official opposition. Finally he concludes this section by saying:
The practice of legislating by appropriation acts has attractions when dealing with special cases or making temporary exceptions from general legislation: but the thought presents itself that it might be a safeguard and a convenience to members were such items listed together in a special schedule and the reasons therefor printed with each item-as is the practice with respect to bills.
I am going to bring forward other examples in just a moment; I am not dealing only with the motorcar allowance. That is just the example I happened to start with. The point I wish to make is that the Auditor General, who is not a lawyer and therefore does not go to the extent of saying whether such and such is illegal, does say that the practice of legislating by putting items in the estimates has attractions when dealing with special cases or making temporary exceptions from general legislation. You can hardly call it a temporary exception, however, to continue paying a $2,000 motorcar allowance from 1931 right down to 1950. The point the Auditor General makes, and the point I make, is that here we are paying out every year a sum of money which was never authorized by parliament in the way in which normal legislation is passed. The normal practice in connection with a money bill is that it is preceded by a resolution and goes through all the various stages. Before we got old age pensions it had to be done in that way. Before we got family allowances it was done in that way. Before we could get any increase in the old age pension it had to be done in that way. Before any money bill becomes law it has to go through all the processes and steps required for the enactment of legislation. When you can slip an item into the estimates and get it passed, however, to use the words of the Auditor General, you by-pass the normal procedures of parliament.
That is done in two ways. It is done by these continuing votes, such as the one that was passed in 1931 having to do with the motorcar allowance to cabinet ministers, the two Speakers, and the leader of the opposition. The result in that case is that it was just passed once in the simplest way possible, and from then on we do not even vote it; it is just listed in the estimates as statutory, and the Auditor General says many such items are scattered through the estimates. In other words, in many cases where the letter (S) appears in the estimates, the item is statutory only in the sense that once upon a time it was passed under the terms of a continuing vote, such as the one I have read


Douglas Charles Abbott: It is a statute.


Stanley Howard Knowles: Just a moment; your quarrel over this matter is with the Auditor General. In most cases where the letter (S) appears in the estimates it means to us that a proper money bill, a proper statute, has been passed by this house. When we see the letter (S) opposite the amount to be voted for old age pensions, or opposite the amount to be voted for family allowances or for disability pensions, we know that provision has been voted by parliament by means of a proper bill with all the terms and conditions set out in that statute. Now, however, we discover that in many cases in the estimates the (S) simply means that it was passed as a continuing item some time in the past. Then there are some cases, like the salary and motorcar allowance of the ministers, where you get two different kinds of votes grouped together. The Salaries Act provides for the $10,000; item 352 in the estimates of 1931 is taken to provide the other $2,000. Now in the estimates, however, they are conveniently put together as $12,000 and marked "Statutory".
Mr. Abbot!: My hon. friend used the phrase "a proper bill." What does he consider a proper bill?


Stanley Howard Knowles: A proper bill legislating for a particular purpose is a bill that stands on its own feet, so you can deal with the principle involved in that bill and so parliament can pass upon its terms and conditions. That is the criticism the Auditor General offers. As a matter of fact, it is the criticism that was made in a report coming from a committee of the Senate thirty years ago, more or less, which I will not take time to read simply because my own time is likely to run out on me.
I shall come back to this if I have time, but I wanted to say that the other way in which we are called upon to legislate by means of items in the estimates is through the inclusion of many items which we do vote every year but which have never been made proper, which have never been clearly set out in an act of parliament.
I can give a few examples. As a matter of fact I have before me a list of about twenty. There is an item in the estimates of the Department of Agriculture which provides for making certain appointments notwithstanding the provisions of the Civil Service Act. In other words by that vote we by-pass the normal requirements of the Civil Service Act, or the necessity of amending that act in the proper way. Oddly enough, there is an item in the section of the estimates headed "civil service commission"
The Budget-Mr. Knowles which provides for the payment of $2,000 a year extra to each of the three civil service commissioners. In view of the care with which the civil service commission carries on in dealing with salary matters, I am amazed that the three commissioners should accept salaries made up of certain amounts provided by statute, plus $2,000 each voted in the estimates.


Douglas Charles Abbott: Which is also provided by statute.


Stanley Howard Knowles: It is voted in the estimates each year, with the phrase "notwithstanding any of the provisions of the Civil Service Act." Then under external affairs there are three items that have such provisions. One has to do with the making of a large number of appointments all over the world, which are made notwithstanding the provisions of the Civil Service Act. We are proud of the fact that the civil service has reached the point it has in our modern democracy, yet we by-pass it time and again. Not only does the government by-pass the act; it bypasses the accepted procedure of changing an act by bringing in an amending bill. This is being done simply by placing an item in the estimates.
There is another external affairs item which has to do with the use of inconvertible foreign currencies to acquire property. Another has to do with the salary of the chairman of the joint United States-Canadian defence board. No statute has been passed to provide that salary; it is done simply by an item in the estimates. The same is true, as the minister knows, of the grants to municipalities in lieu of taxes, though I understand the intention is to bring in a proper statute with respect to that appropriation.


Douglas Charles Abbott: That is not a continuing appropriation.


Stanley Howard Knowles: I think I have already made it clear that there are two ways in which this questionable practice is carried on, one by a continuing appropriation, the other by an appropriation every year which nevertheless by-passes the necessity and desirability of a statute. The secretary to the governor general, a good friend of mine-which proves that there is nothing personal in this-gets his salary in part under the statute, but largely through an item in the estimates containing the provision that this is done notwithstanding the provisions of the governing statute. There are two such items in the estimates of the Department of Justice and one in the estimates of the Department of Labour. There are a couple in the section known as legislation. One of them in particular is the extra $4,000 per year paid to our

The Budget-Mr. Knowles good friends the parliamentary assistants. There never has been a statute to provide for the payment of that money.


Douglas Charles Abbott: There has been, each year. I do not want to interrupt my hon. friend, but he must be accurate. That money is voted each year, and it is in the Appropriation Act each year.


Stanley Howard Knowles: If it is of any interest to the Minister of Finance I can tell him that my notes are taken from a memorandum I received from the Auditor General himself in response to an inquiry I addressed to him.


Douglas Charles Abbott: As I said before, the Auditor General is a distinguished public servant, but he is not a member of the legal profession and his views are his own.


Stanley Howard Knowles: Certainly they are, but I-happen to agree with him. The minister and the government do not hesitate to quote the Auditor General or any distinguished public servant when he is on their side. In this instance I want to make it perfectly clear that he is not saying what has been done is illegal. He is questioning the practice and suggesting that a change should be made.


Douglas Charles Abbott: My only reason for interrupting was that the hon. member said these were not authorized by statute. I am convinced that the Auditor General never said to my hon. friend or anyone else that the $4,000 a year paid the parliamentary assistants is not authorized by statute. I am sure my hon. friend will not find that in any memorandum from the Auditor General or anyone else.


Stanley Howard Knowles: The Auditor General includes that item in the list of twenty or more which he gives as examples of vote texts that legislate, and he seriously questions the practice of legislating merely by putting items in the estimates.


Douglas Charles Abbott: My hon. friend's travelling expenses are in exactly the same category.


Stanley Howard Knowles: The travelling expenses that are paid to us when the government puts an item in the estimates to cover our trip home at Easter are in that category.


Douglas Charles Abbott: That is right.


Stanley Howard Knowles: The expenses that are paid to us on a statutory basis to cover our coming down here at the first of the session and going home at the end are provided for in the proper way by statute. Similarly, if we are going to pass a supplementary item every year providing for the full payment of the indemnity of members of the House of Commons and Senators who have been absent owing to illness, the same Auditor General suggests that, now that it has become a

recognized practice, it should be done by amending the Senate and House of Commons Act. This is not an original idea of mine. That is what the Auditor General has said quite clearly in his memorandum; he has said that the Senate and House of Commons Act should be amended to take care of these things that are being done year in and year out instead of doing them by means of these annual votes on the estimates.
In that connection he points out that the matter was the subject of discussion at one time in the British house, and as a result of a rather interesting case, which was known as the Australian case, Fisher v. the Queen (1903) A.C. 158, the judicial committee of the privy council ruled that an appropriation act could not override a statute. Consequently in 1908, quite a while ago, the British public accounts committee abandoned its previous viewpoint, which was that appropriation acts could be used in the way that we are using them here, and they declared:
It is desirable in the interests of financial regularity and constitutional consistency that such a procedure should be resorted to as rarely as possible, and only to meet a temporary emergency.
And:
The fact that a proposed vote overrides an existing statute should be clearly stated on the face of the estimate, with the reasons for adopting that course, so that no doubt can exist of the deliberate intention of parliament. The exceptional nature of the vote should also be indicated in the Appropriation Act.
I was in the midst of giving certain examples when the Minister of Finance (Mr. Abbott) interrupted me. There is in the estimates of the Department of Mines and Technical Surveys an item that permits of certain funds to be paid to civil servants, notwithstanding the provisions of the relevant statute. In the Department of National Defence there are a couple of large items, to which the Auditor General calls attention, which provide for commitments to be made in future years that total over $600 million. The Auditor General has put it mildly and I agree with him. He questions the practice of agreeing to these large appropriations by the simple process of an item in the estimates as distinct from the normal money bill procedure that requires all the stages that we go through.


Douglas Charles Abbott: Does not my hon. friend call an appropriation bill a money bill?


Stanley Howard Knowles: Certainly it is a money bill.


Douglas Charles Abbott: It is the money bill of all money bills.


Stanley Howard Knowles: But it includes well over $2 billion worth of separate items, and we have

no chance of voting upon the principle involved in these various expenditures in the way in which expenditures are supposed to be dealt with by the process of a resolution and a bill going through all its stages. The minister knows about this because I am sure this memorandum is available to him, as it was to me-as it certainly should be-and all of the quotations and the citations are here for him to read.
I submit seriously that it is not just a technicality. Perhaps the government is trying to save time; but I think they have been in power so long and feel that their power is so great that they follow the simplest course of putting an item in the estimates instead of first bringing down a bill. That is the way it has been done so far with these grants to municipalities in lieu of taxes. That is the way it has been done for several years now with respect to the national health grants which come under the Department of National Health and Welfare.
I sat in the gallery of the Manitoba legislature a week or so ago and heard the minister of health there tell Lloyd Stinson, who had asked him a question, that he understood there soon was going to be a statute so that the provinces would know where they stand with respect to the health grants. I hope that will be done soon, because I make it clear that I am not against this money being voted; I am for it. In fact, I am for a great deal more of it. But I want it done in the proper way. Under Trade and Commerce there is an item of this nature. There is one under Transport and also one under the Central Mortgage and Housing Corporation.
Another one to which the Auditor General calls particular attention is an item in the Finance estimates of this year, vote No. 101, which reads as follows:
To provide, subject to the approval of the treasury board, for miscellaneous minor and unforeseen expenses, including recoverable advances for working capital purposes, and for the re-use of any sum repaid to this appropriation from other appropriations.
From that the Auditor General went on to discuss the question of motorcar allowances and all these other items that are put through in this simple way rather than in the slightly more roundabout but clear-cut way that is provided. The Auditor General has made it clear to me in the correspondence that I have had with him-and I have written him on several occasions-that he is not interested, and that officially he is not supposed to be interested, in the legal aspects of it. I do not quarrel with the practice of the Minister of Finance in going to the Minister of Justice (Mr. Garson) or to the deputy minister of justice for his legal opinions. The Auditor
The Budget-Mr. Knowles General makes it quite clear that it is his function as a servant of parliament to help parliament to protect its interests in the voting of money. One of the principles that have been laid down in our parliamentary institution is that the voting of money is left to parliament and that, before these permanent and continuing sums of money are paid, there should be a statute that provides for the payment of that money, and lays down the terms and conditions under which it is paid.
I think I should take just a moment to read something I referred to a moment ago but did not read because I was afraid of the running out of my time. It was a part of a report made to the Senate by a special committee of the Senate on the rights of that body in matters of financial legislation. The chairman was Senator W. B. Ross. In a memorandum prepared by him and attached by the committee to its report is to be found the following:
To reject a supply bill might in olden times have been feasible, but today, with the functions of government so vast and complicated, it is unthinkable ... It would mean chaos. A supply bill should be passed as a matter of course by the Senate in almost any conceivable circumstances if it contains nothing but supply.


An hon. Member:: What year is that?


Stanley Howard Knowles: It is about thirty years ago. The quotation continues:
If other matters are inserted in the bill or "tacked to it" these should be struck out and be made into a separate bill or bills.
That is the whole point of this part of my remarks, Mr. Speaker. I am not necessarily objecting to any of the items to which I have referred. Some of them I would question, but some of them I am wholly in support of. But I think the position taken by that committee of the Senate thirty years ago, a position given endorsation by the fact that the Auditor General has now included it in the memorandum which he read before the Senate committee not long ago, is perfectly valid, namely, that you should not, if I may use those words, "tack to" a supply bill matters other than supply. If we want to give cabinet ministers or the leader of the opposition $2,000 a year motorcar allowance; if we want to have parliamentary assistants and pay them $4,000 extra a year; if we want to pay members of parliament and senators their full indemnity if they are absent more than fifteen days owing to illness; if we want to make special exceptions in the matter of appointments in the Department of Agriculture or by the Department of External Affairs-


Douglas Charles Abbott: Or pay travelling expenses for Easter.

The Budget-Mr. Knowles


Stanley Howard Knowles: What is that?


Douglas Charles Abbott: If we want to pay travelling expenses for the Easter recess.


Stanley Howard Knowles: Yes, I agree; I fully agree to add that to my list. If we want to make any of these extra commitments; if we want to increase the salaries of the civil service commissioners; if we want to increase the salary of the secretary to the governor general; let us do it in the proper way, by a statute dealing with that specific proposal.
From time to time the Minister of Finance has criticized us in the opposition for the things that we have said about his budget, and he has asked us to look at it with a magnifying glass and find things that are wrong. Well, I hope I have satisfied him today.


Douglas Charles Abbott: Only on procedure; you are taking the Tory line, that you agree with what is done, but that it is done the wrong way.


Stanley Howard Knowles: No. I think if the Minister of Finance (Mr. Abbott) paid attention to the first part of my speech, in which I dealt with the functions of a budget, and where I said his budget had fallen down, he will agree with me-


Douglas Charles Abbott: I was referring to the latter part.


Stanley Howard Knowles: -that there is a wide difference between the so-called Tory line and our position with respect to budget policy.


Douglas Charles Abbott: I was referring only to the latter part.


Stanley Howard Knowles: Well then, the minister
wanted parliament to take time to examine the way in which they are building up the estimates, and asked for suggestions as to how they might be cut down. He got one answer from the hon. member for Kamloops (Mr. Fulton), and I have taken another approach. I have called as my chief witness, in support of the position I take, one whom he has properly described as a distinguished public servant, namely the Auditor General. His position is quite clear. He is the servant of parliament and his job is to help parliament protect its own rights. Let me say I have written to him at times about things that I thought were a little off colour, and I have had replies from him-on occasion-to the effect that I was wrong, and that the practice being followed was the proper one. In the matter about which I am speaking today, his views and mine agree.
In other words, I have complete confidence in the objectivity with respect to these matters of the Auditor General; and I think the

Minister of Finance should have the same confidence. Instead of brushing off the complaints I have made today he should take them more seriously. May I point out that in all of these I have been dealing with representations which the Auditor General made to a committee of the other place, but I have dealt with only one section of them. There are several other complaints he makes with respect to present practices in connection with estimates. If time makes it possible later in the session I shall discuss some of those other matters. At this time, however, I ask particularly that the government give serious consideration to the representations of the Auditor General, and that the practice of legislating by appropriations should be changed, and that the suggestions he has made should be accepted.


George Alexander Drew: Mr. Speaker, the budget which has been under consideration for some time, but under debate for only a few days, is in fact a statement of the way in which the government proposes to deal with the business of the country during the current year. The details are not before us in the budget for examination; and that, in itself, is a basic principle which must have some bearing upon a consideration of the budget. Those details will come before the house in the estimates, and in some cases will come before committees.
It is appropriate, however, to mention the statement of the Minister of Finance (Mr. Abbott) in presenting his budget which, in general terms, said in effect, "These are the expenditures we propose to make. We do not know any economies that can be practised. This level of approximately $2,400 million is going to continue as the lowest point we can expect to reach."
Within the estimates that I included are departments which propose to make very heavy expenditures. The department which will make the heaviest expenditures of any operating department of government is the Department of National Defence. In that case the estimates presented to us give no details which make it possible to understand anything more than the general purpose of the expenditures. That is merely an example of what we are encountering, in effect, in a number of other very important departments.
The Minister of National Defence (Mr. Clax-ton) has persistently resisted the request that his estimates be placed before a committee of the house, as has been done in the case of the Department of External Affairs and has been done in other cases. Now we have received the warning that the information is-

going to be fairly limited so far as the Department of National Defence is concerned. In a radio address last night the Minister of National Defence stated it was not possible to give the public information in regard to his department because the people who would like to know about it would be the Russians.
As has already been pointed out in the house, the estimates of the department of defence in the United Kingdom are placed before a committee, as are other estimates. As has also been pointed out, Mr. Watson Sellar, the Auditor General, has on different occasions-and not only recently-indicated the necessity for improving the method of presenting accounts to the House of Commons, and of establishing a procedure which will restore to parliament effective control over the expenditure of public moneys.
I must confess I was surprised this afternoon to hear the Minister of Finance point out on more than one occasion that the Auditor General is not a lawyer-as though that in some way disqualified the Auditor General from expressing an opinion in regard to the propriety of some particular account, or as to the kind of account it might be. The Auditor General of Canada has been regarded with very high respect by both sides of the house, and his opinion has been regarded as a most reliable one. It has been assumed that when he makes a statement concerning accounts in one way or another, as to their being one kind or another, and that when he makes a statement as to the adequacy of procedure, he is doing so after having obtained whatever legal advice he might regard as necessary for that purpose. He would not be fulfilling his duties as Auditor General if he did not take steps to inform himself in regard to matters of that kind before stating his opinion, as he does. I have confidence, and I am sure most hon. members have confidence, that he is competent to make the statements he does make in his annual reports and on other occasions.
In respect of the Department of National Defence we are being asked to approve an expenditure of $425 million and to make commitments of $619 million. When we examine that item we must realize that a large part of this is made up of expenditures that under no conceivable circumstances could be regarded as secret in any way. Much of it is for clothing; much of it is for equipment; much of it is for buildings. And even that part of it devoted to military expenditures is for goods that are available, in their design and otherwise, to anyone who wishes to consult the ordinary textbooks open to the public. For that reason, these accounts along with others should be submitted to the investigation of a committee on estimates which in
The Budget-Mr. Drew turn would be subdivided into appropriate subcommittees to deal with the various departments.
If there is one thing essential to the effective conduct of the business of this house it is that all essential details be disclosed before members are asked to pass judgment on anything that is before them. That applies with particular force to the granting of those sums of money which in turn can be obtained only by the taxation of the people who are represented by all members here.
There is a simple and obvious reason why the government should seek to make full disclosure of every detail. After all, the government insists upon full details being disclosed by every individual. Every taxpayer must be ready to give the full details in regard to his affairs and it would seem only reasonable that the taxpayer who is going to pay the taxes should be assured of equally complete disclosure by the government of those expenditures which form the basis of that taxation.
In so far as this budget is concerned, it simply gives the broad picture and it is for that reason that amendments are not moved in regard to the detailed accounts as those amendments can always be moved at another time. The amendment proposed by the party to which I belong indicates our views as to the way in which this budget fails to present a proper approach to the problems that are ahead of us. The amendment that was introduced, after the usual introductory word, states:
This house regrets that the policies ol 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.
The statement that the budget makes higher taxation inevitable is based upon the obvious fact that if any of the things are to be done which the government has undertaken to do and which it has not yet done, there is no way of carrying out those undertakings except by higher taxation. Furthermore there will of necessity be higher taxation in order to meet our requirements unless production continues at the level of last year.
The second point is that the budget makes no adequate attempt to eliminate extravagance and avoid unnecessary expenditure. The Minister of Finance has an utterly meaningless interjection which he makes from time to time: "You approve of what we do, but you do not like the way we do it." That statement in itself reflects upon his sense

The Budget-Mr. Drew of responsibility in dealing with this budget and with all it entails. The Minister of Finance comes forward with this budget, which means that the people of Canada will be called upon to pay $2,400 million in taxes, and indicates no way in which any attempt is to be made to increase the efficiency of government, to avoid duplication of services and to reduce unnecessary expenditures in cases where that can be done.
The Minister of Finance says very often, "Show us where we can save money; show us where this can be done." At the same time we are presented with estimates about which the details are not available, and in the case of the largest of these it is said that we cannot get the details because some other country might like to know what they are. There is not a member of this house who does not know of a case where there could be improvement in efficiency and a reduction in the duplication of services, with advantage both to the business of government and to the civil service which is handling the business of government.
Even if there were no such knowledge available we have this simple problem before us. Because of the commitments of war it was necessary and inevitable that there should be a great expansion of government services. In the very nature of that expansion new tasks were undertaken without the time being given that would ordinarily be given to organizing activities of that sort. Any ordinary business which had been called upon to expand in that unexpected and sudden manner would have put experts in to examine its accounts, to examine its structural organization and to suggest improvements in the way of doing business. Any ordinary business that did not carry out some such procedure would be headed for financial trouble. The methods of ordinary business should apply to the business of government, although I agree that they have not been applied and in many cases are not intended to apply.
One thing that should concern every member is the fact that statements have been frankly made by those who are associated with certain services connected with the government that ordinary business methods do not apply. Another thing that should cause concern is the statement that ordinary methods of accounting cannot be put into effect. During the last few years there has been an increasing emphasis everywhere on the necessity of efficient cost accounting. The cost-accounting mind is

completely absent from any approach to the business of government which has been displayed in this house.
The only way that this broadly expanded business of government can be examined and brought to the ultimate efficiency is to do what any efficient business, large or small, would do, have the whole business of government examined by experts and have recommendations made as to how the whole business of government can be made more efficient and how the business of the people can be brought back under the control of parliament itself.
I have already indicated that I intend to bring this subject up on another occasion. For that reason I shall not discuss it in more detail today because members of the house will have an opportunity to express their opinions upon it. But I emphasize to every member the great need for an examination of the whole business of government as one of the factors in the stand we are taking with other democracies against the threat of communist imperialism today. The efficiency of democratic governments is going to measure to a very large extent the way in which they will maintain their strength during that period which has been described as the cold war. The winning of that cold war, without its ever turning into a shooting war, depends to a considerable degree upon the extent to which we can convince the thirteen men in the Kremlin that the business of the democracies is so efficiently conducted that there is no chance of any danger to their economic structure in the years ahead. For that very reason, as a part of the strength of democracy itself in Canada, we should follow a course that will bring to its maximum efficiency the whole business of government which is the business of the people themselves.
The third point made in the amendment is that there is 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. Nowhere in the budget statement is there any suggestion of carrying on any of those activities which would help to expand many of our natural opportunities in Canada in a way which would help to expand production and also help to support a very much larger population. Although it was denied a short time ago, it can no longer be denied that we face a period of decreasing prices for the products of Canada, and it can no longer be denied that unemployment on a very substantial scale is already here.

When those facts are mentioned there are those who say that anyone who mentions unemployment or lower prices for basic products is showing a lack of faith in Canada. The very opposite is the case. We have faith in Canada and its resources, and we do not believe that there should be idle resources in Canada when there are unemployed people who could be working on their development.


An hon. Member:: What about gas lines?


George Alexander Drew: I am very glad gas lines have been mentioned. Canada has available enormous resources of power in the form of electricity, gas and oil. The way to create employment in Canada is to make sure that the first use of those resources is for Canadians themselves. That is what we have been emphasizing and that is what we have been asking. In the past few years discoveries challenging the imagination have been made in oil, gas and iron, as well as titanium and other basic minerals and commodities, all of which can be the basis of a vastly increased population in Canada. By all means let us export the surpluses that we cannot use here up to the point that such export is consistent with our long-term advantage, but also let us be careful that in exporting raw materials we do not to some extent endanger our own future by limiting the amount that may be available at some future time when our population will be very much greater than it is today. There are some kinds of production and export that we can carry on to the maximum without impairment of our strength in any way.
So long as our soil is maintained, so long as conservation methods are practised, there is no reason why we should not produce all that can be produced from our soil for both domestic consumption and export. In the case of such products as those manufactured from the forest wealth of the country, so long as careful conservation is practised and cutting is limited to a point that assures a perpetual crop, there is no reason why we should not export all that we can over and above our own requirements. A different situation, however, arises as to such resources as nickel, copper, lead, zinc, iron, wasting assets of that kind. A very large part of our buoyancy has depended upon exports of these products. I am not suggesting there should be no export but I am suggesting that in all these cases we should seek to expand in every way we can the use of these mineral and other resources in our own country for the employment of Canadians.
There is unemployment today. There are men who desperately want work. There are
The Budget-Mr. Drew resources which can be developed by the government as great national ventures without imposing new tax burdens upon the taxpayers. These resources would produce new power and create new producing capacity from one end of the country to the other. When we express regret that the budget statement indicates no provision for anything of that kind we are combining that with the speech from the throne because it would be within those two speeches that any indication of such action would be disclosed.
We have great confidence in the future of this country. The population any country can support is determined by the food it produces, by the material it can produce for the construction of homes and other necessary buildings, and by the work available for the people. These things are to be found in Canada far beyond the requirements of the present population. We could feed several times the number now living here. We could heat homes in this country with various fuels that are available; and we have the raw materials with which to build homes or other buildings. It is not necessary to determine what the exact figure may be as long as we are confident that we can support that larger population. If we can, then whatever we do to develop new power resources, and resources of other kinds, will assure a substantially larger population in the years to come, over which the burden of our accumulated debts can be distributed. In that way alone can there be a general reduction of taxation. It is perfectly true that a very large part of the tax burden of this country is the result of the part we played in two world wars. That will be a continuing debt for a long time to come; but one way to ease that burden is to do what may be reasonable to spread the carrying charges of that obligation over a larger number of people.
Coming to the subamendment now before us, I see that it refers to development and an increase in production, with which we can most certainly agree. In the second paragraph, however, it regrets that the government makes no provision for increased national production through economic planning, public control of investment and public ownership of monopolistic industries; then it goes on to make further statements. Economic planning must be understood as those words are meant in this case; and in this case economic planning means economic shackles. I recognize that probably those who put forward this suggestion do not believe that yet, but in too many places in the world there have been convincing demonstrations of the fact that the intervention of government in the general economy of a country has limiting
1922	HOUSE OF
The Budget-Mr. Drew rather than expanding results. Also I cannot imagine anything that would be more fatal to the future of a country so relatively undeveloped as Canada as control of investment by government and government doctrinaires.
I do not need to emphasize what the control of investment by government would mean. It would simply mean that the development of anything in this country would depend upon the judgment of some official of the government as to whether or not a particular investment should be made. Nothing would be more certain to prevent the investment of risk capital, which is essential to the full development of our great resources which are capable of so much greater use than that to which they are now being put, right from Newfoundland to British Columbia.
As for the public ownership of monopolistic industries, I would point out that this is a very loose term. Monopolistic industries may mean almost anything, as it has in Saskatchewan. There industries have been taken over for public development, in one case because there was a dispute within the industry; in another case because the government did not like what was being done; and in a number of other cases for no reason that had any relationship to a monopolistic position. On the experience of what has happened in the one case where it has been openly tried in this country, certainly I am convinced that this would impose a measure of control and possibly punitive action, if it could be exercised by those putting it forward, which would be dangerous indeed to the future of this country, and for that reason the party to which I belong will not support the subamendment though the first paragraph and the last part of the second paragraph contain statements with which we could certainly agree.
Having made these observations I only repeat that I feel sure there are those who mistakenly believe some of these ideas would be sound; but if practices of this kind could be justified at all, I can think of no time when they would be less justified and more unwise than at the present, with the vast opportunities that are opening before us today.
This budget debate will be followed by consideration of the estimates, and at that time many details can be examined to such extent as they are available. There is one subject I would put forward at this time, however, since it is something that cannot be dealt with effectively on the estimates-that is the desirability of taking appropriate steps to avoid duplication as between departments of the dominion and provincial governments.


Many of the services being given today could be provided very much more efficiently if a decision were made as to which government should handle a particular subject and what device should be employed for raising the necessary money. Then the whole business could be handled by one department, instead of being divided among one department at Ottawa and ten provincial departments, all dealing with some aspects of the same subject. That applies with particular force to the department of health, and it applies to the departments dealing with lands and forests and minerals. It applies to a number of other departments, and a careful approach to the broad problem of public expenditure would undoubtedly find ways in which substantial reductions could be made at one level or another, the dominion, provincial or municipal, with increased efficiency and with more effective contact with those who are served. That is not something which, at the moment, can be included in the terms of this budget. On this occasion I am simply putting it forward as a suggestion, which is parallel to the suggestion I have already made, that by an examination of the structure of government itself the duplication of services as between government departments, and within departments, could be avoided.
These observations have been made, Mr. Speaker, in the hope that, whatever the result of this vote may be, and I am not making any suggestion that the motion before the house will not be supported by the majority of the house, when that time comes I am still hopeful that parliament will be ready to accept suggestions, and to seek ways by which the business of the people can be brought fully under the control and supervision of the people's representatives. I am sure that to the extent that every member on both sides of the house is prepared to approach the problem in that way, we shall all be making a contribution to the development of Canada in the years ahead.


Mr. P. T. Hellyer (Davenport):: Mr. Speaker, I rise at this time on behalf of the people of Davenport, whom I have the honour to represent. The constituency of Davenport is situated in what was formerly known as the town of York. It is now known from coast to coast, yes even across the seas, as Liberal Toronto. The people of Davenport are ordinary people, and most of them, like myself, are forced to work for a living for reasons that are entirely beyond their control. We in Davenport do not claim high mountains, broad rivers, great mines, or any of the other natural legacies so proudly enumerated by the people of other areas in this great dominion. We do, however, have great respect for

my illustrious predecessor, Dr. J. R. MacNicol, who is a great Canadian, a fine gentleman, and one who does not wish to damn anything -with the probable exception of the south Saskatchewan river.
The people of Davenport are sensible people, and most of them do not make unreasonable demands on government. They only seek a reasonably buoyant economy, one which will provide employment and opportunity for individual initiative, along with a certain amount of collective security to take care of those hazards which are handled so well by means of the insurance principle. It is because of those modest requirements, and the way that they have been and are still being taken care of by the present administration, that I should like to take this opportunity of congratulating the Minister of Finance on the consistent economic policy he has followed in the presentation of his several budgets. It must have required a great deal of intestinal fortitude to present the first two budgets containing the extremely high taxes and restraints that were necessary to control the inflationary tendencies of that time. They were definitely unpopular, and justifiably so in the minds of some people who are prone to criticize.
Then, last year a much more pleasant task devolved upon the minister in that, still in line with his policy, it was necessary to relax some of the restrictions and reduce taxes.


Gordon Knapman Fraser: The 27th of June.


Paul Theodore Hellyer: My hon. friend questions the motive behind last year's budget, but we will not get into a discussion of that. It is possible to kill two birds with one stone, but what I am going to say about this particular budget, regardless of what anyone may think of it, is that it is consistent with the principles set out by the Minister of Finance. This afternoon we have heard people bemoaning the fact that there is some unemployment, and that some people are apprehensive of the future. Before I proceed let me say that last year's budget has been responsible for more production, and more employment, than anyone on the other side of the house is probably willing to give it credit for. If those reductions had not taken place we might have encountered a slight recession, as is the case in the United States.
This year we have a budget which is described by hon. members opposite as a stand-pat budget, and I think rightly so. Conditions in the country today warrant that type of a budget. It is consistent with the policy of preventing the cost of living from rising any further, and at the same time maintaining employment and industry in
The Budget-Mr. Hellyer its present buoyant state. I am sorry the hon. member for Moose Jaw (Mr. Thatcher) is not in his seat, because the other night he made a statement that this was the end of cyclical budgeting. I do not know whether or not the name means anything in particular, but so far as this budget policy is concerned, I do not think it is the end. So far as the Minister of Finance is concerned, it is probably only the beginning of a new phase in the consistent policy so ably initiated by him a few years ago.
The opposition has presented an amendment showing, want of confidence in the minister. They have mentioned three things they think ought to have been done which have not been done, or vice versa, as the case may be; they change their minds so often it does not matter which way you look at it. They bemoan the fact that the things that have been done cause higher taxation. I was looking through a booklet of the campaign speeches and pledges made by the leader of the opposition prior to this date of June 27 which is thrown at us from the opposite side of the house, in which he promises all sorts of things such as canals, highways, bridges, and old age pensions. I should like to quote one phrase from that booklet; "-far beyond any pledge of social security put forward by any other government in the history of this country."
What sort of broad statement that is, 1 do not know.


An hon. Member:: You would not.


James Sinclair: And the trans-Canada highway to go by your place.


Paul Theodore Hellyer: It covers enough to make sure that higher taxation would have been inevitable.


Gordon Knapman Fraser: Oh, no.


Paul Theodore Hellyer: And probably to make sure that there would be further extravagance and further expenditures; because some of the things I have looked over I am sure could not be justified on a self-liquidating basis, and certainly they would have been in a questionable category as far as extravagance is concerned.
National development is also in line with the minister's procedure of sound budgeting. At the present time projects are being carried forward as fast as they can be absorbed. If you read the forecast tabled in this house you will find that this year the capital expenditure will probably be the highest in the history of the Canadian economy. Most of it is relegated to two or three particular types of construction and development. Most of the things which hon. members opposite
1924	HOUSE OF
The Budget-Mr. Hellyer have suggested we should have done are things which would compete with the things being done, to the extent that the inflationary spiral would start again, with higher and higher prices; and you would be right back throwing at us the fact that things were getting out of hand and our money was being further depreciated, and so on.
The conclusion to these few remarks is,
I think, Mr. Speaker, that they do not know just what to ask for and do not know just what to complain about but because of their honourable status as His Majesty's loyal opposition they have to take some position. One day it is one position and another day it is the other position. But they are consistent in one fact: it is always some position.


Stanley Howard Knowles: What position are you in?


Paul Theodore Hellyer: I had intended, Mr. Speaker, to make this a sort of full-blown economic debate-


Gordon Knapman Fraser: It is full-blown, all right.


Paul Theodore Hellyer: -and elaborate on the minister's policy of consistent budgeting, but there are certain reasons why I should not. First of all, some of the people who need it most are not at present sitting in the house; and the second reason, and probably the most cogent, is the fact that I am not going to have enough time to do so.


Stanley Howard Knowles: Look at the Liberal benches; they are half empty.


Paul Theodore Hellyer: The financial critic of the Progressive Conservative party, the hon. member for Greenwood (Mr. Macdonnell), made a statement which I found most interesting. He mentioned the freedom that has brought us as far as we have come. I believe that is worthy of consideration. At the same time the leader of the opposition (Mr. Drew) recently made the statement, during a comment on a speech made by some other hon. member opposite, that he thought the situation could be handled by the same processes we have always used; by carrying on with exactly the same methods and techniques that we had used during the past generations and decades. Unfortunately, I do not believe that is true, and I know that the . Minister of Finance (Mr. Abbott) does not think it is true or he would not have initiated this consistent policy which has been called cyclical budgeting; you can call it what you like.
The first great reason why it is not so and why the leader of the opposition is not on solid ground is that some of what he calls the natural laws no longer apply in our economy. What have been referred to as


booms are usually artificial booms; and busts are, by the same definition, in many respects artificial too. I have not the time to go into the background of this; but, as you all know, in ancient days most of the economies were of the nature of one or two products; and if you had a natural failure, by immediate consequence you then had a depressed state. There has been a gradual tendency away from this and we have developed exceedingly complex societies, complex economic relationships, and a degree of specialization of labour which was never previously dreamed of. If you average all the cycles, all the moods of men, all the lack of rain in one area of the country offset by rain in the other, you find that the potential production of a diversified economy like our own does not change a great deal from one year to the next, except by natural increase.
The leader of the opposition would lead us to believe that if we just sort of let things go their own natural course-I think he might favour returning to the gold standard or something-it would all right itself and pretty soon we would have a new equilibrium which would have all of the necessary requirements to produce full employment and an extremely buoyant economy. Unfortunately this is not true either, and it is due to a natural process which has developed during the last two hundred years. We started with small industries. For natural reasons those have integrated and have become larger and larger for the sake of efficiency. Every year we have more industries, more products and more classes of produce in a category which could be said to be of a semi-rigid or rigid price nature. They are prices set by arbitrary decision and which do not obey the laws of supply and demand-one of the leader of the opposition's natural laws. A few years ago we had more commodities which fell in the natural price law category but the numbers are diminishing, and we now find ourselves in a complex economy in which we have a predominantly private enterprise, semi-rigid price structure. We still have some commodities in the free enterprise free competitive price category which obey the law of supply and demand.


Stanley Howard Knowles: We have the highest cost of living in our history.


James Sinclair: We have the highest national income in our history.


Mr. Speaker:: Order.


Mr. Blackmore:: Yes, give the man a chance.


Paul Theodore Hellyer: It is because of this that the natural laws, which previously would have come into operation to get us out of our

troubles and restore equilibrium when disequilibrium sets in, are no longer of necessity operative. It is because of this that I believe that the Minister of Finance has accepted the inevitability of having to compensate for this price rigidity through a sound policy of cyclical budgeting.


Lewis Elston Cardiff: You had better call it six o'clock.


Paul Theodore Hellyer: Before I take my seat, I think I will just close by saying that I have every confidence in both the administration and the Minister of Finance and his officials, to maintain equilibrium, to maintain our purchasing power and to keep in this country that degree of economic buoyancy which is necessary to provide ample employment, and an increasingly higher standard of living for those apostles who keep interrupting with their gloomy remarks from the opposite side of the house. I have every confidence that there will be no depression in this country. A depression is not necessary.


Gordon Knapman Fraser: We agree with you on that.


Paul Theodore Hellyer: We do not intend to have one. I suggest, Mr. Speaker, that if hon. members opposite would devote their time and talents
The Budget-Mr. Hellyer to an effort to develop new industries so as to provide employment in exploiting the natural resources of the country, we might make appreciable progress toward full nationhood, and in the process enable immigrants in larger numbers to join with us in building Canada into that still greater nation which I am sure we all fervently hope it will one day become. As a closing remark, Mr. Speaker, I should think that this all ties in with something else which is of extreme interest to most people at the present time, and that is that if we can break this one thing, this business cycle, we shall have for all time disproved the Marxist theory and, in the words of Woodrow Wilson, made the world safe for democracy.
On motion of Mr. Fleming the debate was adjourned.



BUSINESS OF THE HOUSE

Mr. Fournier (Hull):: Mr. Speaker, tomorrow the hon. member for Eglinton will continue the debate.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, April 27, 1950