1950-09-14

PRIVILEGE


[Stage Direction]
(Translation):
Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, I rise on a question of privilege, with respect to an article which appeared in Le Devoir of September 12, 1950, under the byline of Mr. Pierre Laporte. It is very seldom that I take exception to anything said by Le Devoir because this newspaper's opinions are well known and also because I concede its right to express them. However, I am concerned here with something that is more than an opinion. I refer to an article entitled:
Are we to return to the era of Mr. King's lies? Mr. St. Laurent has deceived us about Korea-5,000 men who turn out to be 15,000.
The article is written in the same key as its title. It pays me the compliment of stating that when I became leader of the government it was felt that I was a man who was not afraid of the truth and who would dare to speak his mind even though his personal popularity might be affected. That is quite true. I admit that I have never anticipated any great personal popularity with the staff of Le Devoir. This does not mean that I do not value my reputation for not being afraid to speak the truth. The statement that I have deceived either Le Devoir or the public is absolutely false.
This matter arose over the difference that is claimed to exist between what we had stated would be the strength of the brigade to be sent to Korea, when ready, if that should be the place where it would serve most usefully, and the limit of 15,000 men mentioned in the order in council which was tabled the other day.
Here is what was said. I have stated several times, and stated again yesterday, what the position is with regard to the government's plans in this matter. Those plans have been set forth frankly to the public and to the house and if at any time there is need to make any substantial change or addition, the government will reach a decision and announce it to the house without having the slightest fear of the truth or of comments
from Le Devoir. We shall make our decisions if we consider it in the interest of the Canadian nation to do so. We shall do so openly and we shall expose ourselves openly to their shafts and criticism. As to the limit of 15,000 men mentioned in the order in council, here is why that limit has been set. It has been stated that the number of men in the special brigade is to be approximately 5,300 but that at the same time we shall train a number of men to be used as reinforcements should events make them necessary.
Up to now, we have enlisted for this brigade a little over 9,000 men. Moreover, as the house has been told, some 1,000 troops from the permanent forces of the Canadian army were added, such troops to fulfil duties for which new recruits are not qualified. This involves some 10,000 men. We have a contingent of the Canadian navy comprising not quite one thousand men whom it will be necessary, from time to time, to replace by others when events may require shifts or changes in the personnel on the destroyers on active service there. There is also a contingent of a little less than 1,000 men from the air force on air transport duty. In order to be able to maintain these three contingents at peak efficiency we have set a limit of 15,000.
Should it ever become necessary to go further than the three groups about which we have given full particulars to the nation, we shall give the additional information to the public and, when we have reached a decision, we shall make it known and we shall not shrink from any truths in connection with what we may consider to be in the interest of the Canadian nation.
(Text):



NATIONAL DEFENCE


Hon. Robert H. Winters (Minister of Resources and Development):: Mr. Speaker, the Minister of National Defence (Mr. Claxton) has referred to me a series of questions which were put to him on September 6 last by the hon. member for Lethbridge, as reported in Hansard at page 335. I have prepared a statement containing the answers to questions 1 to 9 inclusive. The information required to answer the remaining questions

National Defence-Housing is available only from the province. If the house wishes to give unanimous consent I shall be pleased to table the statement; it might save the time of hon. members.


Some hon. Members:: Agreed.


Mr. Blackmore:: Would it not be preferable to have the minister put the answers on Hansard instead of tabling them?


Robert Henry Winters: That was the intention; the statement has been tabled.


Mr. Speaker:: I think the hon. member for Lethbridge would prefer that the answers should appear on Hansard rather than be tabled. If that is correct and if it is the wish
of the house I would ask to have the answers appear in Hansard.


Some hon. Members:: Agreed.


Robert Henry Winters: The statement follows:
On September 6 the hon. member for Lethbridge asked several questions of the Minister of National Defence respecting the Sea Island housing project and the Maritime Construction Company Limited. The Sea Island project was a part of the 1949 married quarters construction program of the Department of National Defence, and the contract for the construction of these houses was therefore arranged by Central Mortgage and Housing Corporation.
This project has not been satisfactory. I feel it might be better for me to give the house a brief review of the circumstances of this project, rather than make individual answers to each of the questions asked. Some of the questions asked by the hon. member dealt with the corporate nature of the Maritime Construction Company Limited, and the information to answer these questions is not available from government records.
On the 25th of June, 1949, Central Mortgage and Housing Corporation advertised a tender call for the construction of 35 houses at Sea Island. Tenders were received as
follows:
Maritime Construction Company Ltd	$191,465.00
The Housemart Ltd	 193,777.84
Dick and Perkins Construction Company.. 204,493.64 Pyke and White Construction Company .. 207,455.00
Allen Burgess	 221,435.00
Stolberg Construction Ltd	 230,678.45
Marpole Construction Company Ltd	 244,338.00
The tender of Maritime Construction Company Limited was the lowest received. Knowing of no reason why this company should not prove a satisfactory contractor, a contract was awarded to the Maritime Construction Company Limited on the 19th July. The standard form of contract used in these cases does not specify a completion date. At the time a contract is awarded, construction offi-
cials of the corporation meet with the contractor and plan a schedule of progress which is satisfactory to both parties. The schedule for the Sea Island project anticipated that the houses would be completed late in the spring of 1950. The contractor reported the houses as being finished in April of this year, but when officials of the corporation inspected these houses, they were not satisfied that the quality of construction was as called for by the contract and the specifications. The corporation therefore would not accept the houses from the contractor. The contractor refused to remedy the deficiencies and could not be persuaded to return to work on the job. These houses were urgently required by the Department of National Defence and, as the contractor would not return to the job under the original contract, the corporation considered it necessary to take steps to have the houses completed. Accordingly the corporation advised the contractor that he was considered to be in default and that other arrangements were being made to remedy the deficiencies in construction. A construction crew, organized on a day labour basis and working directly under the supervision of corporation construction officials, has been engaged in putting these houses in satisfactory shape, and I expect that they will be turned over to the Department of National Defence by the end of this week.
The contractor is presently requesting that an extra payment of some $42,000 be made to him, because he was unable to do the work for the amount of his tender, and because extra costs were involved not contemplated when the job was let. We have suggested that the contractor file a statement of claim for extras which may be accepted, but as yet this statement has not been received. It is not the intention of the corporation to make any adjustment in the basic contract price, and any further payment to the contractor vyill be limited to extras which can be recognized plus or minus the difference between the hold-back and the amount required to complete the units.



CIVIL SERVICE


Hon. Douglas Abbott (Minister of Finance):: Mr. Speaker, as a matter of privilege I should like to refer to two newspaper accounts of what took place yesterday morning at a conference between representatives of the civil service, on the one hand, and the Secretary of State (Mr. Bradley) and myself, on the other. The two reports to which I refer appeared yesterday afternoon in the Ottawa

Questions
Evening Citizen and the Journal respectively. The reports differ materially as to what I said, and I should like to say that the account in the Citizen is much more nearly correct than that in the Journal.
Perhaps I should inform the house briefty that I covered three main points in my reply to the civil service brief. First, I said that conditions had changed sufficiently during the past six or eight months to justify the government in requesting the civil service commission and the treasury board staff immediately to review the whole question of general salary levels in the civil service which have remained unchanged since October, 1948. Second, I said that any action by the government on the recommendations of the civil service commission would have to await the provision of additional funds by parliament. And third, I said that we should have to review, concurrently with the salary question, matters relating to efficiency, productivity, hours, and size of staffs.
I made it very clear that any decisions by the government would be made in the light of civil service commission recommendations, and, in particular, I expressed no views, directly or indirectly, on the subject of retroactive increases.
I might say that the report by the Canadian Press in the Montreal and other papers was correct.



QUESTIONS

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

Mr. Courlemanche:: 1.	Is there a ferry boat operating between Cross Point, Quebec and Campbellton, New Brunswick?
2.	If so, who are the owners or shareholders thereof?
3.	Was the contract awarded after tender or otherwise, and to whom?
4.	On what date does it expire?
5.	Were any amounts paid by the government by way of grants or otherwise in connection with construction of the said boat? If so, in what amount?


Mr. Fournier (Hull):: 1.	Yes.
2.	No information.
3.	(a) Licence issued after public advertisement; Ob) Restigouche Ferries Company, Limited.
4.	April 30, 1954.
5.	Not by this department.


IMMIGRATION
Mr. Cafherwood:: 1.	How many immigrants came to Canada from all countries in the six months ending June 30, 1950?
2.	How many immigrants came to Canada during the twelve months ending December 31, 1949?


Mr. Harris (Grey-Bruce):: 1.	37,286.
2.	95,217.


QUESTION PASSED AS ORDER FOR RETURN
PUBLIC SERVICE
Mr. Knowles:: 1.	How many employees in the service of the federal government have been granted extensions permitting them to continue in such service beyond the age of sixty-five, during each of the last five years?
2.	When employees are permitted to continue in such service beyond the age of sixty-five, does it provide a basis for an increased pension upon retirement?
3.	How many requests from employees in the service of the federal government for extensions permitting them to continue in such service beyond the age of sixty-five have been refused during each of the last five years?
4.	On what basis are such requests (a) granted; (b) refused?


SENATE AND HOUSE OF COMMONS
Louis Stephen St-Laurent: ithat the house go into committee at the next sitting to consider the following resolution:
That it is expedient to present a bill respecting payment of sessional allowances to senators and members of the House of Commons during the present session and payment of their usual moving, transportation and living expenses, in the event of adjournment of parliament for more than one week and subsequent resumption of its sittings.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.
Perhaps I might be allowed to say at this moment that the purpose of the resolution is to provide by a bill that the provisions of section 36 of the Senate and House of Commons Act, chapter 147 of the Revised Statutes of Canada, would not apply in the event of there being an adjournment instead of prorogation. I understand that many hon. members have expressed the view that it would be preferable to adjourn this session, subject to hon. members being called back by you, Mr. Speaker, rather than to prorogue and thus have to have a new proclamation if

Senate and House of Commons it were necessary for hon. members to come back prior to the date for the opening of the regular 1951 session of parliament.
Section 36 of the Senate and House of Commons Act reads in part:
Each day during the session on which there has been no sitting of such house in consequence of its having adjourned over such day . . . shall be reckoned as a day of attendance at such session for the purpose of the indemnity.
It is my understanding that hon. members have felt that it would not do to take a long adjournment and have the days of the adjournment reckoned for the purpose of the member's indemnity. If we are to adjourn instead of proroguing it will be necessary to provide by a bill that this disposition shall not apply to the long adjournment, but that if members are called back, the provision respecting travelling allowances will apply as if they were recalled for a new session. If parliament sees fit to adopt that kind of legislation, it would be possible to make provision as expressed in the other resolution in my name, which I will ask to have stand until parliament has indicated whether or not it wishes to have this legislation adopted.


[Stage Direction]
Motion agreed to.
Mr. Si. Laurent:: Notwithstanding the form of the motion, I hope that with the unanimous consent of the house it may be convenient to call it for consideration some time today.


Mr. Drew:: When will the bill be ready?


Jean-Paul Stephen St-Laurent: The bill is ready, and if
it pleases members of the house to adopt the resolution at once, the bill can be distributed immediately so that members will see exactly what it contains, and whatever discussion ensues can take place with the bill before them.


George Alexander Drew: I think the better course would be to adopt the resolution. Then we shall have the bill before us and can consider it, and when we deal with second reading we shall know what its provisions are.


Louis Stephen St-Laurent: that the house go into committee to consider the resolution.
Motion agreed to and the house went into committee, Mr. Dion in the chair.
Resolution reported, read the second time and concurred in.
Mr. St. Laurent thereupon moved for leave to introduce Bill No. 7, respecting payment of sessional allowances and transportation expenses to members of the Senate and the House of Commons.
Motion agreed to and bill read the first time.


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


Louis Stephen St-Laurent: Later this day.


LACROSSE
[Stage Direction]
On the orders of the day:
Mr. H. P. Cavers (Lincoln):: Mr. Speaker, members of the house may be interested to know that the St. Catharines Athletics last evening won the junior lacrosse championship of Canada by defeating Vancouver Burrards at Vancouver by a score of 17 to 8. In doing so they bring to the east the Minto cup, emblematic of Canadian junior lacrosse supremacy. These local boys, all products of the city of St. Catharines, deserve great credit for their accomplishment in winning the Canadian championship in three straight games.


PUBLIC WORKS
[Stage Direction]
On the orders of the day:
Mr. S. R. Balcom (Halifax):: Mr. Speaker, I should like to direct a question to the Minister of Transport, arising out of a report in the Halifax press quoting the Nova Scotia minister of highways as saying that the Halifax-Dartmouth bridge is a matter strictly for Ottawa. Is the Halifax-Dartmouth bridge project a matter strictly for federal action, or are other parties working in conjunction? If so, who will have final jurisdiction?


Hon. Lionel Chevrier (Minister of Transport):: Mr. Speaker, for a first question from the junior member for Halifax it is a rather difficult one to answer. Perhaps I might say to him, however, that the proposal for the construction of a Halifax-Dartmouth bridge is one which involves several jurisdictions, and comes only incidentally under the Department of Transport. As a rule the Department of Transport does not build bridges, but I am informed that conversations on the subject have taken place between the government of the province of Nova Scotia and the government of Canada. I presume that a statement will be made some time later when the matter is finalized.


CHARLOTTETOWN, P.E.I., PUBLIC BUILDING   QUESTION AS TO PROGRESS IN CONSTRUCTION
[Stage Direction]
On the orders of the day:
Mr.  W. Chester S. McLure@Queens: On
September 8, at page 444 of Hansard, the Minister of Public Works made this statement:
As soon as I have read the statement made last evening by the Minister of Finance I shall prepare a statement with respect to that building.

That was the minister's reply to my question concerning the construction progress of the federal building at Charlottetown. My question is, and I know the minister is prepared to answer it: will he now give that statement to the house?


Hon. Alphonse Fournier (Minister of Public Works):: I object only to the last part of the question, Mr. Speaker; I am not as well prepared as the hon. gentleman thinks. Many times I have read over the statement of the Minister of Finance, and I have looked over the file concerning the .building at Charlottetown. I find that the government now is the owner of the site; that we are preparing plans; and I may go so far as to say that after the plans are prepared we shall probably ask for tenders to have the buildings on that site torn down. As to any further work, I would hesitate to commit the government, at this time.


WINNIPEG POST OFFICE BUILDING
Mr. Stanley Knowles (Winnipeg North Centre):: I am sure the Minister of Public Works will recall a similar promise he gave me the other day, that when his mind was made up on the question I asked him he would make a statement to the house. Is he prepared to make that statement now?


Alphonse Fournier: I am always prepared to make certain statements, but I do not know whether they will meet the wishes of hon. members. The government has decided that every project under consideration for which amounts were voted at the last session should be reviewed. Those that have been started, or for which tenders have been called, or which are ready for tenders, I believe will be proceeded with, though not with the usual haste of the public works department. As for the others, the moment the session is over we shall be reviewing every file concerning those projects, and I shall do my best to satisfy even those to whom I did not make any promises.


Stanley Howard Knowles: May I just remind the minister that while some hon. members thought I was interested in only one project, my question was whether he would be able to give the house a general statement concerning government policy in connection with public buildings.
Inquiries of the Ministry NATIONAL DEFENCE


RESERVE ARMY
[Stage Direction]
On the orders of the day:
Mr. G. R. Pearkes (Nanaimo):: The day
before yesterday I asked a question of the parliamentary assistant to the Minister of National Defence. I wonder if he can give me an answer. The question dealt with enlistment in the reserve army.


Mr. J. A. Blanchette (Parliamentary Assistant to the Minister of National Defence):: I expect to have the reply later today.


KOREAN CAMPAIGN
[Stage Direction]
On the orders of the day:
Harry Peter Cavers: Mr. Speaker, I should like to direct a question to the Minister of National Defence. The report is current that losses have been suffered in a naval action off Korea. Can the Minister of National Defence say whether any losses have been suffered by our Canadian ships?


Hon. Brooke Claxton (Minister of National Defence):: I understand that an action has taken place, but that it has not involved ships of the Royal Canadian Navy.


MESSAGE FROM GENERAL MACARTHUR
Brooke Claxton: Mr. Speaker, with the consent of the house I should like to read what I think hon. members will regard as a very fine message received from General MacArthur by the commanding officer of the squadron. General MacArthur said:
I cannot praise too highly the splendid efficiency of your command. Not only professionally but upon the broader basis of smooth co-operation with naval forces of other countries, your squadron has demonstrated the highest efficiency. I wish you would convey to your chief of the naval staff the pride I have in being associated with such a splendid command. I hope that before too long a time elapses the higher Canadian naval command can visit this area and by personal observation confirm my opinion of your forces.


INQUIRY AS TO ARRANGEMENTS FOR DELIVERY OF MAIL
[Stage Direction]
On the orders of the day:
Mr. G. K. Fraser (Peterborough West):: Reports coming from the United States indicate that that country has experienced difficulty in delivering mail, air mail, parcels and so on to Korea. Is the Post Office Department
724	HOUSE OF
Inquiries of the Ministry preparing some method by which parcels and mail will be delivered to our men when they get there? Has anything been done?


Hon. Edouard Rinfret (Postmaster General):: Arrangements have been made in conjunction with the Department of National Defence to the end that this service will be rendered when it becomes necessary.


Gordon Knapman Fraser: If I may ask a further question, will there be a special rate on parcels?


Édouard-Gabriel Rinfret: That has not been decided yet.


SPECIAL COMPENSATION FOR MEMBERS OF SESSIONAL STAFF
[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: I should like to ask the appropriate authorities whether consideration will be given to some special compensation for members of the sessional staff, who have been called upon to work particularly long hours during this special session.


Mr. Speaker:: Probably I might answer that question now. This matter has been brought to my attention by a number of hon. members.
I have had an opportunity of discussing it with the officials of the house. I was in conference with them yesterday, and we were of the opinion that, in view of the fact that a number of sessional employees have had to come to Ottawa from a distance, others have given up positions in order to be here, and generally on account of the unusual circumstances associated with the present session, the services of sessional employees of the house should not be terminated abruptly the day parliament closes but that they should be given one week's pay. I trust that will meet with the approval of the house.


REQUEST FOR NARROWING OF SPREADS BETWEEN GRADES
[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: should like to direct a question to the Minister of Trade and Commerce having to do with the spread between the different grades of wheat. Having regard to the complaints the minister must be receiving, would he say whether consideration is being given to narrowing the present rather wide spreads between the prices of the various grades of wheat?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: No consideration is being


given to narrowing the spreads so far as initial payments are concerned. I would point out to my hon. friend, however, that if in fact it is found that the lower grades can be sold at prices higher than the spreads would indicate, the final payments on the wheat of each grade will reflect that higher sale price, so the farmers will lose nothing in the long run.


John George Diefenbaker: They are complaining bitterly at the present time.



WAYS AND MEANS

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

[Stage Direction]
2. That there be imposed, levied and collected an excise tax of fifteen per cent on the following: (a) electrical appliances and equipment adapted to household use, viz., blankets: chafing dishes: coffee makers: curling irons or tongs; dishwashers; food or drink mixers; food choppers and grinders; floor waxers and polishers; garbage disposal units; hair dryers; irons and ironers; juice extractors; kettles; portable humidifiers; razors and shavers; toasters of all kinds; vacuum cleaners and attachments therefor; waffle irons; (b) firearms and complete parts thereof and ammunition except for military or police purposes; (c) motor cycles and all other two- or three-wheeled motor-driven vehicles including motors for attachment to bicycles but not including vehicles specially designed for carrying goods or for use by invalids; (d) golf clubs and golf balls; (e) fishing rods and fishing reels.
Gordon Knapman Fraser: In the first part of paragraph (a) mention is made of coffee makers; then near the end of the paragraph reference is made to vacuum cleaners and attachments therefor. In the case of coffee makers does this refer only to the electrical portion, or would it include also the glass and metal parts that may come separately?


Mr. Sinclair:: It would be based entirely upon the actual unit of sale. If the electrical portion is incorporated in the metal or glass part, it would be one unit and subject to the tax. If they are separate, of course only the electrical part is taxed.


Gordon Knapman Fraser: In the case of the Silex or Cory coffee makers, for example, you can buy the electrical part as a unit, and the glass portion as another unit. I understand, then, that the glass part would not be taxed?


James Sinclair: If it is sold separately it would not be taxed.


Gordon Knapman Fraser: Then a person would be very foolish to buy the whole thing as a unit. That is what I am getting at. I think that should be stated in this resolution.


James Sinclair: Of course the first words in the paragraph are "electrical appliances and equipment", and certainly the glass parts of

a Silex coffee maker, for example, would not be electrical appliances. I should think the shopkeeper or purchaser would realize that, without our having to spell it out here.


Gordon Knapman Fraser: Yes, but when the paragraph deals with vacuum cleaners it says "and attachments therefor". Those attachments may not be electrical; they may consist of a hose or a brush.


James Sinclair: I am informed that the vac-cuum cleaner and attachments are one unit of sale, whereas in the case of the coffee maker the glass portion and the hotplate obviously can be sold as separate units.


Gordon Knapman Fraser: The parliamentary assistant is wrong; vacuum cleaners and attachments need not be sold as one unit. Vacuum cleaners are sold separately. If you want the attachments you buy them separately; they are generally encased in a box and marked "vacuum attachments". I believe something definite should be in there to indicate that the tax does not apply to the glass parts of coffee makers.


James Sinclair: I can only assure the hon. member that it is administered in that way and will continue to be so administered.


Gordon Knapman Fraser: Then I am glad I brought it up, so that there will be no doubt about it.


George Randolph Pearkes: Does the reference to fishing rods and fishing reels apply only to sporting equipment, or does it apply also to rods and reels which may be used in commercial fishing?


James Sinclair: In the act itself a special exemption is given to gear used for commercial fishing, and the intention is that paragraph (e) will apply to fishing rods and reels for sporting use.


John George Diefenbaker: Will the parliamentary
assistant tell me what the tariff on these appliances is in addition to the excise tax? According to an investigation conducted by one "C. T." of the Winnipeg Free Press, many of these appliances are much higher in price in Canada than they are in the United States. At a time when the cost of living is of such importance it would be of interest to know what the tariff is on most of these appliances, and the extent to which that tariff accounts for the pronounced differences in prices that prevail as between contiguous cities in the United States and Canada. In the Winnipeg Free Press of March 18 and March 20 a complete comparison of prices of these appliances as between the United States and Canada was given.
I do not intend to name the different standard makes because, after all, one does not need to know the companies in question. In
Excise Tax Act
Winnipeg steam irons are $22.95, and in Minneapolis the price is $14.95; electric toasters, automatic, Winnipeg price, $32; Minneapolis price, $22.50. For other electrical appliances, naming the different types: mixers, Winnipeg price, $49.75; Minneapolis price, $37.50; coffee percolators, $33.95 Winnipeg price, and Minneapolis price, $24.95. It is the same for plumbing fixtures. For exactly the same products in glassware the Winnipeg price is $10 and the Minneapolis price $5. In connection with radios the spread is, taking a certain example, $24.95 in Winnipeg and $19.95 in Minneapolis. In vacuum cleaners there is a spread between the Winnipeg price of $119.50 and the Minneapolis price of $79.95. For another model vacuum cleaner the Winnipeg price is $119.50 and the Minneapolis price is $94.50. The same thing is true of washing machines and the like.
I am asking the parliamentary assistant about this matter because it is of considerable interest to those who have to pay the higher prices. When he replies I ask him to state whether he agrees with the Winnipeg Free Press, and I am going to read what is stated in the issue of March 18:
Here in Winnipeg comparable cars cost approximately twenty per cent more than Minneapolis. Refrigerator, range, vacuum cleaner, radio and washing machine cost is thirty per cent more.
The article goes on to give the reason:
In part this is traceable to the depreciated value of the Canadian dollar-ninety cents in terms of United States currency: in great part-
And I emphasize this.
-however, it is due to the Canadian tariff and various Canadian taxes.
I should like to find out from the parliamentary assistant what the tariff is on these appliances, and, if what is stated in the articles in the Free Press is true, whether something has not been done to reduce the tariff in order to assure Canadians of at least some approximation to equal prices for the same products. The fact that in some cases the prices are thirty per cent higher in Canada certainly seems difficult to understand. All the comparisons I have placed before you, sir, are of regularly advertised and nationally known products. I should like the parliamentary assistant to say what the policy of government is with reference to tariff matters and whether, should the tariff be removed or reduced, the saving would be passed on to the consumer. It would result in the home owner being able to secure these necessities at much lower prices than Canadians have to pay today.


James Sinclair: Mr. Chairman, the point raised by the member for Lake Centre is interesting. I must first explain that I have not with me

Excise Tax Act
at the moment the customs tariff rates on these items in section 2(a), because there are no changes being made. By the time this bill comes up for second reading later this day, I shall have the rates available.
If I could comment on this problem generally now, the apparent difference in cost between Canada and the United States is certainly caused in part by depreciation of the dollar. Even those goods which are manufactured in Canada, for example what we loosely call Canadian cars, have an American content and the depreciation of the dollar would raise the price of them. Undoubtedly the second factor is the customs tariff. It has been the policy of this country going back to 1867, followed strongly by some governments and not so strongly by others, to give that protection to Canadian industry. Certainly when we are up against a neighbour of the size of the United States, with their tremendous plants for mass production and a huge market which undoubtedly cut the overhead cost and so cut the unit cost, there is no doubt that their price would be lower than ours. However, in the afternoon, when we pass on to second reading of the bill and these items are again mentioned specifically, I hope to have the answers to the questions asked.


Stanley Howard Knowles: Mr. Chairman, when we were discussing this section last night, the parliamentary assistant made an admission to which I wanted to reply at that time, but time did not permit. He admitted that one of the difficulties facing a taxation authority in a matter of this kind is to determine where to draw the line between luxuries and necessities. Indeed he asserted-and rightly so- that many items which were thought to be luxuries ten years ago are now regarded as necessities. As a matter of fact, he made the same point in that well known speech of his a few days ago, to which reference has been made a number of times, when he talked about the cost of living in the period 1935-39.
The point I should like to impress upon the parliamentary assistant, and others on his side of the house, is that the change to what we recognize as a more desirable standard of living, the changing of former luxuries to necessities, is not reflected in the official cost of living index. The cost of living index is based on an actual budget of goods and services purchased by the so-called average Canadian family during the period 1935-39. Accordingly when we have the information that the cost of living index today is 168-5, that merely means it costs 168-5 in relation to 100 to purchase the same budget of goods and services that was an acceptable standard of living in 1935. But that same

quantity of goods and services is not an acceptable standard of living today, and it is for that reason some of us argue-I think the parliamentary assistant will admit it when he gives some thought to it-that the real cost of living today is much higher than the figure indicated in the official index. That is borne out by the fact that the dominion bureau of statistics has already indicated that it is reviewing the whole situation.
On the other hand, the wage index figures that hon. members opposite like to throw at us when we talk about the cost of living index are based on absolute dollars and cents. Furthermore, they are based on only a certain number of leading industries and on statistics gathered from employers who have fifteen or more employees. In other words, the point I am making is that the wage index shows a higher figure than is actually the case if you take into consideration all the wage earners of the country, whereas the cost of living index shows a lower figure than is actually the case, because of the very point the parliamentary assistant admitted yesterday, namely, that the standard of living does change and things that were luxuries ten years ago are necessities today.
I would point out also that these two indexes-that is what we seem to be calling them now, rather than indices-are prepared by different departments. The cost of living index is prepared by the dominion bureau of statistics of the Department of Trade and Commerce. The wage index is prepared by the economics and research branch of the Department of Labour, and they have difficulty in trying to put the two together. Indeed, the research people of the Department of Labour have been trying to work their tables out on the basis of 1941. The whole point of these remarks is to emphasize the fact that these two sets of figures are not properly comparable. In that circumstance, I submit that the average worker and the average housewife are correct in taking the view that the increased wages that people may get across the years do not catch up with the rising costs of living that we are still experiencing.


James Sinclair: I follow to a point the argument of the hon. member for Winnipeg North Centre with regard to the cost of living index. In the now well-quoted speech I did say that I thought that to start off with a fresh index, as for example as of August, 1950, with regard to prices and wages and the present living standards of the Canadian people, might give a better appreciation of what is occurring. But I think he destroys his argument when he takes the reverse stand with regard to the wage index; because after

all, when we say 100 and 168 these things are comparative, as he pointed out in discussing the wage index. It is true that the wage index today is taken from representative wages in certain chosen groups, but those are the same chosen groups as in the 1939 base; therefore the comparison is there, whether you take poorest paid groups in 1939 or poorest paid groups today, or average groups or a selection of groups, as they take. As for myself, I know that the dominion bureau of statistics is trying to work out a method of improving the cost of living index and the wage index so that it will convey more in reality to the people than a comparison with the 1939 level.


Stanley Howard Knowles: My point is that the two indexes are not comparable.


Mr. While (Middlesex Easl):: We hear a great deal about the cost of living index and the purchasing power of wages. The impression seems to be abroad that food is one thing which is costing the people of this country too much. While I represent a riding that is about half rural and half urban, I want to point out that never in the history of this country has an hour's labour bought more food than it does today. The trouble that people have with not making their dollars go round is that, they sometimes do not work enough hours in comparison with those worked by the farmer. In 1949 one hour's labour bought forty-two per cent more cheese than it did in 1939, sixty-two per cent more eggs than in 1939, and twenty-two per cent more bacon. Let us not be mistaken about these values and try to pound down the price of agricultural products and boost the price of labour. We are getting all out of line.


James Sinclair: I am grateful for the analysis given by the hon. member, because it bears out the comment made the other evening by the Minister of Finance. It is always helpful to have such figures given by the opposition, because they seem to carry more weight than if they are put on the record by a government spokesman.


Mr. Macdonnell (Greenwood):: I am glad the parliamentary assistant realizes that.


[Stage Direction]
Resolution agreed to.
3. That there be imposed, levied and collected an excise tax of thirty per cent on carbonated beverages, aerated waters, unfermented fruit juice beverages (not including beverages at least ninety-five per cent of which consists of pure juice of the fruit) and imitations thereof and all other compounded or mixed soft drinks put up in bottles or other containers for sale.
John Horne Blackmore: I wish to protest against
the levy which is proposed on candy, confectionery and other items in resolution 5.
Excise Tax Act
We have heard several members set forth the idea that candy is not good for the children, and that soft drinks are not good for them.
I submit that the person who should decide whether candy is good for my children is their father or mother; no group of bureaucrats in Canada has any right to tell me or my wife what our children should have. As we are at present proceeding, we are adopting the attitude that the dominion government has the right to tell the Canadian people what their children shall have and enjoy.
I can see no reason for the levy which is being placed on candy. It is recognized that sugar is one of the finest sources of energy. Why should there be a levy on candy?


Mr. White (Middlesex East):: Would you
apply that same reasoning to liquor?


John Horne Blackmore: I am not sure that liquor
was ever recognized as being a food.


Harry Oliver White: You talk about bureaucrats imposing their ideas.


John Horne Blackmore: I will apply the same rule to liquor, having regard to bureaucrats imposing their will upon the people.


Gordon Knapman Fraser: That's the spirit.


John Horne Blackmore: My particular concern
now is candy. Anybody who knows the facts concerning sugar knows that sugar is perhaps the finest source of energy known to man. There is not a doubt in the world that we in Canada can produce an abundance of sugar; if we cannot now produce it it is our own fault and the fault should be rectified. I protest strongly against this imposition of a levy on candy.


Mr. Low:: I should like to ask the parliamentary assistant to the Minister of Finance if he does not think that the imposition of a thirty per cent tax on candy and chocolate, particularly as it applies to candy bars, complicates the whole situation for the consumer and perhaps for the vendor or retailer? Is it not clear that by putting a thirty per cent tax on at the manufacturer's level, if one calculates the amount of tax and adds it to the manufacturer's price, it might result in adding a split part of a cent to the cost of the candy bar? Is it not true that the average retailer would exact the full cent because he could not split the cent to the consumer? He would have to exact the full extra cent, or perhaps more than a cent. I believe in a good many cases it will be found that candy bars will not go up only one cent; they may go up two or three cents.

Excise Tax Act
For the purpose of getting the revenue he wants, has the parliamentary assistant considered the possibility of applying an ultimate purchaser's tax of one cent per bar? Is there any possibility of arranging it so that a good ten-cent bar could be sold to the general public, and so that there would not be an excessive amount of taxation on this commodity?


James Sinclair: The hon. member has made a most pertinent observation, because these were the very things discussed and analysed by the budget committee when the resolutions were being drawn up. The average manufacturer's price for tax purposes in the case of soft drinks, for example-and I take it that we are discussing resolutions 3, 4 and 5 together, which include candy and soft drinks -has been around three cents. At the manufacturers' level, where we are levying this tax, we wanted to get as close to the one cent as we could. Had we levied a different tax we would have reached a point where the manufacturer would have raised his price to the next cent, and the greater part of the increase would have gone to them rather than to taxation. The tax on carbonic acid gas used in soda fountain drinks and the thirty per cent tax on soft drinks have been designed so that that increase of one cent will be received by the government-or at least the largest practical portion of that cent.
The problem in connection with chocolate bars is not so easy, because there is a range of values.


Solon Earl Low: Weights.


James Sinclair: Yes, weights and values as well. On the other hand, in the eyes of the public certainly today these confections, whether they are soft drinks or candy bars, are regarded as one classification. It seems unfair, therefore, to levy a lighter tax in one group than in the other.
The suggestion made by the hon. member at the conclusion of his remarks, that perhaps the whole pricing principle of chocolate bars should be revised, as apparently it has been done in the United States, is somewhat along the lines of the suggestion made by the hon. member for Nipissing. It may be that that will be the most practical way chocolate manufacturers can find, namely to make a bigger bar for ten cents. The thirty per cent levy on their present bar would perhaps in some cases be more than a cent. Perhaps that would be the best way to compete, because they are in the industry in competition with those who sell soft drinks and ice cream.
Perhaps I should point out to the hon. member for Lethbridge that neither the minister, nor I, as spokesman for the government, made any comment on either the worth or lack of worth of any of these products. With us it is purely a matter of taxation. It is true that one member from a dairy district did speak strongly, and other members with other views spoke with equal strength, about the merits of candy and soft drinks.
There was one point I made in my remarks which it seemed to me should not be overlooked. It was a phase of the matter which appealed to me, namely the fact that these taxes were providing an extra incentive to dairy farmers. I remember standing here when the last budget resolutions were being put through committee, answering questions about the sales tax on ice cream. All hon. members, on both sides of the house, hastened to assure me what a wonderful thing it would be if ice cream had no sales tax and thus would be permitted to compete.
That has been attended to, with the result that now the farmer has this extra edge on the market. Today if I give any of my four small children a nickel they know the one thing they can buy is an ice cream cone. Remember, I am not saying it is better or worse than a bar or a soft drink. But we must all agree that it is an extra help to the farmer.


John Horne Blackmore: As a representative from
a constituency in which dairy products are produced in large quantities, I should like to commend the department for its consideration of this matter. I am well pleased to see that ' no malted milk or other milk or cream products are being subjected to any impost. That is something which deserves high commendation, and I do not see any reason why we, who are the most critical among the opposition concerning the operations of the Minister of Finance, should not give him a little credit where credit is due.


Mr. Cardiff:: How much butterfat is there
in ice cream? It is suggested that the sale of ice cream will be beneficial to the dairy industry, but I am informed that there is very little butterfat in ice cream now. I do not know what they are putting in it, but it is not butterfat.


James Sinclair: Once again I have not the
figure with me.


Gordon Knapman Fraser: It is no less than thirteen per
cent.


James Sinclair: The hon. member for Peterborough West asked me that question last

year, I recall. He now says it is no less than thirteen per cent. Last year the Minister of Agriculture assured us that when ice cream is sold as ice cream it is made from cream and not from synthetic oils, which are beginning to come into use in other countries.


Gordon Knapman Fraser: I asked that it be increased.


James Sinclair: Yes.


Mr. Hatfield:: Is there not some other way
in which the government could raise this amount of money, instead of taxing the children? Surely it is not necessary to tax the children's nickels to raise this $48 million.


James Sinclair: That is an easy way to phrase it, as though the children were the only ones paying the tax. One member of the C.C.F. pointed out yesterday that it is not the children who are paying it; that it is a form of taxation paid by the wage earner the same as every other form of taxation. It is very easy to say that the corporation tax should be increased. Well, the corporation tax right now is 43 per cent in eight of the provinces and 45 per cent in the two central provinces. Someone may say that there should be further taxes on liquor, but liquor taxes are already very heavy. We must make an effort to spread the load around.
I was glad to hear the views of the hon. member for Lethbridge, and his approval of the fact that we have not taxed the dairy product. But we must begin to tax other things if we wish to raise the revenue which must be obtained to carry out our program.


Solon Earl Low: Would the parliamentary assistant clarify the expression "or a substitute for candy" as it appears in resolution 5?


James Sinclair: When I attempt to prepare myself for the discussion on these budget resolutions I try to think what questions I would ask if I were sitting in opposition. I had thought that I would have asked the very question the hon. member has now asked.
The department has considered the dictionary definition as a basis for its regulations in connection with candy. If hon. members are interested in the actual formal definition I can give it to them. It is set out in this way in the Webster dictionary.
1.	Sugar crystals formed by evaporating or boiling cane sugar, a syrup, or the like; also, a confection covered with these crystals.
2.	Chiefly U.S. A food product made from sugar, varied by the addition of fruits, nuts, chocolate, flavours and colours.
And in the Oxford dictionary we find this definition:
1. Crystallized sugar, made by repeated boiling and slow evaporation, more fully called sugar candy; also any confection made of, or incrusted with this.
Excise Tax Act
There would be confections such as marshmallows which would not come within that category. I suppose peanut brittle could be classified in the same way, and possibly liqueur candies. In 1942 and 1943 the field was covered carefully, and it was found that to be safe, so as to include all these groups, the expression "a substitute for candy" should be used, in view of the specific definitions in the dictionaries.


Solon Earl Low: Would it include maple sugar products?


James Sinclair: Yes.


Harry Oliver White: I think this tax on soft drinks and chocolate bars is one of the least popular of the budget changes. It will create additional difficulties in selling in the way of making change, and there will probably be a reduction in the size of the chocolate bars. The soft drink manufacturer has been up against a five cent sales wall which has been in effect as long as I can remember. In the last two or three years the cost of everything going into this product, such as labour, glass, cases, and motor trucks, has gone up, yet the industry is up against that five cent sale wall. This tax is going to increase costs still further. The streetcar industry was a five cent industry, but they had to go higher. This industry uses automatic vending machines made for the nickel, and tremendous losses will be incurred because of these taxes.


Gordon Knapman Fraser: Does not this resolution prove the old family saying that Pop always pays?


Heber Harold Hatfield: Will popsicles come under this? I understand they are made mostly of water.


James Sinclair: They do not come under this because they are not a candy confection, in the sense that they are mostly water.


John George Diefenbaker: There is no doubt that this tax is most unpopular. One has only to read the press of the country to see that there has been fairly general criticism of it. Within the last few days I have received a number of letters protesting against it. In the United States one reads quite frequently of people protesting against expected changes by writing letters to the government or to members of congress. Can the parliamentary assistant indicate how many protests have been received by the Department of Finance?


James Sinclair: The industry as such has registered a protest, but I must confess that I have had no protests in my personal mail. In the forecasts made by gentlemen of the press about the budget I do not think mention

Excise Tax Act
was made of this particular tax; therefore it probably came as a bit of a surprise. I shall take the matter up with the officials during the interval between the resolution stage and second reading of the bill and give the hon. member an answer.


John George Diefenbaker: I am interested in the extent to which people have protested.


James MacKerras Macdonnell: Should not the committee know what protests have been made? One does not know just why the minister is not here, but it seems to me quite unsatisfactory to have the parliamentary assistant say that protests have come to the minister and he will inquire about them.


James Sinclair: The fact that I did not know about it shows that there have been very few'. If the volume had been substantial I would have had to take part in answering the protests. I shall give the actual figures when the bill is up for second reading.


John Horne Blackmore: Mr. Chairman, I do not know of a better time than the present to call on hon. members who have objected to these taxes to tell the government where they can get the money that these taxes will provide for them.


John George Diefenbaker: Are you assistant to the assistant?


John Horne Blackmore: I am just calling on anybody who thinks he knows. It is an easy thing for Conservative members to get up and protest against a tax, or for Social Credit or C.C.F. members to get up and protest, because it sounds good to the folks back home. I shall try to avoid that as far as possible and endeavour to talk in terms of the interests of the country. In what I have heard up to the present time there has not been one single word of suggestion as to where the government might get the money which they propose to raise by these taxes.
I hope I shall not be too far out of order if I make another comment upon what I have heard since I have come to this special session. We have heard people arguing and declaiming and storming and thundering against the government because our war effort is not sufficient. These protests have taken all forms, but there has never been one single statement from any member of the opposition, so far as I have heard, as to how much further in debt he would be willing to have Canada go in order to provide the additional defences which he admits Canada should have, or as to how much additional taxation he would be willing to approve, or on what aspects of life those taxes should be levied. The whole thing has given parliament the appearance of unreality.


Mr. Bryce:: They will find a seat for you over there.


John Horne Blackmore: We do not need any remarks even from such a fine gentleman as the hon. member for Selkirk. He must realize that we are in all these things as Canadians. I often think when listening to all these protests just how I would feel if I were the prime minister or the minister of finance.


An hon. Member:: You never will be.


John Horne Blackmore: Of course I will not. That foolhardy remark is simply another one of these bits of levity that just do not get us anywhere. What I am expressing is a profound truth, and the hon. member who has indulged in levity can laugh that off if he can. The man standing at the head of the government is being attacked on every side. Do hon. members think that to be attacked like this puts him in a better condition to fight the battle which he must fight when the house adjourns? It is not an easy thing for members of the cabinet, and it certainly is not easy for at least one of them, to listen to all these attacks on policies that are made without there being one single suggestion as to how to improve those policies. After listening to that sort of thing a man goes away feeling sick at heart and far weaker than when he came.
We should remember that the people who are conducting the affairs of this country are facing the gravest crisis ever faced by this country. Probably they are going to have the most difficult time that any group of men have ever had in the history of Canada. Yet they are going away from this house after having nothing but brickbats thrown at them. What suggestions are hon. members prepared to make?
I think it is well known to nearly everybody that in a general way Social Crediters believe that there is a way in which this $18 million could have been provided.


Gordon Knapman Fraser: Here is where I came in.


John Horne Blackmore: If hon. members who are making remarks would just put themselves in positions of responsibility they probably would not say the silly things they are saying. I wonder if there is a way in which this country can avoid such nuisance taxes as these? Surely there must be a way. The question would naturally arise somehow-


Gordon Knapman Fraser: Not again.


John Horne Blackmore: I shall be glad to answer the question, and I can do it briefly. Let every member of the House of Commons and every person throughout the country who happens to read this ask himself the question

whether $18 million created by the Bank of Canada and advanced to the dominion government to supply the revenue that the $18 million in taxes will provide would produce any more ill effects than this set of taxes. It is argued that normally if money is created by the state and put into circulation it will cause a rise in prices. Every single item in these resolutions will cause a rise in prices. There is no probability about it; it is a certainty.
Let us face the matter from that standpoint. Let us bear in mind that money will not cause a rise in prices if there are plenty of goods. I think nearly everyone in Canada will agree that not only the long list of goods which I mentioned in my speech yesterday are in abundance and can be in greater abundance, but also large quantities of other goods to which the Minister of Trade and Commerce referred are already in Canada and can be in greater abundance without seriously impairing our war effort. These are facts. Let hon. members face the situation confronting Canada right now.


Heber Harold Hatfield: They want to prevent you from growing sugar beets.


John Horne Blackmore: Yes, that is another serious problem. There is one other little thing which I may be almost out of order in mentioning, but somebody needs to mention it before we go home. Apparently the government has laid down the policy that we are going to fight this war on a pay as you go basis. It is not difficult for the people of Canada to figure what is going to be the absolute maximum of the effort Canada can put forth if the money to conduct the war is to be taken out of the pockets of the Canadian people. It is not very difficult to apprehend the injury that will be inflicted upon the Canadian economy by the taxation which will be necessary to raise the money. Are members of the Liberal, Conservative and C.C.F. parties prepared to limit the war effort of Canada to the amount of money which can be taken out of the pockets of the Canadian people? Apparently the government is endeavouring to give us the impression that is what they propose to do when they speak of a pay as you go policy.
Therefore we are faced by what constitutes a most solemn reality. Let members of this house, even the smartest and wisest, those who do not hesitate a minute to make some smart aleck remark with nothing in the world behind it, get right down to genuine business and see if they can figure out a way to finance this country's war effort and our other concerns without such taxes. I maintain we can.
Excise Tax Act


James Sinclair: I can give the answer now to the hon. member who asked whether any complaints had been received. Up until last night we had received eight telegrams from people who had purchased soft drink vending machines and who thought the tax was a little unjust, and one letter protesting against the tax on candy.


Mr. Hodgson:: I have already received ten letters from persons who have purchased soft drink vending machines.


James Sinclair: I was not asked how many letters the hon. member had received. I was asked how many letters had come to the Minister of Finance.'


Mr. Hansell:: The parliamentary assistant has not answered the hon. member for Lethbridge. I think what the hon. member for Lethbridge has said deserves an answer, because he has touched on government financial policy. That is the crux of the whole situation. Is the government pursuing the right policy? The reason why some other groups in the house have no suggestions to offer to the government as to how they should obtain the money is that their policies are the same as the policy of the government in matters of finance. I think the parliamentary assistant owes it to the hon. member for Lethbridge to answer him.
Let me put it in this way. The hon. member for Lethbridge has already said that the imposition of these taxes raises prices. That is inflation. I want to ask a direct question. Is the imposition of these taxes for the purpose of obtaining money to carry on the extra war effort-and the hon. member for Lethbridge pointed out that it can be got from the Bank of Canada by direct creation-or is it for the purpose of siphoning off purchasing power? I do not want the parliamentary assistant to give an hour's reply. He does not have to do that. He would becloud the issue if he did. Let him answer in a simple way.


James Sinclair: When the hon. member for Macleod got to his feet I could not help but remember the advice he gave a year ago, that if he were a minister or parliamentary assistant piloting estimates through he would simply sit tight with a dumb look on his face.


Ernest George Hansell: Hear, hear.


James Sinclair: I might be tempted, therefore, to follow that course, and hon. members will agree that I could do it without much difficulty. But T also recall that the hon. member for Lethbridge said it was not I he wanted to answer the question he was asking; it was members of the opposition.

Excise Tax Act
He asked them to suggest what alternative taxes they would apply which would raise $18 million.


John Horne Blackmore: That is exactly right.


James Sinclair: Since none of them answered, and I do not regard myself as an opposition member, I do not see any reason why I should.


John Horne Blackmore: I did not ask the parliamentary assistant that question.


Ernest George Hansell: If I am confused as to whom the question was directed, then I misjudged the discussion. Therefore I am now asking the parliamentary assistant to answer my question. The Bank of Canada has the authority to create money for the government. There is no question about their having that authority. The government have not asked them to exercise that authority. The government are imposing a tax on these goods. Is the imposition of that tax for the purpose of raising money to carry on the extra war effort, or is it for the purpose of siphoning off purchasing power? I want that question answered.


James Sinclair: I shall not follow the advice given to me by the hon. member for Macleod last year. I will give him the same answer I gave to the hon. member for Lethbridge when he asked the same question last year. I quite agree, and I think every member of the house, no matter what his financial theories or beliefs are, will agree, that so far as this $18 million is concerned, the printing presses of the Bank of Canada could turn out another $18 million to be put into circulation, and it would not make much more than a little ripple on the actual price structure of the country. Of course if that is a good policy for pop and candy, we should do the same thing in respect to corporation taxes, excise taxes, customs duties, and so on. Then we should also recall that at the peak of our war expenditures during the last war we were spending $6 billion a year. If we start turning out $6 billion a year in the Bank of Canada to meet these expenditures, then 'I say-I may be wrong, but I think we have some pretty good authorities to back me up-that we would be following exactly the same course as was followed by Germany after the first great war. I believe that is the view of the minister. Certainly it is the view I expressed last year.


Ernest George Hansell: Then I take it the purpose is to siphon off purchasing power; that is the answer of the parliamentary assistant.


Mr. McCann:: Mr. Chairman, I do not intend to enter into any academic discussion as to whether or not the money should be borrowed from the banks, but I think we

must understand and recognize two cardinal principles in reference to taxation. Taxation is always imposed for the purpose of raising money. So far as these proposed taxes are concerned, they have a dual purpose-not only to raise revenue, but to discourage unnecessary buying. In my judgment the imposition of a tax on commodities of this kind does discourage unnecessary buying. If in the course of a year we can collect $48 to $50 million in these taxes, as we did when they were in effect previously, in my judgment that would represent an expenditure of perhaps a couple of hundred million dollars a year on these articles, which are not absolutely necessary. One does not have to enter upon a discussion of the relative merits of different types of foods, but these taxes are imposed upon commodities which are not absolutely necessary, no matter how pleasant they may be to consume; and they provide a good field for taxation to meet our revenues.
The great sources of revenue in Canada, of course-and I have the duty of collecting most of our revenue-are corporation and personal income taxes and succession duties, which come under our taxation division. In the customs and excise branches the great sources of revenue are the sales tax, the taxes on cigarettes and liquor, and the customs tariff. Taxes upon commodities such as these bring in a comparatively small amount in comparison to the revenues that are necessary in order to carry on the business of government.
. When the government adopted a pay as you go policy for this year at least, a policy which I hope will be continued, we had to look over the field and see where we could get the money with the least upset in business. We are increasing the taxes on corporations, and we are also imposing additional taxation on certain commodities. In resolution 2, paragraph (a), covering electrical appliances and equipment, not a single item is mentioned for which a substitute cannot be found which will be equally efficient and equally useful. Take electric blankets, for instance. People can get along just as well with ordinary woollen blankets in times like these. Chafing dishes are included among the appliances and equipment for household use. Last evening I listened to a speech on chafing dishes by the hon. member for York West, and as I listened I thought perhaps the chef from the Royal York hotel had escaped and come to parliament. If the hon. member has any cooking to do he can use an elqctric stove, on which there is no increase in taxation. I could go on and take

all the items mentioned-coffee makers, curling irons, dishwashers, and so on. There is not a single item for which there is not a substitute which bears no taxation.


Mr. Fleming:: What about electric toasters?


James Joseph McCann: Well, I can remember the
day when they made just as good toast without having electric toasters.


Donald Methuen Fleming: Do you want to go back to
the days of an open fire?


James Joseph McCann: Not at all; but I can tell the hon. member that before this thing is over we shall go back to a whole lot of things we used years ago. If we have to spend billions of dollars for war purposes, which produce no revenue, we shall have to be prepared to accept a measure of austerity in this country that we have not had for a long time.
I believe most people have no great objection to this method of taxation. It is one that has been given a great deal of consideration, and we believe it to be equitable and fair. In my department perhaps more detail is involved in the collection of taxes of this kind than in any others, but we take on that added duty believing that the public generally will meet the demand of the times and pay the taxes willingly, despite the criticism of details we have heard from the hon. members on the opposite side.
The Depuiy Chairman:	I think all hon.
members will agree that a general discussion of taxation methods or policies is not relevant to resolution 3. While I should like this interesting discussion to continue, hon. members will realize that I am bound to see that the rules are observed. Therefore I would ask hon. members to keep their remarks strictly relevant to resolution 3.


Donald Methuen Fleming: That is what the minister
should have done.


John Horne Blackmore: Surely, Mr. Chairman,
you would not object if I answered the argument put forward by the minister.


The Deputy Chairman:: I would remind the hon. member for Eglinton that this discussion was brought about by the remarks of the hon. member for Lethbridge. As hon. members know, it is difficult for the chairman to appreciate exactly how the discussion will develop until he has heard a little of it.


John Horne Blackmore: I want to place just two
points before the committee. What has been said by the minister and the parliamentary assistant is very good and very sound, and can be easily*backed up; but all that has gone into Hansard without an answer. Let me give the other side. It is proposed to raise $18
Excise Tax Act
million through these particular taxes. Suppose you tried to raise the total revenue of Canada through these taxes; where would you get?
The Depuiy Chairman:	Order. I think the
hon. member for Lethbridge should be reminded again that the discussion must be related to resolution 3. According to the rules, remarks in committee must be strictly relevant to the item under consideration.


John Horne Blackmore: Mr. Chairman, you have complete authority in this committee, and I bow to that authority. But if the purpose or meaning behind all this discussion is not advisability or inadvisability of any given tax,
I fail to appreciate what it is. The one thing above all others that we should be discussing during this debate is how we can best raise the money we need in order to carry on the affairs of the country. Consequently anyone who has any suggestions to offer should be in order.
The Depuiy Chairman: But the question is not to be determined by a discussion of resolution 3. There was an opportunity for such discussion earlier, and when the bill is brought in there will be a further opportunity to discuss the various principles to which the hon. member has referred.


John Horne Blackmore: That will be permitted, will it, on second reading of the bill? There was a great deal of talk going on around me, and I could not hear what you said. When will it be in order to discuss this all-important matter?


An hon. Member:: Next week.


John Horne Blackmore: Well, there is levity again.
The Depuiy Chairman: The hon. member will realize that the chairman cannot decide questions of order in anticipation. The chairman decides questions of order only as they arise, and at the moment it is not in order to discuss taxation policies.


Mr. Noseworihy:: The hon. member for Lethbridge threw out a challenge to the two other opposition groups, to suggest alternative methods of raising this revenue. I merely remind him that in our subamendment, which was supported by his party as well as by the Conservatives, we did suggest one alternative.


[Stage Direction]
Resolution agreed to.
4.	That there be imposed, levied and collected an excise tax of fifty cents per pound on carbonic acid gas and similar preparations to be used for aerating non-alcoholic beverages.
The Depuiy Chairman: Shall the resolution carry?
Stanley Howard Knowles: No.

Excise Tax Act


Some hon. Members:: On division.
Resolution agreed to on division.
5.	That there be imposed, levied and collected an excise tax of thirty per cent on candy, chocolate, chewing gum, and confectionery which may be classed as candy or a substitute for candy.


Louis-René Beaudoin: Shall the resolution carry?


Stanley Howard Knowles: On division.
Resolution agreed to on division.
6.	That any enactment founded upon this resolution come into force on the 8th day of September, 1950.


Donald Methuen Fleming: This resolution relates to the date on which these tax increases come into effect. I was reviewing what the Minister of Finance had to say about the revenue expected to be derived from these taxes during the remainder of this fiscal year. What I am struck by is the wide variation in the rates of return for the remainder of this fiscal year in relation to the revenue the minister expected in a full fiscal year. For instance, through the increase in the tax on corporation income he estimated the revenue for the remainder of this fiscal year, which means six months of revenue, at $13-5 million, but a total of $85 million for a full twelve months' period. In other words, for the second half of this fiscal year he expects from that source a revenue of only 16 per cent of what it would be for a full twelve months. The revenue from the taxes on alcohol and malt the minister estimated at $10 million during the remainder of this fiscal year, and $22 million for a full twelve months' period. As to the taxes on goods-that is, the commodity taxes, Mr. Chairman including the new taxes and the increase in the previous taxes-he estimated the revenue for the remainder of the fiscal year at $17 million, and for a full twelve months' period, $34 million. In other words, he would receive 50 per cent during the remainder of this fiscal year. In the case of the tax on alcohol the sum received during the remainder of this fiscal year works out at 46 per cent.
In the case of candy, soft drinks and chewing gum, the tax for the remainder of this fiscal year is estimated at approximately $18 million, while for a full twelve months' period it would amount to $48 million. In other words, he estimates revenue during the remainder of this fiscal year from September 8 to March 31 at 37-5 per cent of the revenue for a full year. These are very great variations, from 16 per cent in the case of corporation profits to 46 per cent in the case of the tax on alcohol and malt, 50 per cent in the case of the commodity taxes, and 37-5 per cent in the case of soft drinks, candy 
and chewing gum. I think these comparisons call for some explanation. I believe I can surmise that the explanation with regard to corporation profits is the lag in payments by corporations of taxes on profits. There is still quite a substantial variation in the case of these other items.


James Sinclair: The member for Winnipeg North Centre asked this question last night about corporations. The member for Eglin-ton is quite right in saying that one of the causes of that difference is the lag in the payment of corporation taxes six months after the beginning of the fiscal year. That does not mean we do not start collecting the tax immediately, but our collections will not necessarily appear in the period under review. Some will appear in next year's receipts.
There is another reason which the Minister of National Revenue pointed out last night, and that is the fiscal years of the companies themselves. Most companies have fiscal years ending with the completion of the calendar year; some do not. For instance, some companies originally started business in August and so have a fiscal year ending in August. The effect of this increase in their taxes will be shown in next year's tax receipts, although the higher tax rate is applied now.
So far as excise taxes are concerned, there again there is a two-months' lag. Excise taxes which accrue in September are not collected until towards the end of October. Again there is that lag, not in amount but in the time of receipt. The taxes are being levied immediately but they do not turn up in the receipts until later in the fiscal year. So far as soft drinks are concerned the same reason applies, because it is also an excise tax; but there is another reason as well. There is a tremendous demand for soft drinks during the summer, but in the winter months the demand is less, and so our revenue in those months will be less.


Mr. Fair:: Mr. Chairman, would there be
any possibility of transferring the tax on soft drinks, candy and chewing gum to liquor and adding it to the present liquor tax? Many speeches have been made in this house about drunk driving, and I think that would be one way of eliminating a number of the accidents which are becoming more numerous every day. Perhaps the parliamentary assistant might take that question up with his minister and see if something could be done about it.


[Stage Direction]
Resolution agreed to.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend The Excise Act, 1934, and to provide:
1.	That the duty of excise on spirits distilled in Canada be increased from eleven dollars to twelve dollars per proof gallon.
Mr. Gibson:: Will the parliamentary assistant indicate by what amount the provincial governments will increase the price of liquor as a result of this increase?


James Sinclair: It is very difficult to say
what increased price will be charged by the provincial governments, because they have their own merchandising problems to consider. As you know, the price of liquor varies in the different provinces, but the direct actual increase in price because of the increased tax can quickly be worked out. The liquor generally sold across Canada today is seventy per cent proof, so for a gallon of proof spirits the liquor stores will get 1.4 gallons of seventy per cent strength. Then, of course, the quart sold by the liquor stores is not a quart at all, but twenty-six ounces. There are 160 ounces in an imperial gallon, so there are six of these bottles of whisky which are sold as quarts; therefore in 1.4 gallons there would be eight and a half bottles of whisky for the stores which would bear this dollar increase in tax.


John Lambert Gibson: Therefore roughly a fifteen
cent increase would be sufficient to take care of this increase in taxation without the provincial governments contributing to the spiral of inflation?


James Sinclair: That is roughly what this
break-down at the manufacturer's level means.


[Stage Direction]
Resolution agreed to.
2.	That the duty of excise on Canadian brandy be increased from nine dollars to ten dollars per proof gallon.
Resolution agreed to.
3.	That the duty of excise on malt be increased from sixteen cents per pound to twenty-one cents per pound.
Resolution agreed to.
4.	That any enactment founded upon this resolution shall come into force on the 8th day of September, 1950.
Resolution agreed to.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the customs tariff and to provide:
1. That schedule A to the customs tariff be amended by deleting therefrom the following enumerations of goods and rates of additional duties of customs: whisky, brandy, rum, gin and all other goods specified in customs tariff items 156
Excise Act, 1934
and 156b, $7 per gallon of the strength of proof; ale, beer, porter and stout, 30 cents per gallon; and by substituting therefor the following enumerations of goods and rates of additional duties of customs: whisky, brandy, rum, gin and all other goods specified in the various subitems of tariff item 156, $8 per gallon of the strength of proof; ale, beer, porter and stout, 40 cents per gallon.
Resolution agreed to.
2. That any enactment founded upon this resolution shall be deemed to have come into force on the 8th day of September, 1950, and to have applied to all goods mentioned in this resolution imported or taken out of warehouse for consumption on and after that date, and to have applied to goods previously imported for which no entry for consumption was made before that date.
Resolution agreed to.
Resolutions reported, read the second time and concurred in.

Alphonse Fournier: for leave to introduce Bill No. 8, to amend the Excise Tax Act.
Motion agreed to and bill read the first time.


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


Alphonse Fournier: Later this day.


EXCISE ACT, 1934
Alphonse Fournier: for leave to introduce Bill No. 9, to amend the Excise Act, 1934.
Motion agreed to and bill read the first time.


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


Alphonse Fournier: Later this day.


CUSTOMS TARIFF
Alphonse Fournier: for leave to introduce Bill No. 10, to amend the Customs Tariff.
Motion agreed to and bill read the first time.


Mr. Speaker:: Is it agreed that the bill be read the second time later this day?


Stanley Howard Knowles: Mr. Speaker, may I ask if these bills are printed and if we shall have them in our hands?


Alphonse Fournier: You will have them
before three o'clock.


James Sinclair: They are available.


Alphonse Fournier: They are here. We have them on the desk right now.


Mr. Speaker:: Agreed?

Income Tax Act


Some hon. Members:: Agreed.
At one o'clock the house took recess.
The house resumed at three o'clock.


INCOME TAX ACT
Douglas Charles Abbott: the second reading of Bill No. 6, to amend the Income Tax Act.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, before the second reading of this bill I should like to make a few remarks and take a few parting shots at the government, because this question of income tax is a serious one for the Canadian people, and it is very closely related to the rising cost of living, inflation, and possible shortages.
We in this group believe that of all taxes the income tax is the fairest one. It is the fairest in every way. In particular we are opposed to indirect and hidden taxes. If we were in power we would remove them as quickly as possible.
While in this bill there is no provision for any increase in the personal income tax, and to that extent many Canadians may be led to believe that they will not suffer, we believe the majority of Canadians will be taxed to a far greater extent by the rising cost of living.
This group and other hon. members have done their best to present the experiences of the past to the government and the house. They have done their best to present evidence as to the cost of living, and the effect of the income tax in that connection. They have used logical arguments in the presentation of their case to the government, and have done their best to voice what is without doubt the majority opinion of the Canadian people. Regardless of those efforts by a comparatively small number of members in the house, so far as the suggestions of this and other groups are concerned the government has remained unmoved with respect to the excess profits tax, the increase of taxes on corporations, and the increase of taxes on those in higher brackets.
This group and others in the house have presented their arguments repeatedly, until I am sure their representations have become almost boring to hon. members on the government side of the house. And what do I find in the issue of the Financial Post for September 16, 1950, which reached me today? It is likely that the house will soon adjourn and hon. members will return to their constituencies. We leave here with a definite sense of insecurity so far as the future is concerned. The Financial Post is regarded

as a reliable paper dealing with prices and financial matters in this country. We see in a heading that cement and brick grey markets are growing. Another heading states that there is a steel pinch ahead in consumer goods. There is reference in another heading to higher prices for pulpwood, including, of course, paper products. All through this paper one finds articles indicating possible shortages and possible increases in the prices of commodities.
I do not wish to take up the time of the house for more than a few minutes, but I would call the attention of hon. members to a paragraph which deals with retail food prices. It states:
Retail food prices uptrend is shown in the following table for Toronto (all prices based on
comparable items from	the same store):	
(Toronto	prices, cents)	
	June 15	Now
Bread, loaf 			 15	[DOT]16
Round steak, lb			[DOT]96
Hamburg, lb	
-57	*63Bacon,lb. (back) 	
-89	[DOT]99Peameal bacon 	[DOT]72Butter, lb	[DOT]58Fresh milk, quart ....	
19	[DOT]19Coffee, lb	[DOT]89Shortening, lb	
-31	[DOT]32Sugar, 5 lbs	[DOT]53
Those are accurate food price figures taken from one store in Toronto showing the comparison of prices as between June 15 and now; and it is indicative of the situation now facing the people of Canada.
We have consistently urged higher taxation by way of excess profits tax, a higher corporation tax and a higher tax for the higher income groups, and as I said before, without results.
What an opportunity the government has lost in this supplementary budget to impose these higher taxes as requested by members of this group and of other groups in the house. This would do three things. First of all it would assist in the prevention of inflation, pay for the additional cost involved in the administration of price controls, and pay subsidies where necessary to equalize the cost of goods to producers and consumers. If the government had seen fit to raise these taxes, as suggested, it would have prevented any further expansion in capital goods which will create shortages of labour and materials and bring about rising prices, while at the same time it would have provided funds to carry on a price control and subsidies policy. Had the representations of this group been recognized by the government, it would then have given meaning to the high-sounding phrases we have heard on several occasions from the government benches.

Let me say in conclusion that the Canadian people would face the future with greater confidence if, before the house adjourns, the government were to declare that living costs would be stabilized; that measures would be taken to that end so as to prevent this growing and increasing burden on the lower income groups. I say the people would have had greater confidence if the government had proclaimed that in the event of actual shortage all would receive their fair share, and that no one because of wealth would receive an unfair share of goods in short supply.
Instead of that members of the House of Commons will return to their constituencies to face rising living costs, shortages, and a future of uncertainty. I am sure that before many weeks or months have passed time will prove once again that the proposals of this group in the matter of taxation, price controls and subsidies are sound and necessary if the best interests of the Canadian people are to be served.


Mr. Victor Quelch (Acadia):: Mr. Speaker, I do not think it can be argued that the taxation proposals will overburden anyone. On the other hand I do not think it can be said that they make possible a proper distribution of the burden.
We have been hearing a great deal of talk here about the need for a pay as you go policy. We heard exactly the same kind of talk in 1939. As the leader of this group pointed out, there are two interpretations of a pay as you go policy. On the one hand, it may be interpreted as a policy under which Canada as a nation will not go into debt to any other nation. On the other hand, it may be interpreted as meaning that the government will balance their expenditures with their revenues and not increase the national debt.
We know that during the last war we adopted the former policy, that is, we adopted a pay as you go policy in the matter of nonexpansion of our external debt. But on the other hand we did increase considerably our internal debt. Personally I do not believe that you can fight an all-out war without some increase in debt. It may be possible in the initial stages, but eventually as the war takes a larger and larger percentage of the total national production you are bound to have an increase in the national debt, if for no other purpose than to drain the surplus purchasing power from the channels of purchasing power and hence stop inflation.
But when you find it necessary to increase taxation further in order to withdraw surplus purchasing power from circulation it is essential that you bring about an equitable distribution of the debt claims in the country.
Income Tax Act
That is something we have not provided for in the past. I recall that in 1939 the governor of the Bank of Canada stated that the national debt was a national asset and therefore we should not be greatly concerned about it. It is true that the national debt may be called a national asset to the extent that the people hold the debt claims against the nation, but when you have a situation such as we have had in the past, where a small percentage of the people hold a large percentage of the debt claims, you have an unequal distribution of the asset. While it may be said that the national debt is a national asset, what actually is the fact is that a small percentage of the people have it as a national asset, while it is a liability of all the people. You have to tax all the people to pay interest to a comparatively small number of people. Unfortunately the system of financing that we adopted during the last war aggravated that position. I recall a return tabled in this house stating that less than one per cent of the subscribers to war loans had purchased over sixty per cent of the total, indicating that the holdings against the national debt were distributed in a most inequitable way.
I think all hon. members will agree that there should be no profiteering in war. But when we say that there should be no profiteering we do not mean to say that there should be no profit. So long as we are under the capitalist system, so long as we are under the profit system, we believe that every producer should be allowed a fair profit, and that fair profit should be allowed whether the producer is producing consumer goods or war materials; otherwise there would be rank discrimination. It would be hard to get people to change from the production of consumer goods to the production of war materials if they were to be denied a profit. To my mind that would be nonsensical and that is why we oppose the proposition to nationalize the production of war materials on the ground that the producers of war materials are not entitled to a profit. I submit that the producers of war materials are just as much entitled to a profit as are the producers of consumer goods.
We support the motion to impose an excess profits tax in order to eliminate profiteering at this time. I think the government are making a great mistake in not imposing an excess profits tax right at the beginning of hostilities so as to assure the people of Canada that we are not going to allow profiteering.
I would say that the essentials of a sound policy are that taxation should be on the basis of ability to pay, with exemption from taxation for those in the lower income groups. Then as war takes an increasing amount of

Income Tax Act
the production of the country it will be found impossible to meet our expenses by taxation alone, because if we do that we are apt to face the law of diminishing returns. We shall then have to indulge in borrowing, and those borrowings should be from the savings of the people and from the savings of the people alone.
What did we do in the last war? We did not attempt to finance that war by borrowing the savings of the people. We borrowed quite heavily from the chartered banks and from the large financial corporations. We submit that when it becomes necessary to siphon off purchasing power, it should be done by compulsory savings rather than by bond issues. I say that for two reasons. When you have bond issues you have an inequitable distribution of the debt holdings, and you have absolutely no guarantee that the action you take on the day you withdraw that money from circulation will not be counteracted the very next day by the people who bought bonds taking them to the banks to cash them. That was done time and time again during the last war. People were high-pressured into buying bonds when in many cases they could not afford to buy them. In a day or two they would go to a chartered bank and cash them. The process then became inflationary.
It went even further than that. The chartered banks would say to people, "You had better buy some bonds". A man might answer that he had no money, but the manager of the chartered bank would offer to lend him the money. That was not the purpose of the bond issue. The purpose of the bond issue was to withdraw money from circulation. When the chartered banks created money for a person to buy bonds they were counteracting the very thing the government was trying to accomplish.
We submit that as soon as the government considers it necessary to start withdrawing money from circulation by means of borrowing it should be done by compulsory savings rather than by bond issues. May I point out again that during the last war, when bond issues were put out, less than one per cent of the subscribers purchased sixty per cent of the total issues, showing a most inequitable holding of the debt claims against the nation.
Let me go a step further. When you have reached the position that it is no longer possible to meet government expenditures for war purposes by taxation or by borrowing the savings of the people, then the government have to indulge in a system of monetary expansion whether they like it or not. In 1939 the former minister of finance, Mr. Ilsley, stated that once you had reached full

employment it would not be justifiable to have an expansion of money. But in spite of that statement we know that it became necessary to indulge in monetary expansion to the tune of over $4,000 million. Once we reach the position where it is essential to have monetary expansion, then we insist that that monetary expansion should be brought about by borrowings from the Bank of Canada rather than by borrowings from the chartered banks.
It is true that in both cases it is an expansion of money. It has been argued in the past that borrowing from the Bank of Canada is far more inflationary than borrowing from the chartered banks. The only reason why former ministers of finance have argued that borrowing from the Bank of Canada is more inflationary than borrowing from the chartered banks is that when you borrow money from the Bank of Canada you put in circulation legal tender which finds its way into the tills of the chartered banks, thereby expanding the cash reserves of the chartered banks and making it possible for them to expand their loans at the rate of ten to one on the money so issued, or actually twenty to one under the Bank Act. That has been the attitude of former ministers of finance as expressed in this house, but I was quite interested to find that apparently it is not the opinion of the officials of the Bank of Canada. The officials of the Bank of Canada are not prepared to admit that borrowing from the Bank of Canada would necessarily mean that the chartered banks would immediately increase their loans up to ten times the amount of money so issued.
The reason I say that is that officials of the Bank of Canada say that all they have to do is to advise the chartered banks against an expansion in loans and they will carry out their advice. If you read the reports of the Bank of Canada I think you will see that time and again the Bank of Canada has advised the chartered banks to adopt a certain policy, and the chartered banks have adopted that policy without any legislation being passed to force them. On the other hand, if ministers of finance in the future are going to insist, in spite of that, that utilization of the Bank of Canada would be inflationary, there is a very simple way to prevent it. All that would be necessary would be to amend the Bank Act to increase the cash reserve requirements of the chartered banks so that expansion of money by the Bank of Canada could not be utilized by the chartered banks as a means of expanding loans.
In that way you would very easily offset any inflation. In that way the action of the Bank of Canada would not be any more inflationary

than if the chartered banks had issued it. Of course the great advantage would be that instead of increasing our interest bearing debt to the chartered banks, it would be merely a debt to ourselves, because the Bank of Canada is owned by the people of Canada and all interest paid to the Bank of Canada is paid into the general revenue fund to the extent that it is in excess of their actual operating costs.
Another step that we feel should be taken at this time by the government is the institution of controls. I believe by instituting controls you would be able to help at least to keep down the volume of taxation. We in this group were the first ones in the house to advocate price control during the last war. I shall never forget the way that the then minister of finance rose and criticized our suggestions. When we advocated price control in the last war the then minister of finance said that it was unthinkable. He said it would mean a spy in every grocery store. He said that might be all right in Germany but we would never stand for it in Canada. It was less than a year after we made that proposition that the government adopted price control, and I think it proved very effective.
On the other hand, if the government postpones the day of price control too long, our price level will get more and more out of hand. It will make price control very difficult to impose when it is imposed-because if the war continues to expand I think the parliamentary assistant will agree that price control will have to be adopted. Apparently the government is still hoping that the war will not develop into an all-out war. We all hope that it will not develop into that kind of war, but on the other hand, even if the war in Korea finishes next year, as long as the international situation continues as it is today we shall have to continue preparing for an outbreak of war in any part of the globe. Therefore I believe that in order to place our economy in such a position that it will be able to meet the costs of war and distribute the burden equitably amongst the people, the suggestions I have made should be adopted.


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


John Horne Blackmore: Mr. Speaker-


Mr. Speaker:: Order. Probably I should
point out that we are now dealing with the principle of Bill No. 6, an act to amend the Income Tax Act. This bill deals only with income taxation on corporations. I think I have allowed too great latitude in the debate up to the present time. The bill is not such as to allow a general discussion of taxation.
69262-47^
Income Tax Act
We had that on the budget debate. The resolutions have been approved in committee and passed by the house, and the bill is based on the resolutions. I ask hon. members who may speak to direct their remarks more closely to the principle of the bill now before the house.


John Horne Blackmore: Mr. Speaker, I deeply
appreciate your remarks and their significance. May I point out that one of the major principles of the bill is whether or not it is expedient at this particular stage of Canadian history to levy taxes on corporations; therefore it becomes completely in order to discuss whether or not the whole government financial policy is sound or unsound.


Mr. Speaker:: I think that would be a
rather broad interpretation of the principle of the bill. I did not rise particularly to curtail the discussion, but I do not think it should get entirely beyond the scope of the bill.


John Horne Blackmore: I shall endeavour to confine my remarks within the scope of the bill and within the scope of the government's financial policy, part of which the bill embodies.


Mr. Maclnnis:: Some scope.


John Horne Blackmore: Mr. Speaker, in the first place I should like to commend the hon. member for Acadia (Mr. Quelch) for the remarks he made. I say to the house, the government and the country that if the recommendations of the hon. member for Acadia are adopted in toto, no one in this country will ever be sorry that it was done, but if the recommendations of the hon. member for Acadia are disregarded in any particular, everybody in this country will have cause to be sorry to the extent to which they are not adopted. They represent the very finest constructive set of suggestions that can be offered at the present time. I think the Minister of Finance (Mr. Abbott) must realize that. If he does not he soon will.
If I may do so, I wish to refer for a minute or two to certain remarks that were made just before we adjourned at one o'clock. I wish to do so in order to show the kind of thing this country is heading towards unless the very wisest policies are pursued.
In his remarks in committee the Minister of National Revenue (Mr. McCann)-and I am quite certain his remarks have a direct bearing on the bill-used words which I am sure he will not be sorry to have repeated. He made his pronouncement with such solemnity, such warning, and it was so much applauded by his followers that I am sure

Income Tax Act '
he would like to have it repeated a dozen times. This is what he said:
Not at all; but I can tell the hon. member that before this thing is over-
He was referring to the war situation.
-we shall go back to a whole lot of things we used years ago. If we have to spend billions of dollars for war purposes, which produce no revenue, we shall have to be prepared to accept a measure of austerity in this country that we have not had for a long time.
I take it that is the considered opinion of the Department of Finance. The other day the Minister of Trade and Commerce (Mr. Howe) made an excellent speech from which I quoted several excerpts yesterday. He told the house, as found on page 448 of Hansard, that if individuals and governments co-operated there was no reason whatsoever why the Canadian people should not be able to take in their stride their increased preparedness and still have enough to supply them with a high standard of living. Hon. members can put the summary I have given of the remarks of the Minister of Trade and Commerce alongside the statement of the Minister of National Revenue, and can accept the one they consider the most authentic on the subject under discussion. I maintain that the Minister of Trade and Commerce made a good case when he pointed out that this country is able to produce far more goods of every kind than ever before. He pointed out that we shall require only a very small percentage of our productive capacity to meet our military obligations, as compared with the tremendous percentage we had to take from our production during the peak of the last war; and in several other ways he indicated that there was simply no excuse whatever for the adoption and implementation in this country of a policy that means scarcity and austerity, for the simple reason that our actual production now is so great and our productive capacity is capable of such a tremendous expansion.
For those who desire to get the gist of what the minister said I gave a number of quotations yesterday, which will be found at page 665 of Hansard. By reading those statements hon. members and the country at large can get the actual picture. It seems to me, Mr. Speaker, that there is a deliberate design on the part of a good many people in this country to sell the people of Canada the idea that we have to tighten our belts and go through the miseries of austerity and restriction in order to fight a war. As a matter of fact the very opposite is the case; the stronger we get our general economy, the higher the standard of living our people have, the more joyfully will they go out and meet the dangers and sacrifices which will come to us in plenty, in spite of anything we can do. As I see it, this is the question that faces the members of this
[Mr. Blackmore.l
house and the people of this country right now:	Shall we submit to the imposition of a
regime of scarcity, or shall we insist that in a country with such abundant resources as Canada we shall enjoy a high standard of living and take this war in our stride?
Much has been said about inflation, and I should like to say a word about it as well. The hon. member for Kootenay West (Mr. Herridge) mentioned a number of articles the prices of which had increased in Toronto within the last two or three days. I ask any member of this house, any member of the government or anyone in the country: Do you believe any one of those increases was the result of too much money or of a scarcity of goods? Or were those increases the result of direct and in many cases mischievous manipulation on the part of those who found themselves in a position to manipulate? I challenge any one of the interested persons who increased prices as the hon. member for Kootenay West indicated to show that they had any justification at all for doing so. Certainly they are not justified on the ground of inflation resulting from too much money or the scarcity of goods. Imagine increasing the price of bread, of milk, of sugar or of similar commodities in Canada, because there is too much money! Why, that is enough to cause a person to have a nightmare. To suggest it is nonsense; yet an attempt is being made to sell that very idea to the people of Canada. If the members of this house permit themselves to be indoctrinated with that theory they will have cause for deep regret, and so will all the people who entrusted them with responsibility.
So much for inflation. I say that if we can increase our production sufficiently to keep ahead of the expenditures necessary for the conduct of the war effort, there need be no rise in the price of any commodity, and there need be scarcity in respect of only a very few commodities. There need be no rise in prices such as is ordinarily called inflation. In the light of that, just let us see whether there is any validity in the proposal I made when we were considering the excise tax resolution, that the amount of money which would ordinarily be collected under those excise taxes could have been created by the Bank of Canada just as well, with no ill effects. On the other hand the imposition of the excise tax will force up prices in respect of every single commodity affected either directly or indirectly.
Let us face the facts just as they are; let us be sane and calm and realistic about these matters, and we will come out of this struggle a happier, more prosperous and more powerful country. If I may I should like to

quote some words uttered this morning by the parliamentary assistant to the Minister of Finance (Mr. Sinclair); I am quite sure he will be happy to have these words repeated. He said:
I quite agree, and I think every member of the house, no matter what his financial theories or beliefs are, will agree, that so far as this $18 million is concerned, the printing presses of the Bank of Canada could turn out another $18 million to be put into circulation, and it would not make much more than a little ripple on the actual price structure of the country.
May I commend the brilliant young assistant on that remark. That is the most honest statement I have heard from anyone connected with the finance department in the fifteen years I have been in the House of Commons. It is entirely factual and accurate. I want to offer one suggestion to the young parliamentary assistant, whose intelligence and ability to conduct his affairs in the house I greatly admire, in spite of the fact that he made a mistake the day before yesterday, I think it was. I suggest to him that if there are more goods in Canada than the $18 million would buy without creating a scarcity, there would not be even "a little ripple" on "the price structure". I think the hon. member will readily recognize that as a statement of sound, simple, conservative fact.
Just to fortify the hon. member in his opinion, and to fortify me in mine, I would refer to the budget speech of the Minister of Finance (Mr. Abbott). He said something very good when he pointed out, as clearly as words could indicate, that the amount of money safely possible of being in circulation in a country is governed by the amount of goods and services available to be purchased with that money. In accordance with that statement the position of the parliamentary assistant was perfectly sound, and I entirely agree with him. But now may I go on to read a little more of what he said:
Of course if that is a good policy for pop and candy, we should do the same thing in respect to corporation taxes, excise taxes, customs duties, and so on.
There the parliamentary assistant made a very serious blunder. Just because it would be a good thing for you to take a pint or a quart of milk a day it does not follow that it would be equally good to take a gallon or two gallons a day. The point is that the amount of money which could be created and put into circulation depends entirely on the goods you have in the country to be bought with that money. Just as soon as the amount of money you issue exceeds the amount of goods available, there will be inflationary pressure which is likely to cause a rise in prices.
Income Tax Act


Some hon. Members:: Louder.


John Horne Blackmore: I shall endeavour to speak loudly enough so that hon. members who are doing me the great compliment of listening closely, which I appreciate, may be able to hear.
I say the amount of money in circulation in a country should depend entirely upon the amount of goods available to be purchased. No matter how much money may be put into circulation, if the goods available to be purchased are equivalent to that amount of money there will be no inflationary pressure on prices. This is the fundamental principle upon which the whole concept of monetary reform is to be based. The Minister of Finance laid that principle down in unequivocal terms in his budget speech, which I would have quoted in this debate if it had been in order.
Consequently, if we say that this $18 million which would be raised by taxes on candy, pop and other things should be remitted and the $18 million printed by the Bank of Canada and put in the place of that tax, we are not arguing that you should not have a corporation tax or any other kind of taxes whatever. We are discussing this particular item. I do not know how much money could be safely created, and put into circulation in Canada today. It would depend upon how much production we have, and what productive capacity we have readily available for the distribution of consumer goods. This would have to be determined by a most careful study by the best experts available in the country. As the member for Peace River (Mr. Low) pointed out we would then be able to determine how much money could be issued. Our general contention, Mr. Speaker, is that, having discovered how much money could be so produced without creating a ripple in the price structure, that amount of money should be counted upon as part of the revenues of the country annually. It should be entered into the estimates annually by the minister. It should be discussed and voted upon by the house annually so that the whole subject would be under the control of this parliament, and we would be able to make what is physically possible in Canada actually financially possible.
Now that is reasonable, moderate and it is strictly in accordance with the principle laid down by the Minister of Finance. May I just read one more statement from the young parliamentary assistant, and then I close. He goes on:
Then we should recall also that at the peak of our war expenditures during the last war we were spending $6 billion a year. If we start turning out $6 billion a year in the Bank of Canada to meet these expenditures, then I say-and I

Excise Act, 1934
may be wrong but. I think we have some pretty good authorities to back me up-that we would be following exactly the same course as was followed by Germany after the first great war.
The last part about Germany is not completely accurate, but it is near enough for the minister's purpose. I would say that I would back the parliamentary assistant up, too, and every Social Crediter would back him up. We could not issue all of $6 billion of that money without drawing any off. The principle laid down by the member for Acadia (Mr. Quelch) shows that he fully comprehends the facts in relation to these matters. So, Mr. Speaker, I do urge on the government, and the members of the house, that they take into the most careful consideration immediately the use of Canada's credit as a means of supplementing income which they could use in creating good conditions in Canada and also in conducting a war.


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


[Stage Direction]
Motion agreed to, bill read the second time, considered in committee and reported.
Mr. Speaker:: When shall this bill be read a third time?


Douglas Charles Abbott: Now.


Stanley Howard Knowles: By leave.


Douglas Charles Abbott: the third reading of the bill.
Motion agreed to and bill read the third time and passed.


EXCISE ACT, 1934
Douglas Charles Abbott: the second reading of Bill No. 9, to amend the Excise Act, 1934.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Dion in the chair.
On section 1.
John George Diefenbaker: There were some questions asked of the parliamentary assistant this morning which I hope he is in a position to answer now.


James Sinclair: Mr. Chairman, it is for that reason we are calling the Excise Act before the Excise Tax Act. The Excise Act is the liquor tax bill, and when the other tax bill comes before the house I have a table available to answer those questions.


[Stage Direction]
Section agreed to.
Sections 2 to 4 inclusive agreed to.
Bill reported.
Mr. Speaker:: When shall this bill be read a third time?


Alphonse Fournier: Now.
[Mr. Blackmore.l


Stanley Howard Knowles: By leave.


Douglas Charles Abbott: the third reading of the bill.
Motion agreed to and bill read the third time and passed.


CUSTOMS TARIFF
Douglas Charles Abbott: the second reading of Bill No. 10, to amend the Customs Tariff.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Dion in the chair.
On section 1.
John Horne Blackmore: Mr. Chairman, will you tell us whether or not we shall consider the matter of the excise tax on brandy under this bill?


James Sinclair: No, the next bill.


[Stage Direction]
Section agreed to.
Bill reported.
Mr. Speaker:: When shall this bill be read a third time?


Douglas Charles Abbott: Now.


Stanley Howard Knowles: By leave.


Douglas Charles Abbott: the third reading of the bill.
Motion agreed to and bill read the third time and passed.


EXCISE TAX ACT
Douglas Charles Abbott: the second reading of Bill No. 8, to amend the Excise Tax Act.


Stanley Howard Knowles: Mr. Speaker, I think there is one point that should be cleared up in connection with this bill, and the effect it is expected to have. The other night the Minister of Finance (Mr. Abbott) indicated that the purpose of this tax was to raise additional revenue. As a matter of fact, he indicated the amount of additional revenue it would raise. This morning we had quite an interesting lecture from the Minister of National Revenue (Mr. McCann) telling us that the effect of these taxes might be to discourage people from buying these articles. In fact, during the course of that lecture we were told by him that it might be a good idea to get back to the good old days when we made our toast over an open fire and did not have all these luxuries that we have at the present time.


Gordon Knapman Fraser: It tastes better that way.


Stanley Howard Knowles: I think the point should be cleared up. The government cannot have it

both ways. These taxes cannot raise revenue if their effect is going to be to discourage people from buying the articles upon which the tax is placed.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Dion in the chair.
On section 1.
James Sinclair: I should like to make a correction of a statement I made this morning to the hon. member for Peace River. He asked me whether or not maple syrup as such would be taxed as candy and I told him yes. That answer is partly wrong. There is a tariff board ruling that maple sugar which is sold in block form is regarded as a raw product and is free from such tax but maple syrup which is cut up in small form and sold as a confection will be regarded as candy.
Second, the hon. member for Lake Centre this morning asked whether I would supply a list of the various tariffs-which of course fall into three scales: British preferential, most-favoured-nation and the general tariff-
Excise Tax Act
on the goods which are listed in section 3(a) of schedule I of the act. The department has compiled this list and has gone a little further than 3 (a). They have given the actual tariffs on all the items in section 3. There is another tariff effect of course which is definitely in the resolution, namely the effect of import restrictions necessary because of foreign exchange control. I have also provided a column to show which will still be controlled after October 1 of this year. If there is any interest in it, we can put this list on Hansard. It is much too long a list for me to read. If the hon. member just wants it for his own information, I can hand him the list.


John George Diefenbaker: I think it should be placed on Hansard.


James Sinclair: By leave of the house, then, this table will be inserted in Hansard.


The Chairman:: Is it the pleasure of the committee to have that done?


Some hon. Members:: Agreed.


James Sinclair: Senate and House of Commons


John Horne Blackmore: Before the section carries, I should like to register a protest against the imposition of this impost upon soft drinks. I spoke on candy this morning. My general impression with regard to soft drinks is this: They give to the people a great deal of relaxation from strain. I cannot account for the great popularity of soft drinks except on that assumption. If that is the case, and that seems to be the effect on those whom I know best, it is most unwise to attempt to deprive people of the use of soft drinks. I do not think that we are going to be endeavouring to use, in the conduct of the war, any of the commodities or ingredients that enter into the making of soft drinks. I doubt greatly if we shall have to use for that purpose any of the effective personnel who are now employed in the making of soft drinks. If we should, however, have to use them, I think their place could readily be taken by elder people who now cannot find jobs or by people who are less physically fit. I therefore see no reason at all for imposing this tax upon soft drinks. Consequently I would oppose imposing it. I have already indicated how the revenue which will be derived from such an impost might be made up. I would suggest to the government that it seriously consider cancelling this impost.


[Stage Direction]
Section agreed to.
Sections 2 to 6 inclusive agreed to.
Schedules I and II agreed to.
Title agreed to.
Bill reported.
Mr. Speaker:: When shall the bill be read a third time?


Some hon. Members:: Now.


Stanley Howard Knowles: By leave.
Mr. Fournier, Hull (for Mr. Abbot!) moved the third reading of the bill.
Motion agreed to and bill read the third time and passed.


SENATE AND HOUSE OF COMMONS
[Stage Direction]
members' sessional allowances and TRANSPORTATION EXPENSES
Alphonse Fournier: the second reading of Bill No. 7, respecting payment of sessional allowances and transportation expenses of members of the Senate and the House of Commons.
He said: Mr. Speaker, the Prime Minister (Mr. St. Laurent) will be in the chamber in a moment.


Louis Stephen St-Laurent: Mr. Speaker, there is very little I can add to what I said this morning. This would be necessary in order to permit this house to adjourn and be on call at the direction of the Speaker, instead of proroguing, without increasing the expenditure to the public that would result otherwise from the application of section 36 of the Senate and House of Commons Act.
I hope hon. members have seen the text of the bill. It provides that if this session, which commenced on August 29, is adjourned for more than a week, the days of such adjournment will not be counted as days of attendance for purposes of allowances to members; but that if after any adjournment of a week or more the members were recalled the provisions applying to the payment of their travelling allowances and expenses from their residences to Ottawa would apply in the same way as if it were a new session. Of course then the ordinary rules would go on until there was another adjournment of more than a week.
It was drafted so as not to exclude from computation the Saturdays and Sundays which intervene while the house is actually proceeding with its current work, and so as not to exclude any adjournment more than a week at a time. That would allow parliament to remain in session, subject to the call of Mr. Speaker, without increasing the public expenditure. The same results could be achieved by proroguing the House of Commons and, if it were necessary to come back, issuing a new proclamation, as was done this time. But that might occasion some little delay; and I thought that the public generally would feel that in these times things can happen so rapidly that it would be advisable to have parliament subject to call for the resumption of its sittings, should there be circumstances which would make that advisable.
The bill would have to be acceptable to both houses of parliament-not only the House of Commons, because of course it affects both houses. If it is passed by parliament, then that makes it possible, without expenditure to the country, to have parliament resume at the call of His Honour the Speaker at such time as events would make it desirable that the sittings be resumed.


George Alexander Drew: Mr. Speaker, as there has not
been an opportunity to examine this bill in the ordinary fashion, I should simply like the

assurance of the Prime Minister (Mr. St. Laurent) that, as it stands, this bill does not provide for any additional allowances, except for days that members have actually attended in session.


Louis Stephen St-Laurent: That is right, but with
this qualification, that it does not exclude the two Sundays that intervened while we have been proceeding with the business of parliament, and it would not provide for any allowance whatsoever from the time a long adjournment came into force until such time as is fixed by that adjournment, or until such day as the Speaker might recall members to resume the sittings.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Dion in the chair.
On section 1-If either house adjourned for more than one week.
Ernest George Hansell: Mr. Chairman, in connection
with a bill of this kind I fancy I detect among members the feeling that, should they rise and speak to it, they would run the risk of becoming a sort of goat. I have run that risk before, and I do not think my constituents have held it against me. I am not now speaking for this group. I am speaking on my own responsibility. I am not going to complain about the bill, but I do believe there is a feeling among the members that perhaps, because of the long hours we have put in, and the fact that some members have had to leave their businesses, a little bit in addition to the $25 a day might have been granted to us.
I would not stand here and ask for anything more than we deserve-but I do not believe we should be required to take any less, particularly when one considers that we have been sitting from eleven in the morning until eleven at night, six days of the week, which ordinarily would amount to two or three days more than our ordinary sitting weeks. Then we have had to do our other work in addition to that, some hon. members having found it necessary to get to this building at eight o'clock in the morning. I do not come here that early, but there are some who do. Sometimes I have been detained until after midnight.
Having these points in mind I had thought that perhaps, under the circumstances, we might have expected a little more consideration. However, as I said I am not one who would ask for more than we deserve-but I do not believe we should be given any less. If we counted the extra hours which, in labour circles, might have been considered as overtime, I should think we might have expected some further consideration.
Senate and House of Commons
I agree that we should not adjourn and receive a full indemnity, but I do think there is a danger of cheapening our parliamentary institutions. I am not referring particularly to this bill when I say that I think it is a shame that we pay the Prime Minister of Canada such a small salary, especially when we stop to think that there are officials running governmental institutions who are paid two, three and perhaps four times as much as is paid to the Prime Minister for running the whole country. That does not add up. The ministers of the crown bear heavy responsibilities and I am quite sure that if they applied their abilities to the running of a corporation or in other ways they would earn much more. There are members of parliament who are lawyers and doctors or who follow other professions who lose money every day they sit in this house.
That does not go for clergymen. I could say that I am quite content as I do not suppose there is a church that would pay me the same salary I receive as a member of parliament. Therefore I can speak with some authority and feeling on this matter. But I repeat that there is a danger of cheapening parliament in respect to these things. I do not think the time should be far distant when this act should be overhauled. Let us pay members of the cabinet and members of parliament an amount commensurate with that paid by business organizations of this country for similar responsibilities.
Pensions for members have been referred to in days gone by. There are some members of parliament who give their whole lives to their parliamentary careers, and I am one of those. I do not serve any particular church and when I do go out to serve-perhaps I should not say this-it costs me money. Quite often they say, "Oh, yes, Hansell will come, he is a member of parliament and we do not need to pay him". Many of us give our whole lives to our parliamentary careers and we cannot look forward to a pension until some pension scheme is brought in for members of parliament.
Perhaps in mentioning these things I shall be dubbed the goat, but I am quite certain that I am voicing the feelings of a large majority of hon. members.
There are one or two questions I should like to ask under this section. Will members be paid for one week of adjournment? I realize that they will not be paid if the house adjourns for more than one week, but will they be paid for one week of adjournment? Shall we be paid before leaving here? Some of us may be broke. I am not broke exactly. I do not want all of you to come to me now and borrow money from me in order to get

Senate and House of Commons home. I am not broke, but I am badly bent. Ordinarily we would not be paid until the end of the month. These may be considered trivial questions, but they are in the minds of some hon. members.


Louis Stephen St-Laurent: The bill as drafted does not provide for an indemnity for one week of adjournment if the house is adjourned for more than one week. If it is adjourned for a week or less the allowances will run on but if the adjournment is for more than a week, a week's adjournment is not paid for. The second question was whether the members will receive their allowances immediately or have to wait. I am informed that the treasury officer is prepared to issue cheques immediately at the $25 rate for the days we shall have been here.
I just wish to enter this one divergent view with respect to the other matters mentioned by the hon. member. I do not pretend to be running the country and I do not think any of my predecessors pretended nor will any of my successors pretend that they have run or will be running the country. They discharged, I am discharging and they will be discharging heavy responsibilities; but those are responsibilities which are shared not only with their colleagues but with all members of parliament. Together we try, not to run the country but to help our fellow citizens operate its economy in a manner that will be to the advantage of all.
With respect to the insufficiency of the indemnities that are paid, it may very well be that some day parliament will have to consider this whole question. But at this time I do not think the public would expect us to be thinking of ourselves but rather to be thinking of the general situation as it exists.


Ernest George Hansell: I am not going to extend my remarks except to say that it is a nice spirit that the Prime Minister manifests when he says that he is not attempting to run the whole country. I realize that he and his colleagues do not do that, but I realize also that if anything goes wrong with the country they will be blamed. Perhaps that is worth some consideration in the way of compensation.


Donald MacInnis: Mr. Chairman, because of the remarks made by the hon. member for Macleod it may be that some of us would be misunderstood if we did not say something. I did not say anything because the bill proposed by the Prime Minister is in my opinion quite reasonable. Because it is quite reasonable and because I felt that I understood the meaning of the words therein there was no reason to make any remarks or to ask any questions. Although I have not
'Mr. Hansell.]

consulted with other members of our group I think that I can speak for our group as a whole. As I listened to the remarks made by the hon. member for Macleod, I was greatly tempted to follow him, but I shall content myself with saying that I do not believe members of parliament will come into disrepute because of the size of their indemnities. Members of parliament will come into disrepute, if they do so at all, because of their conduct. There is nothing that makes me feel worse than to hear in many quarters today people like the Prime Minister and other members of the house who have been here for a long time, and who have given their lives to political affairs, referred to sneeringly as politicians. There is something wrong either with the actions of members of parliament or with the thinking of the community when members of parliament are referred to sneeringly as politicians. If we are ever going to get away from that we shall do so only through our own conduct and not because we decide to pay ourselves a higher indemnity. The hon. member for Macleod also said that the government would take the responsibility or take the blame. I do not think that is right. We may attempt to charge them with the blame, but they are not going to take the responsibility.
(Translation):


Mr. Bonnier:: Mr. Chairman, I wish to point out that we have no French copies of the bill under consideration. Twice I have asked the messenger to bring me a copy but it is impossible to get one. I would like to know the reason for this. It is always the same story; we always have a hard time getting the French version of the bills. I wish the French and English copies of the bills were distributed at the same time.


Louis Stephen St-Laurent: Mr. Chairman, if the hon. member did not get a French copy of this bill it is due to an error in distribution. The copies were ready and the messengers handed them out to those who, to the best of their knowledge, wanted French copies.
(Text):


Mr. Smith (Calgary West):: I should like to say a word. I must say that I am content and pleased with the explanation of the Prime Minister. To digress for a second, I agree with the hon. member for Macleod that we pay our Prime Minister what, in my judgment, is a disgracefully inadequate sum of money for the responsibilities of his office. However, I will leave that. So far as the rest of us are concerned, nobody had to twist our arms to get us to come down here. We all struggled pretty hard to make the

grade and some of us did get here. After the temporary but complete tie-up of the economy of this country I should like to say that, in view of negotiations presently proceeding, parliament could not deal itself a more fatal blow than by giving ourselves money for days that we have not served, particularly in this time of emergency.


[Stage Direction]
Section agreed to.
Preamble agreed to.
Title agreed to.
Bill reported.
Mr. Speaker:: When shall this bill be read a third time?


Some hon. Members:: Now.


Some hon. Members:: By leave.


Mr.   SI Laurent moved@: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



BUSINESS OF THE HOUSE


Louis Stephen St-Laurent: That when this house adjourns on completion of current business of the session it stand adjourned until February 14, 1951, provided always that if it appears to the satisfaction of Mr. Speaker, after consultation with His Majesty's government, that the public interest requires that the house should meet at an earlier time during the adjournment, Mr. Speaker may give notice that he is so satisfied, and thereupon the house shall meet at the time stated in such notice, and shall transact its business as if it had been duly adjourned to that time.
He said: Mr. Speaker, this motion is drafted in the terms that were used in 1941 and 1942. Of course the date mentioned is a pro forma date which is fixed to be beyond any time when, if nothing occurred requiring parliament to meet earlier, the 1951 session would be commencing. It also provides that, if in the meantime it should appear to the satisfaction of Mr. Speaker that the public interest requires an earlier meeting, he will have the authority to give notice that he is so satisfied and thus bring parliament together again.
By the terms of the resolution he is required to consult with the government in that respect, but that does not in any way imply that he is to be regarded in any other capacity than that which you, sir, assert to the representative of the crown when you take office, that you are the servant of the whole house. Therefore I am sure that Mr. Speaker will be quite prepared at any time to receive representations from any hon. member of the house that 69262-484
Business of the House
in his view an earlier meeting is required. Of course Mr. Speaker, representing the whole house, would have to consider the reasons urged, and he would have the responsibility of deciding whether or not he was satisfied that the public interest required the house to meet earlier. It would be his decision. Of course he would consult the government, and the government would make available to him all information which it had bearing upon whatever subject was then the topic concerning which it was suggested that the house should meet earlier, but the responsibility for making the decision would be that of His Honour the Speaker, as the servant of the whole house.


George Alexander Drew: Mr. Speaker, I think that hon. members of the house generally will be very pleased with the fact that there is to be adjournment of the house instead of prorogation at this time. I also hope it will carry some measure of reassurance to the people of Canada that it is intended that members of the house shall be on call to deal as expeditiously as possible with any events that may arise before the regular session of the house would normally be called. For that reason I welcome the fact that there is to be an adjournment under a motion of this kind. I recognize that the insertion of the words "February 14, 1951" sets a date which need not necessarily be the date on which the house would again meet. As the Prime Minister (Mr. St. Laurent) has pointed out, Mr. Speaker may call the house together at any time he becomes convinced that it is in the public interest that this house should again convene.
I wish to leave no doubt in the mind of anyone that I share what I believe is the general view of hon. members that Mr. Speaker will dispatch his duties as the servant of the whole house in the same commendable way he has always done. Nevertheless Mr. Speaker, as the servant of the whole house, must of necessity and in good judgment be guided by the advice of the government as to whether or not there is legislation or whether or not there are measures to be placed before the house which would call for disposition by the elected representatives of the people. For that reason the government necessarily to a very large degree will determine whether the house shall or shall not meet, simply by reason of the fact that it will have the information which would be the most convincing evidence to Mr. Speaker that such a necessity exists.
The Prime Minister has pointed out that it would be for Mr. Speaker to consider the

Business of the House
situations that might arise. It seems to me that none of us can have any doubt as to the situation that is going to call for the attention of members of this house. Within the next few weeks some of the most momentous gatherings in modern history are to take place, at a time when we have all come to recognize a new form of aggression and a new world threat with a clarity that was not apparent only a few months ago. The representatives of the Big Three met the day before yesterday. Their discussions will have a profound effect upon the other meetings that will take place and the decisions that will be reached there. Tomorrow the ministers and other delegates of the Atlantic pact countries will meet to discuss their plans, in the light of the decisions taken by the security council of the United Nations and the world events which have been the cause of their action, and the general increase in public awareness of the dangers on all sides. Then on September 19, only next Tuesday, the general assembly of the United Nations will meet in what will probably be the most decisive gathering of the United Nations since that charter was drafted and signed in the spring of 1945. The importance attached to that meeting by Russia as well as the other nations is evidenced by the fact that Mr. Vishinsky is on his way to attend it.
It is not beyond the realm of possibility that already in the minds of the men in the Kremlin the idea may be stirring that it would be better to seek a working arrangement with the free nations of the western world, at any rate. I think we all hope for that possibility. If on the other hand Vishinsky comes to that meeting and leaves no doubt as to the continuation of the course of aggression we have seen in these past few months, then those nations which are determined to hold the tide of communism will be called upon to reach new decisions which will make it possible for them to act without the restraint of the veto, which could paralyse effective action through the broad channels of the United Nations. Then following the discussions among the representatives of the Big Three who are now meeting, and the delegates of the Atlantic pact nations, who meet tomorrow, and of the United Nations, which meets on Tuesday, on October 16 the defence ministers of the Atlantic nations are to meet. At that time, with the advice of their general staff, they will be called upon to place before their respective governments recommendations which will interpret the diplomatic and other results of all these conferences that are taking place.
It seems clear, therefore, that one way or the other new decisions must be made by

the end of October which this house should be called upon to consider with the utmost dispatch, so that through this meeting place of the representatives of the people not only those representatives but all the people of Canada may be fully informed as to what is the situation, and decisions may be reached which will be in keeping with that situation. For that reason, Mr. Speaker, and without suggesting that you would not at all times be open to recommendations as to what should be done and believing that you would give them your careful consideration, I think this house should be assured that the date of February 14 will not, under any circumstances, be the date we shall be called upon to meet again. In view of the clearly settled dates I have mentioned and the course of events which must flow from those dates, I believe we should certainly meet not later than November 15. This would mean that even assuming the defence ministers met for a week or ten days, there would be ample opportunity for their recommendations to be considered by this and other governments before the legislative bodies were called upon to consider those decisions. Therefore, Mr. Speaker, I do most earnestly urge that there be no doubt about the fact that we are going to meet at as early a date as will give adequate opportunity for the consideration of the discussions which will take place, and the recommendations which will flow from them.
We have been told, and cannot be told too often, that these are the most critical days of our modern history. If the free nations can stand together and build up their strength during these next few years, perhaps show their determination to build their strength within the next few months, then it may well be that peace will be realized. With this schedule of meetings taking place within the coming weeks, I do not think we should adjourn with any possibility that this house will not meet again for five months. Five months is a long period of time in these days of fast-moving world events. Mr. Speaker, I therefore move:
That the words "February 14,	1951", in the
second and third lines of the motion be deleted and the following substituted therefor: "November 15, 1950."


Stanley Howard Knowles: Mr. Speaker, I should like to say
a word mainly with respect to the motion of the Prime Minister (Mr. St. Laurent) rather than with respect to the particular alteration of the date that has been suggested by the Leader of the Opposition (Mr. Drew). With regard to the motion itself, I can assure the Prime Minister it has our support. He knows that, of course, from the fact that earlier in

this session I expressed the view that in this time of world crisis parliament should not be prorogued but should merely adjourn, so that it could be readily called together to deal with any situation that might develop.
All of us have in mind the various points that were mentioned by the leader of the opposition in relation to the international situation. It is quite clear that that is the main reason why most members of this house feel the session should be adjourned., as is called for by the Prime Minister's motion. We, too, feel that it should be quite clear that if there is any worsening of the international situation, we shall be called together. From what the Prime Minister said to us the other night in discussing another matter, I feel sure that that is the case. Without detracting by one iota from the fact that our main concern is with the international situation, I would also draw to the attention of the government the fact that the public interest might require parliament to reassemble to deal with matters on the home front. I have in mind, for example, a matter that some of us have been pressing for right from the day this session opened, namely, the need for price controls. I suggest that the government, and you sir, now that additional responsibility has been placed upon your shoulders, should watch the price situation. If it worsens to any extent at all so that the standard of our living starts to go down any more than has already been the case, then parliament should be called to deal with that situation, even if our hopes are realized and parliament does not have to meet to deal with a worsening international situation.
I was quite interested in the way in which the Prime Minister put this motion today. He pointed out that, although the wording of the motion refers to consultation between Your Honour and His Majesty's government, he made it clear also that you, sir, are the servant of the entire house. If you were to receive representations from other members of the house than those who form His Majesty's government, you would have to take notice of them. I give you notice now, Mr. Speaker, that if the price situation gets out of hand, you will hear from me; indeed from this group as a whole. I hope that such representations as any of us might make as to the need for calling parliament to meet that situation will have the concurrence of the government at that time. That is my main reason for rising at this time, to urge upon the government to watch closely the international situation and be ready to call parliament the moment that situation makes it necessary, but to watch also the domestic situation, prices, matters affecting
Business of the House the workers of this country, and any serious situation that might face our farmers because of the frost out west. If anything of that nature makes you think that the public interest requires the summoning of parliament, I hope that the government will also make those representations to you, sir, and parliament will be called into session.
With regard to the amendment moved by the leader of the opposition, I did not have time to consult with my colleagues who are sitting near me, but this point does occur to me. The wording of the motion as it was originally drafted made it possible for parliament to meet on February 14 or on any earlier date. There was no possibility of its being any later. The substitution of the words "November 15" would of course make it imperative that parliament meet by that time, whether or not the situation demanded it. I believe I share the feelings of the leader of the opposition that the chances are conditions will make it imperative. It seems to me there is some question as to whether it should be made quite so mandatory in the resolution. What would be more useful to me at this time would be the assurance of the Prime Minister, the same kind of satisfactory assurance he gave the other night with respect to placing the troops on active service for any area other than Korea, namely, that if there is a worsening of the situation on the domestic front parliament will be called.


Solon Earl Low: Mr. Speaker, I should like to say a word in support of the principle of the resolution. We think it is important that parliament be alerted, and ready to meet at any date it is deemed necessary to deal with either domestic or international matters as they may arise. I have not had time to consider the wording of the amendment or to consult with my colleagues, but I would say that I would not presume to suggest November 15 as the last day on which it would be wise to allow the adjournment to continue. I think all I can say is that we are urging the government to call parliament without delay when it is felt necessary to deal expeditiously with any matter.


Mr. H. R. Argue (Assiniboia):: Mr. Speaker, I want to agree with those who say that if the international or domestic situation requires it, parliament should be called at an early date. I have in mind one thing which I believe the government might take into consideration whenever they are making recommendations in that regard, and that is the real emergency which I have said now exists and which will in time become even more apparent as a result of the severe frost damage. Just before three o'clock an expert on that matter informed me that he would estimate that one-third of the value

Business of the House of the crop had been lost, representing a loss of perhaps as much as $200 million in the province of Saskatchewan. Yesterday in the house I made the suggestion that the Prairie Farm [DOT] Assistance Act should be amended so as to take into account the fact that while in some instances the farmers may have a yield of wheat greater than eight bushels per acre, the value of that wheat may be much less than it would be in a crop failure as defined under the act in an ordinary year.
Since making that suggestion I can say that I have had an interested and favourable response from people who are concerned with this problem. I just bring that matter to the attention of the government since I feel it is necessary that this act be amended soon in order to meet the emergency; and if it were necessary that it be done at an early date, that factor also should be taken into account.


Mr. Speaker:: The question is on the amendment. Shall the amendment carry? Those in favour of the amendment will please say yea.


Some hon. Members:: Yea.


Mr. Speaker:: Those opposed to it will
please say nay.


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion, the nays have
it


Mr. Casselman:: On division.
Amendment (Mr. Drew) negatived on division.


Mr. Speaker:: The question is on the main motion. Does the main motion carry?


George Alexander Drew: On division.
Motion (Mr. St. Laurent) agreed to on division.


Mr. Mclvor:: Mr. Speaker, I should just like to congratulate the Prime Minister (Mr. St. Laurent) on the day that he has chosen as the one on which he expects to open the next session. February 14 is a great day. That is the day that has some heart in it. That is also the day when my dad said I first saw the light. It augurs well for the next session. May it be one of peace and progress, and one with some heart in it.
I congratulate you, Mr. Speaker, and your whole staff-and that includes the page boys -on the splendid service we have received during this special session.



Louis Stephen St-Laurent: Mr. Speaker, I move that the house do now adjourn until eleven o'clock tomorrow morning. I think we have reason to expect that by then the other place will have dealt with the bills that have been dealt with here and that the royal assent might be given to that legislation. The motion that has just been adopted applies only after the current business of the session is completed. That business will not be completed until Mr. Speaker comes back to this house and reports that royal assent has been given to the bills that have been passed.
Motion agreed to and the house adjourned at 4.55 p.m.

Friday, September 15, 1950