1952-04-24

[Stage Direction]
Mr. T. G. W. Ashbourne (Grand Falls-White Bay) presented the first report of the standing committee on marine and fisheries, and moved that the report be concurred in.
Motion agreed to.

Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, I beg leave to lay on the table the operating budget of Trans-Canada Air Lines for the calendar year 1952, together with the capital budget of the company for the same period.



QUESTIONS


Mr. Diefenbaker:: 1.	What is the amount recommended to be paid or paid to each of the farmers in the Regina area for cattle that have been destroyed in the eradication of foot-and-mouth disease?
2.	How many head of cattle did each of said farmers have?
3.	How much has been paid or has been recommended to be paid to the Bums company by way of damages for (a) destruction of buildings or other facilities; (b) for cattle?


Mr. Gardiner:: Mr. Speaker, might I ask the hon. member to allow this question to be dropped, on the understanding that I will give him the full information that is asked for? I do not think it is fair to these people to print that information and to display it to the public in general, but I think it is all right for members to have it and to use it freely.


Mr. Diefenbaker:: As long as the information that is furnished may be used, I have no objection to dropping the question, Mr. Speaker. It is to be made clear, however, that any information given privately can be used publicly.


James Garfield Gardiner: That is quite all right. It will be given in writing.


John George Diefenbaker: That is satisfactory.


Mr. Speaker:: Question dropped.



HEALTH AND WELFARE


Mr. Gingues:: 1.	Will the Department of National Health and Welfare make available to the sanatoria the new drug rimifon, as it did for streptomycin, P.A.S. and tibione?
2.	When will such drug be made available to patients?


Mr. McCusker:: 1.	Yes, if present trials prove satisfactory.
2.	When requested by the provinces under the federal tuberculosis control grant.



PENSION ACT


Hon. Hugues Lapointe (Minister of Veterans Affairs) moved: that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to present a measure to amend the Pension Act (a) to adjust the allowance for excessive wear and tear of a pensioner's slothing, when he wears a prosthesis, to correspond to the increase in the basic scale of pensions; (b) to make more adequate provision when there are two dependent parents of a deceased member of the forces; and (c) to provide for some administrative changes.
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.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver-Quadra):: Mr. Speaker, I should like to direct a question to the Minister of Transport. Is he in a position to make a report on the disastrous fire on the Vancouver waterfront yesterday? In particular, can he tell us to what extent national harbours board or other government property has been damaged, to what extent shipping from the port will be interfered with, and whether there is to be any investigation by the government?


Hon. Lionel Chevrier (Minister of Transport):: Yes, Mr. Speaker. The hon. member was good enough to telephone me this morning that he was going to ask this question,
1546	HOUSE OF
Inquiries of the Ministry and last evening the hon. member for Vancouver-Burrard (Mr. MacDougall) spoke to me about the subject matter.
I have before me a wire which gives the general situation, in so far as it can be ascertained at this time, and perhaps I might be allowed to read it to the house:
A serious fire broke out at about 11.45 a.m., yesterday, in Vancouver, destroying jetty No. 3 and loading galleries serving elevator of the United Grain Growers Limited as well as their warehouse on Burrard inlet. The adjacent warehouse, belonging to Buckerfields Limited, containing feed'grain and fertilizer, was damaged. The fire was reported under control at 2.45 p.m. The United Grain Growers Limited expect to continue operations by using Kerr Gifford elevator, which is not busy at the present time.
Elevator No. 3, leased to the United Grain Growers Association of Canada, is the property of the national harbours board. It is estimated the damage, together with all other damage suffered by the national harbours board, amounts to from $1 million to $1,500,000. The elevator is covered by insurance to the extent of $1,949,000, with loss payable to the national harbours board. Over and above this there was some damage suffered to the property of the Canadian National Railways. Five box cars were destroyed. One other box car was completely destroyed on an adjacent elevator track, and two* other box cars were damaged, but they can be repaired.
The position in so far as shipping is concerned is that the shipping in the harbour is not interfered with in the slightest, with the exception of course of the jetty and pier at which the fire took place. From there shipping has been prohibited. The national harbours board began yesterday the conduct of an investigation into the cause of the fire, but it will be some days before a report is available.


Howard Charles Green: Could the minister have included in that investigation an inquiry into the adequacy of the protection against fire by way of fire boats? I refer to protection from the water side, if possible.


Lionel Chevrier: I should like to remind my hon. friend that the national harbours board has always taken the position that the question of fire protection is not its responsibility. During the war years, by virtue of the powers under the emergency act, provision was made by the national harbours board for protection such as this in our harbours, but that was withdrawn after the war. In the case of Vancouver, the national harbours board does contribute, I think, the sum of $20,000 or $25,000-I think it is the latter amount-


Mr. Campney:: It is $25,000.


Lionel Chevrier: I am informed it is $25,000- for the maintenance and operation of a fire tug by the city of Vancouver. .


Howard Charles Green: I suggest to the minister that that subject be included in the investigation.



CAMP BORDEN


Hon. Brooke Claxion (Minister of National Defence):: Mr. Speaker, yesterday the hon. member for Lake Centre (Mr. Diefenbaker) asked me about cases of typhoid at Camp Borden. It has now been ascertained that the two men are not suffering from typhoid.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: May I direct a question to the Minister of Veterans Affairs? In view of the assurance that changes in the War Veterans Allowance Act will be made retroactive to January 1, 1952, is it not possible to delay the recovery of any overpayments alleged to have been made since January 1 to recipients 70 years of age and over, until the proposed changes have been enacted?


Hugues Lapointe: It is hoped to introduce the legislation to which my hon. friend refers at a very early date. There is a resolution on the order paper standing in my name on this subject. I hope to be able to bring in a resolution to set up the committee within a few days, and then this could be completely looked into. I certainly will look into the possibility of doing what is suggested by the hon. member, but offhand it would seem to me that following this course might create some uncertainty and confusion among the veterans. I shall have it looked into, and in the meantime I feel sure that no recoveries are being made which are reducing the amounts payable below the recipients' necessities.


Stanley Howard Knowles: May I ask a supplementary question? I thank the minister for the assurance he has given that he will have this matter looked into. If I send him the particulars of a case in which recovery is being effected, will he look into it?


Hugues Lapointe: I certainly will.



PRESS REPORTS OF EARLY ARMISTICE

[Stage Direction]
On the orders of the day:
Mr. A. Earl Catherwood (Haldimand):: should like to direct a question to the

Secretary for External Affairs. Will the minister comment on the Canadian Press report that the 8th army officials and the general headquarters in Tokyo see possibilities of an early armistice in Korea?


Hon. L. B. Pearson (Secretary of State for External Affairs):: The hon. member was
good enough to give me notice of this question, but I am afraid it does not make an answer much easier. According to the last reports received, agreement has been reached on all but three points with regard to the armistice in Korea. These three points are: first, the nomination by the communists of the Soviet union to be a member of the neutral organ of inspection which is to help to supervise the carrying out of the armistice; second, the conditions under which prisoners of war are to be exchanged, and, third, the claim of the communists that they should be allowed to rebuild and enlarge airfields in North Korea while the armistice is in force.
All three of these problems, Mr. Speaker, are susceptible of solution. Whether they will in fact be solved at an early date is another question. All I can say now is that I know of no recent developments which would cause me to alter the opinion I have expressed previously, that there is a fifty-fifty chance of achieving a satisfactory armistice in Korea.



CANNED PORK


[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: I should
like to direct a question to the Minister of Agriculture. Has the government's floor price for canned pork ceased to operate? Will the floor price be extended to the canning of more than the original twenty million pounds?


James Garfield Gardiner: The hon. member was kind
enough to send me copy of his question. The answer is that there has been no special floor price for pork entering into cans. There is a floor price under hogs, and incidentally, we did put some of the surplus pork into cans. The amount which is set aside for that purpose took care of the twenty million pounds, but surplus pork is now being frozen as Wiltshire sides. The floor price is related only to the hogs themselves.


John George Diefenbaker: Will the minister allow a question in connection with floor prices? What protection has the farmer who has delivered his pork products to a packer when the returns he receives are less than the 55704-98J
Inquiries of the Ministry amount of the floor price? I think that is becoming more general, and it deserves the attention of the government.


James Garfield Gardiner: Farmers are writing in
continuously and drawing attention to any cases in which they think that they have not been paid the floor price. These cases are investigated, and in a number of instances adjustments have been made.


Mr. Charlton:: Will the minister tell us what they propose to do with Wiltshire sides that are frozen? Is there a possibility of selling some of them to Great Britain?


James Garfield Gardiner: We hope that there is a
possibility of selling them somewhere as soon as possible. Wiltshire sides frozen can be sold in any form later on. Once they are put into vats for curing of course they make only bacon. As long as they are just frozen they can be used for any kind of pork cut and can be sold anywhere.



TRANS-CANADA AIR LINES PRESS REPORT AS TO SERVING OF FREE LIQUOR TO PASSENGERS

[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, I should like to ask a question of the Minister of Trade and Commerce. Will the minister comment on the editorial in the United Church Observer of May 1 next, which I have sent him? Is it true that free liquor is being given to passengers by Trans-Canada Air Lines on its run to Trinidad? If so, on whose authority and at whose expense? Is it government policy to permit sales promotion of this kind for particular firms? Will the minister comment on this practice in relation to passenger confidence?


Some hon. Members:: Order paper.


Mr. Speaker:: It seems to me that this is a question that should come before the house when the minister's estimates are being considered. I do not think it should be asked at this time.


Mr. Graydon:: Is there an item in the estimates for it?


Stanley Howard Knowles: Mr. Speaker, I submit there is a feeling of some concern and some urgency in the matter on the part of a body such as the United Church of Canada, which has made editorial comment on it in the current issue of its publication. I am sure there are those who would like to hear from the minister on this question.


Mr. Speaker:: I realize it is an important question, but I believe that under house procedure a more satisfactory discussion could
1548	HOUSE OF
Committee on Railways and Shipping take place and a more complete answer could be given when the house is in committee of supply or when these estimates are being referred to a committee.



RAILWAYS AND SHIPPING


[Stage Direction]
The house resumed, from Wednesday, April 23, consideration of the motion of Mr. Chevrier for the appointment of a special committee on railways and shipping owned, operated and controlled by the government.
John George Diefenbaker: Mr. Speaker, I shall not be a member of this committee; therefore I wish to refer to a matter which on several occasions over the years I have brought to the attention of the Minister of Transport (Mr. Chevrier), and to which reference was made yesterday by the hon. member for Winnipeg North Centre (Mr. Knowles). I refer to Canadian National Railways pensions, and in particular to the basic pension payable under regulations, not only those existing since 1935 but also those now in effect following the recent changes in connection with pensions in general.
As a result of the recent announcements, considerable improvement has been effected in respect of those in the service who are on pension and who made contributions thereto. But there is no improvement whatsoever in respect of pensioners who did not or will not make contributions.
I wish to refer briefly to the summary sent out by the chairman and president of Canadian National Railways on March 8 last, directed to retired officers and employees receiving pensions under the rules of the Canadian National Railways pension plan, and in particular to that part of the summary which deals with existing pensioners and makes reference to the revisions described therein. I might say that in general the revisions are very satisfactory, and the president and officers of the railways and the chairmen of the various brotherhoods who co-operated in arriving at the pension plan, one very much in keeping with that in effect in the United States, deserve commendation.
At the moment I am raising no objection to the general plan. I believe it is a step forward, one that was necessary and one which, for the last four or five years I have been recommending,-a pension plan in keeping with the responsibilities of those engaged in transport, and one that is actuarially sound.


One of the great difficulties in connection with the plan is that it does nothing for pensioners who are at present on pension. The part of the letter to which I have made reference states:
The foregoing revisions are applicable to those in the service at January 1, 1952, and who had not attained age 65 prior thereto.
And then it says:
A pensioner who did not contribute during his service towards a supplementary annuity will continue to receive the basic or service pension to which he is entitled under the existing rules.
That, I submit, is quite unjustified. The amount payable as basic pension is $25 a month. It is an amount that is not reasonable, satisfactory or justifiable. A great many of the employees of the railway company did not make contributions. The contributory feature did not come into effect until 1935. The numbers were set forth in Hansard on March 12, 1951, in answer to certain questions asked. The first question was:
How many retired employees of the Canadian National Railways are in receipt of pensions of less than $25 per month?
The answer was that there were 24, under the C.N.R. prior plan. Then the next question:
How many are in receipt of only the basic pension of $25 per month?
The reply was that there were 3,256. Then the next question was, in part:
How many are in receipt of non-contributory service pensions (a) $25.01 to $29.99 per month; (b) $30 to $39.99 per month; (c) $40 to $49.99 per month?
The answer was:
(a) $25.01 to $29.99 per month, 745; (b) $30.00 to $39.99 per month, 670;	(c)	$40.00 to $49.99 per
month, 330.
In other words a great many of these retired employees are today in receipt of basic pensions that are not in keeping with a national organization such as the Canadian National Railways. After all, if the government goes into business it should at least pay pensions that would be in keeping with those paid by private industry.
In addition to the questions asked by the hon. member for Winnipeg North Centre, there was a further series of questions as to how many were in receipt of pensions from $25 to $30 a month who had made contributions. The answer was that there were 459. Of those receiving between $30 and $40 a month who had made contributions, there were 2,115. In other words, out of some 105,000 employees, of whom some 40,000 are contributors, there is a goodly number who receive a pension which has not been improved in recent years and whose claims have

been ignored as a result of the findings and conclusions of the committee set up for the purpose of deciding the matter.
Therefore, the responsibility for those who are pensioned rests directly upon the Department of Transport. I am sure that the minister is most sympathetic toward the request made by these people, but sympathy alone is of little use. Recently representations were made to the Prime Minister and the Minister of Transport by the Canadian Railway Pensioners Association, the grand president of which is Mr. J. T. Cormier, of Moncton. I am going to read the pertinent part of a submission that was made and ask the minister whether representations have been made to Mr. Gordon and the directors of the railway company to give consideration to increasing the amount of the basic pension to the end that a fair and a reasonable basic pension will be provided for those who are at present pensioned.
The pertinent part of the submission reads:
Whereas the Canadian National Railways are owned by the people of Canada and operated by a board of directors appointed by the hon. Minister of Transport on behalf of the government of this country, and whereas the government has from time to time assisted various groups of citizens through subsidies and other assistance, etc., we feel we are justified in requesting assistance for this group of railway pensioners, also due to present high cost of living and devaluation of our purchasing dollar, and knowing that a large number of railway pensioners are in distress, having to depend on charity and municipal assistance, we feel therefore that the present government should direct the board of directors of the Canadian National Railways to provide to all Canadian National Railways pensioners an increase of basic pensions, in order to afford a large number of pensioners a reasonable standard of living, seventy per cent of which do not benefit by old age assistance, under the age of seventy years, particularly retired railway pensioners who through physical disability brought on by hardships suffered in the course of their employment or through service in the defence of their country.
I realize that the minister may take the stand that it is not for him to direct the directors of the Canadian National Railways. Subject to his views in that regard, which I am sure are far removed from directing the directors of the Canadian National Railways, and deleting that portion of the representations, I suggest to him that a strong case has been made out by these people. Their number is considerable; the claims they make are definite, and the grounds for consideration reasonable.
It is not a case of asking for the expenditure of a large amount of money. It is simply a question of asking for assurance that former government employees shall be maintained on an equality with those who have served private industry. Certainly the present
24. 1952	1549
Committee on Railways and Shipping basic pension of $25 a month is not in keeping with the dignity of the individuals pensioned; nor is it, may I say with the greatest deference, in keeping with the dignity of this country.


Mr. R. R. Knight (Saskatoon):: Mr. Speaker, I should like to support what has been said by the hon. member for Lake Centre (Mr. Diefenbaker) and also the continuing plea that has been made by the hon. member for Winnipeg North Centre (Mr. Knowles) on behalf of these Canadian National pensioners receiving $25 per month. I do not propose to go into the details, because this has been done by the hon. member who has just spoken, and who read to the house the submission made by these people.
I am interested in this matter because my home city is on the main line of the Canadian National Railways. Many people there are affected seriously by this limitation in pension, and many of them have approached me on the matter. I consider it my duty and a privilege to bring it to your attention.
It is true that changes have been made in the Canadian National pension scheme which have resulted in improvement for those now working, but I emphasize the word "now". It also improves the position of those who have been retired on pensions toward which they have contributed in part, that is, those who are receiving pensions of over $25 per month. But there is no improvement at all for those who are retired on pensions of $25 a month.
Of late consideration has been given in most pension schemes to the increased cost of living. Bonuses have been attached to many pensions and wage scales, and I do not see why the same thing should not be done for these people.
It is not clear to me whether this is the responsibility of the government or of the Canadian National Railways, but in view of the connection between the two bodies I am sure that if the government were to give the green light, Canadian National Railways could be persuaded to do something about it. I hope when the minister closes the debate he will answer the questions put to him yesterday by the hon. member for Winnipeg North Centre as to what progress has been made in considering this matter. Consideration of this matter was asked for some time ago by the hon. member for Winnipeg North Centre, in fact on March 20. At that time the minister said that he had assured the delegation which had approached him that the matter would receive consideration.
That was a month or so ago and I repeat the question my colleague asked yesterday:

Committee on Railways and Shipping What progress has been made in giving consideration to this group whose pensions are limited to $25 per month, an amount upon which it is impossible even to hope to live?


Mr. E. D. Fulton (Kamloops):: Mr. Speaker,
I feel that something more should be said with regard to these Canadian National pensioners. It is important to bear two things in mind. First, we are not discussing those who are now employed or those who have contributed over five per cent of their gross earnings during their period of employment.
I understand that both these groups will benefit under the new pension scheme, for which a good deal of credit should be given to the officers and directors of the railroad and the government. I am pleased to join with those who have expressed that view, but this new scheme does not benefit those already retired who in the past have not contributed more than five per cent of their earnings.
The other point which should be made clear is that although a committee is to be appointed to review the operations of the Canadian National Railways for the past year, there would be no point in discussing this matter in that committee. This is about the only place where we can usefully discuss the matter at this time.
My information is that at one time the officers of the railroad did recommend a scheme which would have benefited these retired employees about whom we are now talking. However, the tentative agreement, which would have been very beneficial and which was approved by the president and, I am given to understand, by the board of directors, was not approved by the government, in spite of the president's efforts to have it approved. If that be the case-and the minister can confirm whether or not it is -the situation is that there is not much point in our getting after the president of Canadian National Railways in the committee to do something which would benefit these pensioners because, depending upon how far he is able to go, his answer must be: Well, I have done all I can, and it is now up to the government. That will be the situation, because it appears that Mr. Gordon and the directors recommended a scheme which would benefit the men but Mr. Gordon was not able to have it approved by the government.
I do not think anything further need be said to emphasize the fact that $25 a month is not enough on which to live. I think nothing need be said as to the humanitarian aspects of the matter. Like the hon. member for Lake Centre (Mr. Diefenbaker), I am sure the


minister is as sympathetic to the plight of these men as anyone on this side of the house who has spoken about the matter or has taken an interest in it otherwise. But, as has been said, sympathy is not going to help people to live.
It seems to me that the only obstacle to acceding to the request can be the ground that it would involve an expense to the treasury. I should like the minister to confirm my understanding or point out that it is not correct. I understand that the request of these pensioners could be met without a direct grant by the government out of the general tax revenues of the country. The point that has been impressed upon me by the pensioners' association, who have'discussed the matter with me in the past, is that their position is that they have contributed in the past to the Canadian National Railways pension fund. They are not asking the government to make a grant so as to increase their pensions, but are asking that the increase be taken out of the C.N.R. pension fund. They say there would be a sufficient amount built up in the fund in future years to enable the request to be met without direct cost to the government.
They point out that they are the people who in past years did contribute to the fund, and although they did not contribute the maximum equal to five per cent of their earnings, they are amongst those who have built up the fund. They say that any increases in pension payments, even the increases now authorized under the new plan, will of necessity have to be taken from the present fund, and that even though increased contributions will be required in future from present employees, the fact is that increased payments to those who have contributed the maximum of five per cent will not come from anything further that they contribute. They say that in the case of an employee who is retired now and goes on pension immediately his increase will not come out of anything he has contributed over and above his former contribution, because there will not be time for the increased contribution to become effective.
They point out that the increased contributions mentioned by Mr. Gordon as justifying increased pensions to the limited class to which it would apply will not show any tangible return for the first five years, that there will be no tangible effect on the pension fund and that employees retired during that period will not have had an opportunity to contribute an amount sufficient to pay for

the increased pension payments they will now receive for life. In their representations they also have this to say:
To us it is inconceivable that an increase in pension payments will be made available in the future to seventy per cent of the employees who have to date contributed nothing to the fund while thirty per cent of the former employees who were regular contributors to the fund will not receive the Increase as stated by Mr. Gordon.
As I understand it, the injustice there is that, although these men have not contributed as much as five per cent, they have helped to build up the pension fund. Simply by virtue of the fact they did not contribute up to five per cent maximum they get no increased pension. On the other hand, an employee who retires the day after the new plan comes into effect, and whose contributions at the increased rate will not have had any effect on the amount of the pension fund, will get a pension at the increased rate. Their point is that they helped to build up the fund over the years and that they are now getting nothing extra from it, while the man who helped no more proportionately than they have is now going to get an extra payment from the fund. On the face of it I must say it seems difficult to me to describe that situation as anything but an injustice.
As I say, they make the additional point that they are not asking for a grant from the government or for anything that will increase taxes. They are asking that they be taken care of out of the pension fund which they helped to build up. They have made a submission which to me at least appears reasonable. They say that with the new scale of contributions they could be taken care of as requested out of the pension fund as it now stands and as it will be in the future without the necessity of a government grant.
I hope the minister will review the whole matter. There is no point in our taking it up again with Mr. Gordon before the committee, because I understand he has done his best, made his recommendation, and the present scheme is all he has been able to secure. It seems to me the matter rests entirely with the minister and the government. I hope the minister will have it reviewed and see if he can accede to the request of these $25 a month pensioners.


Mr. P. C. Black (Cumberland):: I have a matter of special interest to the province of Nova Scotia. Like the hon. member for Lake Centre (Mr. Diefenbaker), I am not a member of the committee. I wish to refer to the introduction of diesel-operated locomotives into the Atlantic division of Canadian National Railways. A few years ago in the committee there was an understanding that
24. 1952	1551
Committee on Railways and Shipping oil-operated locomotives would not be used in that division, but they are being introduced more and more and I understand that a large number are now on order. If this plan is proceeded with, the most assured market for Nova Scotia coal will be destroyed. The companies and the workmen are most uneasy about the introduction of oil-burning engines in the Atlantic division and the threat of the further use of such locomotives.
It is a very important matter to the province of Nova Scotia, and I think there should be some assurance given by the minister or some action taken by the committee to make sure that the market Nova Scotia has had for so long for its coal will not be destroyed. It is not only a question of a market for the producers of Nova Scotia; in past years the production of this coal has been most necessary to enable the Canadian National Railways and the Intercolonial Railway to operate at all. It is a most important matter and is causing considerable uneasiness in my province.


Mr. H. O. White (Middlesex East):: Before the minister replies, may I say that over a year ago representations were made to me, and I placed them before the house, concerning the desire of employees of Canadian National Railways to participate in reserve training. I pointed out that they were being discouraged. In other words, they were more or less told not to do it. Assurance was given me at that time that the matter would be looked into and corrected. Last week I had the opportunity to talk to certain employees, and they told me that although the assurance had been given, the spirit of the assurance is not being carried out. They say they are being discouraged with respect to serving in the reserves and going to camp.
They mentioned Petawawa. I do not know why they wanted to go to Petawawa, but that was the place they mentioned. I served some time at Petawawa myself, and I do not see why they would want to go there. I hope the men who are prepared to serve in the reserve forces will be given an opportunity to do so, and will not be discriminated against when they make application.


Lionel Chevrier: Mr. Speaker-


Mr. Speaker:: If the minister speaks now he will close the debate.


Mr. C. W. Hodgson (Victoria, Onl.):: I want to say one word in reference to these pensions to railroad men, especially those in the lower income group. Many of those men have paid into this fund for forty or fifty years. During that time each dollar they paid in was worth
1552	HOUSE OF
Committee on Railways and Shipping a dollar. Now they are about to receive a pension when the dollar is worth only fifty cents. I would like the minister to take that into consideration.


Lionel Chevrier: Mr. Speaker-


Mr. Speaker:: The minister will close the debate.


Lionel Chevrier: Mr. Speaker, I am grateful to the house for this short and interesting debate on the subject of the pensions of employees of the Canadian National Railways. I am particularly pleased that the view of the house is that the position is far better than it was when the earlier debate took place, and of course with that I am in full agreement. That is one point the house perhaps should take into consideration, namely the improved pension position of C.N.R. employees, both those retired and those still on duty.
There are several points I would like to make, as briefly as possihle; but two in particular lead me to make the statement that the position of these men is far better than it was when the debate took place last year. The first of these points has been mentioned by the hon. member for Lake Centre (Mr. Diefenbaker) and I believe by the hon. member for Winnipeg North Centre (Mr. Knowles), who referred to the revised pension rules of the Canadian National Railways. There is no doubt that the pension plan has been greatly improved. I would remind the house that the revised rules were arrived at following discussion between officers and employees of the Canadian National Railways. After they had studied the matter for many months, if not more than a year, they recommended to the government the adoption of the new pension plan, which I believe is far better than the old one. It received the full approval of the men, and I believe there is correspondence on record to indicate that while the pension plan does not go nearly as far as many of us would like, it is nevertheless a great improvement over the previous plan.
That is the first point I wish to make, namely the substantial change in the position of these men. The next point is that this house approved a universal old age pension of $40 a month without a means test for those over 70 years of age, the total cost being met by this government. It also passed legislation providing for a pension of $40 a month, half the cost to be paid by this government, to those between 65 and 70, with a means test. As a result the man who is in receipt of a basic pension and who is 70 years of age gets an additional $40 a month, ac does the man between 65 and 70 who can prove his 

position to be such that he is in need of the additional amount. So the position in reference to these men is far better than when the matter was discussed earlier.
Another feature seems to have been forgotten entirely. It is that no official representations were made to me by the president or the directors of the Canadian National Railways along the lines suggested by the hon. member for Kamloops (Mr. Fulton).


John George Diefenbaker: Were there any unofficial representations?


Lionel Chevrier: I will come to that in a moment. What happened was that both the president of the Canadian National Railways and his predecessor held talks with the view of increasing the basic pension. Those talks were suspended because the Canadian National Railways and their employees were discussing a revision of their pension plan. I believe the intention at the time was that some sort of actuarially sound plan might be submitted to the government which would have the effect of increasing the basic pension. But when it became known that the government was bringing down legislation providing for universal old age pensions, as well as the legislation I referred to a moment ago, it became clear that the plan would have to be changed. In the light of the legislation brought down in the house the whole position concerning the pension discussions, to which I referred a moment ago, with Mr. Gordon and his predecessor Mr. Vaughan, was reviewed not by us but by the pension committee of the Canadian National Railways in co-operation with their men. Their recommendation was that the basic pension of $25 per month in part 1 of the plan should remain in force. That was the recommendation we received, and that was the recommendation to which we saw no objection.
When it is said that it is the responsibility of the Department of Transport or of the government to see to it that these basic pensions are increased, I have always stated in this house that I think that is the responsibility of management with its employees. That certainly was the position they took in reference to the revised pension rules. If notwithstanding the new rules that have been adopted they feel there should be an amendment and make a recommendation to us to that effect, I assure the house and those responsible that such representations will receive very careful consideration.


Edmund Davie Fulton: If the minister will permit a question, does he feel that the principle he has just stated, namely, that it is entirely the

responsibility of management, applies equally to past employees and present employees?


Lionel Chevrier: I was just coming to that. I wanted to say a word on that subject, and that will deal with the question raised the other day by the hon. member for Winnipeg North Centre.
The delegation that waited upon me was not a delegation of retired C.N.R. employees. It was a delegation of Intercolonial and P.E.I. former employees. They were here to speak for themselves, but said they thought they also spoke for the employees of the Canadian National Railways. When I asked if their position was not infinitely better because of the legislation that had been passed, they admitted that it had been improved. They did state there were some cases in which there was hardship. I asked them to indicate how many such cases there were, but they were not in a position to say. They did state, and I believe, that in some cases there is hardship, but I am sure such cases are in the minority. To deal with my friend's question, when the hon. member for Kamloops (Mr. Fulton)-


Stanley Howard Knowles: Before the minister leaves his comment on the representations from that delegation, can he say what has resulted from his undertaking to them that their representations would be given consideration?


Lionel Chevrier: I told them that that is what would happen, namely that their representations would receive consideration. The hon. member for Kamloops raises a point which is so, namely that there would be, because of the new pension rules, two classes of pensioners who still receive less than $40 a month: those who would be pensioned after January 1, 1952 and who have not contributed to their pension fund, and those who are now on pension and did not avail themselves of the opportunity of increasing their pension. But I presume that those two classes were given consideration by the committee that discussed the matter over a period of months and recommended this plan.
As I stated earlier, if there are recommendations along the lines of those submitted by members of this house, they will be considered; but I must say that for the government to direct the Canadian National Railways to review the cases mentioned-which are not nearly as numerous as they were last year-would be placing itself in the position of having to do the same thing for other groups, as I indicated before, such as superannuated civil servants, pilots who are on retirement and a number of like groups. I think that the practice that we have followed is the right one. We have allowed the railway, in co-operation with its employees, to 55704-99
24, 1952
Committee on Railways and Shipping study these plans and to make recommendations to us. I think that has proven to be a satisfactory method of operation and I submit to the house with deference that we should continue to follow that plan of action.
There were other matters that were raised here by the hon. member for Cumberland (Mr. Black) and one other member. I think they are matters that should receive the attention of the officers of the railway when they are here in committee and who can deal with these particular problems, as it is somewhat difficult to debate them on a motion of this kind.


Stanley Howard Knowles: Will the minister permit one more question before he sits down? He said that the plan that is now in effect has had the endorsation of the C.N.R. pension fund committee which consists of representatives of management and representatives of the employees. Is it not a fact that the representatives of the employees on that committee, even after it was common knowledge that there would be changes in our old age pension legislation, pressed for something to be done for those who are already retired on only $25 a month?


Lionel Chevrier: I am not in a position to say whether they pressed individually. They may well have sent letters to me, because I received a considerable number of letters. I am not, however, aware that any representations came from them to me or to the government directly along the lines suggested by my hon. friend.


[Stage Direction]
Motion agreed to.

Clarence Decatur Howe: Mr. Speaker, if we can revert to motions by leave of the house I wish to move:
That the annual report of Trans-Canada Air Lines for the year ended December 31, 1951, tabled on March 24, 1952, the auditors' report to parliament for the year ended December 31, 1951, and also the operating budget and the capital budget for the calendar year 1952 in respect of Trans-Canada Air Lines, tabled earlier this day, be referred to the sessional committee on railways and shipping owned, operated and controlled by the government.


Stanley Howard Knowles: Now that this motion is before us, perhaps the minister will answer the question I put to him on the orders of the day.


Clarence Decatur Howe: Mr. Speaker, so far as I know, every airplane and every ship that travels outside of the territorial waters of Canada serves liquor to its passengers; that is, it

The Budget-Mrs. Fairclough makes liquor available for purchase. In that regard Trans-Canada Air Lines does exactly the same as every other air line and as every passenger ship. A practice has grown up which, as I understand it, is going to be terminated for the transatlantic service on the first day of May, namely, that of serving one free cocktail with a meal. That has been standard practice with every air line. Some air lines are more generous than Trans-Canada.


Edmund Davie Fulton: Free, you mean?


Clarence Decatur Howe: Yes, free. That is part of the food service of Trans-Canada Air Lines. My hon. friend asks who pays for the free drink. I suppose it is the same person who pays for the free meal. It is paid for in the fare of the passenger. After the first of May of this year the transatlantic fare will not include an allotment for either food or the free cocktail. If you want food, you will pay for it; and if you want a cocktail, you will pay for it. I hope that covers my hon. friend's question.


[Stage Direction]
Motion agreed to.


Lionel Chevrier: Mr. Speaker, by leave of the house I wish to move:
That the annual reports for 1951 of the Canadian National Railways. Canadian National (West Indies) Steamships, Limited, the Canadian National Railways securities trust, and the auditors' report to parliament in respect to the Canadian National railway system and the Canadian National (West Indies) Steamships, Limited, tabled on April 3, 1952, and the budget of the Canadian National Railways and Canadian National (West Indies) Steamships, Limited, for 1952, tabled on April 21, 1952, be referred to the sessional committee on railways and shipping owned, operated and controlled by the government, together with the following items of estimates for 1952-53:
Vote 485-Prince Edward Island car ferry and terminals-deficit;
Vote 486-Canadian National (West Indies) Steamships, Limited-deficit;
Vote 493-Maritime Freight Rates Act-payment of twenty per cent reduction in tariff of tolls to Canadian National Railway and other railways operating in territory fixed by the act.
And that the resolution passed by the house on March 19, 1952, referring certain estimates to the committee of supply, be rescinded in so far as the said resolution relates to votes Nos. 485, 486 and 493.


[Stage Direction]
Motion agreed to.


[Stage Direction]
The house resumed, from Wednesday, April 23, consideration of the motion of Hon.

Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Greenwood), and the amendment to the amendment of Mr. Coldwell.
Mrs. Ellen L. Fairclough (Hamilton West):: Mr. Speaker, in proceeding with this debate I should like to draw attention to a statement made the other evening in this house by the hon. member for Greenwood (Mr. Macdonnell) when, as reported at page 1474 of Hansard, he said:
. . . there is not much satisfaction to many of our taxpayers to hear these millions and billions bandied about-they do not live in a world of millions and billions; they live in a world of fives and tens, and less than that. It Is the ordinary taxpayer that I am interested in, and it is the ordinary taxpayer that this house exists to protect.
I believe that this is a profound truth that is too often overlooked in this chamber. After all, we are here to provide for and to protect the interests of all the millions of little taxpayers in the whole of this dominion of Canada. As taxes rise and the basis for taxation becomes increasingly important, the deductions from income which are allowed before the incidence of tax become a matter of grave concern to every employed person and to every recipient of income from any source whatsoever. As the high levels of tax are maintained, and the prices at the consumer level increase or fluctuate in a tantalizing manner, as they do, around the peak, it becomes necessary to pay more and more attention to the alleviation of distress, particularly in the lower income brackets.
When I was preparing the notes from which I propose to speak today I was surprised to find that about 75 per cent of them dealt with income tax, and it may well be that in the time at my disposal, Mr. Speaker, I may not be able to speak about anything but income tax. There are several matters that I should like to bring to the attention of this house, matters that have come to my attention possibly because of the peculiar nature of my own business. One is the matter of taxation of pensions; that is, privately purchased pensions, which should claim the attention of this house.
We assume that a man purchases a pension payable to himself on retirement or to his estate upon his demise. The pension was provided, let us say, by tax-free contributions, and therefore it is fully taxable as income when it is received. Well, that is all quite regular; it is an accepted fact, and the purchaser knows it before he makes his contract. The purchaser dies, and the widow is the sole beneficiary. The pension is then valued for succession duty purposes and is part of

the estate that he has left. So the duty is paid out of cash resources, with the result that the balance in the estate yields a reduced income. The widow is taxed duty on the estate, and income tax is payable on the revenue from what is left of the estate after the payment of that succession duty. It is, I submit, an anomaly that the value of the pension is fixed for succession duty without any abatement of income tax; because if the state removes say 25 per cent of the value as succession duty, then theoretically there is only 75 per cent left to provide income, and that 75 per cent of the income should be taxed; either that, or no income tax should be payable until the widow has received as much in pension as she had paid out in succession duty on the value of the pension. Certainly there is an element of double taxation in the present system, and I submit, Mr. Speaker, that the situation should be corrected.
The subject of double taxation brings up another point. Two years ago double taxation received the attention of the government, and a manner of relief was granted to the taxpayer, whereby he was permitted to deduct from his tax the amount of 10 per cent of the net dividends which had been received from taxable Canadian corporations. On the 1951 return it works out something like this. In order to illustrate the point I have calculated on a hypothetical income of $7,000, the whole of which was secured from dividends from taxable Canadian corporations. I have selected $7,000 and the status of a married person because, with the $2,000 exemption, it gives us a nice round figure of $5,000 on which to calculate. That may be a lazy woman's way of doing it, but nevertheless that is what I have done. I found out that that person will owe $1,104 in tax, composed of the regular income tax and the surtax on investment income. Added to this $1,104 in 1951 there was first of all the defence surtax of 10 per cent, which came to $110.40, and brought the total tax payable up to $1,214.40. Then, and only then did the 10 per cent of net dividends apply against the tax payable. Now the net result of that is this: Had the 10 per cent of net dividends been deducted from the tax payable, the total tax payable, before the imposition of the surcharge, the taxpayer would have benefited to the extent of the 10 per cent originally intended. However, now that the defence surtax has been added first, the taxpayer finds that instead of 10 per cent allowance for income from taxable Canadian corporations, he has a 9 per cent allowance.
As we go into another taxation year we find that the situation is worsened to this extent: Instead of the 10 per cent defence surcharge 55704-991
The Budget-Mrs. Fairclough we have the 20 per cent surtax, and following the same procedure right down the line we find that we have the same tax at the level before the application of the defence surtax of $1,104; with the addition of the 20 per cent, it brings it up to $1,324.80, and on the $1,324.80 the $700 tax refund applies. Had the tax refund been taken off the total tax before the imposition of the 20 per cent defence tax, the taxpayer would have his full 10 per cent. As it is, if the government proceeds in this manner in 1952 as it has for 1951, the taxpayer will lose an additional 2 per cent, and instead of the 10 per cent allowance he will find that he has an 8 per cent allowance. This is in spite of the fact, Mr. Speaker, that the corporations did pay the defence tax; so the double taxation is indeed doubled and redoubled, let us say.
This relief was intended in the first instance as a straight deduction from total tax. I would just like to say this, and maybe I can pass it on as a word of advice to the minister. I hope he has already thought of it. Before he has the income tax returns printed for 1952 I hope they will be carefully reviewed. If this juggling was not deliberate, then the forms should be printed in such a way as to permit the deduction of 10 per cent of dividends from taxable Canadian corporations before the imposition of the defence surtax. If it was deliberate then I can only say one thing, namely, Indian giver.
It might also be noted that anyone who has investment income of over $2,400 is also liable for the 4 per cent surtax, which added on about 25 per cent or more to the net allowance of 10 per cent of dividends, so that the person who has followed the advice of the government from time to time and has been thrifty, has saved his money, and then, possibly being a bit of a gambler has invested in Canadian corporations, purchasing stocks which pay him dividends, and on which, as income of each company, the tax has already been collected-he has not invested his money in bonds-he has not invested it in real estate; he has invested it in industrial Canada. And because the government took cognizance of the fact that there was this element of double taxation, the relief was granted.
It would seem that, having granted that relief, the government has repented, and these people are in the position of being penalized for their thrift. Possibly it is a case of robbing Peter to pay Paul, but it seems to me it is a matter that should be considered carefully and rectified before the end of the present taxation year. I find it

The Budget-Mrs. Fairclough hard to believe that this was done deliberately. I think the effect of such action must surely have been an oversight in the department.
There is also a recommendation with respect to this 10 per cent of dividend income which was passed on to the Minister of Finance (Mr. Abbott) and the Minister of National Revenue (Mr. McCann) by the taxation section of the Canadian Bar Association and the legislation committee of the Canadian Institute of Chartered Accountants in March of 1952.
Among many other recommendations, all of which in my opinion are remarkably commendable, there is one that has reference to a situation obtaining where the spouse of a taxpayer has investment income which is not sufficient to warrant the payment of a tax. In other words, if I may quote from the recommendation:
The result Is that in many cases the supporting spouse pays a greater tax than would be exigible if his spouse's income in excess of $250 were in fact added to his own income. This will be true in every case in which the supported spouse's separate income over $250 is less than the aggregate of the tax exemptions to which he or she is entitled.
Then these organizations make this recommendation:
It is accordingly recommended that the act be appropriately amended so that in cases to which section 25 (2) would otherwise apply to supporting spouse may at his option and for all purposes of the act elect to have any specific items of the income of the supported spouse treated as his income and excluded in computing the income of the supported spouse.
This is a situation with which all accountants are familiar, and I trust the government will accept the recommendation of these two responsible bodies, and implement the recommendation.
I could not speak in this debate without touching upon a matter that has received considerable attention in the last few days, and one upon which I spoke when the resolution with reference to the elimination of the four per cent hold-back on medical expenses was being considered. At that time I cited a hypothetical case of a taxpayer who was supporting another individual who was ill and who eventually died. The taxpayer was not only burdened with this expense but, in addition, was reduced in status from the married to the single state. Peculiarly enough, on the very week end, when I went back to my office I had the exact duplicate of that case placed before me, upon which I was asked to prepare income tax returns.
I should like to place before the house the facts of that case. This woman had not been enjoying good health, and because of that her
[Mrs. Fairclough.1
income had suffered. She had not been able to devote to her business the attention it had formerly received. Her sister, who was dependent upon the taxpayer in question for support, and who had lived with the taxpayer for many years-indeed, I believe, all her life-became very ill.
When the taxpayer brought her income return to me and asked me to figure it out she placed before me medical bills which, upon totalled, showed the sum of $2,990.20. In addition to that there were $500 funeral expenses. Meantime the income of the taxpayer had shrunk to the point where she could claim only $107.60 of the medical expenses in computing her tax for 1951. She said to me, "What shall I do with the rest of these bills?" I said to her that I was sorry, but that so far as I could see she might as well forget she had ever paid them, because she could not claim a cent of them. This taxpayer could not understand why in 1952 she could not claim some of these bills. I believe her point was well taken, and that she should have been able to claim them. The fact is however that one can claim expenses only on behalf of a dependent, and the position then was that the taxpayer in question was no longer supporting the dependent. Therefore she could not claim, despite the fact that some of the bills were incurred in the latter part of the year and that, in normal circumstances, if her sister had lived she could have made the claim under the twelve months provision.
Had the sister lived, the taxpayer would have had not only the opportunity to claim for these bills but an additional exemption by reason of her having supported the sister. It is clear therefore that this taxpayer was placed in a peculiar position. As a woman past middle age, and one who had worked for many years, she had accumulated some small savings, the greater part of which have now been dissipated through the payment of these extraordinarily high medical expenses.
If the department has not already considered the matter, then I suggest to it that provision should be made for cases such as the one I have described, and that in the year following that in which the taxpayer has incurred the expense an opportunity should be afforded to deduct from taxable income those medical expenses paid out on behalf of a person deceased. I agree that this provision could not be extended over a period of years, but I believe an allowance might be made in the year immediately following. I commend this to the department for its consideration.
In connection with the elimination of the four per cent, I have worked out a few specimens which I believe the house will find

interesting. The first of these deals with a single person receiving a salary of $50 a week and who, as in. the case of the woman whose circumstances I have just described, was responsible for a dependent for whom heavy expenses were incurred. This person maintained the dependent in a self-contained: domestic establishment, and would be entitled to married status affording a tax exemption of $2,000. Then the taxpayer loses the dependent and is left with some heavy bills which, as obtained in respect of my client, could not be paid in one year. We will say that in the first year the taxpayer pays $300 or $400 of the bills which have accrued. He will then deduct from the amount he claims for medical expenses four per cent of his income of $2,600, or the sum of $104. If we suppose that he took off $400 he would have to deduct therefrom $104, leaving $296. As I mentioned before in the other case, the rest of the expenses that would have been paid in subsequent years could not be charged at all. This is slightly different from the other case I gave as an example. In this case the person could not pay all the expenses at once and they had to be spread over the years.
Many institutions and medical people in this country would probably just address their bills to the taxpayer and say "for professional services" and forget that the person on whose behalf the expenses had been incurred had died. In that way the taxpayer would be able to claim those expenditures as medical expenses. I do not like that way of doing things. . I think we should make provision for these -cases so that we do not force people to evade the law in order to obtain their just deserts. Even in such a case the taxpayer again loses out on the 4 per cent income in each year. If it takes three years to pay this he loses, as I said the other night, not 4 per cent but 12 per cent of his income in exemptions.
The next specimen which I worked out had to do with a married man with two children making $60 per week. With his exemptions his taxable income would be $820, which would put him in the lowest bracket of 15 per cent. He would pay 15 per cent on the $820 with the surtax of 20 per cent on top of that. That would cost him $147.60. Suppose he has $120 in medical expenses. The extra tax on the $120 at 18 per cent would be $21.60 which he would lose because the $120 would be short of the 4 per cent of his income and therefore he could not claim anything. Supposing that he has more than $120, he still loses the 18 per cent tax payable on the 4 per cent of his income, which is a difference of $22.46.
24, 1952
The Budget-Mrs. Fairclough
Likewise the man who makes $75 a week, is married with three children. He would have a tax payable-I will skip all the preliminaries-of $271.80, counting the defence surtax. Supposing he had $450 in medical expenses, which is not even out of the way in many cases if you have but one serious illness in a family of five people; if the total were allowed, his saving would be $91.80. However, if the 4 per cent is disallowed then he saves only $59.98. In other words, by reason of this 4 per cent floor he loses $31.82 in taxes.
I maintain that this situation should be corrected. There are a great many families who, expenses being as they are, find it difficult to bring up children in the manner in which they would like to bring them up, or even to provide for them certain things which we in our modern age consider necessary. From the taxpayer's standpoint each year he is robbed of 4 per cent of income in the matter of this tax exemption. It is quite feasible that even with a small income that would mean $150 tax exemption in each year. If he is bringing up three children- take the case I mentioned of a $3,900 income -he loses a tax exemption of $156 each year because we must recognize that while every family would not have medical expenses, the average family with three children is apt to have medical expenses. It takes one form or another, either dental care, the youngsters getting measles or chickenpox, someone breaking a leg or having to go to the hospital for appendicitis or tonsillitis. All these things cost money. When you have even a minor operation you find that the bills run up.
I do not think it unreasonable to assume that a man in that tax bracket or that income bracket would have $150 medical expenses every year, but he cannot claim one cent because he has not yet reached 4 per cent of his income. Over a period of ten years while his family was growing up he would in fact lose $1,500 in tax exemptions. A saving in tax exemption of that size might mean all the difference between university or no university for one of the children.
When the parliamentary assistant was speaking yesterday he made a statement to which I must take objection.


Mr. Macdonnell (Greenwood):: Only one?


Ellen Louks Fairclough: The hon. member for
Greenwood says "only one?" I must admit that he made a great many, but I do take great exception to one statement. On page 1524 of Hansard he is reported as having made this statement:
In this instance, if the four per cent, which is less than the national average of hospital, medical, dental and drug care, was removed, that would
1558	HOUSE OF
The Budget-Mrs. Fairclough remove four per cent of the present taxable income of this nation. It would result in a reduction in our personal income tax receipts of four per cent or approximately $48 million.
I do not understand how the parliamentary assistant could make a statement like that. Such a figure must be predicated on two assumptions. First, that the personal taxable income is $1,200 million, and second that every taxpayer would have medical expenses up to or exceeding 4 per cent of his taxable income. That is just sheer nonsense. The white paper tabled when the minister made his budget speech gave a preliminary estimate of personal income taxes for 1951 as $890 million, and I find this figure in table 4 on page 13. I assume that that is the calendar year. Then on page 78 where they deal with the last five fiscal years the tax revenue from individual income tax is estimated at $980 million.
Upon asking a question of the department I secured a figure for the actual individual income tax receipts of $975,776,000. Even that amount does not come anywhere near the supposed $1,200 million upon which the parliamentary assistant's statement would have to be figured. As I said before, it would have to be predicated on the assumption that every taxpayer in the country would have medical expenses beyond 4 per cent of his income.


Mr. Sinclair:: May I make just one statement. That of course is less than the average in these things across the country which affects both income and income tax. I will admit that I did make one mistake. I should have deducted from that average the $30 million which would be claimed by people who were above the average last year. That is $30 million on the income, not on the tax.


Ellen Louks Fairclough: On the taxable income.


James Sinclair: Which is some $6,000 million.


Ellen Louks Fairclough: With all due deference to the parliamentary assistant, I submit that his figures are far wide of the mark. I do not think they can be substantiated at all. I really must take exception to this type of thing being done. In my estimation this is an example of expansive, irresponsible misstatements which make it most difficult to come to grips with a real problem in this house. I find it occurring more and more frequently. I do not approve of it at all, and I do not think any of us should condone that type of thing.
The question is not what amount would be lost to the treasury through such tax relief. The question is: Is it right? In my opinion the principle transcends dollars


James Sinclair: May I make one observation. You appreciate of course that in the year the child of November birth comes off family allowance the parent gets the family allowance for eleven months of the year and then because the child is off family allowance in the twelfth month he can claim the $400.


Ellen Louks Fairclough: I realize that. I do not want to interrupt the parliamentary assistant but I have only a few minutes left. Peculiarly enough, in the case to which I have referred the child was 16 in January. Therefore the parent had his exemption cut from $400 to $150 because of one payment in December, received one payment in January and then got no more. I admit it is an odd case, but that is what happened. I maintain that in those circumstances he should not even have had to apply for family allowance. He did not want to apply and he should not have had to do so. Whether or not he received the cheque he would still have been in the same position.
The small income groups are in a very sad plight today because of the taxation in this country. They are gradually losing their savings. I know of many who have cashed insurance policies in order to keep going, to pay for illnesses and the many other things which beset a family. That is largely as the result of the heavy taxes levied upon them. Taxes for what? To reduce the national debt? They were not consulted whether or not they wanted to reduce the national debt, and the house was not consulted as to whether or not it wished to reduce the national debt. Yet these people are paying taxes for that purpose. In the last five years the national debt has been reduced by $2,344 million, an
The Budget-Mr. Weaver average of $33J per person per annum. For a family of five it is $167i per annum or $837J for the five years.
That would go a long way toward the ownership of a small house. With housing loans reduced and credit restrictions in force the little fellow has not much of a chance. The thing that builds a nation is the faith of its people and their pride. On Tuesday last the hon. member for Cape Breton South (Mr. Gillis) said, as found at page 1513 of Hansard:
When a man owns his home he has his roots in the soil; he is a citizen; he belongs to the country and to a certain part of it.
I submit that if an agent or trustee were given money by an individual with which to purchase a house for him and when he requested possession of the house he was told, "Sorry, but you owed some money elsewhere and I applied your payments on your debt; you do not own a house", the law would take a very dim view of the agent's activities. In fact he would find himself in a very precarious legal position. If the minister believes the national debt should be reduced let him say so. Let him put into the budget an amount for that specific purpose and not call it public buildings which cannot be built, clothing for the forces which cannot be used, equipment which is not required, and then turn round and say to the little fellow: Sorry, we could not use your money for that so we paid your debts.


Mr. G. D. Weaver (Churchill):: Mr. Speaker, two years ago this month I took part in another budget debate in this chamber, and congratulated the government on their handling of the affairs of this country. At that time I asked the Minister of Finance (Mr. Abbott) to lend a sympathetic ear to the Minister of Agriculture (Mr. Gardiner) in his plans for the development of the west under P.F.R.A. At the same time I asked him to lend a sympathetic ear to the Minister of Transport (Mr. Chevrier) in any plans he might bring forward respecting railway development in our great northland. I also asked the Minister of Finance to take as his yardstick in financing and government spending the words of an eastern farmer: "Break the back forty acres before you build a new front porch". I said I would ask the minister to move in that direction as far and as fast as our resources would permit.
Unfortunately war broke out in Korea shortly after that, which brought heavy demands upon the economy of Canada, and I could not expect very much headway to be made in the direction I had pointed out. However, as I look back I find that considerable progress has been made. I find that the
1560	HOUSE OF
The Budget-Mr. Weaver Lynn Lake railway to which I referred at that time is daily pushing further and further into that northland. Since that time P.F.R.A. surveys have been carried out in an area which I described in that address. Two years ago I spoke of the Prime Minister (Mr. St. Laurent) looking northward; these were the words I used, at page 1839 of Hansard for 1950:
-looking northward at a treasure house beside which fabulous wealth, to which the genie of Aladdin's lamp had access, was peanuts.
i went on to illustrate, and spoke of the Flin Flon mine. This is what I said at that time, at page 1840 of Hansard:
The Flin Flon mine went into production in 1930 with ore reserves at that time of 19 million tons. Today Flin Flon is a town of 10,000 persons. In 1949 it produced $37 million worth of metals. It paid directly into the treasury of the people of Canada in income taxes and ore royalties, more than $5,500,000, and indirectly another $1,500,000. Considering the 10,000 people who derive their livelihood from that mine, they have contributed from five to seven and one-half times the national average towards the revenues of $2,500 million collected last year by the Minister of Finance.
I have before me the annual report of that same company for 1951, and I want to point out the further progress that has been made. The revenue from that mine in 1951 instead of $37 million was $54,250,000. Instead of paying $5,500,000 into the treasury of the people of Canada the figure was $12,100,000. Instead of $1,500,000 paid indirectly, the figure is now $3 million. The total revenue of the government last year was not doubled, however; instead of the $2,500 million I mentioned in 1950 it was $4,000 million, an increase of only 60 per cent. So the figure I mentioned of from five to seven and one-half times the national average, as representing the wealth created by these people, now has become from seven to ten times the national average. As I said at that time, it was surely something to gladden the heart of the Minister of Finance to find such revenues coming from these mines in northern Canada.
At this time, Mr. Speaker, I am going to lift the lid of the treasure box and give you a further glimpse into what you may expect to come out of the northland in the near future. I will deal for a moment with the railway picture, starting with the very poorest. The Lynn Lake railway is opening up a new mining development which has turned the eyes of the people to northern Manitoba. With the movement of the town of Sherridon to Lynn Lake, that railway reaches far into the north. It is only about 100 miles from a place called Brochet on Reindeer lake, which itself is only a short jump from Uranium City in northern Saskatchewan, which in the not far distant


future will be a town of 5,000 people, and which requires railway facilities. Once you reach that point it is only another short jump to Pine Point on Great Slave lake, where is one of the greatest undeveloped ore bodies in the world. At that point you are down to an elevation of 600 feet, and can follow along the Mackenzie river to a point where it is just a short jump to Alaska. If you take a globe-there is no point in looking at an ordinary map-and draw a line from central Alaska through this area to eastern Canada you will find that the shortest route from Alaska to the industrial areas of the east is via Lynn Lake and on down through Manitoba.
Up in northern Manitoba we have the Hudson Bay railway, which has been mentioned many times in this house. I do not think many people realize just what that railway means at the present time. Last year 7,250,000 bushels of wheat were shipped over that route. That in itself puts the Hudson Bay railway in the black. There are certain savings because of the short route to Europe. Those savings do not necessarily come back to Canada, but somebody gets them, and they are just like sugar scattered out to attract ants, the ants in this case being the ships that can make money coming to Churchill to pick up wheat. The more ships that come, the more wheat will be shipped from there, so today that is a paying proposition for the people of Canada in spite of any minor deficits that may show in the balance sheets. I can assure this house that those deficits will be wiped out in the very near future. Interests in Zurich, Switzerland, are interested in taking out 200,000 tons of pulpwood a year through the port of Churchill. This year they are taking out a trial shipment of
5.000	cords. I will try to put this in figures which will be easy to understand. Those
200.000	tons of pulpwood will mean revenue to the Hudson Bay railway equal to that from 8 million bushels of wheat. So no one in the east and no one in this house need feel that if they do see a small deficit in the accounts, they are paying for the upkeep of something that is not of value to this country.
I would like to mention another point in regard to this northern area. Last year 22 million pounds of fish were shipped out of northern Manitoba. This year 30 million pounds of fish were shipped out of northern Manitoba, and there are going to be many large increases as the Lynn Lake railway keeps working north.
I turn now to the mining picture. Few people know that northern Manitoba is the coming nickel capital of the world. I think I am conservative in this estimate; some

people may dispute it but I am being careful to be conservative. Approximately 75 per cent of the ore reserves of nickel on this globe are in northern Manitoba. There are four potential Sudburys in northern Manitoba. To indicate further that I have some knowledge of that of which I speak, may I say that I know personally that in one of these potential Sudburys there are five tremendous ore bodies. One of those ore bodies is sheared diagonally from one side at the top to the bottom so that the ore body gets smaller as it goes down but the piece that is sheared off gets larger as it goes down. Above 1,000 feet of this one ore body the ore that has been blocked out equals one-quarter of a billion tons. There are 250 million tons of ore above 1,000 feet; and that is not all the ore above 1,000 feet in this one block out of five. In terms of the present value of nickel, that ore is worth $6.50 a ton.
Again, to give you a comparison of what that means in value, may I say that down in Utah where they have a large copper mining development they mine, by open pit method, ore that is worth $3 ai ton. It is a large type of operation. I have not looked up the figures in recent years but they started to develop, in 1940, an operation that would mine 25,000 tons a day of that copper ore; and before they had completed the plant they doubled the size of it to 50,000 tons a day. That is the type of operation that we shall see in northern Manitoba in the not far distant future.
Lest some people misunderstand what I am saying, I would point out that this has no connection with Lynn Lake. Lynn Lake is a relatively small, high-grade nickel operation that completely justifies the railway that isi going in there now. But these other properties are away beyond that. Lynn Lake cannot be compared with them. In fact, this one little piece I have outlined to you has eight times the ore reserves blocked out at Lynn Lake up to the end of 1949. There are huge nickel ore bodies there. These nickel ore bodies compare in size with the iron ore of Labrador. As you know, nickel is worth something between 60 cents and 70 cents a pound, as compared with the relatively low price of iron. That will give you some conception of the development that is now under way in Manitoba.
The first time that I heard of this nickel ore body was when flying with a prospector only three years ago. Drilling had been just started on this block at that time. He did not know the values and I had no idea at that time what the values of this ore would be. But he described to me the ore body, because it came right to the surface. He did not know
The Budget-Mr. Weaver what it was but he described the size of it to me. I estimated at that time that that ore body would be of the order of 400 million tons. From then on I was curious as to what the content of it would be. When I found the content of it I placed it on the records of this house. The future is terrific for that part of the country.
I might say that this reef, as you would call it, runs for approximately 300 miles. To give you a little bit of an idea of what happened, may I say this. In the days when the world was young by some upheaval the crust was broken, and these fluid, metal-bearing ores were squeezed up as the crust shifted and came back. That is how our mines of certain types were laid down many years ago.
Copper is one of the metals in short supply in the world today. The copper picture is exceedingly favourable in northern Manitoba. Not far from this new reef that runs so far, there is a similar reef that is copper bearing. It would not surprise me if the same thing that applies to nickel is later found to apply to copper.
I know of another mine; it is a tungsten mine. Tungsten is something that is in exceedingly short supply at the present time. This mine has rich ore, and it will be brought into production in the not far distant future. There are many small mines that cannot go into production because they have no power. It is only the big operations that can bring power to them. The power picture in northern Manitoba is something out of this world. To give you an idea of it, let me say this. You have all heard of the Saskatchewan river and the power development along the Saskatchewan river. You have heard of the power development along the Red river and the Winnipeg river. The Red river watershed which runs down into the United States pours all its waters into lake Winnipeg. The Saskatchewan river, from both north and south watersheds, pours its waters into lake Winnipeg. Out of the north end of lake Winnipeg runs the Nelson river to Hudson bay, a drop of about 850 feet. Along that river, from source to mouth, is approximately 2J million horsepower that can be generated by water power; it is there to be developed but is still undeveloped.
One of the large developments is at White Mud falls. It is the first. It lies not far from the north end of lake Winnipeg. I have been told by responsible authorities that survey parties were out there last year and that they will be out there in larger numbers this year, and thaF the power from that development will be required in southern Manitoba inside of seven years. When I say it will

The Budget-Mr. Weaver be required, I do not mean that the development will have to start then; the development will have to be completed and will have to be turning out power inside of seven years. The moment it starts turning out power, numerous mines will open up in this area. You can talk about the resources in northern Alberta, and in northern Ontario and in northern Quebec. Canada is aware of those resources but is not aware of the fact that in northern Manitoba, having regard to its size and to its population, there are greater resources there than in any other place in Canada.


An hon. Member:: Or in the world.


George Dyer Weaver: Yes; possibly in the world. Certainly those resources in older parts of the world have sustained populations of 50 million and 100 million people, not just
50,000	or 48,000 as there are in my constituency at the present time.
This area is in the Pre-Cambrian formation. These people require food. To give you an example of what that means, may I point out that in Flin Flon, Manitoba, we have to import our milk, and over half our milk comes from away out in Saskatchewan, from a place called Melfort, and it takes twenty-four hours by railroad to reach us. When you start bringing milk to 10,000 people, and you have to ship it on the train for twenty-four hours, you will see the problem in front of you, when you get larger populations in that area, to supply them with milk. I am going to make a forecast. I have made many forecasts in the past, and my batting average is fairly high. We have been talking about redistribution and the movement of population and the losing of population. Some people have worried about Manitoba losing a couple of seats this year. I am going to make this forecast. By the time of the next redistribution, that is within ten years, there will be 100,000 people in that area that I describe. According to the present quota of Canada that will be two constituencies. You never need to worry about Manitoba, as long as Canada exists, in respect of losing seats, because that province will more than keep up with the growth of Canada. But I am talking about this large population. They need food. They do not want to bring it long distances by rail, particularly milk.
Two years ago I described an area that has lain there dormant for many many years, which is known as the Saskatchewan river delta. All this water coming down from the western prairies over the years has dropped this silt from the prairies into this area until it is now 40 feet deep in places. It is marvellous agricultural land. To give you an

idea of the size of this area, it has been estimated by competent engineers that the area consists of 4 million acres. Hon. members know that Manitoba is a wheat-growing province, but only 2 million acres of wheat were grown in Manitoba last year. That will give hon. members some conception of the size of this area to which I refer.
When you go to bring in a new process in industry and you are not certain as to how it will work out, you first test it in the laboratory and then you take it to the pilot plant stage. We have the pilot plant stage in this huge development at The Pas, Manitoba. There is an area there known as the Pasquia river area. It is a small triangle that lies between the Pasquia and the Carrot rivers and the Manitoba and Saskatchewan boundaries, with the apex of this triangle at The Pas, Manitoba. To show you how much attention has been given to this area by engineers, but not by the public, I would point out that between 1914 and 1916 an expedition known as the Dunn inquiry examined this area and considered draining a very large lake there known as Cedar lake. During the period from 1921 to 1924 this was followed by an investigation under Mr. Horsey, an official of the then department of the interior. In 1946 a detailed survey of agriculture in this district was undertaken by Mr. F. W. Broderick, horticulturist, and Mr. S. E. Churniak, economist. I have before me all these reports. They are quite voluminous, and they are my authority for saying that people who are competent to study these things have gone into them. I have before me a soil survey report on the Carrot river reclamation project by Professor Ellis, of the university -of Manitoba. Mr. E. B. Paterson in 1947 prepared the engineering survey which I hold in my hand. We have a progress report on this Pasquia river development area, dated November 1, 1951-that is the triangle I am speaking of- which is worthy of consideration by anyone who is interested. I am going to tell you briefly what it contains, to give you an idea how much of that 4 million acres may be arable land. There are 135,000 acres that have been all surveyed. I am giving you the facts. Of those 135,000 acres, 96,000 acres are arable land, and a further 10,000 acres suitable for growing hay and grazing.
The cost to protect this area from floods, which is the great danger, because the Saskatchewan river overflows its banks from Cumberland House to The Pas periodically, and that is what built this delta, is estimated by the engineers at $1,350,000. Now, estimates are always turning out low, but assume it will cost $1,500,000 to protect these 100,000 acres, roughly, of arable land. That would work out at a cost of $15 an acre. There is

no place in the Dominion of Canada, there is no place anywhere, that you can get land as cheap as $15 an acre, and this is the very best land. It was put there in the first place by the Almighty to provide food for this great area, or the people in it, when the time arrived to develop it, which is now.
Objections have been raised regarding the climate. From my personal observation I can say that we do not need to worry about the climate. About three hundred years ago, when the first settlers came into Quebec, they had a very difficult time to survive because of the climate. If you read the early history of the St. Lawrence valley and the privations of the early settlers, you will realize that at that time the climate of the valley was considered a hard one. Our climate there is no worse than that. We have longer hours of sunshine in the summertime; we have a little longer winters, but so far as severity goes, I have been colder in Ottawa than I have ever been up there.
I am very interested in gardening. For many years I have raised a garden a hundred miles north of this area, and I picked ripe tomatoes in my garden on August 10. I have ripened egg plant in my garden. As a matter of fact there is nothing I cannot grow in my garden except corn, and grow it very successfully. However, I am not asking you to take my word for it. I asked an official of The Pas, Mr. F. B. Chalmers, superintendent of northern resources, who should know, to write me a letter on this, and I want to read some parts of it. He says:
Further to our discussion of this area with reference to frost damage, I have had a good many years of experience as a lands inspector for the Manitoba farms loans and am intimately familiar with many areas in Manitoba, as well as the Carrot river. It cannot, of course, be said that there is no danger from frost in the Carrot river; however, I feel confident that it may be definitely stated that there are several other sections of the province which are farmed successfully and are equally, if not more subject to frost than this particular area. This is rather an indefinite statement, but I feel justified in making it from the experience I have had.
I have spoken with several farmers who have farmed in this area over periods of from fifteen to twenty years and they tell me, of course, that at times they have had some frost, but that they have never experienced a total loss through frost.
I am interested in the subject of frost. I am going to tell you that frost can be a serious obstacle. This is an area that should be a mixed farming area. It is an area that should supply milk, grazing, hay, and coarse grains. This is something that the farmers will recognize, that you will make more money out of frosted grain feeding it to stock than you ever will make out of bread grain, raising it and selling it through the elevators. That, gentlemen, is the picture of that area. The principles of the Prairie Farm
The Budget-Mr. Weaver Rehabilitation Act should be extended from one end of Canada to the other to take care of propositions such as this because they are large propositions.
In 1947 it was estimated that it would cost $20 million to bring those 4 million acres into production. Let us assume that that was a low estimate, and that it would cost $40 million; that is still only $10 an acre for a tremendous area, which will support a population-or supports a similar population in other parts of Canada-of upwards of 60,000 persons, without the attendant services which go with those persons, That is something that is a little difficult for the financial structure of provincial governments.
Large sums of money have been spent in many provinces, based upon these principles, and they should be extended. I understand there is a bill that might have been introduced a number of times in the last few years, but that because of a lack of interest that bill has not come forward. It would extend these principles to other parts of Canada. I feel the cabinet should reconsider its position, and that the bill should be introduced and passed at this session.
This project will go ahead. If it failed to go ahead here, then any bright individual could go down to New York and get United States funds, without any question, sufficient to develop the area, But that is not what we want. We want these things developed as they have been developed in recent years.
We have heard criticisms in the house from the city of Winnipeg, because they feel they have lost their preferred position in connection with freight rates. Winnipeg has had a preferred position for many years in respect of freight rates, because of its location not far from the head of the lakes. But we must keep in mind that Canada is not made up of any one city or any one area. If Winnipeg has had something that should naturally fall to Edmonton, then it is time it did fall to Edmonton.
I will say this to the city of Winnipeg, that I do not think many people in that city are aware of what is taking place in the province of Manitoba. If they will forget the preferred position they had with respect to the area west of them on the prairies, and will look north, they will find an empire at their doorstep which will keep their resources going just as long as any of the people of that city would want.
One further quotation regarding this area I should like to give, and then I shall close my remarks. I read this once before, but repetition will do no harm and I shall read it again. This is from the address of Mr. S. W.

The Budget-Mr. G. S. White Fairweather, vice-president of research and development for the Canadian National Railways, of Montreal, before the Engineering Institute of Canada and the Association of Professional Engineers of the province of Manitoba in Winnipeg, on Thursday, January 12, 1950. He said:
The subject which I intend to discuss is of particular interest to those who are developing what I have elsewhere termed the "frontier fringe of Canada." In many countries the word "frontier" has a grim significance but the frontier of which I speak is not a dividing line between nations, it is a dividing line between the developed and the undeveloped. Beyond it lies opportunity, a challenge to the venturesome and a sure hope of reward to industry, intelligence and perseverance. By the definition of my term, the frontier of which I speak is not static. It is being pushed back year by year. It has receded far beyond the position it occupied along the coast and the St. Lawrence river 200 years ago. Only one life-span ago this city of Winnipeg with all its present amenities of civilization was on the frontier fringe. Development pressed westward from the east and eastward from the west until from ocean to ocean the natural resources of Canada were made available in a belt of varying width. Now the path of development lies northward and much of what we regarded not many decades ago as a hostile, barren waste is proving to be a storehouse of wealth-the reward of the hardy, modern pioneer. The rock drill and the mine shaft may have replaced the plow and the grain elevator as symbols of development; but whether the development is of the forest, the fisheries, agriculture or mining, the end objective must be profit to the individual and an increase in national wealth.
Hon. members, we are building a nation today, a nation such as has never been known before on the face of the globe, a nation such as this globe will never see again.


Mr. G. S. While (Hasiings-Pelerborough):: Mr. Speaker, I should like most sincerely to congratulate the hon. member who has just completed his remarks upon having made a most interesting and instructive address, and having given us a glimpse into the future, and of the great natural resources existing in his province. Through his kindness I was one of the privileged few who, when the party visited Churchill, were taken to his home town of Flin Flon, and were there able to see something of the great development at the Hudson bay mine.
I liked in particular one remark of the hon, member when he referred to the national outlook. It seems to me that many times Canadians are too provincial in their outlook, and we overlook the fact that anything that benefits one part of Canada benefits all Canadians, in the long run.
In taking part in this debate I wish to direct my remarks to the national emergency existing today in Canada in regard to dairy products, and in particular to the tragic


plight of the cheese producers. No one can deny the seriousness of the situation facing these producers today.
Three cold facts have to be faced: First, there is the effect of substantial imports of dairy products from other countries; secondly, the loss of the United Kingdom and United States markets for dairy products; and, thirdly the problem of the huge surplus of milk in the provinces of Ontario and Quebec, due to the United States embargo on importations of dairy cattle from Canada brought about by the outbreak of foot-and-mouth disease. There is no getting away from these three facts. They have created an emergency so far as the cheese producers are concerned.
It is a well recognized and widely accepted fact that the dairy industry plays an important part in the health of any nation and that, consequently, its importance to the Canadian economy must be weighed in a balance that takes this factor into account, even though the value of such a factor is difficult to set forth in plain dollars and cents.
Leaving that aside, let us consider the known factors. First, there are 450,000 farm families, representing over three millions of people in Canada, who are directly dependent upon the dairy industry for the major part of their livelihood. Secondly, there are thousands of people engaged in dairy manufacture and distribution who, in addition, are indirectly dependent upon the dairy industry for their living. Then, thirdly, there are plants and equipment in Canada represented by over
11,000	creameries, over 500 Cheddar cheese factories, and some 150 combined butter and cheese factories, hundreds of fluid milk distributing plants, as well as many factories engaged in evaporating and condensing milk, and in the production of powdered milk, ice cream, processed cheese, and the like. All these are operated wholly by the dairy industry.
The dairy industry contributes well over half a billion dollars per annum to the farmers of Canada. The value of dairy products at the factories and milk plants is approximately $454 million, while the value of dairy products used on the farm is well over $105 million. Today some wonder if the industry is sufficiently important to worry about. I think it is, for many reasons.
Over the years it has been proved that the dairy industry is the most stable branch of agriculture, being less prone to weather and other economic ills which appear from time to time. Dairy products have assumed an indispensable place in the diet of this country which we associate with a high standard of living. The dairy industry is the cornerstone

of our economic stability. It is essential for the maintenance of soil fertility. There are millions of people in the world today who require and need better food, without which there is less likelihood of a peaceful understanding of each other.
In so far as this country is concerned it is imperative that dairying be made sufficiently attractive to ensure its remaining one of our major industries. During the war years we were never faced with any question of overproduction or surplus of dairy products. In fact during those years the government encouraged the farmer to increase his production in every way. The farmer was encouraged to increase his stock and to put new acreage under production. Thus the farmer was able to greatly increase the production of food.
During those years farm labour was scarce because no one wanted to work on the farm. Labour wanted to work in industry in the cities at higher wages. The dairy producer, despite the shortage of labour and the scarcity and expense of farm machinery and all the other difficulties that faced him, was able to play his part. He increased his stock and he cultivated more acres. Thus there was additional food available, not only for ourselves but for our allies.
During those years the farmer did not have a price tag on his products because the government strictly controlled the price of farm products. As far as cheese was concerned, during those years it was all requisitioned by the government. This did not apply to industry. Not only during war years but later on, until today industry has operated on a cost-plus basis. Every article manufactured by industry sells at a figure that will return to the manufacturer, not only his cost of production but a fair profit in addition. It is quite clear now that wartime controls and the policies of the government in force since the war cost the dairy producer hundreds of millions of dollars.
It seems to me that the government should take some action to reimburse the dairy producers of Ontario and Quebec for the losses they have sustained. Apparently the government recognized that it had some responsibility in the matter, although I will not say it was a legal responsibility, because only a short time ago it approved the payment of $65 million to reimburse the western farmers who during the war years and since had sold their farm products under practically the same conditions as the farm products of Ontario and Quebec were sold. That action indicated the advantage to any group of producers in Canada of being well organized,
The Budget-Mr. G. S. White in being able to exert pressure on the government and in having members in the house making insistent demands on their behalf.
As everyone knows, farmers do not work on a 40, 44 or 48 hour week as does industry. If they did, the cost of dairy products would be much higher than it is today. The farmer continually hears over the radio or reads in the press of new wage demands, of demands for better working conditions for labour. Every time there is an increase in wages to labour the price of the manufactured article which the farmer has to pay increases while the prices he receives for his dairy products remain the same or in many cases decrease. The dairy producer is simply asking that in this emergency, and it must be classed as an emergency, the government take immediate and proper steps to save this vital industry.
I have mentioned the part played by the dairy farmer during the war. If war comes again he will be expected to produce more food under practically the same conditions which existed from 1940 to 1946. It is the opinion of many thinking Canadian citizens that it is in the interests of Canada to maintain and support a dairy industry as a defence measure.
There is a further obligation on the government to the hundreds of veterans who used their gratuities and re-establishment credits to set themselves up in farming. These veterans have heavy commitments to meet over the years stretching into the future. If they are to be successful in re-establishing themselves in the peacetime economy of our country, then the veteran farmers must receive a fair price for their dairy products.
Farming, including dairy farming, has become a much more expensive business than it was years ago. The capital outlay and operating expenses are much higher. The type of labour required calls for more skill, and all in all the business demands that it be operated at full capacity. When you have a high producing cost the need for efficiency is greater than ever before. The dairy farmer today is finding that year by year the cost of farm labour is increasing and that other expenses such as municipal taxes, hydro, telephone, repairs, freight rates and the articles used by him in the operation of his farm have increased over what they were in 1951.
In addition, the cost of operating the cheese factory has increased to the same degree. The wages of a man who draws the milk, the wages of the cheese maker and the wages of other help are all up over 1951, as are the costs of fuel, supplies, repairs and
1566	HOUSE OF
The Budget-Mr. G. S. White everything else. The speech from the throne delivered in February, 1950, contained this paragraph:
Circumstances outside Canada have been responsible for some downward adjustment in the price of farm products. Measures have already been taken to reduce the impact of these adjustments. In order to provide authority for continuing price support to that end for the primary products of our farms and fisheries, you will be asked to amend the Agricultural Products Act, the Agricultural Prices Support Act and the Fisheries Prices Support Act.
Apparently in February 1950 the government felt that it had some responsibility for continuing price support for the primary products of the farm. If the government felt that price support was necessary for dairy products in February, 1950, surely the need is much greater today with the loss of the United Kingdom and United States markets and United States embargo on Canadian cattle. The words "outside of Canada" used in 1950 did not relieve the government of all its responsibility because some of the circumstances which have put the dairy industry on the rocks today happened inside this country.
The outlook is grim indeed for the dairy producers of Canada if the government does not recognize that and has no plan for correcting its errors. The importing of millions of pounds of cheese from other countries did not benefit the Canadian cheese producer. The importation of vegetable oils and the use of substitutes for cream and milk did not help the dairy producer. Today we find many bakeries, which formerly used thick cream and milk, now using a filled product, the chief ingredient of which is imported into Canada. The uses to which this filling can be put are practically endless.
Nor can the government escape some measure of responsibility for the manner in which the outbreak of foot-and-mouth disease was handled by the officials of the Department of Agriculture. The dairy producer has to compete with imported vegetable oils and fats, and fats extracted from imported seeds and grains. Where these fats are of domestic origin the dairy farmer has to meet that competition. However, in the case of fats derived from imports it seems to me that the dairy producer has a perfect right to demand from the federal authorities, who have control of tariffs and excise taxes, the same protection readily afforded other industries which affect far fewer people than the hundreds of thousands of Canadians engaged in agriculture.
It is admitted, and it is true, that by reason of our climatic conditions the Canadian dairy producer cannot at all seasons produce


dairy products as cheaply as countries more favourably situated or where competitive wages and standards of living are lower. I am sure no one will argue that producers of dairy products in Canada should accept lower returns to meet competition from these countries. As long as the Canadian farmer is doing his job efficiently, he is entitled to equality in hours of labour and living conditions with the rest of the Canadian people.
The two main items of costs, wages and prices of concentrated feeds, are beyond the control of the average dairy farmer, and as long as they remain at the present prices we will never have cheap milk. The only factors the farmer can control are the volume and quality of his crops and the care he gives his herd. The Minister of Agriculture (Mr. Gardiner) made two statements in the house this week which I think demand some further explanation. I should like to quote the following from page 1427 of Hanard:


Mr. W. G. Blair (Lanark):: I should like to
direct a question to the Minister of Agriculture. Will he make a statement on the assistance to be given to the cheese producing industry? Will the assistance given to them bring the price in line with that of the concentrated milk producers who are at present receiving $3.30 on local sales?


James Garfield Gardiner: I think it has been decided in the courts
that questions having to do with the price of milk are under the jurisdiction of the provincial governments. The question of cheese and milk in general has, I think, been fairly well taken care of by the government of Ontario. As to cheese production and other related problems, they are dealt with accordingly.


George Stanley White: I should
like to ask the minister a supplementary question. Did I understand him to say that there will be no floor price with regard to cheese?


James Garfield Gardiner: I am not in a position to say
whether there will or will not be. I understand that in Ontario there is an established price under provincial lav/. I do not know that anything we would do about it would override that law.
Again, at page 1471 of Hansard, in answer to another question the Minister of Agriculture replied as follows:
There is a floor price under butter, of course, and, as I said yesterday, there is a legalized position in Ontario in relation to cheese. Since most of the cheese is made in Ontario, the cheese position is quite well governed by that.
I would point out that if the Minister of Agriculture was referring to the Milk Control Act of Ontario, which is R.S.O. 1950, chapter 179, there are these two definitions in the interpretation section:
Milk includes cream and such products of milk or cream as are manufactured or processed in any form, other than butter and cheese.
Processor means a person engaged in the business of processing milk or manufacturing milk products, other than butter and cheese.

If that was the act to which the minister was referring, he will note that cheese and butter are not included. The minister says:
I understand that in Ontario there is an established price under provincial law. I do not know that anything we would do about it would override that law.
I would point out that the minister uses the word "law" several times. As far as I know there is no law in the province of Ontario that sets an established price. I for one would be much interested in obtaining from the Minister of Agriculture the necessary particulars as to where one will find an Ontario law which sets an established price as far as cheese is concerned.


Clayton Wesley Hodgson: There is none. He is passing the buck.


George Stanley White: I
admit the minister left the door open when he answered my question as to whether or not there would be a floor price for cheese. I quite appreciate this announcement may and can be made before the end of the dairy year which closes on the 30th of April. It is interesting to note that at the recent cheese board held at the city of Belleville no cheese was purchased. As the result of that all other boards have been cancelled. I noticed yesterday in the Ottawa Journal a report of a meeting at Vankleek Hill on April 22 of eastern Ontario cheese men who asked for a 33 cent floor price for cheese. I should like to quote two paragraphs from the remarks made by the chairman of the meeting, Mr. John A. Fraser. He said:
In order to survive in eastern Ontario producers of milk for cheese factories had to get from $2.75 to $3 per hundredweight for 3-5 milk. If cheese reverted to the last year's floor of 28 to 29 cents factories would be padlocked in eastern Ontario. From 20 to 30 small factories definitely would have to close their doors.
In the same paper there is an editorial on the statements made by the Minister of Agriculture in the house with respect to the questions asked by the hon. member for Lanark (Mr. Blair) and myself. The editorial is headed, "Mr. Gardiner Backs Away From the Cheese Crisis". After reviewing the situation, the editorial sums up the present situation as follows:
The net result is the threat of a chaotic tangle in the entire Ontario dairy industry, possibly in Quebec as well. Cheese exchanges, where the trade buys from the factories, are closed and the trade is not buying. Many factories have not opened. Cows will soon all be on pasture and a huge flow of milk threatens to back up right to the top grade. This could well threaten the livelihood of several hundred thousand persons in Ontario alone, could result in widespread unemployment. It is certainly
The Budget-Mr. G. S. White a situation which requires something better than the evasive answer Mr. Gardiner gave in the house last week.
I should also like to refer to the chamber of commerce resolutions for 1951-52 in their chapter on agriculture. They make this statement:
It believes that acreage controls, delivery quotas and governmental marketing monopolies should be limited to times of extreme national emergency . . .
I would submit, Mr. Speaker, that the present condition in the dairy industry is a national emergency brought about by conditions over which the dairy producer had no control. As the editorial points out, this emergency condition affects hundreds of thousands of Canadians and may be the cause of widespread unemployment, for if the dairy producer cannot sell his product certainly he cannot buy the product of industry. Almost any implement dealer in eastern Ontario can tell of the many contracts he had on file for the delivery of tractors and other implements this spring which have been cancelled.
Any attempt by the minister to evade the issue or to place the responsibility upon any provincial government will not be accepted by the dairy producer, and will not meet this emergency which cannot be handled either by the producers or within any province. The loss of our two markets, the United Kingdom market and the United States market because of the embargo following the outbreak of foot-and-mouth disease, created a condition the cheese producers could not handle. I am sure the minister is aware of the many meetings that have been held in eastern Ontario during the past six weeks. I am sure he must have received many petitions and resolutions asking that a floor price be established for cheese. As I mentioned a moment ago, the meeting at Vankleek Hill asked for a floor price of 33 cents. The meeting in Belleville on April 19 asked for a floor price of 36 cents.
I appeal to the minister to recognize the emergency that exists today in the dairy industry, an industry which affects the whole economy of Canada so greatly. I cannot believe he meant by his remarks last Monday that no floor price will be set for cheese. Surely he will agree that this large number of Canadians are entitled to assistance during this emergency period by means of a floor price that will at the very least permit the dairy farmer to produce his product with a small margin of profit.
At six o'clock the house took recess.
1568	HOUSE OF
The Budget-Mr. Thatcher AFTER RECESS
The house resumed at eight o'clock.


Mr. W. Ross Thatcher (Moose Jaw):: I am
one of those Canadians, Mr. Speaker, who paid their income taxes in the last few weeks.
I do not suppose that makes me an expert on this budget. However I can tell you it permits me to speak with greater feeling than might otherwise have been possible. I believe that taxes in Canada are too high, and I think some way must toe found to bring about reductions.
When the Minister of Finance (Mr. Abbott) introduced his budget shortly before Easter, he certainly presented Canadians with a sobering document. In a nutshell, he is proposing to take from the pockets of the people this year a sum of $4-5 billion or better. What is the significance of that figure to the average taxpayer? In the first place, it means that this year the federal government is going to take 21 cents in taxes, out of every dollar which is earned in the country. In the second place, it means that the federal government in 1952 is going to take from every man, woman and child in this nation average taxes of $320. This compares with a per capita tax in 1939 of only $40. Strangely enough, Mr. Speaker, when I was home at Easter I did not find too many of my constituents worried about that fact. I think the main reason for the apparent public apathy is the number of anaesthetic devices that the government has developed in recent years, to ease the pain in extracting the taxpayers' dollar. About 99 out of every 100 taxpayers in Canada pay the 10 per cent sales tax, the 15 per cent luxury tax, cigarette taxes, excise taxes, customs duties, tariffs, in blissful ignorance of the amount which is going to the federal treasury. As a matter of fact, even where personal income taxes are concerned much of it is collected by the employer. Even if you go to the employee and ask him how much he is paying the federal government in personal income taxes he has not the vaguest idea.
For that reason, I think Canadians have not as yet realized the significance of the astronomical figures which the Minister of Finance presented here a few weeks ago, nor have they realized the seriousness of those figures. I think it is a tragedy that, for one year at least, we cannot have Canadians pay all their federal taxes in one lump sum. If they had to do that, there would not be a revolution, but I venture to say the government would not last one week unless they brought taxes down. I say that the level of taxation in Canada has reached the danger point. I believe it has reached a level where


it is lowering our standard of living. It has reached a point where it is discouraging initiative on the farm, in the factory, and throughout business generally. It has reached a level where it is harming trade, and is promoting inflation.
More than a year ago the Minister of Finance made a proposition to this house with which I wholeheartedly agreed. He said this, in effect. There is no magic in government finance. A dollar which is given to one person must, first of all, be taken away from another. $4-5 billion is a lot of money. I think no one should feel that this money can be raised simply by "soaking the rich". Let no citizen make any mistake. These expenditures are going to be paid for by the average Canadian, the workingman, the farmer and the small businesfsman. I realize that our national production is high, but I do not think it has reached a point where we can take $4-5 billion in federal taxes without having serious repercussions. I shall, therefore, propose this evening, that our federal expenditures should be cut by at least $315 million. It is fair for the minister to ask me "how" and "where". I shall try to tell him.
The government would have us believe that this budget is the price which we have to pay for security. But is it? I remind hon. members that the greater part of this budget is for items that have no relation whatever to defence. In his budget speech last year, the Minister of Finance stated that the necessities of defence now require that our expenditures for all other purposes should be reduced. Yet despite that statement the minister has come before parliament with a proposal that non-defence expenditures be increased by at least $227 million. Personally, I cannot agree that, in view of our defence emergency, non-defence expenditures should continue to grow and grow. Many of the items in this budget are desirable, in fact most of them are desirable, and most of them are for items that Canadians would like. But I think if it means getting the tax level down, Canadians would just as soon do without some of them.
Since coming to Ottawa I have been one of those who have always believed there was a good deal of merit in the suggestion that a commission be set up somewhat along the lines of the Hoover commission in the United States, to study waste and duplication in the government. I think a good deal could be accomplished by such a commission, because *certainly members of parliament have not the time nor the facilities to go through the estimates and the public accounts, and give

them the scrutiny that they deserve. This evening I desire to make a number of concrete proposals of instances where I think the minister could save money. I realize that some of the suggestions may not be popular; nevertheless, I think they are sensible. I shall classify these savings in three categories: First, petty savings; second, major savings which are dependent more or less upon government policy; third, savings in the defence effort.
In the first category, I maintain that the estimates are cluttered up with dozens of petty expenditures which no sound business concern would maintain in a time of financial emergency. I should like to give a few examples. I refer the house to the estimates, first to items 54 and 55. In these items the government proposes to spend $2,039,000 for international shortwave broadcast services. If I understand these services correctly, they beam broadcasts to countries in Europe, and particularly behind the iron curtain. In the first place, I doubt if there are many people in those countries who have radios powerful enough to receive the broadcasts. But even admitting that the broadcasts have a certain propaganda value, even admitting that they may create certain good' will for Canadians, I believe that their value is far outweighed by the cost.
I suggest to this house tonight that this item might be classified as a luxury expenditure under present circumstances. I believe it should be deleted from the estimates1, in order to save the taxpayer $2,000,000.
The second saving I would suggest has to do with the House of Commons itself. After all, if hon. members are really interested in making savings I think they should set an example. For three straight years, ever since the inception of the 21st parliament, we have had double sessions. As nearly as I can gather, the last double session of parliament cost the taxpayers of Canada directly $2 million, and indirectly I suppose a good deal more money. Surely, if our rules were modernized, if they were brought up to date, it should be possible for this parliament to get through its work in four or five months at most. There are other disadvantages to these double sessions. After all, it is difficult for a member to get around to see his constituents if he has to be down here eight or nine months of the year. I think too if they are persisted in, they will discourage many members from offering themselves for parliament, because of the time involved1 at Ottawa. There is a good deal of talk of another fall session this year. I sincerely hope that this may not be necessary. Let us sit and get
The Budget-Mr. Thatcher our work done by July. I do not think it is fair to ask the taxpayers to pay the cost of another double session.
The third saving which I would suggest is of a minor nature; it has been made in this parliament before. For the first time, this year, it is proposed to pay lieutenant governors a special allowance, "hospitality" and "entertainment." Personally, I have always felt that the work done by these gentlemen could be just as effectively performed by our chief justices. However, whether or not that is so, I do not think that at a time when the taxpayers are facing expenditures of $4-5 billion, they should be called upon to pay bills for entertainment and hospitality for these gentlemen. If item 170 were deleted from the estimates, the amount of $86,000 could be saved.
The fourth saving I would suggest has to do with the printing of departmental reports and other publications. This year the government is going to spend $7 million on this item; and in addition it proposes to spend $10,500,000 on films, displays, advertising and so forth. Of course, some of these pamphlets are valuable; I do not deny that. But there are a great number-and I think the number is growing-which have very dubious value. I have several in my hand which came to my office this week. Two of them are from the Department of National Health and Welfare. One of them contains a series of cartoons. One of the cartoons shows a workingman having his hand held by a nurse. It says: "The nurse and the pulse of industry." For the life of me I cannot see of what value such pamphlets are to the taxpayers of Canada. I will venture to say that there is not one member in this house who does not consign regularly each week forty or fifty of these pamphlets to the wastepaper basket. I wish that the Minister of Finance or his parliamentary assistant would order the queen's printer to assemble all these publications and pamphlets in the railway committee room, and then I wish he would invite members of parliament to see the exhibition. I will wager that not only would the members get an eye-opener, but so also would the Minister of Finance and his parliamentary assistant.


Gordon Graydon: You would need the exhibition grounds.


Mr. Cardiff:: You could not open their eyes.


Wilbert Ross Thatcher: I contend that there is no real need for a good many of these pamphlets that are being put out, and I suggest three steps to cut them down. First of all, I think we should set up a small central publicity bureau to handle all work of this kind. Then
1570	HOUSE OF
The Budget-Mr. Thatcher I think we should tell the bureau to eliminate all but the most essential publications. In the third place, I think we should start charging for technical publications to the mining industry, to agriculture, and to groups of that kind. It is my belief that if we did that we could save a minimum of $4 million this year.
What I have said, Mr. Speaker, also applies to the dominion bureau of statistics. In 1939 the dominion bureau of statistics cost the taxpayers $1,042,000. Today it is costing us $6 million. I think we have an efficient bureau, but I also think that they are compiling a good deal of information for which the average Canadian has no need, and which in an emergency most Canadians would just as soon get along without. I am in the hardware business. I receive numerous publications from the bureau. I must be frank and say that they do not seem valuable to me. I suggest to the Minister of Finance that he curtail the estimates of the bureau of statistics by $1 million. I think he could do it without in any way curtailing the more important features of its services.
My sixth suggestion, Mr. Speaker, is that item 42 of the estimates be deleted. Last March 12, the hon. member for Charlotte (Mr. Stuart) made a very interesting speech in this house, and I quote from Hansard at page 377:
The federal government has voted $500,000 annually to buy aluminum pails for the maple syrup industry of this country.
Well, my sentiments are somewhat similar to those he expressed on that occasion. Why on earth should the taxpayers of Canada buy aluminum pails for the maple sugar producers? Why should they not buy their own?


Mr. Maltais:: Seventy-five million dollars for wheat.


Wilbert Ross Thatcher: Unless there is some reason, Mr. Speaker,-


Mr. Gingras:: Syrup is much better than wheat.


An hon. Member:: A drop in the bucket.


Wilbert Ross Thatcher: Unless there is some reason which does not meet the eye, Mr. Speaker, I believe that item 42 could very well be deleted.


Auguste Maltais: What is the amount there?


Wilbert Ross Thatcher: The amount is $500,000.


Auguste Maltais: Seventy-five million dollars for wheat.


Wilbert Ross Thatcher: I propose that items 291 and 292 of the national health estimates be deleted. These expenditures have to do with
*NMr. Thatcher.]

the administration of the National Physical Fitness Act. This year they total $211,000.
I remind the house that the original purpose of that act was to promote and co-ordinate a physical fitness program among the provinces. I would admit that the division has done some useful work-not too much. It has prepared a variety of literature on recreational topics; it has studied different recreational programs in other countries; it has studied layouts for playgrounds and so on; but by and large I believe the program has been a failure. Two provinces have not even bothered to enter the scheme, and the division, which was originally set up to work on physical education, has gradually been drifting into adult education, the drama, and so on. It seems to me that in the eight years this act has been in force there has been no great need for the service demonstrated. I say that the taxpayers are not getting value for their money, and that this item should be taken from the estimates.
Item 419 of the estimates calls for an expenditure of $1,500,000 for promoting the tourist business in Canada. I realize I am probably skating on pretty thin ice when I suggest that that is an expenditure that should be cut this year; but nevertheless, in view of the tax load, I think $500,000 could be taken from this item without any harm being done.
There is just one more of these petty expenditures that I should like to mention, namely, item 96. Item 96 is to provide for the construction and execution in Canada of seven doors to be donated by Canada to the United Nations permanent headquarters. Seven doors, at $7,143 per door. What kind of doors are they? I could build a whole house in my city for that price. If these doors have not been ordered I think this might be a good item to delete while there is yet time.
I have listed these seven or eight items, petty expenditures, simply to give the house examples of savings which I think could be made. In themselves they may seem petty; I think they add up to about $10,300,000. However the point I wish to make is that these estimates are cluttered up with dozens of expenditures which, at a time like this, ordinary companies would eliminate.


Mr. Fournier (Hull):: That is far from $315 million.


Wilbert Ross Thatcher: Oh, I shall come to your department in a minute. I have only commenced.
I come now to the second category: Major savings which are more or less dependent upon government policy; and in that connection I shall refer first of all to the Department of Public Works. This department

plans to spend in 1952, $107 million, which is an increase over last year of $8.2 million. I would agree with the minister that probably most of those expenditures are desirable, and probably most Canadians would like to see these various expenditures proceeded with. But, despite that fact, I think that the height of the tax level in Canada today makes it imperative that the less urgent of those projects be temporarily deferred.


Alphonse Fournier: Name them.


Wilbert Ross Thatcher: I will come to that; give me time. It seems to me that in order to lighten the tax load, such expenditures as most of the post offices, most of the wharves, most of the dry docks, the customs buildings-


An hon. Member:: Oh, no, no.


Some hon. Members:: Oh, oh.


Alphonse Fournier: And that was from one of your own members.


Wilbert Ross Thatcher: -and most of the public buildings could be dispensed with. I think the Minister of Public Works could cut his expenditures by $20 million this year.


Alphonse Fournier: Where?


Wilbert Ross Thatcher: I just told you where.


Alphonse Fournier: Give me one instance. Be specific, so I will know it-and if it is in your riding, I will remember it.


Wilbert Ross Thatcher: Go through your estimates and you will find them.


James Sinclair: The Moose Jaw post office should be the first one.


Wilbert Ross Thatcher: Since when were they going to build a post office in Moose Jaw?
Every five years the Minister of Finance has been telling the opposition members to show him how to save money. Now, if he will be patient long enough, I will tell him how to save it.
I come now to the civil service.


Alphonse Fournier: Oh, you have left public works, have you?


Wilbert Ross Thatcher: I have suggested what could be done to ease the tax burden in your department.
To what extent is the government economizing on its own payroll? Certainly in the past few years I have heard the Minister of Finance tell us repeatedly that every effort was being made to keep civil service numbers within reason. What are the facts? The fact is that the federal government has thousands-more of employees today than it had at the peak of the war years.


Mr. Sinnoti:: So has Saskatchewan.
The Budget-Mr. Thatcher


Wilbert Ross Thatcher: It has three and a half times the number that it had in 1939. And I should like to be a little more specific. Last year, important evidence was placed before the Senate committee on finance. I would make reference to a table at page 64 which purports to indicate the numbers of employees of the government of Canada, exclusive of members of the armed forces and the Royal Canadian Mounted Police. This chart shows that in 1939 civil servants in Canada numbered 46,106, in 1950 they numbered 155,960, and in 1951 there were 156,220.
The cost to the taxpayers of salaries might be of interest to the house. The figures show that in 1939 the cost of civil service salaries was $74 million, while in the year 1950-51 it was $282 million, in 1951-52 it was $302 million, and this year it is to be $333 million. I think it is obvious from these figures that both the numbers and the cost of Canada's civil servants continue to grow rapidly. Hardly a day goes by that members do not receive some notification in their mail that some new appointment has been made, or is about to be made.
Most Canadians can understand why an expansion in our civil service is needed during years of war, but I think -there are many Canadians who cannot understand why the numbers continue to increase so rapidly after the war, instead of showing any tendency to diminish.


Alphonse Fournier: How much would you cut there?


Wilbert Ross Thatcher: I will come to all that. Please do not be so impatient. On the surface at least it would appear that many departments have increased very rapidly. I would mention, for instance, the Department of Transport. In 1939 it had 5,760 employees, while in 1951 it had 11,970.
Now, no one in the house need agree with me, if he does not- wish to; but I contend that the civil service could be cut by 5 per cent at least, without in any way impairing efficiency.


Alphonse Fournier: That is $16 million.


Wilbert Ross Thatcher: All right. We will save $16 million, or perhaps a little more. I think we could save almost $20 million-


Alphonse Fournier: All right, then, $20 million-.


Wilbert Ross Thatcher: -and without impairing the service one bit.


An hon. Member:: Make it $25 million.


Wilbert Ross Thatcher: With federal taxes today running about $4 * 5 billion, I think the time has come when this government must find
1572	HOUSE OF
The Budget-Mr. Thatcher some way of measuring the size and efficiency of our civil service. As I said a moment ago,
I think we should give consideration to setting up a commission similar to the Hoover commission, to come in and see whether efficiency is there or not.
The next saving I would suggest is also connected with the civil service, and concerns specifically the age of retirement. I think I am not exaggerating when I say that many Canadians were profoundly shocked when the Minister of Finance brought in-I think it was last March 29

supplementary estimates which contained on page 3 an item of $102 million which was allocated to the civil service superannuation fund.
I would remind the house that this amount was in addition to regular payments. I would also remind the house, and remind the parliamentary assistant, that this amount of money was in addition to the $75 million that was allocated the fund last year.


Gordon Graydon: Get up, Stanley.


James Sinclair: May I ask the hon. member a question?


Wilbert Ross Thatcher: No.


Stanley Howard Knowles: I will answer it.


James Sinclair: Would the hon. member permit a question?


Mr. Speaker:: Order. Unless the hon. member gives way, he cannot be interrupted.
Jilr. Thatcher: I would be pleased to permit a question.


James Sinclair: I was wondering whether the hon. member was in the house this afternoon when his colleague from Winnipeg North Centre (Mr. Knowles) was urging that a much greater contribution be put into certain government pensions.


Stanley Howard Knowles: Hear, hear.


An hon. Member:: Get together.


Wilbert Ross Thatcher: I am expressing my opinions, whether anyone in the house agrees with them or not. Perhaps my hon. friend and colleague was not advocating the same thing as I am.


Some hon. Members:: Oh, oh.


Wilbert Ross Thatcher: Now, to be serious-


An hon. Member:: Try to be.


Alphonse Fournier: Oh, do you have to be serious?


Wilbert Ross Thatcher: -I believe in pension funds.
I certainly believe that a civil servant who has served his country faithfully and well should be able to retire with a decent pension. But I also believe that we, as members


of parliament and as the representatives of the taxpayers of Canada, have a responsibility to see that the cost of these pensions is kept within reasonable limits. Now, I may be wrong, but it seems to me that $102 million in one year for the pension fund is not keeping it within reasonable limits.


Mr. Dewar:: Would you increase railroad pensions?


James Sinclair: Yes, would you?


Wilbert Ross Thatcher: Would the hon. member for Qu'Appelle like me to suggest savings that his minister has been asking for, for some years?
I admit I have not studied the Civil Service Superannuation Act in great detail.


Some hon. Members:: Oh, oh.


Hugues Lapointe: There seem to be some other things you have not studied.


Wilbert Ross Thatcher: I said that I have not studied this act with profound care, but I have read it several times.


Alphonse Fournier: Why speak about it, then?


Wilbert Ross Thatcher: And if my understanding is correct, the act says that a civil servant today may retire at the age of 60, if he wishes, and that he is forced to retire at the age of 65.


John Sylvester Aloysius Sinnott: No, he is not.


Wilbert Ross Thatcher: I contend that under present circumstances, when, we are in the midst of a rearmament program, the retirement of citizens at the age of 60 or 65 is financially dangerous. The cost to the taxpayer is simply too great. I presume to suggest several amendments, therefore, to this legislation.
I refer to the retirement age for civil servants. I think the voluntary age of retirement should be changed from 60 to 63 years, while the compulsory age should be raised from 65 to 68 years. I think the civil servants themselves would welcome this latter amendment because many of them do not like to be forced into idleness in these days of high prices. That should save the taxpayers at least $1 million, and perhaps a much greater sum over the years.


Mr. Robinson:: Will the hon. member permit another question? He has been suggesting a number of savings and I was wondering if he intends to support the resolution standing in the name of the hon. member for Winnipeg North Centre (Mr. Knowles) in connection with social security? If he is, it seems to me that all his savings will disappear in the one item.


Wilbert Ross Thatcher: I thank my hon. friend for asking his question. I shall give that resolution my careful consideration.


Stanley Howard Knowles: The hon. member sounds like a minister.


Wilbert Ross Thatcher: The estimates of the Minister of National Health and Welfare (Mr. Martin) are going to be increased this year by $255 million, mainly because of pension changes which were introduced at the last session. Today we are paying old age pensions to every Canadian at the age of 70 years without a means test. That measure passed this parliament unanimously and I was one of the members who supported it. But I must admit I am beginning to wonder if certain modifications to that act might not be desired. We have had this scheme now for four months and I cannot help doubting the wisdom of paying old age pensions to Canadians who are wealthy and have no need of them.


James Sinclair: You want a means test, in other words.


Wilbert Ross Thatcher: Just let me continue.


James Sinclair: You want a means test.


Wilbert Ross Thatcher: I must say that I find it a little ludicrous that the taxpayers of Canada, overburdened as they are, should be paying an old age pension-I take this gentleman only as an example-to the Prime Minister (Mr. St. Laurent). I cannot believe that a man in his financial circumstances needs it. I understand too that we are paying the pension to quite a few senators. I suppose even my old employer, multimillionaire J. S. McLean, now qualifies for the $40 monthly cheque, although I do not know whether he is collecting it or not.
The point I am trying to make is that there are thousands and thousands of Canadians receiving this old age pension who obviously do not need it. The same might be said of the baby bonuses. The taxpayers are going to spend $332 million this year on family allowances. I say at once that most of this money will be well spent, but I cannot help wondering how badly my good friend, the hon. member for Comox-Alberni (Mr. Gibson), needs three family allowance cheques to make ends meet. There must be many other people in Canada in the same category.


Mr. Garson:: Would the hon. gentleman permit a question. Would he apply a means test to family allowances, too?


Stanley Howard Knowles: Over my dead body.


Wilbert Ross Thatcher: I thank the minister for his question and I should like to answer it. I wonder whether it is sensible to pay old age
The Budget-Mr. Thatcher pensions or family allowances to those with an income say of $5,000 a year or more. I take that figure out of the air, as perhaps it should be $6,000. I am referring to those people who have no need of them. If the minister adopted this suggestion my closest estimate is that he would save the taxpayers about $30 million.
Today there are about twenty different branches or agencies buying supplies or materials for the federal government. They are buying food, coal, paint, munitions, office equipment and things of that kind. It seems to me that so many purchasing departments cannot help but promote inefficiency ' and duplication. I remember Mr. Bryce, one of the officials of the Department of Finance, appearing last year before the public accounts committee. He told us that the Department of National Defence bought its cars direct from the manufacturers while the other departments did not, and as a result paid considerably higher price. Such a policy cost the taxpayer a good deal of money. I doubt if there is a single corporation in Canada with more than one purchasing department. Some years ago the province of Saskatchewan set up a central purchasing department and they have been most gratified with the results obtained. Such a central purchasing department for the federal government would mean a saving of about $10 million in the extra discounts that could be obtained through volume buying.
The savings in this category which I have mentioned would amount to roughly $81 million. If we add those to the first category, the savings would total about $91 million in non-defence expenditures.
Finally I come to the touchy defence figures. I would be the first to admit that I am not an expert on international affairs or national defence, but I do not think that that means that I as a federal representative should regard these expenditures as sacrosanct or beyond the pale of criticism.
It is proposed in the coming fiscal year to spend between $2,000 million and $2,500 million on rearmament and defence generally. It is incredible that a peace-loving nation like Canada only a few years after world war II should face commitments of this size.
I think everyone realizes that we are living in dangerous times and it is sensible and necessary to have adequate defences. However after having been home for a few weeks I can say to the minister that there are many Canadians who are viewing with great uneasiness the size of our rearmament program. They realize that every dollar spent on arms means $1 less spent on constructive national development.
1574	HOUSE OF
The Budget-Mr. Thatcher
Is this money being spent wisely by national defence? I think every hon. member realizes that parliament, or even the efficient treasury board, has very little direct control over the detailed expenditures which are made for national defence. Today the Minister of National Defence (Mr. Claxton) is spending more than $2,000 million,-more money than the whole government was spending shortly before Korea, and almost as much as is being spent this year by all his colleagues together. He is spending four times what the whole government was spending in 1939. While the minister may be the ablest minister in the world I do not think it is physically possible for him, or any one person, to go over these detailed defence expenditures, and say that they are being handled without waste or inefficiency.
The fact is that the military authorities have the responsibility for most of these military expenditures. I am not sure that the Canadian taxpayer is convinced that these gentlemen are not spending his money with too much abandon. I do not think the Canadian taxpayer is a bit impressed with the efforts at economy which the government has made in this connection. I feel the Department of National Defence is the department where the greatest economies in the budget can be made. I remember when Mr. Bryce, Mr. Drury and certain other officials appeared before the public accounts committee a year or so ago. Why, for instance, are we operating today in some cities a recruiting office for each of the three services?
I remember the hon. member for Calgary East (Mr. Harkness) pointing out to the public accounts committee that in that city there was a recruiting office for the navy, one for the air force and one for the army, all within a few blocks of each other. There are other savings of that kind which could be made. I remind the house that a few months ago Winston Churchill pared the defence budget of Great Britain substantially. I also remind the house that a week or so ago the United States congress was impressed with the need for economy. I have a press dispatch carrying the story. The heading of the article is, "Slash Advised in U.S. Budget". The article reads in part:
A $4,240,638,500 cut in the United States defence department's $50,921,022,770 budget for the fiscal year starting July 1 was recommended today by the House of Representatives appropriations committee.
If Great Britain and the United States can set such an example I do not see why it would not be sensible for Canada to follow the same course. If we could cut our budget


by 10 per cent, leaving it to the military to decide where they want it cut, we could save the taxpayers of Canada $225 million. I remind the house once again of the words of the Minister of Finance last year. He said that there was no magic in government financing, and that a dollar paid out to one person must first of all be taken from another. High taxes are not inevitable but if they are not inevitable, then expenses must be cut.
I think I have suggested savings approximating $315 million, and if there is something wrong with my suggestions let the minister point it out. I say that peacetime taxes in Canada have become too high. The government is taking 21 cents out of every dollar earned, on top of provincial and municipal taxation and have reached a point where most Canadians can no longer stand them. My main criticism of the budget must be that the federal government has not persevered in its efforts to curtail federal expenditures.


Mr. Cresiohl:: Would the hon. member permit a question?


Wilbert Ross Thatcher: Certainly.


Leon David Crestohl: How does the hon. member reconcile his plea for economy with the proposals of some of the leaders of his own party that the people of Canada should help finance a Pacific pact, should send to Great Britain gifts approximating $200 million and should construct a peace park, something that the hon. member himself has suggested?


Wilbert Ross Thatcher: I simply told the house tonight that I accepted the challenge which the Minister of Finance has made on many occasions that we should be specific and try to suggest tangible savings that could be made. I ask no hon. member to agree with me. If hon. members wish to be facetious that is their privilege.


John Sylvester Aloysius Sinnott: Mr. Speaker, at the outset I must congratulate the hon. member for Moose Jaw (Mr. Thatcher) on his courage in attempting to cut certain expenditures that some of his colleagues are advocating. At long last the top has come off the kettle-


Wilbert Ross Thatcher: Which the government has put into effect.


John Sylvester Aloysius Sinnott: -and we really understand the position of the hon. member for Moose Jaw. He is going to curtail the civil service. He is going to curtail the building of public wharves, public buildings and public houses.


Wilbert Ross Thatcher: Temporarily, and I did not say "houses".


John Sylvester Aloysius Sinnott: Houses lor the soldiers. If we are going to follow his program I am afraid it will not be in keeping at all with the program of his party for full employment.


Wilbert Ross Thatcher: Why not?


John Sylvester Aloysius Sinnott: If you are going to lay off all these men naturally you are going to have unemployment.


Wilbert Ross Thatcher: What men did I suggest should be laid off other than non-essential workers?


John Sylvester Aloysius Sinnott: You are not going to build public wharves or public buildings and you are going to curtail the civil service. That takes in pretty nearly everybody.
In my opening remarks, Mr. Speaker, I intend to deal largely with finance, and I want to refer to an article appearing in a pamphlet of the Canadian Construction Association. I think what the president of the Canadian Construction Association has to say is of importance to this country at the present time, and I will deal with it more fully later. At page 14 there is a chapter headed, "Economic development best antidepression insurance". The article reads:
Any lack of confidence in the future appears to result from a fear of a recurrence of the thirties. Examples of this are the restrictive practices, featherbedding, wildcat strikes and security aims encountered in some trade union activities. Let us look forward, not back. Canada is like an ambitious youth with unlimited horizons in front of him. And just as a young man should concentrate primarily on grasping opportunities rather than seeking security, the people of a young nation like Canada should do likewise. People are too depression conscious and I repeat that I personally feel that we need have no fear of a depression if our expansion program is carried out in forthright cooperative fashion. Canada possesses sufficient natural wealth to support a far larger population and to provide employment to all who are able to work. Emphasis on the word "work," however-


An hon. Member:: And wages.


John Sylvester Aloysius Sinnott: It continues:
-is important. Labour has throughout the years benefited from capital investment which has led to increased production. Employees can best improve their status through helping in every possible way the economic development of their country. This does not include decreased productivity, unnecessary work stoppages and the raising of costs to levels that discourage investors or purchasers. There have been gratifying indications of late of a greater understanding-


An hon. Member:: What book are you reading from?


John Sylvester Aloysius Sinnott: It continues:
-of the relation between wages and prices, between subsidized social services and taxes, and between production and living standards. But there are still a number of irresponsible labour leaders throughout our various industries who evidently choose to disregard these relationships and appear
The Budget-Mr. Sinnott to be more interested in their own personal score than in playing the game for the benefit of the whole team.


Lewis Elston Cardiff: Are you reading your speech?


John Sylvester Aloysius Sinnott: He goes on to say:
Galloping inflation would have communist approval.


Some hon. Members:: Hear, hear.


John Sylvester Aloysius Sinnott: Our Tory friends on the other side are always fighting the communists, and I think they would do well to listen to what this man has to say. I continue:
It has been stated that virulent inflation and communism constitute the two chief dangers to our way of life at the present time. Union demands for higher wages not accompanied by increased production and lower unit costs are highly inflationary and can but lead to the well-known spiral of wages and prices.


An hon. Member:: Who wrote that?


John Sylvester Aloysius Sinnott: I continue:
This has led to the confusing situation where there is an uncomfortable amount of truth reflected in a recent cartoon in which a labour representative during wage negotiations says "We also think there should be an escalator clause to meet any cost of living increase that may result from the granting of our wage demands."


An hon. Member:: What are you reading?


John Sylvester Aloysius Sinnott: I continue.
It is well to remember that communist leaders on many occasions have advocated industrial unrest so that eventually prices will be so inflated that the economic systems of the western world will break down, leaving the door-


An hon. Member:: Wide open.


John Sylvester Aloysius Sinnott: I continue:
-open for widespread communism and, incidentally, the suppression of free unions.
I would remind my hecklers across the way that this is a statement by the president of the Canadian Construction Association.


Clayton Wesley Hodgson: What is his name?


John Sylvester Aloysius Sinnott: Mr. Robert Drummond.


An hon. Member:: You have read all that.


John Sylvester Aloysius Sinnott: Well, at least I can read; you can't. I have read this statement because it has something to do with the hon. member for Winnipeg North Centre (Mr. Knowles). We in this house know the hon. member is always advocating shorter hours and higher pay. He also advocates more social services, and he does not agree with our friend from Moose Jaw (Mr. Thatcher). A year or so ago I named the hon. member public enemy No. 1. I did that in a kindly way, because he seems to have in mind only one cry, shorter hours and higher wages. The other day he told us his constituency was one mile wide and three miles long. My constituency is 110 miles wide and 320 miles long; and in
1576	HOUSE OF
The Budget-Mr. Sinnott order that the people he represents may work forty hours a week or less he is asking my constituents to work sixteen or twenty hours a day. I have asked the hon. member for Winnipeg North Centre before, and I am going to ask him again, to come to my constituency any time he chooses this summer and work with me for one full day. Then he will know what a day's work is like. This country simply cannot produce more and more, and provide more social services, with shorter hours and higher wages. Nevertheless the hon. member keeps harping on that subject because he knows it will get him votes, and that is what he is working for.


Stanley Howard Knowles: It makes your hair stand on end, doesn't it?


John Sylvester Aloysius Sinnott: Well, if the hon. member gets any comfort from that he is welcome to it. Yesterday he accused the parliamentary assistant to the Minister of Finance (Mr. Sinclair) and the minister of trying to trick the people in connection with his resolution regarding the four per cent floor under medical expenses. I was in the house at the time that resolution was adopted, and just when the discussion finished the hon. member hollered "unanimously". Well, there is no question about it; the house adopted the resolution unanimously. But the resolution only requested the government to consider the suggestion. The house did not unanimously adopt the resolution in the form the hon. member tried to twist it in order to bring the minister and the government to their knees. The government will consider it, and if in course of time they think it feasible, it will be brought in. But let us make no mistake about it; we voted that the government should consider the matter and nothing more.
Yesterday the hon. member for Eglinton (Mr. Fleming) had a good deal to say. At times he worked himself almost into a fury, attacking the government, attacking the Minister of Finance (Mr. Abbott), attacking the parliamentary assistant, and in general attacking the budget. He went on to say that the per capita taxation this year amounted to $300. The hon. member for Moose Jaw upped that tonight and made it $320. Then the hon. member for Eglinton said that the average family of five paid $1,750. If you multiply 300 by 5 it makes 1,500, not 1,750, so the hon. member was wrong there. Now let us see the per capita position as far as income is concerned. In 1951 the national income was $17 billion, 230 million; the population was 14 million, and the per capita income was $1,231, or $6,155 for a family of five. Let us . turn to 'he Tory regime and listen to them howl.


In 1935 the national income was $3 billion, 188 million; the population was 10,800,000 and the per capita income was $295 or $1,475 for a family of five. However, most people look at what they have left for themselves after paying taxes. The average income per family of five in 1951 was $6,155; taxes were $1,500, leaving that family $4,655. Under the Tory regime in 1935 a family of five with an income of $1,475 and taxes of $155 had only $1,320 for themselves. In 1951, after sixteen years of Liberal government the family of five-the Eglinton family, as I call it-have for themselves an income of $4,655, so in spite of what the hon. member says they are better off now than ever before. I would not call this a Hallowe'en budget, as the hon. member called it. Nor would I call it a budget with a false face. I would call it a sunshine budget. I would say the people of Canada have seen the light, that they have seen what a good government can do in reducing the national debt so there will be more sunshine for future Canadians.
Now we will leave the hon. member for Eglinton and talk about the financial critic of the opposition. I sent a note over to the hon. member for Lake Centre (Mr. Diefen-baker) a while ago saying I was going to mention those two members. I am sorry they are not here tonight, but that is their responsibility. At page 1473 of Hansard the financial critic quoted Mr. Muir, president of the Royal Bank, as questioning whether the government was justified in raising such huge revenues. As you know, bankers make it their business to lend money. When they see prosperity in Canada getting to the point where people do not have to borrow so much, or can borrow from the government, so the banks make less and less money, naturally any banker in the country will not think that is good business. I would suggest that at this time there be less borrowing by governments, and that we carry our public works program and our social service program through the Bank of Canada, instead of borrowing from the private banks.
Then at page 1478 the financial critic accused the government of debasing or debauching the currency of Canada. Unlike Nelson, who had at least one good eye, the hon. member for Greenwood (Mr. Macdon-nell) held his hands over both eyes so he could not see what was going on. I realize the difficulty of the financial critic of the Tory party. He had a terribly hard time finding any justification for criticizing the budget, but he did the best he could under the circumstances.


An hon. Member:: Did he write that speech you are reading?.


John Sylvester Aloysius Sinnott: I have notes in my hand just to refresh my memory. If you would like to come over here and hand them to me it will be all right. On the whole, Mr. Speaker, I think Canadians will regard this government as one that has steadily decreased our national debt.


An hon. Member:: Decreased?


John Sylvester Aloysius Sinnott: Don't mistake me; I said it had decreased Canada's national debt.


An hon. Member:: Since when?


John Sylvester Aloysius Sinnott: In the year 1946 when our present Minister of Finance took over, you will recall what I said to him. I told the minister at that time that he should roll up his sleeves and get down to work to see what made the clock tick rather than listen to his financial advisers. Well, Mr. Abbott did that, and I shall show you the record. In 1947, he reduced Canada's national debt by $373,648,000. In 1948 he reduced Canada's debt by $676,119,000. Would the financial critic of the Conservative party say that was wrong? No. In 1949, he reduced it by $595,502,000. Would he say that was wrong? In 1950, he reduced it again by $131,525,000. Would he say that was wrong? Then again in 1951, he reduced it by $211,294,000. If the country had been going behind as it was under the Tory regime from 1930 to 1935, we would have been paying an extra $62 million per year in interest.
I realize that the position of the opposition is a difficult one. They hate to sit back and see the progress and expansion the country is experiencing with the Liberals in the driver's seat. No country in the world has such a record and such a continuous excellent-


Some hon. Members:: Oh, oh.


An hon. Member:: Try it again.


Clayton Wesley Hodgson: Take a third go at it.


John Sylvester Aloysius Sinnott: People all over the world envy Canadians. Today 31 out of every hundred people in Britain are striving to get to Canada, but they cannot do it for financial reasons.


Clayton Wesley Hodgson: You have not got the proper immigration system set up.


John Sylvester Aloysius Sinnott: Compare our country with the United States. Here is a country with 14 million people, while to the south of us there is a country of 156 million people. But when you compare our currency with that of the United States and Britain you find that in 1945 the United States dollar was worth $1.10 in Canada. Today the same United States dollar is worth only 98 cents in Canada. In 1945 the United Kingdom pound was worth $4.02J; today it is only worth $2.75. These
The Budget-Mr. Hees are not the values under any artificial standard but out on the free market, not debased, not debauched, and they prove that Canada's is the strongest currency in the world.
I have been amazed, Mr. Speaker, to see press headlines such as "Budget under heavy fire". You will see other headlines in large black type, so that you would think that Canada's future was so dismal Canadians could not exist. What I am going to say now may not be welcomed in some parts of this house, but nevertheless it is true and I think Canadians would like to be told the truth for once. Press correspondents across this country have a duty to inform the people of Canada of the progressive, debt-reducing policy of this government which has relieved from the shoulders of the Canadian people a debt of almost $3 billion in the last five years. This is a record unsurpassed by any government in the world today.


Clayton Wesley Hodgson: Whose writing are you
reading?


John Sylvester Aloysius Sinnott: I am not reading, Mr. Speaker. In conclusion, I would say that I should like to get out on the hustings today and tell Canadians the truth; tell them the way that Canada's national debt has been reduced; tell them how Canada has expanded; tell them of the progress that is being made and how the people in foreign countries are just clamouring to get to this country. They envy the government of this country, and if the truth is told from coast'to coast, when the Liberals go to the country and put this program in its true light they do not need to worry about coming back.


Mr. George H. Hees (Broadview):: In this budget presented to parliament on April 8, the Minister of Finance (Mr. Abbott) estimated that he would have a surplus of $9 million at the end of the present fiscal year. To anyone who has studied this budget; who has studied conditions in the country today; and who is familiar with this government's method of producing tax reductions in an election year, there is not the slightest doubt that we will end up this year with a surplus at least as great as the one we had at the end of the year just past.
My reasons for saying that are twofold.
First of all, the basic tax rates this year are substantially the same as they were a year ago. Income tax rates are up, and some commodity taxes are down.
Secondly, our gross national production, our gross national income, and our consumer spending, upon which all taxes are levied, are expected to be substantially greater this year than they were last year. I therefore

The Budget-Mr. Hees feel that we may expect tax revenues this year to be considerably above 1951; enough to more than take care of our increased defence expenditure.
In addition to that, Mr. Speaker, when the minister presented his budget on April 8 he said, as recorded on page 1250 of Hansard:
In line with past experience, I expect there will be a shortfall of expenditures below the amount provided by parliament in the appropriation votes.
Therefore, I believe that we can expect approximately the same budget surplus at the end of this year as we had at the end of the year just past. I believe that this fact makes it necessary for us to ask ourselves several questions.
First of all, why does this government find it necessary to overtax the people this year so that it can have a surplus at the end of the fiscal year?
The second question is, is it because next year, 1953, will be an election year, and the government will then be able to make substantial tax reductions, and so attempt to win votes for the Liberal party? What the government is actually doing is taking money out of the people's pockets this year so that they can pay it back to them next year.
In short, under the present government, we have in this country a budgetary system which estimates a surplus of $9 million, but which, in its very structure, provides for revenues in excess of expenditures, which admittedly will fall far short of the requested appropriation votes.
I believe that no reasonably minded Canadian objects to paying taxes necessary to pay for the cost of defence, both at home and in co-operation with our allies abroad. Nor do I believe that reasonably minded Canadians object to bearing the cost of necessary social security measures. However, to implement in this country a budgetary system which overestimates expenditures, and underestimates revenues, resulting in unjust and unwarranted taxation, would constitute in my mind a political fraud which should not be condoned in any democratic country.
In the pre-election budget of 1949, the government announced sweeping tax reductions amounting to $369 million in that year. While the obvious reason for this change of heart by the government in its 1949 budget was the impending general election, the reasons given parliament were as follows: First, that the increasing flow of goods available for sale to consumers, without higher prices, made these reductions economically feasible;
Second, the expected surplus of revenue over expenditure;
[Mr. Hees.J

Third, the reduction of $1,600 million made in the public debt since the war;
And fourth, the government felt that most Canadians would support, and even welcome, enlarged measures of tax reduction.
If these reasons for sweeping tax reductions in the pre-election budget of 1949 were valid, then surely they warrant consideration now, when:
First of all, consumer goods are not only available but are stockpiled in clogged inventories;
Second, when revenues will most surely exceed expenditures for the reasons I have given;
Third, when the amount paid off the national debt stands at $2,344 million as against $1,600 million in 1949;
And fourth, because there can be no doubt that the Canadian people would welcome relief from the present excessive and unwarranted high levels of taxation.
I believe that in the light of present conditions, and the relationship which these conditions bear to the government's action in its pre-election budget of 1949, a cyclical budgetary system, governed by elections and political expediency, is unwarranted, is fraudulent, is an affront to parliament, and should be discarded immediately.
Several weeks before this budget was presented to parliament, the house voted unanimously to do away with the four per cent limit on medical expenses as a deductible expense for income tax puposes. There was not one single dissenting voice in this house. However, despite this unanimous voice of parliament, the minister, in his budget address, said that he did not believe that the four per cent limit should be done away with, and so he completely nullified the unanimous voice of parliament.


James Sinclair: Nonsense; you know it is nonsense too.


George Harris Hees: The cabinet is supposed to be the executive of parliament and subject to the wishes of the majority of parliament. But by his action, the Minister of Finance has shown, once again, the contempt in which this cabinet holds parliament, from which it derives its authority.
In conclusion, Mr. Speaker, I say that the minister has presented a budget which insults the intelligence of the average Canadian; a budget which once again overtaxes the people of Canada, so that the government may reduce taxes next year for the purpose of trying to win another election; and is yet another example of the contempt in which

this cabinet holds parliament. I believe it is a budget designed to serve political expediency, and brings government in this country to a new all-time low.


Mr. J. W. Noseworlhy (York South):: Mr. Speaker, I probably should say at the outset that my speech tonight will not create as much interest among the Liberals particularly as did the speech of my colleague from Moose Jaw (Mr. Thatcher) a few moments ago. I think I should also say that in many respects the hon. member for Moose J aw was speaking his own opinion, which I think he made clear, and was not expressing the wish or the policy of this group. I do not want to imply-


Stuart Sinclair Garson: Will the hon. member permit a question? Is he expressing the views of his group?


Joseph William Noseworthy: I shall try. This much at least can be said. In this group there is some latitude for the expression of a personal opinion. We are not all forced to say the same thing at all times.


Hugues Lapointe: You have no choice in the matter.
Mr. Nose worthy: I do not want to give the impression that this group does not agree with the hon. member for Moose Jaw to the extent that there is need for careful scrutinizing of government expenditures and the expenditure of many departments of the government. I think the hon. member for Moose Jaw was correct when he said that no private business that approximated to any extent the size of the business that is carried' on by the government today would be carried on by the methods followed by the government.
His suggestion that there should be a central purchasing agency, and that there should be a committee of this house set up for the express purpose of scrutinizing government expenditures, as is done in the United States and elsewhere, are suggestions that most members in this house will agree with. At a time when federal, provincial and municipal taxes are taking 33 per cent of our national income, I suggest it does behoove us to scrutinize carefully where there is waste, or where the public is not getting value for the dollars that are collected and- spent.
Why I rose was to support the subamendment which was moved by the hon. member for Rosetown-Biggar (Mr. Coldwell) on April 22, and1 which is found on page 1489 of Hansard as follows:
This house further regrets that the government has ignored the wish of this house, as expressed by a unanimous vote on March 26, that the four per cent floor under medical expenses deductible for income tax purposes should be abolished.
55704-100i
The Budget-Mr. Noseworthy
I rise to support that subamendment with a full knowledge of the utter futility of opposition criticism in this house. My experience in this house has been that, constituted as the house is, opposition criticism is absolutely futile. The government just does not condescend to accept, or pay the slightest attention to any criticism that may come from this side of the house, no matter how well founded that criticism may be. I shall give examples of that at a later time.
I think the wish of the house in the unanimous acceptance it gave to the resolution moved by the hon. member for Winnipeg North Centre (Mr. Knowles) on March 26, and to which reference is made in the subamendment, was made quite clear. I do not think there is any doubt on the part of any member that Liberals and opposition members alike wanted not merely consideration of that question, but to have the four per cent floor removed. I do not think there is any doubt about it. I do not think Liberal members who gave their consent to that resolution wanted a mere consideration, without themselves feeling strongly one way or another as to whether the government should accept the resolution, after giving it consideration.
The country feels today that that four per cent floor should be removed. And when the house voted on the resolution, which was worded in the only way in which it could possibly be presented to the house, it expressed its desire to the minister, and indicated that it wanted the four per cent floor removed.
But after giving consideration, the minister chose to ignore the wishes of parliament. That is the point at issue here. The house has no authority to go farther than to recommend for the consideration of the minister any matter affecting the spending of public money. The house gave the minister its opinion in the only way that opinion could be given, and that applied not only to opposition members but also to Liberals.
I am confident that hon. members sitting on the government benches were just as serious in their desire to have the four per cent floor removed as were our members in the opposition. But what happened? We got not the slightest attention to our request; and this would seem to indicate that in this country we have reached a situation where we no longer have government by parliament, but rather government by a cabinet, or by individual members of that cabinet.
After all, I presume members are elected for some purpose. We are sent here to express as well as we can to the government our wishes in respect of legislation coming before the house. We are here to interpret to
1580	HOUSE OF
The Budget-Mr. Noseworthy the government, so far as we can, the wishes of the people we represent. But in this parliament we have reached the stage where such representations are simply ignored.
No matter how we try, even when Liberal members join with the opposition in trying to impress upon a cabinet minister what they believe the country wants, that cabinet minister can afford to ignore those wishes. I suppose it is too much to expect a Liberal member to oppose a cabinet minister's policy on the floor of the house. There was a time when that was done. I sat in an earlier parliament in which there were any number of Liberal members who were quite ready to stand in their places in the house and criticize policies set forth by the cabinet. But we do not get much of that today. Surely it must be possible for those Liberal members who do not feel free to express opposition to cabinet policy when it is set forth in the house to express such opposition in their own caucuses. I just cannot understand a situation in which every Liberal member in the house on the occasion of the passage of a resolution gives his support to that resolution, and yet will sit in caucus with a minister and permit him to ignore completely the wishes set forth by Liberal and opposition members alike. I should think that, regardless of what Liberal members may do in the house, surely they must be able to influence government policy in their own caucuses.
I certainly hope that, while the minister has indicated in his budget that the four per cent floor is to remain, those Liberal members who supported the resolution in the house will make it quite clear to the minister that they want to have adopted the opinion expressed in the vote on the resolution.
The minister set forth certain objections to eliminating the four per cent floor. He pointed out that originally the legislation was intended to give relief only in exceptional or extraordinary cases of illness. Whatever may have been the original intention of the legislation, the intention of members in the house was quite implicit in the resolution that, regardless of the original intention, we now wanted to have the four per cent floor removed. And, after all, who is to determine what would be considered extraordinary expenses in a case of this kind?
Surely there are tens of thousands of people to whom a hospital bill of $100 is just as great a hardship as a bill of $1,000 or $2,000 to some other citizens. I do not ithink the minister or anyone else can say that a hospital bill of $100 is just an ordinary affair, and that that is not the kind of burden to which the legislation was intended to apply. The fact remains
IMr. Noseworthy.]

that this house and the taxpayers of this country, the people who are directly affected by this, expected that when the resolution passed this house it would be implemented in the budget.
The minister's assistant raises the objection that there would be administrative difficulty in checking hospital and medical bills, but I would draw his attention to what is done in the case of donations for charitable purposes. There must be tens of thousands of citizens whose charitable donations are comparatively small, who give $1, $2, or $5 to the Red Cross during its annual drive and who deduct that amount from their taxable income. If it can be done in the one instance, I fail to see why it cannot be done in the other.
There is another instance in which the minister's action is in direct opposition to the wishes of parliament as expressed in the resolution to which I have referred. The minister retained the four per cent floor but he raised the ceiling. My contention is that that raising of the ceiling will not benefit the class of people about whom we were concerned when we asked for consideration of the abolition of the four per cent floor. The raising of the ceiling to $2,000 will benefit the wealthier citizens who can afford to go to the more expensive hospitals and hire the more expensive specialists, but a $2,000 hospital or sickness bill is something that the ordinary workingman just could not contemplate because it would ruin him. The working people of this country are not the ones who are going to benefit by the raising of that ceiling, but it was those people with whom the house was concerned when we asked for consideration of the removal of the floor of four per cent.
I want to turn for a moment to the question of the personal income tax and the budget and discuss the minister's alleged reduction of six per cent in the personal income tax. In my opinion the minister sought to take credit for an actual reduction in income tax. It is true that his statement on page 1254 of Hansard is quite explicit, and in order to be fair to the minister I shall read it. He said:
In other words, the average taxpayer will pay six per cent less than he would otherwise have done under the income tax law as it now stands.
The interpretation which the country took from that statement was that there would be an actual lowering of the income tax this year. I think the minister contributed to that impression when he said, as reported on page 1255:
I think I should make clear that the reductions in income tax which I have announced will not be sufficient, for most taxpayers, to offset the effect of the old age security tax.

In other words he sought to show the Canadian taxpayer that if by chance he found his 1952 taxes actually higher than his 1951 taxes, the fault lay with the social security tax. The minister succeeded to some extent in spreading that impression throughout the country. For instance, the U. S. News and World Report of April 18, page 82, had this to say:
Canada's personal income tax is being reduced by 6 per cent. For low-income taxpayers, most of the benefit of that cut will be wiped out by a new social security tax that takes effect July 1.
Our own wide-awake Canadian journalists were not slow in seeing through the so-called tax reduction. In the issue of April 26 the editor of Saturday Night stated the case quite clearly when he said:
No one can say that this year's budget was straightforward. The general public must have realized by now that what Mr. Abbott called reductions in income tax are increases over what we paid last year even before you add the social security tax.
That is the actual situation. One would naturally expect that when the minister announced that there was going to be a six per cent reduction in personal income tax this year the man with $2,000 taxable income would pay less in 1952 than he paid in 1951. That is the meaning which ordinary people took out of the statement that taxes were to be reduced six per cent. The actual fact is that even before the two per cent-this year one per cent-social security tax is added the taxpayer actually will pay more in 1952 on the same taxable income than he paid in 1951. A single person whose income was $1,800 in 1951 paid $132 taxes; in 1952, before adding the social security tax, he will pay $140, an increase of $8. A single person with an income of $2,000 paid $165 in 1951. In 1952, before the social security tax is added, he will pay $175, an increase of $10. A man with an income of $5,000 paid $770 in 1951. The same man with the same income will pay $820 in 1952 before the social security tax is added, an increase in 1952 over 1951 of $50. It is not surprising that one of our humorous writers

I think it was Bruce West in the Toronto Globe and Mail-wrote an article on the minister's tax reduction and suggested that since the minister by reducing taxes this year is making us pay more taxes then possibly next year he should increase taxes so that we may be paying less. It is quite possible that the skilled magician who is the Minister of Finance (Mr. Abbott) could by a sleight-of-hand trick convince us next year that by increasing taxes he is actually going to reduce them just as this year while supposedly reducing taxes he actually increased them.
The Budget-Mr. Noseworthy
I want to deal for a moment with the sales tax. In his budget speech the minister said that in his opinion the sales tax is a fair levy. We believe, and have so stated in the house on many occasions, that even with the exemptions from the sales tax it still bears most heavily on those who are least able to pay. The sales tax ignores one of the basic principles of good taxation. It ignores entirely the principle of taxation according to the ability of the person taxed to pay that tax. I should like to remind the house and the minister that all-told the sales and excise taxes now produce about 30 per cent of Canada's federal income. In the United States, where they have sales taxes and to some extent excise taxes, they raise only
11	per cent of their federal budget by these two means. We have maintained and still maintain that the sales tax is not a good tax, that it is a hidden tax, and that the people in the lower income groups, the people with large families to raise, suffer most from that tax.
On the question of corporation taxes the minister expressed regret that they could not be substantially reduced this year but he held out some hope to the corporations that that result might be achieved in future years. The opinion expressed by the minister was shared by the hon. member for Greenwood (Mr. Macdonnell), the financial critic of the official opposition. Unfortunately, and here I think I can speak for this group, we do not share that concern. I do not feel that the corporations have suffered to any great extent by being overburdened with taxation during the past year. In his budget speech the minister indicated that his own estimate of corporation profits made a year ago was
12	per cent too low, that corporation profits for the year 1950 were 12 per cent higher than the minister estimated in April of 1951.
The minister also indicated that much of his surplus resulted from the fact that he underestimated corporation profits. That would suggest to me at least that these corporations have not suffered by being overtaxed. I notice that the minister estimates an increase of $13 million in corporation taxes for the coming year. If his estimate is as conservative as it was last year, then it is quite evident that the minister expects corporation profits to continue to increase this year as they have been doing every year since the war. Here again I should like to make a comparison between Canada and the United States by reference to the publication to which I have already referred. At page 84 there is the following:
Corporations, like individuals, are to get a slight reduction in tax rates under the new Canadian budget.

The Budget-Mr. Noseworthy
Here I might interject that I sincerely hope the proposed reduction in corporation taxes will not work out the same as the reduction in personal income tax. The writer goes on to say:
The result will be that, so far as the central government in Canada is concerned, the top effective tax rate on corporations will be 45 per cent. In addition, there are provincial taxes of 5 to 7 per cent. Canada has no excess profits tax, and the new budget proposes none. In the United States corporations pay a regular federal tax of 52 per cent, plus an excess profits tax of 30 per cent. The average federal tax is about 60 per cent. On top of that, 32 states impose relatively small taxes. So the Canadian corporation, by comparison, comes off fairly easily.
The concern expressed by the minister for corporations is not too well founded, and certainly is not shared by this group.
Turning now to the excise tax reductions, I want to say that we welcome such reductions as the minister saw fit to make, particularly in the taxes that were imposed a year ago. Certainly there was a crying need for those reductions. If the reductions did nothing else they showed that the minister is now willing to acknowledge that he made a mistake a year ago in imposing those taxes. Speaker after speaker from all opposition groups tried to point out to the minister when these taxes were being imposed that he was going to injure our economy. Speaker after speaker tried to persuade the minister not to impose those taxes. The budget speech bears witness to the fact that the opposition members were right and the minister was wrong. During the past year those taxes caused pockets of unemployment and brought unnecessary hardship to thousands of Canadian citizens. The minister gives those taxes some credit for halting inflation. Our position, and I think that of all three opposition groups in the house last year, was that these were not the best measures to curb inflation, that other things could be done which would be much less harmful to the Canadian public.
I wanted to say a word or two on the surplus, about which we have heard so much. I suppose the great conundrum arising out of the budget is when a surplus is not a surplus. The big question is just what was the surplus last year. Was it $1,009 million? Was it $722 million? Or was it a mere $356 million? In the government's monthly report at the end of December an interim surplus of $722 million was shown. Then in the budget the minister tells us that he made certain non-budgetary cash outlays from the surplus which totalled $653 million, and that after making those outlays he still bad a surplus of $356 million. Well, $356 million plus $653 million paid out in non-budgetary cash outlays totals $1,009 million. So the country is left with the big question: just how large was


the actual surplus? Apparently the minister had to do as much juggling with his surplus as he did with the personal income tax.
In conclusion, Mr. Speaker, I think we can agree with hon. members who have already indicated that this budget favours the rich to the disadvantage of the poor. While the hon. member for Greenwood did not express that opinion in those words, he came very close to it; and when the official critic of the Progressive Conservative party feels that a budget is benefiting the well to do at the expense of those in the lower income brackets, I am convinced there must be something in his statement. As a matter of fact the effect of the income tax was very well shown by the hon. member when he pointed out the disparity in the increase this year between those in the lower income groups and those in the higher income groups. That can be found at page 1478 of Hansard. In the distribution of the social security tax, as was pointed out by the hon. member for Rosetown-Biggar (Mr. Coldwell) at page 1485 of Hansard, we have another example. The sales tax, which bears most heavily upon those in the lower income groups, is to contribute $135 million toward the cost of social security; personal income tax is to contribute $52 million; and the corporation tax $48 million. The fact that some slight relief was given corporations while there was no reduction whatever in the sales tax is one more indication that this government has been getting closer and closer to St. James street and farther and farther away from the common people of this country. The high percentage of the federal revenue raised by sales and personal income taxes indicates that disregard for the interests of the common people and illustrates the lack of sympathy on the part of this government for those in the ordinary walks of life.


Mr. Robert Fair (Battle River):: Mr. Speaker, having listened to experts in different lines of business make their contributions to this debate, I almost hesitate to take part in it. Just an hour or so ago we heard quite an address on high finance. I am afraid many of us were not able to take in everything the speaker said, and will have to be enlightened further as the days go by.
This evening I do not intend to give the budget any new name. It has been called so many uncomplimentary things that I do not think it needs another name. It has been very well described by the speakers who have preceded me. Many people were keeping their fingers crossed until April 8 when the Minister of Finance (Mr. Abbott) delivered his budget. Many people hesitated to buy things such as automobiles and other necessary equipment, feeling that some reduction

in taxes would be made. In- particular, many people all across the country were hoping against hope for a reduction in the income tax levies. Taxation, of course, is just one of the headaches that the people have been suffering from for eleven or twelve years.
We have been paying exceedingly heavy income taxes. When the war ceased people thought that they would be granted some relief from the high levies of 1945, but we found we had to prepare for another defensive war. Some people call it policing, but after all it is actual war. The people did- not even have a short breathing spell until heavier taxes were again levied. As a result of the preparations for this defensive war which have been going on for some time we have drifted into a false state of prosperity about which the supporters of the present government are boasting, perhaps for political reasons and because of the expected election in 1953. But when people have to point to war, whether all-out or defensive, as a means of bringing about prosperity, then I think they should get off their high-horse and get back to sound thinking about peacetime prosperity an-d peacetime living. They should not be boosting the policies of their government.
As a result of this false prosperity we have a shortage of building material. Many of our men and women across the country, and the city of Ottawa is no exception, -are suffering from a shortage of houses. They are suffering from a shortage of -cash and credit by means of which they could provide themselves with these houses. We find that within the last day or -two even in this -city some of the -officials have been asking the service clubs to take the lead in providing houses. I believe that conditions are becoming very poor when such events occur. On the 6th of this month I listened -to a sermon by the minister of St. John's church in which he described very well what is happening today. Had he gone all the way and said what he should have said on that occasion perhaps he would have offended some of his parishioners who are supporters of this government, but he did say that because of the shortage of houses families of five or six people were compelled to live in one room. In many cases six, seven or eight families are compelled to use one bathroom. In my opinion such conditions should not exist. Had the government looked after its business as well as it has looked after some other things, such conditions would not occur.
Even after all these events, on the 17th of last month we found that we still had 337,000 unemployed. This is something of which the country should not be very proud. As I stated a moment ago, there are people who still want homes and many other things,
The Budget-Mr. Fair
yet we have this number of unemployed and some unused materials. In addition to these hardships, in the budget brought down by the minister on April 8, we have some added crippling taxation. The minister thought he would give us some good news and led the people to believe that there would be a decrease of six per cent in personal income taxes. Of course, that is not true. Without going to the trouble of preparing a set of figures of my own, I shall read once again the figures put on the record by the hon. member for Peace River (Mr. Low) on Tuesday last. I -think it is a good thing for the members to realize what is happening. These figures can be found on page 1490 of Hansard for April 22, 1952. The hon. member said:
Let us take into consideration married persons without children, those in that category. If the taxable income-that is, after the deduction of their $2,000 exemption-is $250, the 1951 tax is shown as $42; the 1952 tax is $44 plus the old age security levy of $2.50. This is an increase of $4.50 and a percentage increase of 10-7/10 per cent. If the taxable income is $1,000, the 1951 tax was $165; the 1952 tax, $175; the old age security levy, $10. The increase in 1952 over 1951 is $20, and that is a percentage increase of 12-1/10 per cent. If the taxable income is $3,000, then the 1951 tax was $561; the 1952 tax, $596, the old age security levy, $30; the increase in 1952 over 1951 is $65 or 11-6 per cent increase. If the taxable income is $8,000, the tax for 1951 was $1,826; the 1952 tax, $1,946; the old age security levy is $30, which is the ceiling for the old age security levy this year. That is an increase of $150 for 1952 over 1951, which would be a percentage increase of 8-2 per cent. Then if you jump up to the $98,000 taxable income category, $58,370 was the 1951 tax; the 1952 tax will be $61,220; the old age security levy, $30. The total increase for 1952 over 1951 would be $2,820 or a 4-9/10 per cent increase.
I do not need to go further, Mr. Speaker, because the figures I have given will show that instead of a policy of soaking the rich, which is advocated by some people, the policy of the Minister of Finance is to soak the poor, the people who can least afford to pay.
Turning to some of the o-ther taxes, we have the excise tax which was increased last year from 15 to 25 per cent on -certain commodities. In this year's budget it was put back to the original 15 per cent. In my opinion that tax should never have been levied. This opinion was expressed on many occasions during the discussion of the 1951 budget, but the minister would not make the required -changes. Figures which I placed on -the record on March 7 last when I spoke on the address in reply to the speech from the throne show that production of certain commodities has decreased, and the minister collected much less revenue than he would have collected if the tax had not been levied. In addition to that, unemployment increased and as a result of the unemployment many families had to go without things that their

The Budget-Mr. Fair
unemployed breadwinner should have been able to supply. We are wondering whether these tax reductions will be passed on to the consumer. Many people say they are not and from the prices quoted for different commodities I believe they have not been passed on. I wonder what the government is doing in this connection. If the benefits of the tax cut are not being passed on, then I believe that the suggestion made by the hon. member for Charlotte (Mr. Stuart) some weeks ago should be adopted; that is, that the government should cut the tariff on many of the goods that are bearing a high tariff today, and let our manufacturers bring their profits down to some extent as well as passing on the benefits to the consumer.
Some mention was made of the drop in the cost-of-living index. Here again let me point out that according to an article in the Ottawa Journal of April 4 under the heading: "Mostly due to meat price cuts." the decrease in the cost-of-living index was due to decrease in the price of farm products. This is what the editorial said:
Index shows decline for second consecutive month.
The cost-of-living index during February declined by 1-7 points to 189 1 from 190-8, the bureau of statistics reported today.
The second consecutive monthly decline in the prices barometer, based on 1935-39 prices equalling 100, was sparked mostly by a drop in meat prices, the bureau said.
It was the biggest drop since December, 1942, when the index also declined by 1-7 points. The February decline followed a drop of seven-tenths of a point during January.
Meats declined along with eggs, oranges, cabbages, topcoats and men's suits. These overbalanced increases for rent, furniture, dishes, hardware, floor coverings, telephone rates in eastern Canada, domestic coal and health and personal care, along with newspapers and theatre admissions.
I am bringing this in for the purpose of showing that we are getting a cut in the cost of living at the expense of our people on the farms. You will find that practically all of the items that have been reduced are products of the farm; while those that have been increased are products of secondary industry. I feel that government policy at the present time is stacked against the farmer. Farm prices come down, while the cost of the goods the farmer has to buy in order to produce continually climb. We have, for instance, the international wheat agreement. In connection with that, when the first speaker after eight o'clock was on his feet, somebody across the way butted in with the remark of $65 million paid to the wheat growers of the west. I want to tell those who are interested in that question that in addition to the $65 million paid to the farmers they had a net loss of no less than $504 million on the British wheat agreement and on the cheap wheat supplied so that Canadians could eat cheap

bread during the 1946-49 crop years. As a result of the international wheat agreement and cheap bread still being provided to our Canadian consumers, further losses are continuing. One of these days I intend to put these on the record.
While the prices of everything that the farmer has to buy are increasing, we find that provision is made in the international wheat agreement, which will conclude at the end of July, 1953, for the floor price to drop 10 cents per bushel per year, and there is a constant top price of $1.80. At the present time, as all hon. members are aware, or should be aware, the Canadian consumers are eating bread baked from wheat sold to the Canadian millers at the same price as that sold under the international wheat agreement. Why that should be I cannot understand. Government policy, however, is to continue that program, and they have not given any justification for that.
In connection with the new international wheat agreement that is being negotiated in London at the present time, I am not sure whether it will be in the interests of our farmers unless a proposal somewhat similar to that which was put forward by the hon. member for Acadia (Mr. Quelch) when the original international wheat agreement was being discussed is made use of. It will be noted that at that time there was the ceiling price and a decreasing floor price placed on our wheat without for one moment taking into consideration the price of the things that the farmer has to buy in order to produce that wheat. The suggestion was made by the hon. member for Acadia and when the Minister of Trade and Commerce (Mr. Howe) said that it was impossible to find any method by which it could be done, the hon. member for Acadia pointed out to him that the international monetary fund had all of the figures required upon which to base a reasonable agreement.
The policy of supplying cheap wheat to our Canadian people all across the country is one other method of picking the pockets of the Canadian wheat growers, and only the prairie wheat growers, some 232,000 of them, during recent years. Then we have the price of beef. Some people are complaining about that. While the price of good cattle is fixed today at 25 cents at Toronto, that is 3J cents 'below the proposal made by the farm organizations of western Canada. It must be remembered that during recent months many people who are today feeding these cattle paid from 30 cents to 33 cents a pound for them. In addition to the outbreak of foot-and-mouth disease we have this other disaster of a drastic cut in prices, which will

discourage the feeding of these cattle in the future. People perhaps realize that they never miss the water until the well runs dry. You will never realize the injustice you are doing to the producers of livestock until you run short of meat, and then you will suddenly wake up and find out.
The floor price for pork is fixed at $26 at Toronto and Montreal and $24.50 at Winnipeg, but that is nothing to brag about in comparison with the cost of raising hogs at the present time. In my opinion it should have been $28 per hundred, and provision made, which is not made today, for compelling the packers to pay on the basis of the price set by the government.
Then, again, in the case of butter we have a floor price which is guaranteed only to the parties who pack that butter, and the producer is left out in the cold and at the mercy of the purchasers of his commodity. In the case of eggs there is a floor of 38 cents a dozen. Again that is not being paid to the producer, but is a guarantee only to the parties who pack them and have them at the end of the egg season.
For many weeks we have had the cheese producers coming to the government with their plea, with their briefs, to have something done about a floor price for cheese; but up to the present time nothing whatever has been done. Only on Monday we had a question asked of the Minister of Agriculture (Mr. Gardiner) and his reply was that they were watching the situation, or words to that effect. I feel sure that some ways could be devised to provide prices which would benefit the producer rather than the other parties, namely the packers and others in that line of business.
Many of our daily papers are helping to continue to deceive the people of Canada with regard to our agricultural industry. I am glad that we have some weekly newspapers published in farming districts that have a much better grasp of the situation and that are willing to learn things from firsthand experience. Of course those fellows behind the desks in the city editorial rooms would not even think of studying agriculture. That is much too easy at the present time. Perhaps it is like what the banking industry used to be some time ago. Many people felt that if there was a dumb member of the family they had to put him on the farm in order that he could make a living, but today we find in editorial chairs, in the banks, and in other places, many of those dumb members of families. They are placed there so that they can make 55704-101
The Budget-Mr. Fair
a living. That will explain the reasons for some of the stupid editorials we see in our newspapers.
I have here, however, an editorial from the Wainwright Star-Chronicle, which is a weekly newspaper, and a very useful one, printed in my constituency. It has been circulated for a number of years. Some time ago when people were discussing the butter question, and the high prices paid for butter, this editorial appeared:
Some of our daily publications seem to be rather badly troubled about the farmer getting too much money for his butter, and failing to co-operate with his market, the consumer, in providing an adequate supply of this product. Sometimes we think it might be a good idea if those who protest that the farmer or the dairyman is making money too easily were required to do a stint of duty on the farm. While we must admit that the price of livestock has been very satisfactory of late-
And I might add that this was written before the outbreak of the foot-and-mouth disease was made known.
-and dairy products prices have been at a more satisfactory level, we feel that until prices for farm products are such that the farmer can work a forty-hour week and can pay something approaching union scale wages to his help for a union week, we have not been called upon to give the farmer a much greater reward for his effort than is his due.
It appears to us that there are a lot of other trades which have upped their prices quite a lot more than the farmers, and who, if and when they wish, practise "scarcity" marketing.
We're all behind the farmer.
I might say that the purpose of many people being behind the farmer is so that they can boot him good and hard.
He works so hard, he works so long and he gets so little, may be somewhat of an exaggeration, but there is no doubt that when one considers the amount of work he does, the extreme uncertainty of his cash rewards, and the ever growing cost of operation, he is not the most overpaid citizen in Alberta.
Only this morning I noticed in the Ottawa Citizen that authority has been given to the steel producers in the United States to increase their price to the extent of $3 per ton. We import large quantities of steel from that country, and I would expect that in the very near future we will have another increase in the price of farm machinery.
When I spoke in the debate on the address in reply, on March 7, I advocated that something be done about setting up a royal commission to investigate farm machinery prices. Away back in 1937 or 1938 a similar investigation was held in the House of Commons, and the figures brought out at that time showed that almost 70 per cent of the machinery manufactured in Canada went to the farmers of the west. So that when the statement was made some time ago by a member of the house that the west was
1586	HOUSE OF
The Budget-Mr. Fair
opened up for the benefit of central Canada, I suggest it was a correct statement, and that its truth is proved by those figures.
In my opinion farm machinery prices today are much too high, and in a moment or two I hope to place upon the record figures showing those prices. Apparently farm machinery manufacturers feel that the goose is laying the golden egg, and at least some of them are not allowing their agents to cash in on the increased prices. Some time ago a percentage was paid, but I understand that at the moment the agent collects a stipulated amount for each unit sale he makes. Those commissions have not kept pace with recent price increases. Many of them are protesting, and I should not be surprised if in the near future some action were taken by those agents.
In the Alberta wheat pool budget, under the heading, "The Cost of Farming", we find some interesting information. This is the issue of April 11, 1952, only a short time ago. It states:
The cost of goods and services used by farmers in western Canada is considerably more than double that of the prewar years. In January the index figure stood at 223-5. By way of comparison, the cost of living index for all of Canada that month was 191-5. In both cases the base period of 1935-39 equals 100.
The index of commodities and services used by farmers in western Canada, and farm living costs, during the month of January was reported by the dominion bureau of statistics as follows:
Index number
Composite index, excluding living costs 227-3
Equipment and materials	 217-3
Farm machinery	 196-4
Building materials	 332-5
Gasoline, oil and grease	 137-8
Feed	 252-6
Fertilizer	 161-8
Binder twine	 448-3
I might say that one of the dealers told me recently that the price of binder twine would be up another $4 per hundredweight for the 1952 crop year. Then it continues:
Index
number
Seed	 248-7
Hardware	 208-8
Taxes and interest rates	 159-7
Farm wages	 382-4
Let me say that that is one of the items of farm expense that should have been increased, because farm workers were working at wages far below what they should have been receiving, when compared with the wages paid in other industries. Then it continues:
Index number
Farm family living costs	 217-8
Composite index, including living costs 223-5
Those figures should suffice to show that farming costs have increased drastically, 

while the prices of products the farmer sells -have been static or, in many cases, reduced during recent months. I am not going to say more about agriculture at the present time, because I have only a limited time at my disposal.
There is one other matter however about which I should like to speak. I am referring to the physically incapacitated persons in Canada. I felt that at this session we would have an opportunity to discuss this matter, because at the opening of the session I believe the second item on the list of notices of motions was one in the name of the hon. member for Fort William (Mr. Mclvor) in these words:
That, in the opinion of this house, the government should consider the advisability of co-operating with the provincial governments for the purpose of providing pensions, equal to old age pensions, for all those who are incapacitated and unable to earn their living, regardless of age.
I was surprised to note that, for some mysterious reason, the resolution was dropped. Then during the last day or so, we find a resolution worded in exactly the same way appearing almost at the bottom of the list of notices of motion. I would expect -therefore that we would not be able to have an opportunity to discuss the motion or to have a vote upon it at the present session.
On many occasions during the last few years inquiries have been made as to what the government intended to do for those who are incapacitated. Up to the present time we have not had much satisfaction. The hon. member for Fort William did make his speech in the budget debate a couple of days ago, upon which occasion he made reference to physically incapacitated persons, and brought out many good points with which I could heartily agree. The only trouble however is that in spite of all the praise he has given each and every cabinet minister who comes before the house, we have not yet received from the Minister of National Health and Welfare (Mr. Martin) any legislation to provide those pensions so sincerely sought by so many members in the house. I am surprised that these pensions have not been provided for. I understand that last year we had a national production of $21,200 million and we also had a surplus of several hundred million dollars. On April 15 the Minister of National Health and Welfare (Mr. Martin) spoke to -the Western Ontario Liberal Association, and I quote from a report in the Ottawa Citizen of April 16, as follows:
Although taxes are unusually high for a peacetime budget, people of Canada never were better off and prosperity is at its highest peak, Hon. Paul Martin, Minister of Health and Welfare, said Monday.

Speaking before the annual meeting of the Western Ontario Liberal Association, he said the government was faced with the "grave situation of preparing a defence system for Canada and had no alternative but to keep taxes high.
Freedom must be bought and this country is spending two billion dollars this year to see Canadians remain free."
Despite the heavy levy, Mr. Martin said Canadians and the nation never were so prosperous.
If we are so prosperous, why in the world does not the government put into effect a pension policy for those who are unable to help themselves? Is there a deliberate holding up of this legislation until perhaps next year when many of us expect an election and when it can be used as another bribe to get votes so that the government can be returned to power? The minister continued:
Labour income and investment is at a record high and on a per capita basis Canada leads the world in international trade.
Perhaps if the people of Canada had the means with which to purchase their requirements we would not have so much for export. Much of the exports about which the Minister of National Health and Welfare was boasting are being made to our potential enemies in the form of bullets and other things that go with a war, defensive or otherwise. The minister went on:
Canada has been referred to in world circles as being the land of great promise and excellent government.
< Perhaps that should have been changed a little bit so as to read: "Canada has been referred to in world circles as being an excellent country with a government of great promises".
As one example of this, the Minister of Finance promised Canadians a decrease of six per cent in their income tax whereas we find in fact these taxes will be increased from eight to twelve per cent in the low income brackets. That is not good enough. I think the people of Canada are wakening up to what is happening.
The world at large is in need of greater food production and we have the potential means of producing food in great abundance. But when you speak to farmers about this many say, "What is the use? If we produce more crops there are no markets for them and even if we do get a chance to sell our products the government comes along with its income tax legislation and takes our money. So why bother?"
If we had a financial policy that would work in the interests of the common people, that would make it possible for every family to have a decent home and enjoy a decent standard of living, then I think we would have much greater production than we have at the present time. There would be less 55704-101J
The Budget-Mr. J. J. Smith need for worry and war. Social credit can provide that policy if the government will only make use of it.


Mr. J. J. Smith (Moose Mountain):: Mr. Speaker, in rising to take part in this debate I want first to compliment the hon. member for Moose Jaw (Mr. Thatcher) upon the address he made this evening and the courage he displayed. I do not agree with everything he had to say, but I think it was an honest speech. If there were more members in this house with the courage of the hon. member for Moose Jaw I think it would be of benefit to parliament. I have often wondered where we would be heading if a socialist government was elected in Canada, but if we had the hon. member for Moose Jaw as the Minister of Finance possibly they would not put us altogether on the rocks.
I have a few matters to deal with, but first I should like to refer to the budget. Many things have been said about the budget and while I think there is in it really nothing to cheer about, at the same time there is nothing to cry about. I think the people of Canada got pretty well what they expected from the budget. Speaking for the people of my constituency, I think it is just about what they expected. I think Canadians generally realize that you cannot play both ends against the middle. If you are going to have additional services, public works and so on, you must have high taxes. The hon. member for Moose Jaw pointed that out very clearly.
Many illustrations have been given since this debate began of just what this budget means to the Canadian taxpayer. I am going to repeat an illustration which has been used on two occasions by the hon. member for Rosetown-Biggar (Mr. Coldwell) and the hon. member for Coast-Capilano (Mr. Sinclair). The parliamentary assistant to the Minister of Finance is reported on page 1526 of Hansard of April 23 as having said:
I shall use the example the hon. member for Rosetown-Biggar used yesterday, the simple case of the married man with an income of $3,000. He has an exemption of $2,000. His first $1,000 of taxable income in 1950 was taxed at the rate of 15 per cent, and in 1950 he paid $150.
And again:
Therefore while in 1950 he paid $150, he paid $165 in 1951.
That individual had an increase of $15 per year in his income tax. Let us assume that that man is going to buy a small automobile. As a result of the budget, he will save $150 because of the reduced taxes on that automobile. If he were to buy an electric stove he would save $50 on the cheaper type. If he were to pay this additional $15 income

The Budget-Mr. J. J. Smith tax for the next ten years he would save it on the purchase of one automobile.
I want at this time to thank the Minister of Finance (Mr. Abbott) for the decreases in the taxes on automobiles. When I spoke before the Easter recess I suggested that the taxes on automobiles should be eliminated entirely. This is a start, however, and as budgets go on in the future I hope that the taxes on automobiles will be eliminated entirely. I said at that time that I thought the automobile industry of Canada had grown up. I still think so, and if it were given a chance to stand on its own feet I think it could compete with that industry in other countries.
I want to refer to the price of farm machinery. The other day the hon. member for Rosetown-Biggar (Mr. Coldwell) spoke about the prices of machinery in Canada and compared those prices with what the farmer gets for his products. He suggested that a committee or commission should be appointed to investigate the price of machinery. I agree with the hon. member, although I do not agree that we should start in where the Saskatchewan government left off. In Saskatchewan a committee was set up in February by the provincial government to investigate the price of farm machinery. I said publicly at the time in Saskatchewan that it was nothing but a smokescreen, a snowman that would melt in the March sun, and it has already done so. The reason it has done so is that even if there was a combine or cartel existing in the machinery industry there is not a province in the Dominion of Canada that could do anything about it.
The hon. member for Rosetown-Biggar referred to the fact that some of the companies would not give the Saskatchewan committee all the information they wanted. I am sure he was not surprised. Why should they? What could the provincial government do if they did find the price of machinery was too high? If the hon. member for Rosetown-Biggar was sincere-and I am sure he was- I think he could have joined with me when less than six months ago I brought up the same subject in the house. He did not see fit to do so but I will join with him now. However, let us leave the Saskatchewan committee out of it. Personally I think it was only set up for political reasons and, as I stated before, it was only a snowman and has already melted. On October 19, 1951, in speaking in the house I referred to an address made the day before by the hon. member for Coast-Capilano (Mr. Sinclair) and I quoted a part of his speech. I


am going to quote it again. I said, as found at page 228 of Hansard for that date:
Let us see what the hon. member for Coast-Capilano had to say yesterday. As reported at page 162 of Hansard he said:
"I learned a good deal this summer about combines, cartels and monopolies-indeed this has been a very beneficial summer for me-at the United Nations. If there is one country in the world which has tried to wipe out cartels, combines and business monopolies, it has been the United States of America-and this goes away back to Teddy Roosevelt's time. The Americans have found that no matter how they attacked the problem of monopolies, combines and trusts in their own country, international cartels have to be attacked internationally. With that in mind they put forward a resolution before the United Nations to have an international commission which would deal internationally with cartels beyond the reach of any individual government. I, as the Canadian representative, was glad to second that resolution."
At that time I went on to say:
I have read that to the house to show that so far as machinery is concerned, if these things do exist within the machinery industry, there is nothing that this government can do alone, but it certainly can do something in co-operation with the United States.
Therefore I suggest that when the government of Saskatchewan set up their committee last February they must have known perfectly well that if there was anything wrong with the price of machinery there was nothing they could do about it. Nevertheless I will join with any member from any part of the house who urges the government- and I already have once-to investigate the machinery industry in Canada. However, I want to be fair. As farmers we have been complaining about the price of machinery rising since 1946. I have an article in my hand from the Winnipeg Free Press. I have also seen the same statement in Maclean's magazine and I have not heard or seen it refuted. The heading is, "Farm tools up only 66 per cent in ten years". The article reads:
The Increase in retail prices of other commodities since 1941 has far exceeded that of farm machinery, G. A. McMillan of Toronto, Canadian sales manager for Massey-Harris Company Limited, told the Free Press, Friday. In Winnipeg to confer with sales representatives for Manitoba and eastern Saskatchewan, Mr. McMillan said farm machinery prices have risen only 66 per cent in the ten-year period. But the cost of raw materials is up about 98 per cent and hourly wage rates had risen by 158 per cent. Mr. McMillan said the Massey-Harris Company had spent about $34 million-most of it in Canada-enlarging its operation since 1941. A $225,000 depot had been erected in Winnipeg.
I hold no brief for the machine companies but I want to be fair, and if that is the case -and I have not heard anyone refute it-then if they are making excess profits they certainly have not been making as much since 1946 up to the present time as they were prior to that. That is all I am going to say about farm machinery at the moment.

I want to speak for a few moments about the South Saskatchewan dam. At the outset I want to say that as far as I personally and the people of my constituency are concerned we will not benefit any more from the Saskatchewan dam than will the constituencies of Manitoba. I could use the constituency of Souris as an example. I think the hon. member for Souris (Mr. Ross) will agree with me. I think he knows my constituency about as well as I know his, and I think his constituency will not benefit any more than mine. I hope that before too long we can get on with the job. I do not often quote editorials but I have one here to which I should like to refer. It is taken from a farm paper, the Western Producer of April 10, 1952. It deals with the debate that went on in the Saskatchewan legislature this winter with respect to the dam. It reads in part:
When the subject was debated in the Saskatchewan legislative assembly it seemed at times that anybody who dared to cast doubts on its soundness was regarded as no better than a traitor. The main thing appeared to be to get on with the job-start spending the money. Surely those who are convinced of the feasibility and soundness of the scheme should welcome full investigation. This is far too big a thing to monkey around with or with which to play petty politics.
I wholeheartedly agree with that statement. It continues:
Surely no one wants western agriculture to be saddled with a white elephant for which it will take generations to pay. On the other hand, if the practical value of the proposition is determined beyond reasonable doubt, no one need fear that it will be proceeded with against any opposition. It may be doubted whether the performances put on by those legislators in Regina who seemed more interested in playing politics than in building dams will be helpful.
Well, I hope we in this house will not play politics with that dam. Last fall the government decided to appoint a commission to take one more look at the project, but I do not believe it has been able to make a report as yet. I hope that may be done in the very near future. Within the last day or so, however, I have learned from very reliable sources that this commission is holding meetings in western Canada, one in Lethbridge and one in Winnipeg. I should like to know why a commission needs to go to Winnipeg or Lethbridge to decide whether it is feasible to build a dam in Saskatchewan.
I am sure that when the St. Mary's dam was being considered there were no meetings held in Saskatchewan to decide whether or not a dam should be built in Alberta. It may have been necessary for the commission to go to Saskatchewan to decide upon the feasibility of this undertaking. I would not object to that, but I do criticize it for this delay. To me that is a lot of nonsense, and I hope those
The Budget-Mr. J. J. Smith in the government who are looking after this matter will see that they get down to work and give us a report yes or no.
One other matter I want to mention briefly is the damp grain in western Canada. It is not too often that I give bouquets to the government on the floor of this house. I do that in my constituency, and very successfully, I may say. However, I want to tell the Minister of Trade and Commerce (Mr. Howe) that we appreciate the way this grain has been handled, and I think that goes for those hon. members who do not support the government. I understand the grain is being moved with very little danger of spoiling, and we do appreciate that very much.


James MacKerras Macdonnell: The sun
helped too, did it not?


John James Smith: The sun did
not help very much. In conclusion I want to refer again to redistribution, and what is going to happen in western Canada. When the Prime Minister (Mr. St. Laurent) presented his bill I asked, for the information of those who were opposed to it, what could be done so that Saskatchewan would not lose five seats, 25 per cent of its representation. The Prime Minister looked at me with a smile and said it would be necessary to amend the constitution; that that was a big order, but it would be given consideration. Well, it has been given consideration, and it seems that we will lose three seats instead of five.
I want to tell the Prime Minister and members of the government that we greatly appreciate this consideration. The job may have been big but it looks as though it will be done. I think all hon. members from Saskatchewan, including the hon. member for Lake Centre (Mr. Diefenbaker) and those of the C.C.F. party, will join me in thanking the Prime Minister. Perhaps I should go further and thank all hon. members, from the maritime provinces, the central provinces, Manitoba and British Columbia for their kind consideration in this regard.
That is all I have to say at this time, Mr. Speaker. No doubt there will be other opportunities to speak in this debate, though I do not believe I will do so unless I am provoked into it.
On motion of Mr. Tustin the debate was adjourned.



ST. LAWRENCE WATERWAY   REFERENCE TO ARTICLE IN TORONTO &quot;STAR&quot; OF APRIL 23

Lionel Chevrier: On a question of privilege, Mr. Speaker,
I wish to refer to a press clipping from the

Privilege-Mr. Chevrier Toronto Daily Star of April 23, 1952, which was brought to my attention late this afternoon. The heading is "Canada to push seaway, ignore U.S.-Chevrier." The body of the article goes on to say:
Ottawa, April 23-Canada is going to push ahead with her plans for the all-Canadian St. Lawrence seaway and joint Canadian-U.S. power project just as if the U.S. Senate wasn't considering U.S. participation in the seaway, Hon. Lionel Chevrier, Minister of Transport, said today.
He was commenting on developments in the U.S. capital, where a senate committee reported the project to the Senate but without giving it a priority rating for consideration.
"We are going to continue to press for a joint application to the international joint committee and if something does happen to make it possible for the U.S. to participate on the basis of the 1941 agreement we will be all set to proceed with that," Mr. Chevrier said.
In the first place, Mr. Speaker, I made no such statement as that attributed to me in, the title, and the statements carried in the body of the article are not fully accurate. When I was asked by the correspondent of the Star over the telephone for my comments on the decision of the foreign relations committee of the Senate of the United States to refer the long-debated 1941 agreement to the floor of that body, I stated that Canada was going to press forward as strongly as it could for the all-Canadian seaway and the joint Canadian-United States power project by cooperation with the United States in filing an
application to the international joint commission. I added that if meanwhile the United States congress approved of the 1941 agreement, Canada would be ready to proceed with the seaway on the basis of that agreement.
A headline such as this does me an injustice and the St. Lawrence waterway project a disservice. I have repeatedly taken the position both in and out of this house that the Canadian government favours the 1941 agreement but that it could not wait indefinitely. As an alternative it was developing the allCanadian seaway. I hasten to add that I am led to believe that the correspondent reporting this statement is not himself responsible for the heading of it, but that does not detract from the harm and injury a statement such as this could do, particularly if it got any circulation in the United States. For that reason I felt that a correction should be made without delay.



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow we will continue the budget debate.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Friday, April 25, 1952