1952-03-10

Mr. George A. Drew (Leader of ihe Opposition):: Mr. Speaker, on a question of privilege, I wish to refer to a speech made in New York by the Secretary of State for External Affairs (Mr. Pearson) on-


Mr. Speaker:: It seems to me that this should be a question to the ministry when the orders of the day are called, rather than a question of privilege. Probably the misunderstanding has arisen because of the procedure I permitted at the last session, and for which I must take the responsibility. At that time there was no committee of supply and no committee of ways and means, and I allowed considerable latitude in raising questions of privilege and other matters at the opening of the sitting. I do not think, however, that I should follow that procedure at this session.
In my view we should abide by the rules in this respect, because under those rules there are ample opportunities to ask questions of the ministry and to bring up such matters as the one now indicated by the leader of the opposition. I think it would be more in keeping with proper procedure if we followed the rules as they are set out in the standing orders, and in Beauchesne's Parliamentary Rules and Forms.


George Alexander Drew: Naturally I am in no way questioning the statement you have made, Mr. Speaker. I would point out, however, that I raised the question at this stage because of the practice which, so far as I know, has been followed ever since my coming to the house-which is not so long ago. That practice has been that ministers and others have dealt with questions of privilege at the opening of the proceedings. So long as we understand that any questions raised by way of privilege or having to do with important public business are to be raised when the orders of the day are called, at the same time as questions are asked of the government, then I think all of us will very naturally follow the same pattern. I assume we may accept the statement you have now made, sir, as settling the procedure in connection with matters of this kind; that
such questions, whether raised by ministers or others, will be dealt with when the orders of the day are called instead of at the opening of the proceedings.


Mr. Speaker:: I do not wish to be misunderstood. I do not know that there is any provision in the rules for discussion of any question when the orders of the day are called. In the normal proceedings of the house there are opportunities afforded hon. members to raise important questions. At the present time the debate on the address in reply to the speech from the throne is in progress, and in that debate important questions can be discussed. When the address has been adopted, I should think it is likely that there would be a committee of supply and a committee of ways and means; on the motion to go into committee these matters can be discussed.
I realize that there was a change during the last session, at which time I allowed considerable latitude. Probably I am taking the house by surprise today when I remind hon. members of the rule. As this is the first time the situation has arisen during the present session, probably I should allow the leader of the opposition to speak now.


Some hon. Members:: No.


Mr. Speaker:: If it is not the wish of the house then, I suggest to the leader of the opposition that he raise his question when the orders of the day are called.



WAR REPARATIONS


[Stage Direction]
Right Hon. L. S. St. Laurent (Prime
Minister): Mr. Speaker, since I replied on March 7 to a question from the leader of the opposition on interim payments for war claims in cases of real need, I have made further inquiries and can now give the house some additional information.
A scheme has been devised, following the interim report from Mr. Justice Ilsley, by which advance payments may be made to claimants coming under categories laid down in certain compensation rules. These rules were attached as a schedule to order in council P.C. 667 of February 4, 1952, which is published in part II of the Canada Gazette of February 27 at page 159. Appropriate form letters and forms for application have been
[Stage Direction]
Redistribution
sent to all known claimants in respect of death or personal injury claims, and to date some thirteen persons have applied for interim payment.
George Alexander Drew: Mr. Speaker, I think hon.
members who are interested in this subject will welcome the statement by the Prime Minister that a procedure is now actually settled. I think that all of us who are aware of the very real gravity of the situation for some of these people will hope that interim payments can be arranged very quickly for some of the needy cases that are known to the government and of which many of us are aware.


Mr. St. Laurent:: As I stated, known
claimants for compensation resulting from death or personal injury have been informed and have received forms on which they can make application for interim payment if they feel their cases come within the rules, of which copies are available to them.



REDISTRIBUTION


Louis Stephen St-Laurent: for leave to introduce Bill No. 8, to readjust the representation in the House of Commons.


Mr. Knowles:: Explain.


Louis Stephen St-Laurent: When hon. members see the bill they will find that the preamble is in the same form as were the preambles to the bills which became chapter 54 of the statutes of 1933 and chapter 71 of the statutes of 1947. They will find that the statute recites that the results of the last census require, according to the constitution, that there be a redistribution of representation in this house. This is a duty imposed, not upon the government but upon parliament. I understand that the practice since confederation has been for the leader of the majority party in the house to take the initiative in bringing before the house a bill to carry out that constitutional obligation. This bill has been drawn in the form which has been in use as far back as I have been able to go.
It provides for the distribution among the provinces of the number of representatives provided by the rules fixed in the constitution. The representation within the provinces will be by electoral districts according to schedule. In accordance with the time-honoured practice the bill simply provides for the schedule and will leave it to a select committee of the house to draft the appropriate schedule.

The bill is being brought in at this time because it is felt, as it always has been felt, that it is a responsibility of parliament to deal with this matter immediately after the results of a census become known. This was felt to be such an obligation that even during the war, when there was a general feeling that it would not be proper to indulge in the controversies that sometimes arise over this matter, an amendment to the constitution was sought to authorize parliament to postpone until after the cessation of hostilities the consideration of a redistribution bill.
The bill is always brought down in the name of the government, but I feel it is more my responsibility as leader of the majority party in the house than as Prime Minister to introduce it, because it is not a matter for the executive government; it is a responsibility put upon parliament to determine something which is of particular concern to parliament.
Motion agreed to and bill read the first time.



CANADIAN NATIONAL RAILWAYS


Hon. Lionel Chevrier (Minister of Transport) moved: for leave to introduce Bill No. 9, respecting the appointment of auditors for national railways.
Motion agreed to and bill read the first time.



REDISTRIBUTION


[Stage Direction]
On the orders of the day:
Mr. J. J. Smith (Moose Mountain):: Mr. Speaker, I should like to direct a question to the Prime Minister. For the information of those of us who are opposed to the bill which has just been read the first time and which deals with redistribution, will he indicate what procedure is necessary to amend the constitution so that the province of Saskatchewan shall not suffer a sudden and calamitous reduction in her representation?


Louis Stephen St-Laurent: I am afraid that that is rather a large order. I shall consider the terms of the question, and when the matter arises again I hope to be in position to give the necessary information to the hon. member. I understand that his question relates to the procedure required to amend the constitution. I shall endeavour to deal with that as fully as possible the next time the matter comes up in the house.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
George Alexander Drew: Mr. Speaker, I propose to refer now to the matter I mentioned before, but before I do so I should like to make one or two observations. Rulings become precedents and there are certain traditional procedures in this house which each one of us should understand. I have been under -the impression that it has been the practice to deal with matters of privilege at some stage before the orders of the day, and I am raising a question of privilege on this occasion for that reason.
Because of a remark which you made, sir, I would ask that you bear in mind that there may be many occasions on which debates would not be in progress which would permit the raising of some question. Unless the practice is continued, which has certainly been in force since I came into this house, of permitting questions of privilege to be raised as they have been in the past, it will be very difficult to discuss important questions of privilege, and I submit that any ruling now made should be made with the recognition of the fact that such a ruling would become a precedent which would have a substantial effect on the proceedings day by day in this house. I mentioned before that, as a matter of privilege affecting every member of the house, I wished to comment on the speech made by the Secretary of State for External Affairs in New York on Friday, which was very extensively reported in the press of Canada. I do so for this reason. In the speech delivered by the Secretary of State for External Affairs he dealt with extremely important subjects connected with Canada's foreign policy. It has been indicated that we are awaiting with interest an opportunity to debate a resolution which will ask approval of the government's proposals that may emerge from the NATO conference at Lisbon and such other proposals as they may put forward with respect to the foreign policy of Canada.
At the very time that we are waiting for such an opportunity to hear a report we read in the press statements announcing new policies on which this house has at no time passed. The question whether we agree or disagree with those policies is not the point which should concern us. It is the authority of parliament itself over its own affairs, and particularly over such vitally important matters as the foreign policy of Canada at the present time.
Inquiries of the Ministry
Without enlarging too extensively on what was said, I should simply like to refer to one paragraph in the -speech made in New York on Friday containing four positive declarations of policy which I submit have not been passed on by the house. I shall quote not only from the press report but also from the text of the speech which was handed out by the Department of External Affairs. It reads as follows:
As for China, we should let the Peking government know that they must expect communist aggression to be met by collective resistance; that no government in Peking committing such aggression can hope to be accepted into the community of nations; that, on the other hand, we ourselves did not intervene in Korea, or, indeed, in Formosa in order to overthrow by force the government in Peking. I think also that we should make it clear that while Formosa cannot be allowed to fall into Chinese communist hands while aggressive war is going on in Korea, we do not intend to use our own forces to restore to China the regime which is now in Formosa after being driven off the mainland.
I would point out first that thi-s is a clear declaration that the nations, presumably the United Nations, should tell communist China the west's stand on aggression, and should tell China that any aggression will be met by collective action. This of course could have no meaning unless it referred to aggression by China anywhere in Asia, because already their aggressive action in Korea has been effectively resisted, and Canadians -are taking part in that collective action against aggression.
In the past the Secretary of State for External Affairs has very strongly resisted the suggestion that we should enter into a Pacific pact, on the ground, as I believe it was understood in the house, that our main concern was Europe and that no such general undertaking in Asia was appropriate at this time. Whether or not we agree, that certainly would appear to be the interpretation to be taken from reading the statements in Hansard on policy relating to this subject.
The next point that was clearly put forward was that no government in Peking committing aggression can hope to be taken into the community of nations. I for one would welcome unqualified assurance to that effect. It happens it is not the position that has been taken by the government of the United Kingdom, while on the other hand it is the position that has been taken by the government of the United States. Nevertheless, no matter what the individual point of view of any one of us may be, it seems to me that this is the place where a decision of that kind should be made.

Inquiries of the Ministry
I would merely make the comment that the reference to Formosa leaves the impression that we are engaged in the defence of Formosa. I was unaware of that.
I pass to the next point, namely, that we should make it clear that, while Formosa cannot be allowed to fall into Chinese communist hands while an aggressive war is going on in Korea, we do not intend to use our forces to restore to China the regime which is now in Formosa after being driven off the mainland. The comment I would make there is that if these words mean what they would appear to mean, then we are not prepared to consider agreement on our part to abandon Formosa while communist China is guilty of aggression, but the words mean nothing unless the understanding to be taken from them is that if aggression should stop then our position with regard to Formosa would change. The other point is that we have decided we will do nothing to assist the Chiang forces on Formosa with respect to any action they may take against the mainland.
I submit these are all positive declarations of policy which should be placed before the house before they are stated anywhere else, and that approval should be sought from the House of Commons and the parliament of Canada of statements of policy which may affect the whole future of this country. This is not only the life of Canada. It is the life of this parliament. Unless we are to have authority over decisions affecting the future of Canada, then parliament certainly can no longer claim to assert its proper authority on behalf of the people of Canada.
I am raising this question of privilege as one affecting every member. I most earnestly hope, in view of the speech made in New York on Friday, that, no matter how much any one of us may agree with the views put forward, the Prime Minister will recall the suggestion made a few days ago and will announce now that there will be a debate on external affairs on a motion to approve proposals made by the government, and that on that occasion proposals will be put forward that will indicate what we have undertaken, subject to qualifications, at Lisbon, and also any other proposals such as these so that they may receive the approval or otherwise of this house. If that were done then, as I indicated before, we would not be called upon to carry forward casually, within the broad ambit of the speech from the throne, a debate which should be centred around a clear statement of policy by the government which seeks the approval of the house for that policy.

Mr. Speakers Order. Before the Prime Minister replies, I might say that I think the remarks that have been made by the leader of the opposition show clearly that the rules should be adhered to. I am not criticizing the leader of the opposition for doing it, because, as I said, I allowed it to be done during the last session. He has made a statement with respect to a speech delivered by a minister of the crown outside of this house. Tonight another minister may make another speech. Tomorrow someone else may take exception to it, rise in his place and make a speech with regard to it. The leader of the opposition has stated his views very briefly on certain portions of what was said, and has intimated how he feels about them. Now I see the hon. member for Rose-town-Biggar seeking to rise in his place and comment on the speech. I do not know if he does want to comment on it, but I know he was rising in his place to say something before the Prime Minister rose. Having allowed the leader of the opposition to comment, I do not see how I can prevent the hon. member for Rosetown-Biggar from doing so, and I do not see how I can prevent other hon. members from doing so. It occurs to me that this question could be raised during the debate on the speech from the throne, and that what has been requested of the government today could be requested in that debate. I merely point that out in order to emphasize that I think we shall make more progress if we abide by the established rules instead of departing from them.


Mr. Coldwell:: Mr. Speaker, I was merely rising on a point of privilege to say what you have said much better than I could have done. Consequently I shall resume my seat.



PROTECTION OF CANADIAN MISSIONARIES


[Stage Direction]
On the orders of the day:
Mr. George H. Hees (Broadview):: I should like to direct a question to the Secretary of State for External Affairs, or, in his absence, to his parliamentary assistant. I have sent notice of my question. What action does the government plan to take in protest against the shocking treatment of five Canadian nuns in Canton recently, and to ensure that Canadian missionaries are protected against such outrages in future?


Mr. Jean Lesage (Parliamentary Assistant to the Secretary of State for External Affairs):: The hon. member was good enough to give me notice of his question. I believe

little can be added to the statements made in this house by the Prime Minister (Mr. St. Laurent) on December 3, 1951, and by the Secretary of State for External Affairs (Mr. Pearson) on December 29, 1951.
However, I am authorized to repeat that the government deplores the shocking treatment the Canadian missionaries in China have received, and has taken every course open to it to protest to the central people's government of the people's republic of China. In the absence of direct Canadian representation in China we have had the assistance not only of the United Kingdom charge d'affaires but of representatives of other countries. On a number of occasions these gentlemen have made strong representations, and there are some signs that in a certain measure they have succeeded in improving the conditions of some imprisoned persons.
The house will no doubt be aware that three of the nuns who were tried in Canton have now reached Hong Kong, and missionaries of all denominations continue to arrive at that place. Whereas on January 1, 1951 there were about 400 Canadians in China, there are now approximately 160, the majority of whom are missionaries; and many of these have applied for exit permits.
The situation, of course, is one of great delicacy; and, as has been pointed out in the past both by the Prime Minister and by the Secretary of State for External Affairs, the best advice at the disposal of the government indicates that little is to be gained and much may be lost by heated public discussion of those questions. I know the government shares to the full the natural indignation engendered by these events, but it is compelled to suggest, as it has suggested, that the safety of Canadian citizens still in China dictates the utmost caution.



LIVESTOCK


[Stage Direction]
On the orders of the day:
Mr. J. A. Ross (Souris):: I should like to
direct a question to the Acting Minister of Agriculture or his parliamentary assistant. Is it correct that there have been new outbreaks of foot-and-mouth disease among the cattle of western Canada? If so, has the virus from these herds been tested at the Hull laboratory?


Mr. Robert McCubbin (Parliamentary Assistant to the Minister of Agriculture):: There have been three new outbreaks within
Inquiries of the Ministry a mile of Regina. Some virus was taken from those animals and sent to Hull, but I do not know the outcome.



WILLI BRUNTJEN


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: Possibly the hon. gentleman could also tell us about Willi Bruntjen, the travelling exhibit. Have the bacteriological examinations taken place, and if so what was found as to whether or not he was in fact the carrier of the disease?


Robert McCubbin: I can
say that Willi Bruntjen-the immigrant, not the travelling exhibit-has been examined both as to his person and as to his clothes. No sign of the virus was found, and he is now free to leave Hull.



STATEMENT OF MANAGER OF BURNS PLANT IN REGINA

[Stage Direction]
On the orders of the day:
Major James William Coldwell: Has
the attention of the government been drawn to the statement of the manager of the Burns plant in Regina to the effect that no foot-and-mouth disease has been diagnosed in animals in their stockyards or on their premises?


Robert McCubbin: I know about that is what I read in the press, and I cannot make any statement on it at the present time.


Major James William Coldwell: It was in conflict with what we were told here.



PORK PRODUCTS


[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: Is it correct that the price support under hogs has been extended to various pork products?


Robert McCubbin: I am
sorry I cannot answer the question raised by the hon. member for Assiniboia, but I will look into it and give him an answer later.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. G. F. Higgins (St. John's East):: May
I ask the Minister of National Defence if there is to be considerable construction work

Inquiries of the Ministry for the seaward defence base at St. John's? If so, would the minister outline the proposed work?


Hon. Brooke Claxton (Minister of National Defence):: There is to be some construction there. A contract has been let for the construction of a wharf and ramps and other permanent installations in connection with the seaward defence of St. John's.


Gordon Francis Higgins: Would the minister indicate the amount of the contract?


Mr. Speaker:: Order. It seems to me this is a question which should be placed on the order paper.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. W. Ross Thatcher (Moose Jaw):: What steps, if any, have the government taken to provide direct loans to home builders, under section 31A of the act, in municipalities with a population of under 5,000? I ask this question in view of the increasing reluctance of insurance companies to lend money.


Some hon. Members:: Order paper.


Mr. Speaker:: Order. I could not hear all the question with so many members calling "Order paper". From what the hon. members have said, however, I presume it is a question which should be placed on the order paper.


Wilbert Ross Thatcher: I do not think it should be. [Later:]
On the orders of the day:


Wilbert Ross Thatcher: A moment ago I directed a question to the Minister of Resources and Development, Mr. Speaker, and I thought you said that you could not hear it. I should like to ask it again.


Mr. Speaker:: What I said was that it seemed to be the consensus of the house that the question should go on the order paper.


Wilbert Ross Thatcher: As long as you did not make a ruling, Mr. Speaker, I should like to ask it in a nutshell, and I think the minister can answer in the same way. Can people in cities over 5,000 who cannot get housing loans from insurance companies get them now from the government directly under section 31A of the act?


Some hon. Members:: Order paper.


Hon. Robert H. Winters (Minister of Resources and Development):: Mr. Speaker, the hon. member was kind enough to send me notice of this question, and, subject to your ruling, I should be glad to try to answer him.

Mortgage lending has been primarily a field for private investment and one in which the lending institutions have played a leading role. During the past year, however, changes in the money market made mortgages through the National Housing Act less attractive to lending institutions than they were formerly. Accordingly, last June, parliament amended the National Housing Act to encourage lending institutions to continue to lend under its provisions by increasing the rate of interest. In October, increases in the amount of the loan and corresponding reductions in down payments were announced, and Central Mortgage and Housing Corporation at the same time was authorized to extend greater guarantees to the lending institutions.
These steps have helped to keep mortgage money flowing, and, despite the many problems which must be recognized, I hope that the lending institutions will continue to play their traditional role in this field. In the meantime, Central Mortgage and Housing Corporation, under section 31A-that is, the section which authorizes Central Mortgage and Housing Corporation to make direct loans in those fields and areas where the lending institutions do not normally operate -has expanded its operations in a variety of ways, the most important of which are loans for the construction of houses for defence workers, in accordance with the policy announced last October, and loans for rental insurance projects.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
George Alexander Drew: Will the Prime Minister inform us at this time if there is to be a debate on a motion to approve the government's defence preparations and defence production, as one debate, and a separate debate on a motion to approve the government's foreign policy?


Louis Stephen St-Laurent: Mr. Speaker, the leader of the opposition and I have quite divergent views as to what is the constitutional practice under a monarchical as contrasted with a republican form of government. It has not been the practice, nor is it intended at this session to introduce it as the practice, for the government to come before parliament and ask parliament to approve the responsibility it exercises in advising the Governor General as to administrative government. It has been and will continue to be the practice to declare to the house what the decision of the government is, so that the house, exercising its control over responsible government, may dismiss

the government it dissatisfied with its conduct. That is and always has been the constitutional practice, and so long as I have control over what originates from this side of the house it will continue to be the constitutional practice.
With respect to the question whether there will be one or two or more debates, or whether they will be incorporated into the debate on the address, I had thought there would be opportunity for matters of that kind to be discussed on the motion which is on the order paper to set up a committee to scrutinize defence expenditure. Defence expenditure is required because of the international situation, or the view we take of the international situation; and it is recommended to parliament. I think it is the responsibility of parliament to see that it is wisely made and that it tends to serve the purpose for which the government asks parliament to make the appropriations.
With respect to external affairs, if any new commitment is to be made or to be recommended by the government it will be declared to the house, and will not become a commitment until the house has had an opportunity of saying whether or not it has confidence in a government that is prepared to make that kind of commitment. There would be an opportunity for that in the debate on the address. The Secretary of State for External Affairs had prepared a speech in the form of a report on what had taken place at Lisbon. He had hoped, up to Thursday, that he would have an opportunity of delivering it. He wished to make it in this house before expressing any views that he may be called upon to express in fulfilling the engagement that he had made to speak to the Canadian Society in New York. He had accepted that engagement because he had to be in Washington on business connected with the department, and thought he could be away the additional day of Friday without causing any inconvenience. Unfortunately, there is many a slip 'twixt the cup and the lip. Because of an extremely important situation, the first three days of this week had to be devoted to the consideration of matters other than the speech from the throne, and the minister had to leave before there was an opportunity of making that speech.
The minister, as Mr. Pearson, is also the president of the council which met in Lisbon. When he uses the word "we" in his speech that does not necessarily mean the members of the Canadian government or of the Canadian parliament, or even the Canadian people. It means he is speaking as one of a large group, whether the United Nations or the Atlantic treaty council, and has views
Inquiries of the Ministry as to what will best serve the common purpose of deterring aggression. He is expressing views in that regard. I listened with care to what the leader of the opposition (Mr. Drew) had to say. I had seen the report of the speech and I did not find anything new or startling in it; but that may be a matter of interpretation.
To deal specifically with the question, it would be the desire of the government, on the first occasion when there is a government day, to move this motion to set up a committee on defence expenditures. I have been seeking some other matter upon which a debate on external affairs could be brought about at this time without establishing a precedent which I would not be prepared to take the responsibility of establishing, namely that of asking parliament to approve in advance the line of conduct to be taken by the representatives of Canada at these international meetings. I must confess that I have not been able to find the kind of procedure that would not be a departure from our traditional practices.
This motion to set up a committee on defence expenditures would provide an opportunity at least to discuss matters concerning the defence department, and probably also to discuss the reasons which make those policies of the defence department the kind which the government wishes to recommend to parliament. As soon as the estimates are tabled-and the Minister of Finance declared the other day that they were in the hands of the printer and would be tabled as soon as they arrived from the printer-if that takes place before we get a government day, there could be a motion to refer the estimates of the Department of External Affairs to the standing committee. This would afford an opportunity for such a debate. But I cannot go beyond that at this time. The only motion that is ready at this time which would afford an opportunity for such a debate is the one which is on the order paper.


George Alexander Drew: May I point out to the Prime Minister, Mr. Speaker, why, in my opinion, it would be inappropriate for that motion to be used as the vehicle by which we would debate defence preparation and defence production. The motion to set up the committee on defence expenditure is a motion which is in compliance with the request of the opposition. Therefore, the opposition is, without any question, wholly in support of this motion.
The Prime Minister says he has not been able to find a precedent for a motion of the kind that would call for separate debates on defence and defence production, and

Inquiries of the Ministry external affairs. May I point out to him that within the past week precedents have become available from Westminster, because immediately after the British representatives' return from Lisbon they made a report which was debated and voted upon. There was also a separate debate dealing with defence and defence production, and that has been voted upon.
In regard to the comment of the Prime Minister that we have different ideas of the monarchical constitution which may not conform to the monarchical practice at Westminster, which I believe we follow with modifications, may I say that I hope we are prepared to follow suggestions which come from that body. They do not of necessity form a pattern for us, but they do provide suggestions as to the way in which we should conduct debate, and as to the general rules of this house.


Mr. Si. Laurent:: As I understand it, the rules at Westminster are somewhat different from our rules. My reading of the reports of the debates at Westminster leads me to believe that certain items of the estimates are announced, and it is announced that there will be a debate on such and such a matter. For instance, I have before me the report for February 28, and at page 1463, under the heading "Business of the House", I read the following:


Mr.  C. R. Attlee@: May I ask the leader of the
house to state the business for next week?
The Minister of Health (Mr. Harry Crookshank): The business for next week will be as follows:
Monday, 3rd March-Supply (2nd allotted day):
Committee stage of the civil estimates and estimates for revenue departments vote on account, 1952-53.
A debate will take place on the appointment of Lord Waverley as chairman of the royal commission on the taxation of profits and income.
Tuesday, 4th March-Supply (3rd allotted day):
Report stage of the civil estimates and estimates for revenue departments vote on account, 1952-53.
A debate will take place on Central African federation.
The item of the estimates is announced, and it is arranged that a debate will take place on a specific matter in connection with that item. The leader of the opposition knows that at Westminster the estimates are considered in a different way from the way in which they are considered here. There are certain items called, and it is agreed that they will be examined by a committee. There are a certain number of days allotted for the rest of the estimates, and at the expiry of the period the estimates are then submitted without any further discussion of the details. If we could arrive at some kind of system that would resemble that, I feel that everyone would believe it to be a constructive move. But it does require someone to

act as a sort of arbiter, and it is sanctioned by the fact that the government can at all times move that the vote on a certain matter will be taken at a certain hour. I should be very much surprised if it were not felt that any attempt to shut off debate in that way would be misusing the large majority in this house that supports the government.
If something can be arranged, it will have to be arranged beforehand among the representatives of the various parties. I can assure the hon. gentleman that it would be highly satisfactory to us on this side of the house if it could be determined that there would be a debate on such and such a matter, and that it would be over at such and such a time and we could proceed with something else. But I do not think I would venture to try to impose that procedure, by a majority vote, on the opposition parties.


George Alexander Drew: Mr. Speaker, may I just add one comment, in view of the fact that this discussion relates to procedure which I believe is important? As the Prime Minister has said, the practice is different on other occasions, and for reasons which have already been discussed. I would point out, of course, that of necessity at Westminster they have a motion for supply, similar to the one we have here, so that there is a motion before the house. I am not concerned with what form the motion takes, as long as it permits an integrated debate on a particular subject.
I would point out to the Prime Minister that, with the matter left as it is now, the members of the house do not know whether, in the general debate on the speech from the throne, they should speak about defence, defence production or external affairs, or whether in fact we are to have some designated debate such as the Prime Minister has indicated. For that reason I would strongly urge that in order to save time in the debate on the speech from the throne, we may, at the earliest time convenient to him, have an opportunity to discuss the matter and see if there is not some way in which a motion can be brought forward that will guide members as to whether they should or should not discuss these subjects in the debate on the address.



SPEECH FROM THE THRONE


[Stage Direction]
The house resumed, from Friday, March 7, consideration of the motion of Mr. E. W. George for an address to His Excellency the Governor General in reply to his speech at

the opening of the session, and the amendment thereto of Mr. Fair, and the amendment to the amendment of Mr. Bryce.
Stanley Howard Knowles: Mr. Speaker, from reading the
speech from the throne, and from what has happened thus far this session, it appears to me that the government is using this session for the purpose of handing out to the people of Canada as many disappointments as possible. I refer particularly to such questions as health insurance, taxation, and other matters about which I will have something to say if time permits.
I feel that one of the greatest disappointments that this government has ever handed to the people of Canada is its failure, after all these years, to take any action with regard to health insurance. That disappointment is heightened by the fact that the government has not even seen fit to carry out its intention of last June that at this session of parliament a special committee on health insurance would be established.
I know the functions of committees of parliament. There are times when they do good work and when that good work is followed up by good legislation. There are other times, however, when the setting up of a committee is just a delaying action. When, through the Minister of National Health and Welfare (Mr. Martin), the government announced on June 21 last that there would be a special committee at this session, I realized that that meant the delay of at least another year in any legislation respecting health insurance. Nevertheless I welcomed the fact that at least that stage, through which we seem to have to go so long as this government is in power, was at last to be reached; that we would have the committee, and that there would then be some possibility of getting health insurance legislation soon thereafter. Despite the statement made by the Minister of National Health and Welfare on June 21, 1951, as recorded at page 4462 of Hansard of that year, to the effect that he hoped we would have such a committee at this session, when on February 29 this year I asked how soon that committee would be set up, he told us that the government had given consideration to the matter but had decided that there would be no committee at this session of parliament.
This, Mr. Speaker, is not a subject which should be dealt with in a light manner, as I feel the government is doing. In fact I feel that the government is just playing politics with this question of health insurance, and that what we can now look forward to is the gesture of a committee on this matter
The Address-Mr. Knowles next year just on the eve of an election so that the Liberal party can again try to fool the people with respect to this important matter.
It is high time that any responsible government in this country realized the importance to the people of Canada of dealing more adequately with the whole question of health. Progress is being made, largely through the efforts of the provinces, aided by the federal health grants, in building up our facilities for health care. But the program will not be complete, indeed it will not really be effective until there is provided a means to enable our people to make use of these facilities so that they may get the care they need-in other words to enable our people to pay for the care of their health on some reasonable or rational basis. It is the cost of medical care which prevents our people from getting it today, and that is what is involved in the demand of the Canadian people for health insurance, namely that something be done about the cost side of the whole question of hospitalization and medical care.
This question is by no means new. The hon. member for Rosetown-Biggar (Mr. Cold-well) pointed out the other day that health insurance was included in the platform of the Liberal party in 1919 which, even to slow-moving Liberals, is a long time ago. Then, during the forties the question came up for considerable discussion. Indeed in the early forties committees of the house were set up to deal with the matter. Many documents were placed before us, including a draft bill which came before us toward the end of the session of 1943. In 1945 the government made proposals for a national health program, including health insurance as one of the most important aspects of that program.
Hon. members who were here will recall how some of us insisted during the sessions immediately following the making of those 1945 proposals that something should be done without delay about the whole question of health insurance. And it was I feel because of that pressure that Mr. King on May 14, 1948, made the announcement he did make with respect to the federal health grants program now in effect. I well remember that announcement, and I read it again only today. All through the statement he made on that occasion runs the theme that the program then being announced was the taking of the first step toward a program of nation-wide health insurance. Mr. King reviewed the promises that had been made in former years. He reviewed the declared aim of his government and of the Liberal party, and laid emphasis upon the concept of health insurance. He said that that was the purpose

The Address-Mr. Knowles
of the program then being announced, namely that a foundation might be laid for a nationwide program of health insurance.
In subsequent years, those of us in this corner of the house in particular have called upon the government to take the next step, the step that was promised so many years ago. Thus far however that step has not been taken. Finally in June of last year, after three days' debate on the floor of the house, the Minister of National Health and Welfare (Mr. Martin), as reported at page 4462 of Hansard for June 21, 1951, said-and I quote him exactly-
We will examine that problem, and in the regular session of 1952 I hope that we may be able-and I think I may go further than that and say that we are giving consideration to the matter [DOT]-to set up a parliamentary committee to examine this whole problem.
There follows my word of approval, and the speeches of other hon. members who took part in the debate that day indicated that they accepted the minister's announcement at its face value, and welcomed this expression of hope on the part of the minister that we would have the committee at this session of parliament.
On February 29 of this year, I asked the minister when the committee was going to be set up. In reply he referred back to the statement of last June and said it was really only a promise that the government would consider the matter, and that having considered the matter it had decided that no committee would be set up at this session.
As I read closely the minister's statement of June 21 last I discover that he really said two things. He said that he, personally, hoped we would have a committee at this session. His other statement-given parenthetically- was that the government was giving consideration to the matter. What I would like to know is this: Who in the government has frustrated the minister's hope? Who said no?
I find that hope expressed not only in what the minister said on that occasion, but in the most recent report of the Department of National Health and Welfare, which was laid on the table only a few days ago. True, that report is for the fiscal year ended March 31, 1951, nearly a year ago; but we know that these reports are prepared after the end of the fiscal year and, in so far as they contain comments, they reflect current thinking as well as a statement of what happened during that fiscal year.
On looking through the report, I have been interested to find that there are actually more references in it to health insurance than there have been in recent reports of the Department of National Health and

Welfare. While those references do not go quite as far as I would like them to go, they do suggest that the department has been giving considerable thought to the matter. The references suggest to me that the people in the department thought the committee promised last June was going to be established at this session. I find that a statement at page 22 of the report confirms what I said earlier about the national health program, when it says:
The national health program, under which annual federal grants are made to the provinces to strengthen and extend health and hospital services and to lay the foundations for health insurance-
And so on. The point of that quotation is that the department recognizes that the purpose of the present health program is to lay a foundation for national health insurance. Then I turn to pages 61 and 62 of this same report and, under the heading "Health Care Studies," I find a lengthy subsection which reads in part as follows:
Departmental activities in health insurance work are the responsibility of the directorate of health insurance studies, with research studies being conducted by the research division.
During the year a complete re-evaluation of the 1945 proposals for health insurance has been undertaken, with close attention being paid to analysis of systems in operation in all countries, including detailed study of program, administrative methods employed, the success with which objectives are being met, the principal difficulties that have been encountered and costs and methods of financing.
As one goes down through the various paragraphs of this section it is clear that a major interest, a major concern in the Department of National Health and Welfare, has been the study of the question of health insurance, to an extent much greater than has obtained for several years. By reading these excerpts from the report I am led to believe that the people in the department took the minister's statement of last June at its face value, and thought that at this session a special committee would be set up to study the matter.
Then, similarly, at page 102 of the report under the heading "Research Division," which deals with the work of that division, I find that during the year it is said that, among other things, that division worked on the whole question of health insurance.
There you have it. There is a promise dating from 1919, a promise brought to life and renewed during the forties, a promise stated to the house clearly by Mr. King on May 14, 1948, a promise to which references were made frequently during the election campaign of 1949, a promise which, in the light of the statement on June 21 last year by the Minister of National Health and Welfare, we dared to believe was at last on the

way to fulfilment. But come this session, and the answer is that nothing is to be done. I cannot condemn such inaction too strongly.
I realize that last year the general impression was abroad that there might be an election in 1952, and the setting up of a committee on the eve of an election would not have been inconsistent with the way in which this government operates. The general impression now is that the election has been put off until 1953, and so it appears that, similarly, the study of health insurance has been put off.
I wish to condemn as strongly as I can this method of playing politics with a matter of such great importance to the people of this country. I commend all those who have taken part in the progress that has been made in increasing our hospital accommodation, and improving our facilities for medical care. But I say again that not until we have an over-all program that includes health insurance, that provides the means to enable people to pay for the health care that they need, will we have the kind of program we should have, will we have the kind of program that this government has been promising across the years. This is a most urgent matter. I hope we will get action on it soon.
In my opening remarks I suggested that another of the fields in which this government seems to be trying to hand out disappointments to the Canadian people at this session is the field of taxation. This is something that was not referred to in the speech from the throne, but we have had a statement on the matter by the Prime Minister (Mr. St. Laurent) and also a statement, even though somewhat oblique, by the Minister of Finance (Mr. Abbott). It seems clear from those two statements that there will be no significant reductions in taxation at this session of parliament, despite the huge surplus which the Minister of Finance has piled up during this fiscal year.
All of us in this house recognize the need for raising money to meet the services which this house wants to provide for the Canadian people; all of us recognize the tremendous burden of our defence expenditures; but there is still room for adjusting our tax burden on the basis of equity. Furthermore, when there are thess huge surpluses surely now is the time to bring in at least some tax reductions.
What some of us deplore about this whole matter, if I may say so again, is the way in which the government plays politics with this important question.


Some hon. Members:: Oh, oh.
10,	1952
The Address-Mr. Knowles


Stanley Howard Knowles: I hear some hon. members objecting to that statement, but they know just as well as I do that in off-election years the government gives us theories as to why the rates of taxation should stay up, as to why we should have surpluses, as to why we should pay off some of the national debt; but come an election year and those theories are thrown out the window. Then the government tries to find ways by which it can reduce taxes and give to the people a handout which many Canadians are beginning to feel is in the nature of an indirect bribe, using their own money, to persuade some people to vote for the party in power.


Mr. Sinclair:: Is the hon. member aware that in 1949, which was an election year, the government made a substantial reduction in the national debt?


Stanley Howard Knowles: I was just going to deal with the years leading up to 1949. In the years prior to 1949 the government proclaimed and adhered to the theory of cyclical budgeting. I am sure hon. members remember that, although we never hear the phrase used any more. That was proposed with a view to making reductions in the national debt. So there were no significant reductions in taxation. But it appeared to us and it appeared to the people of Canada that what the government was doing during those years was to build up a sufficient surplus so that in an election year they could do both things, they could boast of making a payment against the national debt and at the same time hand out significant tax reductions to try to encourage the people to vote that party back into power.


Mr. Croll:: Was that bad?


Stanley Howard Knowles: Does the hon. member for Spadina mean that it was bad to vote that party back into power? To ask the question is but to answer that it certainly was. The people of Canada know it and they have not forgotten the fact that, despite the huge majority the government has here, their majority at the polls was a fraction under 50 per cent of those who voted in June, 1949.
What happened after 1949? We got back into theoretical budgeting, the kind of budgeting that lays a basis for increasing taxation and the building up of surpluses. As years come and go the minister boasts of the fact that he has these surpluses which are much greater than he anticipated. He now says it is a good thing he has them because they can be used to pay off a portion of the national debt. I do not blame the government for trying to underwrite practice with theory, but there is such a thing as consistency. Everyone in this house knows that the minute it is decided

The Address-Mr. Knowles to go to the country these theories will be forgotten and these huge surpluses will be used for the purpose of making tax reductions.


Mr. Laing:: Is it not true that in 1950 when we set up the committee on old age security the hon. member said that we had ample information on all these social security measures without setting up further committees?


Stanley Howard Knowles: Is the hon. member asking his question in relation to taxation, which I am now discussing, or in relation to health insurance, which I was discussing a few moments ago?


Arthur Laing: You were discussing the setting up of another committee.


Stanley Howard Knowles: I am not proposing the setting up of a committee to deal with the question of taxation. However, I was deploring the fact that so far as health insurance is concerned the government was not prepared to go even that far. I take the position which my leader took the other day, which was put in the form of an amendment, that what we should have at this session is not just a committee but legislation itself. But if the government is not prepared to go that far, then at least it should adhere to its promise to set up a committee.


Arthur Laing: The hon. member argued in 1950 that the government did not need any other committees.


Stanley Howard Knowles: I agree with my hon. friend. A committee is not needed. The government has abundant material on the whole question of health insurance. But the government wants to do it that way, it wants to proceed in the delaying manner of appointing a committee. And now it is not even prepared to do that.
To get back to this question of taxation. What annoys the Canadian people, what annoys us as their representatives in this parliament, even more than the government's failure to make the necessary taxation adjustments, even more than the failure to make reductions at a time when we have this huge surplus, is the feeling that the government is simply using the taxpayers' money to play with in a political fashion, to try to build up surpluses so that they can be used to reduce taxes-in other words as political bait-in an election year. I deplore that and I suggest as strongly as I can that it does not give strength to democracy in times like these when democracy needs all the strength it can possibly muster.
Another subject in connection with which this government is handing out a disappointment, by its silence, is its failure at this


session, and I say this advisedly despite the thoughts that I know will be in some hon. members' minds, to do anything toward increasing the amount of old age pensions, either under the Old Age Security Act or the Old Age Assistance Act. I know that there are many hon. members who will say that these acts were placed on the statute books only last year and they should be allowed to rest for a while. The trouble is that far too many people in this country find that they simply cannot get by on $40 per month, and we have no right to let the matter rest until that amount is increased.
As I pointed out when these two measures were going through parliament last year, the one during the first session and the other during the second session, the rise in the cost of living since the committee on old age security made its recommendations, the rise in the cost of living since the figure of $40 was arrived at just before the election of 1949, makes it imperative that payments under our old age security measures should be not less than $60 per month. I call upon the government to face up to its responsibility. We have heard talks today about responsible government. All right, the government should consider its responsibility to the people of Canada and I call upon it to face up to its responsibility in this field and bring in a measure increasing the amount of the old age pension paid under these two acts.
As I pointed out last fall, to increase the amount paid under the Old Age Security Act from $40 to $60 per month would cost only another $160 million a year. That is a lot of money to any of us as individuals, but it is a small amount of money in terms of the kind of budgets that we have at the present time. Similarly, to increase the amount paid under the Old Age Assistance Act would take a relatively small amount of money compared to what it would mean to those people who are affected, and compared to what it would mean in terms of strengthening democracy, strengthening what is sometimes referred to as "our way of life". I press that demand as strongly as I can, and all hon. members know that I will continue to do so until we get action.
Speaking of old age pensions, it has been a matter of great disappointment to many people to discover that the position has not yet been made clear with respect to recoveries from the estates of persons who were on the former old age pension up to December 31, 1951. I raised this question in the house on June 23, 1951, as can be

found by referring to pages 4586 and 4587 of Hansard for that date. On that occasion I had this to say:
I hope the minister will not say that this matter has to wait until the fall, because it is a matter that is of concern to many pensioners right now. What will be the situation with respect to liens on the property of persons now 70 and over?
The minister and I got into a bit of a crossfire based mainly on confusion as to my use of the word "liens". We eventually got that straightened out, and it was clear then and it is clear now that liens under that former act were placed not by Ottawa but by the provincial governments. But they were placed there because the federal act had in it a clause which said that the provinces had to agree to make recoveries from the estates of deceased pensioners. In other words, the provinces used liens to enable them to carry out the federal government's demand for recoveries. When we finally got that bit of confusion straightened out, I put the matter to the minister in these direct words, speaking of these people who were on the former old age pension:
Will they be treated exactly the same as people who will go on the new universal pension starting in January?
The minister's reply was:
That is a matter that will have to be decided in the future. I cannot decide it now.
What has happened since then is that several of the provinces, accepting the spirit of the new legislation and being anxious to do the fair thing, have passed statutes cancelling all liens against the property of persons who received pensions under the former Old Age Pensions Act. But they have discovered that, although they have the right to cancel those liens, they cannot stop seeking to make recoveries out of the estates of these persons after they pass on. The reason they have to continue making these parliament despite the huge surplus which liens is because the federal government has refused to make any change in the agreements with the provinces, or to make any change in the regulations or in the legislation under which those agreements were drawn.
I remind hon. members that in 1943 Mr. Ilsley, who as minister of finance was in charge of old age pensions at that time, met our request part way and wrote to the provinces and told them that the making of recoveries could henceforth be limited to estates in excess of $2,000. If the government then had the power-under the act, under the regulations and under the agreements that had been made-to draw a line and say that recoveries only had to be made in the case of estates in excess of $2,000,
I submit that the federal government has
The Address-Mr. Knowles the power now to say to the provinces: You need not make any more recoveries whatsoever out of the estates of persons who were drawing pension prior to December 31, 1951. Several provinces, as I say, have come up against this situation. I know they have in Saskatchewan and Manitoba as well as in others. I have in my hand a copy of the Votes and Proceedings of the legislative assembly of Manitoba for February 12, 1952. It records a lengthy statement on this matter by the Hon. Ivan Schultz, minister of health and welfare for that province. He says in part:
In regard to the collection of claims against the estates of deceased pensioners in this group-
He is referring to those who drew pensions prior to this year under the old Old Age Pensions Act.
-the legislation of the federal government and the obligations under the agreement submitted for signature by the federal government compel this province, in accordance with similar agreements with every other province, to collect from the estates of deceased pensioners where the estate is over $2,000 net. Neither Manitoba nor any other province has any option in this matter at the present time.
Last June the Minister of National Health and Welfare played around with this question and said that liens were a provincial matter. All right. Provinces like Saskatchewan, Manitoba, Ontario and perhaps others-I know about the three I have mentioned because I have seen the legislation- have cancelled their liens. Yet they find that even though they have cancelled these liens they are still required under the terms of the federal agreement to seek to make recoveries out of estates for pensions paid prior to December 31, 1951.
I submit this is completely out of keeping with the recommendations of the committee on old age security. It is completely out of keeping with the whole debate that took place in the house last June and again in October and November. I call upon the government to take action similar to that taken by Mr. Ilsley in 1943 and to make it clear to the provinces that henceforth, indeed as from January 1, 1952, they need make no further recoveries whatsoever from the estates of deceased pensioners.
I turn now to another question. Here too, although there has been an announcement in the speech from the throne that something will be done, I fear we may be in for disappointment. I refer to the proposal to amend the War Veterans Allowance Act, something that we asked for with all the power at our command during the fall session of 1951. I suppose there are members on the government side who will say to me: Why do

The Address-Mr. Knowles you not wait and see what is in that legislation? I should like to oblige them but it so happens I have seen press reports as to what that legislation is likely to include. I know that press reports can be wrong but these friends of ours in the press gallery often have an uncanny way of finding out what is going to be included in anticipated legislation.
The reports I have seen suggest that it is the government's intention to raise the war veterans allowance to $50 for a single veteran and $85 for a>
married veteran. That will be a bitter disappointment. When the Canadian Legion asked for a minimum of $50 single and $100 married I think they were being most conservative, reasonable and responsible. I think they should have asked for more. I think they should have asked for not less than $60 single and $120 married. But in the light of what they asked for, if the government only gives $85 for a married pensioner on the burnt-out pension it will be a bitter blow and disappointment for which the government must be severely condemned.
I hope by suggesting this condemnation in advance they will change their minds with respect to that matter.
Another aspect of the rumoured legislation on war veterans allowance is that the income ceilings will be increased slightly so as to permit burnt-out pensioners who are drawing old age security payments to get a little more of the burnt-out pension than they are now receiving. A very common example at the present time is that of a single burnt-out pensioner who was (formerly getting $40.41 by way of burnt-out pension. Many of these men who are over 70 have qualified for the $40 old age security payment. There is no means test under the Old Age Security Act but it is still there in the War Veterans Allowance Act with the result that their war veterans allowance has been reduced from $40.41 right down to $10.83. Thus they are now receiving $40 in old age security and $10.83 as a war veterans allowance, making a total between the two pensions of $50.83. Clearly what is called for is not just a slight increase in the amount of other income allowed under the War Veterans Allowance Act but the complete removal of the means test so far as the war veterans allowance is concerned.
I have been amazed and pleased at the large number of people who have spoken to me about this matter in the last few months, particularly non-veterans, who have said to me time and again that surely this burnt-out pension is something that should be paid without the means test. I know the means test is gone from the Old Age Security Act; but it is very hard to explain to the pensioner,

who has his burnt-out pension reduced when he gets his old age security pension, that the means test is gone. As far as he is concerned it may be gone from one act but it is not gone from the other, so he is still under a means test. I insist, Mr. Speaker, that this is one disappointment which this government must not continue to perpetrate upon the people of this country; that is, niggardly treatment of our burnt-out pensioners. I suggest that the government should go the whole way when that legislation is brought in.
At the same time I feel that something should be done with regard to section 33 of the Pension Act. I regret there is no reference to that in the speech from the throne. Under section 33 of the Pension Act what are known as compassionate pensions are paid, such as pensions to dependent parents, dependent widowed mothers and so on. Section 33 is in the Pension Act, but it is still under a means test. When we were discussing this matter at the fall session I made a plea to the Minister of Veterans Affairs (Mr. Lapointe) to remove the means test from section 33. He contended that this was not really necessary, for after all the members of the pension commission were anxious to do their best by those affected by this section. On November 30, 1951, as reported at page 1490 of Hansard, the minister said:
That is not what happened when the last increase took place. At that time these cases were reviewed by the commission, and a great majority of them were increased because the decision of the commission was taken in the light of the general increases that had1 been given. I have every reason to believe that that will be the way the commission will review these cases. My horn, friend of course realizes that decisions or actions taken by the commission are not at the discretion of the minister, but I think that past experience would show that we can fairly well rely on a generous attitude on their part.
Well, I dared, to hope that that might be the result, and! no doubt it has been in some cases. They would be the cases we do not hear about. But a number of cases have already been drawn to my attention of dependent parents now receiving the old age security pension and having their dependents pension either reduced or cut off altogether. A case was drawn to any attention just a few days ago of dependent parents, where the father formerly had a C.P.B. pension of $36 a month and the mother a dependent parents' pension of $30 a month, and one other contribution of $10 a month. The father is now over 70, so he gets the $40 old age security pension; but the mother's $30 dependent's pension has been discontinued altogether. That is not carrying out the spirit of what the minister said to me on November 30, 1951; and I am more convinced now than I was then that

the only way to deal properly with section 33 of the Pension Act is to remove the means test from it altogether, and to increase the amounts paid under that section.
Another case I would mention is that of a lady 81 years of age who is in an institution for older people in the province of Manitoba. For some 16 years she has been receiving $50 a month under section 33 of the Pension Act. The institution where she is being cared for has taken $45 a month, leaving her $5 for necessities and personal expenditures. What has happened to her? She now gets the $40 old age security pension so the $50 under section 33 of the Pension Act has been reduced, by the commission to $35. Thus she now gets a total of $75 a month; but the institution takes $70, so she is left with the same $5 she had before. That is not good1 enough.
There are scores of cases of this kind, which suggest that so long as the means test is retained in the War Veterans Allowance Act and so long as it is retained in section 33 of the Pension Act, we are going to have a great many people in this country feeling that even with the means test removed from the Old Age Security Act, it has not been removed so far as they are concerned. I call upon the government to take action on this question, not piecemeal, not in a niggardly fashion, but on an over-all basis at this session of parliament.
I see that my time is running along, and I am going to have to compress into a sentence or two each a good many subjects with which I was going to deal. I said at the outset that this is a session of disappointments which the government is handing out to the Canadian people. Another of those is with respect to superannuated civil servants. The hon. member for Fort William (Mr. Mclvor) made reference to them the other night; but in his praise of the speech from the throne he did not seem to realize that there is no reference in that speech to anything being done for them. As I have said repeatedly there are large numbers of these people, 1,478 in fact, drawing pensions of less than $40 a month, together with 2,647 widows of federal civil servants whose pensions are less than $40 a month. To do nothing for those people; to say to them again, "You are on the shelf; it it is too bad, but we are not going to accept you as our responsibility" is simply to hand out one more disappointment to the Canadian people. I feel the same about the attitude of the government toward retired pensioners of the Canadian National Railways. It is fine for the Minister of Transport (Mr. Chevrier) to boast of improvements that are being made
55704-17J
The Address-Mr. Knowles in the Canadian National pension plan with respect to those still in service, but what about the 3,256 retired employees of the C.N.R. whose total pension is only $25 a month? What about the 7,245 pensioners of the C.N.R., including the number I have already mentioned, whose pensions are less than $40 a month? I have read as closely as I can the newspaper accounts of the new pension plan, but it seems quite clear there is nothing in it to improve the position of these people who served this agency of the government for so many years and who are now called upon, like their colleagues the retired civil servants, to get along on such hopelessly small amounts.
I see my time is gone, so I will have to save my other subjects for other occasions. Had there been time I would have had something to say about the disappointment many people feel in that the government is not going ahead with its proposed changes in the annuities act. I would have had something to say about the government's failure in the field of housing. I would have had something to say about the government's continuing failure to do anything about the high cost of living and the difficulty the Canadian people are having-


Mr. Abbott:: Substitute "high" for "rising".


Stanley Howard Knowles: My hon. friend the Minister of Finance seems to enjoy the fact that it is not still rising, according to the latest official figures. May I point out to him that despite the slight drop in the cost of living index in the last month, it is still a fact that the position of the workers of this country in terms of what they can buy per hour of labour-not just a few foods such as the Prime Minister referred to last session, but all the things they have to buy-has improved scarcely at all in the years since 1939. Surely in view of the developments and the technological improvements which have taken place in those years, for our workers not to have had any improvement in their standard of living is hardly a tribute to what is called "our way of life".
I am through, Mr. Speaker. I just want to say again that I deplore the way the government, in an off-election year, is handing out so many disappointments. Its job is to meet the needs of our people. Not to do so is a blow at democracy, when democracy needs all the strength we can give it.
Mr. J. ' M. Macdonnell (Greenwood): Mr. Speaker, in following the usual and pleasant custom of congratulating the mover and seconder of the address, I do so with great good will. I recall what I think Churchill has often said, that it reminds us that in spite of sharp differences of opinion the

The Address-Mr. J. M. Macdonnell things which unite us are greater than the things which divide us. This pleasant custom is one of the things that remind us of that fact.
I wish, Mr. Speaker, to make some remarks about foreign trade, and then some remarks about the subject which has already been discussed a great deal, namely the inflationary prices and the effect on them of taxation and of the large surplus. It seems, perhaps, a suitable time to be discussing foreign trade because tomorrow the chancellor of the British exchequer is to present his first budget in circumstances which are grave to the point of the greatest anxiety. Often we talk as if we were immune from all these worries. I shall have something to say about that in a moment or two.
First, I want to recall to members that a tremendous change has taken place in the course of trade within the last few years. Last year exports to the United States amounted to $2,297 million approximately, and to the United Kingdom, $631 million, a great deal less than a third as much. It is not so many years since the figures were relatively equal, and without wearying you with a lot of details I register that one figure because I think it is a matter upon which we should reflect.
It is the duty of reasonable men to try to look forward and consider the consequences of their own actions. I propose to make some comments on this trade situation. The British chancellor's speech tomorrow is coupled in one's mind with the difficulties which have suddenly overtaken Australia. I do not know why it should be sudden, but at any rate the Australians are busy trying to take steps to curtail imports, just as the British are doing.
What does this mean to us? Sometimes I think, with all due deference to them, that the government has been riding on the crest of a boom for so long that they may fall into the great error of thinking that booms go on forever. Sometimes I recall the old cliche of Dr. Coue who said: "Every day in every way we are getting better and better." I sometimes wonder whether it is not difficult for the government to take these things as seriously as they might. There are many interests in this country who take the present trade situation very seriously. The cheese producers, for one, have been entirely cut off from the British market. The apple growers in British Columbia and the maritime provinces will be extremely anxious, as will the grain farmers and indeed people right across the dominion. It may be said that in particular the provinces east and

west will suffer, but of course we in the central provinces will suffer too, though not quite so acutely.
I ask the question again: To what extent are we perturbed by this situation as I feel we should be? There is an old music hall ditty, which some of you will remember, which says that "where there is a will there are three ways." On the other hand, if there is no will there is not even one way. Sometimes as I read the press, and as I read those dispatches which we all feel are pleasantly inspired from authoritative quarters, I feel that we think of ourselves as lifted up above all the worries that affect the lesser breeds without the law-those unfortunate people that are up against difficulties at the moment.
Recently the Minister of Finance (Mr. Abbott) went to London to attend the commonwealth conference. I am sure he was welcome there. A Canadian Press dispatch appeared on January 12 commenting on Mr. Abbott's departure. I am quite sure that this attitude did not come from the minister but this is what the report says:
Finance Minister Abbott will leave tor London to lend a sympathetic ear to Britain's financial troubles.
I have no doubt the minister did that, and did it in a sympathetic manner. The report continues:
Officials say that Canada, as a dollar country, feels she is on the sidelines in the current crisis, and she is affected only indirectly.
As I say, Mr. Speaker, that came from a source which one usually believes has access to those speakers who are never mentioned by name, but who seem to speak with considerable knowledge. What I should like to ask is whether the man who wrote that dispatch or the people who inspired that dispatch really are taking seriously enough the fact that Britain is our second best customer? In fact, she is the first best customer to a great many people in this country. If that market, which is already seriously damaged, were to be damaged still further the consequences, to put it mildly, would be serious-indeed, far more than serious; they could be absolutely vital to us.
Last autumn the Minister of Trade and Commerce (Mr. Howe) used reassuring words. He said we were doing our best to explore other markets, and I am sure he meant that. The Minister of Agriculture (Mr. Gardiner) seemed to have a certain amount of worry, because it is reported in the Canadian press: . . . that Finance Minister Abbott said production ought to be up. I told him it might be a good thing if you were to go over to Britain to see if financing could be arranged so that production couldi be up.

I seem to remember that a few years ago the Minister of Agriculture was very impatient at the financial barriers in the way of trade and thought they ought to be swept away. It is not quite so easy as that. According to the report the minister goes on to say:
From reports coming back I rather think that he-
That is the Minister of Finance.
-has been able to do something along that line.
A day or two later the Canadian Press from London reported Mr. Abbott as saying that the commonwealth discussions did not include detailed talks on Anglo-Canadian trade, and it seemed "unrealistic" at this time to expect an increase in United Kingdom purchases. We all understand what was in the mind of the minister when he said that, but I come back to the fact that if we accept that position, if we really believe that is the situation and we cannot do anything about it, then we will not do anything about it. I noticed that last December the Winnipeg Free Press said that we were enjoying an abundant foreign market for our exports which were at an all-time peak. Well, that is very comforting. If we let it go at that we might travel along without worry, but I suggest that we have had an indication in the last few days, with the outbreak of foot-and-mouth disease, how quickly the United States can act when they are alarmed. I suggest that when we are flattering ourselves and taking comfort from this very large trade with the United States, we should never forget that the United States is highly competitive with us in many ways; that those large exports are to a large extent the result of the boom; that when the United States feels its interests are affected it can be rather ruthless in shutting out foreign goods.
Going back a few years, we all remember the Hawley-Smoot and Fordney-McCumber tariffs. We have already evidence that congress is cramping the style of the United States administration and seeking to prevent them from giving full effect to some of the agreements which we thought were in full effect. I say, therefore, however true in a technical way it may be to say that Canada is on the sidelines, I think it is highly unrealistic if we have not got in mind that the recovery of the British market is something to which we should be giving the closest thought.
As I said a moment ago, when we recall how much of our economy is dependent on the British market, we need only allow our minds to consider-and it is not a thing that one even wants to mention, but over there the ugly word "bankruptcy" has been used; Churchill has used it-"'hat could happen if
The Address-Mr. J. M. Macdonnell we were really cut off from the British market, and what it would mean to our prairie provinces, to the maritimes and to British Columbia in particular. I therefore say that it ought to be one of the strongest preoccupations in our minds to do everything we possibly can and to make every effort to get back this market. The exchange between the Minister of Agriculture (Mr. Gardiner) and the Minister of Finance (Mr. Abbott) does not entirely reassure us. It stresses the difference of opinion that exists.


Douglas Charles Abbott: There is no difference of opinion.


Mr. Macdonnell (Greenwood):: Well, a
difference of view or a difference of understanding as to what was going on. I will try to get a word which the minister will accept because I always like to please him if I can. Nevertheless, it is perfectly clear that the Minister of Agriculture was troubled because the Minister of Finance was not able to do anything on this particular matter in London. I hope that is a fair statement.


Douglas Charles Abbott: But the Minister of Finance was not over there for that purpose.


James MacKerras Macdonnell: It is all very well to say that. But the Minister of Agriculture, who is one of his colleagues, I presume, and sits in cabinet with him, seems to think he was. It seems to me that that is an unfortunate misunderstanding. I would say it does not seem to me to indicate the best possible organization of government business, now that the minister presses me to express my view further, and it makes one wonder whether there is a division of opinion in the cabinet or, what is much worse, no opinion at all.


Douglas Charles Abbott: The hon. member appreciates the fact that the ability of Britain to import depends upon the internal policy in Britain, not on internal policy in Canada.


James MacKerras Macdonnell: That is a statement which has a good deal to commend it. Nevertheless, going back to what I said, I suggest that it just convinces me of the truth of what Mr. Perlmutter said, namely that where there is a will, there are three ways. It seems to me that what the minister has said practically is that there is no will at all; we are losing our market and we are doing nothing.


Douglas Charles Abbott: He has said no such thing.


James MacKerras Macdonnell: If that is a fair statement, then I say it is lamentable.
_ Mr. Abbott: It is not a fair statement, of course.

The Address-Mr. J. M. Macdonnell


An hon. Member:: What are the three ways?


James MacKerras Macdonnell: That is a matter for the government. They have all the knowledge. They are the people to say that. All I am saying is that if there is a real desire to do something, I am perfectly satisfied that the way to do it is not to do nothing, which if I understand the minister is what he clearly says is the attitude at the moment. We have a market which we are losing. When you are in business and you are losing a market, you spare no effort of any kind to get the market back.


Douglas Charles Abbott: And to get paid for what you sell.	.


James MacKerras Macdonnell: That is our position. I repeat it, and perhaps the minister and I will not go any further along that line. In passing I will mention that Britain is important to us not merely in the economic sphere but also in the strategic sphere. We have learned recently that they have been doing more than we realize in the matter of atomic warfare and they are doing their best to carry their load in a big way.
Here we are getting no lead in trade. We had a little murmur from the Minister of Agriculture which was promptly squelched by the Minister of Finance. I must say that is not usual for the Minister of Agriculture. I wish he would get into one of his bellicose moods, throw his weight about and do a bit of roaring. But at the present time he does not seem to be doing that.
There is one way I might point out in which, of course, by our own actions and neglects, we have made trade just that much harder than it otherwise would be, namely by the measures which we have taken-and I refer now particularly to taxation measures -whereby we have greatly increased prices or have contributed to the rise of prices in this country. As we all know, this rise has been great in the last year.
At the time of the budget, I should just like to remind the house that we had a situation which was overstrained by reason of the rapid rise in prices. They had risen from an average of 135 in 1947 to 155 in 1948, 160 in 1949, 166 in 1950-that is the average of those years-and March, 1951, last year, when we were arguing with the minister, they had reached 179. The argument which we made then, and which I repeat, was that it was a time not to risk raising prices still further, that it was a time when the situation was overstrained, that it was a time to try to avoid putting on any further strain. As we

remember, of course, what the minister did was exactly the opposite. We gave him a great deal of wise advice at that time. I should be glad to think that all the advice we had given in years past was always as sound.


James Sinclair: What about the advice we gave you?


James MacKerras Macdonnell: The advice we gave last year-may I say this in spite of the interruptions by the hon. member for Coast-Capilano and which I cannot hear-was sound. We can stand by that advice before the world.


Douglas Charles Abbott: Do not repeat what you said in Hansard.


James MacKerras Macdonnell: At that time we pointed out to the Minister of Finance that what he was going to do was to raise prices by his actions, and that is, of course, exactly what he has done. I wish to give a general figure which, personally, I find alarming. It shows that while we had a great increase in what is now called, in the statisticians' jargon, the gross national product, and that while that rose $3-2 billion or 17 per cent, approximately two-thirds of that was just fluff, air or whatever you want to call it. It was just higher prices. It did not represent anything but higher prices. So you had $2 billion of inflation, or roughly 10 per cent, on a basis of a little over 21 billions of gross national product. In that way we contributed our full share to the rise in prices which has been one of the greatest burdens imposed on western Europe. As we all know, defence preparation has contributed to raise prices, and we certainly did our bit last year.
Some weeks ago the minister made a broadcast. In that broadcast he did not impose laws as he did on a previous occasion. He was really dealing with something much less important. He was actually answering me, something which I thought was quite an honour. There were one or two things which I had said the minister did not like. He did not like my saying that money was lying around loose. I admit that the word "unappropriated" would have been more, shall I say, comme il faut or would have been more in the language of high finance. But it seemed to me that the ordinary man would understand the word "loose" much better than he would understand the word "unappropriated". As a matter of fact I will repeat it. I stand behind the word "loose", because the money was unappropriated. There is, of course, another thing which bothers me greatly and it is this. When you have all

this money lying around loose the minister- whose efforts in the way of economy, however unsuccessful, we all approve because we know he does his best and whose word-


Douglas Charles Abbott: He gets little assistance from the other side.


James MacKerras Macdonnell: I always
take the minister's word for that, I was going to say. But with all this money lying around loose it must be hard for him to resist the importunities of his colleagues. For instance, how can he resist the plausible persuasions of the Minister of Public Works (Mr. Fournier)? When the pockets of the Minister of Finance are full of money taken from the taxpayers, I can well understand that the Minister of Public Works would be irresistible.


Douglas Charles Abbott: Oh, he is. He is a most persuasive man.


James MacKerras Macdonnell: I take it
that the Minister of Trade and Commerce (Mr. Howe) would have an entirely different technique. I do not know whether he is as tough with the Minister of Finance (Mr. Abbott) as he is with us; but I can imagine that with the Minister of Finance he might say, "Who is going to stop us?" At any rate the minister will realize that what I am thinking of is the difficulty of his position.
And now I come to this unfortunate situation, this large surplus in nine months. I have told you about the rising prices, and I have told you that for reasons of common sense- yes, good common sense-we urged the minister last April he should try to prevent a further rise. The minister got a billion in extra taxes during the year partly through higher prices. The minister got in this revenue from taxation, and then of course he spent it, and all that helped to stir things up and to raise other prices.
One thing puzzles me quite a lot-and I suppose the hon. member for Coast-Capilano (Mr. Sinclair) will take a crack at me on this-


James Sinclair: I am just waiting for the
opportunity.


James MacKerras Macdonnell: I understand they are still disposed to regard this $700 million as a tentative figure which might, overnight, be reduced-which might, in fact, almost disappear. But what I cannot understand is that the minister tells in great detail how he has spent the whole works. I wish to know, if you have a great shrinkage, how you can shrink a thing when it is already spent. But that is by the way. I am not wasting any more time on it, because I have already spent
10.	1952	263
The Address-Mr. J. M. Macdonnell more time on these important matters of external trade than I had intended to spend.
And now I wish to say a word about this merry-go-round the minister gets into, this merry-go-round of taxation. Of course, I tried to make this clear in my broadcast. I must be fair to the minister by saying that he did not answer this part, so I suppose he accepts it. I have an illustration to show how the taxes of a country when imposed added on to prices. I gave one example of a washing machine which before the budget speech sold for $159.50 and after the budget speech for $184.50. Before the budget the amount of the excise tax was $5.91 and after the budget it was $20.30. So I pointed out why, and how the price had gone up when the taxes were added.
But the trouble is that that is not the end of it. A great many people are entitled to have their wages increased as soon as prices go up. The result is that a large number of people became entitled to increased wages; and that, of course, gave costs an additional boost. And, again, the manufacturers would have to raise their prices later on so that, again, the workers would be entitled to a further raise. And so you have a kind of vicious circle going on. And the only one who comes out of this with any feeling of satisfaction at all is the Minister of Finance. He gets his cut on the whole business.
As I said, when you have two billion dollars of inflation, he gets his hundreds of millions of dollars of taxes out of it. So that makes mincemeat of the textbook and classroom theory by which, I regret to say, the Minister of Finance seems to be influenced. It is well not to know much about economics, but just to know a little about what happens to the individual people when they are taxed. The minister says that when you take money away from the people, if you take enough money away from them, then, of course, that reduces demand, and prices come down.
Well, I am not saying there is no truth in that. But what I am saying is that that is diffused and vague. But what is neither diffused nor vague is that sales and excise taxes have shoved up prices, and the only comfort he can get out of it-if it is a comfort at all- is that by that process he has caused a considerable amount of unemployment.
If the government wishes to cause unemployment, if they can produce enough of it, and keep on going like that long enough, they will bring prices down. But it has never been announced as part of their policy to do
264	HOUSE OF
The Address-Mr. J. M. Macdonnell it in that way. And I doubt very much if they intend to do it in that way now. I must be fair to them by saying that.
Now, of course, I thought when the Minister of Finance had made this great mistake he might have apologized for it, that he might have said he was sorry. Perhaps I do not mean that he should apologize, exactly, but that he should have shown some regret. In fact, the Prime Minister (Mr. St. Laurent) seems to show regret. I do not know whether the Minister of Finance has read this, but if he has not he will be interested in doing so. On March 6 the Prime Minister said:
Embarrassing as it may be for the government, for those who made the forecast, it is very fortunate for the Canadian people that it happened.


Douglas Charles Abbott: A little gentle irony on the part of the Prime Minister, I thought. I heard it.


James MacKerras Macdonnell: It was not
ironical when he said it was fortunate for the Canadian people.


Douglas Charles Abbott: Far from it.


James MacKerras Macdonnell: I must admit that the Minister of Finance is a man after my own heart, because he did not make any apology. He said, like little Jack Horner, when he put in his thumb and pulled out a plum-"What a good boy am I!" As a matter of fact I would have argued with the Minister of Finance that they had made so many mistakes that they would be able to calculate how much to allow for their mistakes, and in this way guard against them like the man who called the telephone operator in London and said, "What wrong number must I call in order to get London Wall' 6677?"


Douglas Charles Abbott: I have heard that one before.


James MacKerras Macdonnell: Oh, it is not
new. But these things often improve with age.


Mr. MacDougall:: Like Scotch whisky.


James MacKerras Macdonnell: The minister is incorrigible. He just says that this was a good thing. And you have no more chance of curing the minister than you have of curing a drunkard who says that every time he goes on a spree it is to the advantage of himself and his friends. You would never have a chance to cure a man like that.
The Prime Minister says that the taxpayers are fortunate. Now, why were they fortunate? Are they fortunate if $700 million is taken out of their pockets? I will suggest, with all due deference, that the Minister of 

Finance, and the Prime Minister, too, apparently, have an entirely wrong approach to the whole problem.
The Minister of Finance announced this $700 million surplus as if he had been carrying on a business, as if somehow he had, by some good management, produced a surplus of $700 million. I read his broadcast and, so far as my reading went-and I read it carefully-the word "taxpayer" was not mentioned. The taxpayer apparently was not in the minister's mind at all. The minister referred to government as a business. Well, government is not a business. The oft-quoted words of Philip Snowden will show that. Philip Snowden said that a government has no right to a surplus, except for things pointed out and outlined to the taxpayer as things for which they were taxed.
That raises the question: What do taxpayers expect to pay taxes for? Well, I suggest they expect to pay taxes to pay the postman, to pay for old age pensions, family allowances, and all the other services. But if you tell the taxpayer that he is being taxed in order to make an advance to the foreign exchange control board he would say, "Nuts". In the first place, he would not know what it was. Then, if you explained what it was he would say, "Do you mean to say I am being taxed to pay that?" And I think he would say "Nuts" again.
The Prime Minister says that the taxpayers should feel fortunate. Well, they do not feel as fortunate as all that. I have here a clipping from the newspaper Le Matin of Montreal. I understand Le Matin is not exactly a strong supporter of the government.


Douglas Charles Abbott: Let us say Mr. Duplessis.


James MacKerras Macdonnell: It puts the matter in a rather strong light, but I think there is a good deal in what it says. This is what it says in its issue of March 3, 1952:
New capital is essential for our country's development and greatness. Capital comes from public savings, and today Ottawa does not only discourage and punish saving, but economy itself has become something very difficult to practise.
Federal taxes, especially excise taxes, caused an increase in the price of food and in the general cost of living. Those who tax us claim that it is for the purpose of fighting inflation; but in reality the present taxation system favours inflation.
That is true.
It is something like trying to quench fire with burning torches.
Then there is this last sentence which has a considerable punch in it.
The great flow of taxes in Canada has now reached a point that it could be termed as tragically ridiculous. Ridiculous because our financial policy is a piece of nonsense;-

That covers a lot of territory.
*-tragic, because it has caused serious hardships especially among the low-bracket people and because it endangers the future of our nation in general.
That reference to the low-bracket people is something that nobody can afford to laugh off because that is exactly what has happened.
I should like to refer to one or two examples of the opinions of people who are supposed to be so fortunate because they have had this extra $700 million taken out of their pockets. I have here a copy of an advertisement which I expect you have all read, signed by Kate Aitken. As a matter of fact, the Prime Minister (Mr. St. Laurent) referred to it the other day and I should like to mention it now.


Douglas Charles Abbott: That would not be a pressure group, by any chance, would it? Who is publishing the advertisement?


James MacKerras Macdonnell: The minister is more expert on pressure groups than I.


Douglas Charles Abbott: Who published the advertisement?


James MacKerras Macdonnell: The Canadian Home Laundry Manufacturers Association. I do not know anything about them, but I believe Kate Aitken is a person of considerable standing, of reputation, and has a considerable following. She asks a question which is a little rhetorical but quite interesting, as follows:
Have you ever spent a morning scrubbing over a steaming wash tub, Mr. St. Laurent?
The Prime Minister referred to that the other day. Then she goes on to speak about the taxes placed on a washing machine and she says:
There's a sales tax of 10 per cent to begin with. It costs the buyer about $10 to $30. You'd think that was enough to penalize the woman who needs a washing machine. But the government imposed an extra 15 per cent excise tax as well, adding another $15 to $50 to the cost of the machine.
That is what Kate Aitken said. I should like briefly to refer to an opinion which has been mentioned quite often, that of Mr. Muir of the Royal Bank. He is a person of standing and practical wisdom, and he makes this strong statement:
This surplus actually becomes an inflationary time bomb unless it is rendered inert by impounding it as a deposit in the central bank, or by using it to retire government debt held by the central bank.


Douglas Charles Abbott: I think my hon. friend wants to be fair so I ask him if he would read the next two sentences in Mr. Muir's speech?
55704-1$
10, 1952
The Address-Mr. J. M. Macdonnell


James MacKerras Macdonnell: I am sorry I have not got it here but I would be glad to have it.


Douglas Charles Abbott: They are most relevant. These are the immediately following sentences:
The problem of policy today is that, in a time of acute inflationary pressure, a balanced budget or even a budget surplus is no guarantee against inflation. We all admit that a balanced budget is less inflationary than a deficit, and a surplus is less inflationary than a balanced budget.


James MacKerras Macdonnell: That does not qualify it in the least.


Douglas Charles Abbott: I did not say that it qualifies it, but it applies.


James MacKerras Macdonnell: I would
agree with everything the minister has read, but it does not qualify what has been said here. I have taken the trouble to find out about one of the conditions he put in here when he said "unless it is rendered inert by impounding it as a deposit in the central bank." I made inquiries about that as I felt it was necessary. That rather qualified his first statement. The best information I could get was that that would be true only to a very small extent, say 10 per cent of the amount. Notwithstanding what the minister may have read-


Douglas Charles Abbott: They were the two immediately following sentences.


James MacKerras Macdonnell: All right. What he said was that this surplus actually becomes an inflationary time bomb unless it is rendered inert. All that the minister read was that he believed in a balanced budget, and so do I. What I am complaining about is the $700 million additional and I have read what Mr. Muir had to say about that.
There is just one other thing I should like to deal with, the question of unemployment. This taxation has had the unfortunate effect of producing a considerable amount of unemployment, or at any rate it has contributed to unemployment. If that continues long enough there will be a certain amount of distress selling. As I said a little while ago, I do not believe the government wishes to bring down prices by causing enough unemployment to produce sufficient distress selling to change the whole course of our economy. What they have done is to impose taxes which have raised prices, and the raised prices have had the effect which I have indicated.
Further with regard to the unemployment situation, we had this described to us clearly the other evening. We were told that numbers of unemployed were crowding into the Toronto office. I visited the Toronto office of
266	HOUSE OF
The Address-Mr. Sinclair the unemployment insurance commission on Saturday morning but found it closed. I suggest to the Minister of Labour (Mr. Gregg) that while there is an emergency of this kind it might be reasonable to have the office open on Saturday mornings because we were told clearly the other evening that difficulty was found in dealing with the hundreds who are coming in within the ordinary office hours.
My time is running out and I have just one other comment to make. One effect of this extra taxation has been that $700 million has been taken from the Canadian people which might have been invested. Of course, all of it would not have been, but nevertheless the potential investment power of the Canadian people was decreased by $700 million. That is undesirable because in this time of expansion and new investment it would be very desirable if the Canadian people could own as much as possible of the new enterprises being started in their country. At the present time the Canadian savings have not been adequate to do it.
There will be one question in everyone's mind-whether it is possible for taxation to be reduced. The Prime Minister and perhaps the Minister of Finance (Mr. Abbott) have indicated that that is most unlikely. In my broadcast the other day I quoted Mr. Petrie, who is a competent taxation authority. He used extremely strong language when he said that taxation as it was now was "crushing" business. I remind the Minister of Finance that when he raised the corporation taxes to the level that he did at last session he frankly told us that he felt the level was too high. I think those were his words.
I think the taxpayer will find it much harder to accept the statement that taxes may not be reduced in view of the fact that the Minister of Finance and the Prime Minister have both expressed, not only no dissatisfaction and no regret that the level of taxation produced $700 million surplus this year; they have both approved it and suggested that it is a good thing. I think that there will be a very wide range of opinion against that, and that opinion will be greatly intensified by the feeling that the Minister of Finance and the Prime Minister regard a large surplus as a matter fortunate for the Canadian people.


James Sinclair: Mr. Speaker, my first word must be one of thanks to my deskmate, the hon. member for Spadina (Mr. Croll), for making way for me this afternoon. When I came into the house I had no desire


or intention of speaking in this debate, but when I heard the hon. member for Winnipeg North Centre (Mr. Knowles) expand the wide field which he generally covers in debates in the house to include for the first time the Department of Finance I felt that he deserved an immediate reply. Any hon. member is interested when another hon. member indicates interest in his riding, and any minister or parliamentary assistant is naturally gratified when hon. members express interest in their sphere of operation. The opening point I should like to make is that the hon. member for Winnipeg North Centre (Mr. Knowles) had better devote a lot more interest to the Department of Finance and taxation policy before he goes into a full forty-minute speech on that department. I recall, for example, that he mentioned the fact we had this policy of cyclical budgeting, of taxing stiffly in good years to pay off debt, the old biblical injunction, the policy followed by any good farmer, fisherman, or housewife of paying off your debts in good days so you will be in good shape if rainy days should come. Then he went on to say that this policy was immediately abandoned in election years and just used in off-election years. I am afraid he is not as careful a student of the public accounts as of other public documents because at pages 110 and 111 of the public accounts a record is given of the debt reduction of all governments since 1867.
In particular in the post-war years since 1945 it shows that there has been a substantial debt reduction in every year, not just off-election years. In 1949 there was a debt reduction of over $500 million, and in 1950 a debt reduction of $131 million. It is quite true that in the spring of 1949, because of the expanding economy and because of the fact that civilian goods were again coming on the market in adequate supply, there were tax reductions, but there were also tax reductions in the fall budget of 1949, and there were also tax reductions in the spring budget of 1950. In 1950, however, occurred an event which apparently very conveniently slips the hon. member's mind at times. In June of 1950 came aggression in Korea, and that more than anything else changed this trend of taxation reductions, a trend which was still piling up surpluses however because the expanding economy was able to allow for gradual tax reduction and still accumulate surpluses for debt reduction.
We tried to remind the Canadian people of the impact of Korea on our taxation system by specifically putting the defence surcharge on top of the previous rates of corporation

tax and personal income tax. That is a constant reminder, and that is the reason for the reversal of this trend of tax reduction, not just of having surpluses and applying them to debt reduction, but being able to reduce taxation as the economy and trade have expanded. However, I would also recall that the hon. member also advocated tax reduction. In this connection his views are a little different from those in a document I was reading, while he was speaking, on the financial problems of the United Kingdom. I note that the trade union congress of Great Britain, which is affiliated with the Labour party, is actually recommending an increase of 6 pence in the pound on income taxation to meet the present emergent situation because of Korea, and they are also strongly advocating that the government should budget for a healthy surplus, as we do in this country.
However, in the end the member finished his little dissertation on taxation and then turned to the main body of his speech which I can sum up by saying that he was advocating bigger and bigger expenditures out of the public treasury. If he can come forward in a later full-dress speech on finance and tell us how to accomplish this age-old miracle always promised by oppositions, of lower taxes and increased expenditures, I am sure every member in the house will listen to him very closely. The easiest way in the world for a minister of finance to seek cheap popularity is by cutting taxes, racking up expenditures and then leaving the mess to his successor, but the difference in the case of the present Minister of Finance (Mr. Abbott) of course is that his successor, no matter when he retires, will be a Liberal minister of finance, and the successor to the present government will be a Liberal government. Therefore we are going to keep our house in order for this long-range objective, and not court the easy popularity which is won for a year or two by such a program of tax cutting and overexpenditures.
I am particularly delighted to see the leader of the opposition (Mr. Drew) in the house because while I am on my feet I intend to comment briefly on the remarks he made on taxes in his speech of March 6. The leader of the opposition has many admirable qualities, but I think one quality he has not got is a sense of humour. I want to point this out to you by reading an excerpt from the bottom of page 159 of Hansard of that date. He had this to say:
Some of the finest examples of parliamentary oratory and democracy are to be found in speeches made by those who have spoken from conviction against a government formed from the party to
55704-18*
The Address-Mr. Sinclair which they belong. There are no better examples of speeches of that kind than those of Winston Churchill himself.
I could not agree more, but I would not have the gall or nerve to say things like that in this house as he did with a manuscript in front of him from which he was reading every word, because I think even the young Winston Churchill at school at Harrow would have spoken from his heart and not from a prepared manuscript. To make it even more obvious, a little further on when the Minister of Finance asked him to return to his text, he had this very pertinent observation to make in this passionate outburst of oratory from his heart. At page 162 of Hansard there is the following:


George Alexander Drew: It is a great advantage to the Minister of Finance, of course, that he has been-
Listen to this word.
-permitted to read an advance copy of my text.
How low has parliamentary debate fallen when the leader of the opposition expects the Minister of Finance to be permitted to read an advance copy of his text. Continuing with this rather extraordinary speech or rather reading of the leader of the opposition, I am reminded of a story that comes from the Scots highlands from where I and my forebears came. It has to do with the minister who was seeking to get a call to a little parish kirk where there was a vacancy. He came there in succession after a number of others and preached a very splendid sermon. The congregation sat there impassively but when it was all over he saw an old wifie there whom he knew. He went over and spoke to her and said: "Mrs. McLeod, how did you like my sermon?" "I did not like it at all." "Oh, why not?" The old lady said, "There were three things wrong with it." He said, "What are they?" She said, "First of all, you read your sermon; second, you read it very badly; and third, it was not worth reading." I think that describes the speech of the leader of the opposition better than any words of mine.
I am particularly pleased that in speaking at this time I should have the opportunity of following the financial critic of the opposition. I recognized that he was using some of the notes he had not used during our joint debate on the C.B.C. not very long ago so I sent to my office to get some of the notes I too had not used at that time. I think we can carry on quite nicely from there. First of all he said today that we did not realize we were riding on the crest of a boom and that we should pay more attention to his wise advice. I have got two pages of his wise advice here which I have collected from old Hansards. Every year as financial critic he has stood in his place and predicted gloom.

The Address-Mr. Sinclair If it was not the collapse of the British market it was difficulties with United States exchange. Everything was going wrong. The Minister of Trade and Commerce (Mr. Howe) was a super-optimist because in the post-war years he predicted expanding employment, expanding income and expanding trade for Canada. I have several quotations here. For example, in 1946 this was his wise advice to the Minister of Finance, as found at page 3214 of Hansard:
. . . notwithstanding his rather optimistic forecast it seems to me it is doubtful whether he is going to get the production that he wished.
At page 3217 he predicted dwindling trade and growing unemployment, and came out very strongly at that time against deficit financing. That year we finished with a record surplus, record trade and record employment, so that his wise advice was not very wise at the time. It is wise now of course with hindsight. At page 3217 he said he found "the minister's picture tinged with a certain unreality". Then again next year, in 1947, as found at page 2800 of Hansard, he was again full of gloom. He had this to say:
. . . this situation which the minister shows us is not anything like as good as those figures would indicate.
That was his forecast of a surplus.
In fact it is a very dangerous situation.
However, once again of course the surplus did exceed the very cautious estimate made by the Minister of Finance. Very interestingly, at page 2802 of Hansard for the same year he came out very strongly for a policy of debt reduction by paying off maturing loans out of current government resources which we have been doing. In 1950, however, he was again giving wise advice to the minister. The minister had predicted a $20 million surplus. The financial critic derided him for this and at page 1525 of Hansard for that year he had this to say:
I have tried to show the house that the situation is clear, that the best we can do, even if things are good in the coming year, is to break even.
Things were good that year and we did more than break even. Once again we racked up a good surplus in place of the deficit he was so gloomily predicting at the beginning of the year.


James MacKerras Macdonnell: Would the hon. member read what I said just after that?


An hon. Member:: The next two lines.


George Alexander Drew: The next two sentences.


James Sinclair: I will admit that in this case he scored a small touche as I have not all his quotations since I did not think it would be necessary to read those other lines. I would

be quite happy, however, if the hon. gentleman would like to get up and give us the next two lines of this quotation of his own speech. Apparently he is not quite so able as the Minister of Finance, who was able to finish a quotation from Mr. Muir's speech.
The next thing he worked over, of course, was the Abbott broadcast, and how the minister had taken some time to reply to his statement that it was money on the loose. I would have thought he would certainly finish the quotation in his own speech. Let me just read what the hon. gentleman did say on this broadcast. This was not in debate; this was when he had the microphone to himself without check or interruption:
What does it mean when governments have hundreds of millions of dollars to play about with, dollars which it had not planned for, dollars which are not earmarked in any way, dollars that are on the loose-
But the hon. gentleman did not end there. ^ There is no mention of "unappropriated". * -delightfully free for the government to use in any way it likes?
I think every member of parliament here except perhaps the hon. member realizes that under our parliamentary system money has to be appropriated. This money, which he has rightfully described as unappropriated, can only be used for debt reduction or for purposes which have been approved by parliament. He may have been trying to kid the people over the air, but I do not think he is kidding any member of this house by making a statement like that-that this money was loose for the government-to spend as it pleased.
Then he gets along to this matter of forecasting. Perhaps I should return to the leader of the opposition as far as forecasting is concerned. In his speech, to which I have referred, the hon. gentleman calls the minister's forecast in regard to the last budget the worst miscalculation in Canadian history. Well, a budget forecast in a country like Canada is a very difficult thing. The Minister of Finance has to steer a middle course between the gloom and pessimism of the opposition and the optimism of those on this side, who recognize that the government of this country is in good hands and that the Canadian people are going ahead. The minister has to be cautious, for with a steeply graduated income tax such as we have and a heavy corporation tax, the actual revenues are extremely subject to fluctuation if there should be a falling off of trade, which hon. gentlemen opposite have been forecasting in recent years.
However, in connection with this question, since the leader of the opposition said this was the worst forecast in Canadian history,

I thought I would look up some other forecasts of other Canadian ministers in the past. In deference to the Conservative party I turned' first of all to a very great minister of finance, R. B. Bennett. The present Minister of Finance is 8 per cent out in his estimate of revenue, and we are 10 per cent down in our estimate of expenditure, mainly defence expenditure. However, when R. B. Bennett was minister of finance he was always out too. In 1931 he was out not 8 per cent but 17 per cent in his estimate of revenue; and not up, but down. The next year he was exactly the same; he was 17 per cent down, and had a big deficit.
To the south in the United States we have an economy comparable to our own. Last year the secretary of the treasury in the United, States estimated revenue at $37 billion. He actually got over $48 billion. In that year the revenue was up not by 8 per cent but by 29 per cent, as compared with the 8 per cent increase in our revenues. Even better, let us look elsewhere here in Canada, because after all this is our own economy. Let us look at the three provinces which have or had Conservative ministers of finance. The provinces have a much easier time forecasting their revenues because these revenues are more stable: the land taxes, timber and mining royalties, the liquor profits, the gasoline tax, and the federal subsidies. In Ontario Premier Frost is treasurer; and I think everyone in this house irrespective of party politics will agree that Premier Frost is a great improvement over the last premier of Ontario. He estimated a revenue of $228 million, and finished up with $265 million. He was out 16 per cent, as compared to the 8 per cent error in the federal estimates. In Quebec Mr. Gagnon, the provincial treasurer-and those of us who recall the Drew-Duplessis axis recognize, of course, that the Union Nationale is the French-Canadian branch of the Conservative party-estimated revenue of $201 million. He finished' up with $238 million. He was out 18J per cent, as against the federal error of 8 per cent. Out in British Columbia Mr. Anscomb, the Conservative who has since been fired though not for his error in forecasting, was out 17J per cent in his estimate of revenue, again a surplus.
The extraordinary thing by the standards of both the leader of the opposition and the financial critic, however, is that these three provincial Conservative finance ministers are not at all sorry about their surpluses; they are very proud of them. They will use them at election time to indicate the sound position in which their provincial finances were, even though they were much worse calculators
The Address-Mr. Sinclair than the example given by the leader of the opposition as the worst calculation in Canadian history.
Now I go along to the next point made, in connection with this surplus of $722 million for nine months. That is always said with the inflection on the nine months, to give the public the impression that by the end of the year it will be up around a billion dollars. Once again we can look at the record and see the pattern. Our collection of revenues is pretty even right through the year; but in common with all governments, all business and all individuals, the major expenses are in the last quarter of the year. In December of 1949 we had a surplus of roughly $300 million. By the end of March, the end of our fiscal year, not that we had shrunk our money away or wasted it but because we had made the expenditures approved by parliament, that had fallen to $131 million, or less than half. In December of 1950 the surplus was $420 million. By the end of the fiscal year it was down to $211 million. It is true that as of last December the surplus was $722 million. I am not forecasting, but if that pattern is followed the surplus should be down to $400 or $450 million by the end of the year, when the expenditures approved by parliament have been made.	[DOT]


Mr. Fraser:: Will the hon. member permit a question? How does he figure that the Minister of Finance is out only 8 per cent?


James Sinclair: I figure it out in the very simplest way, by actually looking at the current receipts of revenue against the estimated receipts of revenue. If you will give a little more study to it you will find in the case of the provinces the estimates of revenue were high while the estimates of expenditure were low. They got more and spent more than they estimated, whereas it worked the other way with us. Our expenditures were much lower than we estimated and our revenues were much higher so the gap was opened up in that way. I am glad to be helpful to the hon. member. At the present time we are 8 per cent above in revenue and 10 per cent down in spending.
That raises another point which was brought up by the financial critic. He said of course with that money lying around loose what a temptation it would be to the genial Minister of Public Works to go ahead with public works expenditures. Once again, if hon. members will examine the public works estimates they will find why we in British Columbia, in a very friendly way, call the minister "Revote Fournier". Far from spending up to the limit each year there is substantial underexpenditure. My recollection

The Address-Mr. Sinclair is that this year only two-thirds of what was actually voted for public works has been expended, again because of control by treasury board of such expenditures, not because of anything said by the opposition members, each of whom in turn has been advocating bigger and better expenditures for public works by the government, and of course lower taxes as well.
The next point that is made continually is that this money was taken by the government from the taxpayers, as though the government were highway robbers. To begin with, the government is only the taxpayers of Canada, and the taxpayers are in the position of owing a very large sum of money because of previous expenditures. Our net national debt in 1945 was $13J billion. Since the leader of the opposition is always keen on turning these things into per capita figures, that means every person in this country owes $1,000 as his share of the national debt. To use the example he uses all the time, a family of five is faced with a $5,000 share of the national debt. Well, on that $5,000 share there comes the problem of paying interest at 3 per cent; and the interest on the individual share of the national debt amounts to $30 per person. If you look at the public accounts you will see that figure is pretty accurate, because we pay about $427 million in interest charges on the national debt. So we are faced with this fact, that even with the reductions we have made in our national debt each person in Canada today owes about $1,000 of that debt. We have better times in Canada than we ever had in all our history.
What does a good man do in good times? He pays off his debts, and that is what we are doing for all the nation. The interesting thing is that if the surplus at the end of the year is of the order of $400 million or $500 million, it will be roughly the same as our current interest payment. So far as the government is concerned, the per capita payment of interest of $30 will be matched by a reduction in principal of about $30. I do not think many people with mortgages on their homes, or with business debts, would think they were doing very well if in years as good as this they were only meeting the interest on their debt and not reducing the principal by the amount of the interest; that is all we are doing in Canada today.
However, I should like to mention next this matter of prices. The financial critic raised the point of the prices of electrical appliances, and he used Kate Aitken in a paid advertisement as an authority. It is true that the prices of electrical appliances are up. The wages of the workers are up, and the general income of

those people who sell these appliances is up. The figures furnished by the dominion bureau of statistics and quoted in a very negative fashion by the member for Winnipeg North Centre today show, according to the hon. member, that the average wage does buy a little more goods than in 1939. The point is that it still buys more.
There is one thing I should like to say about the prices of electrical appliances. I believe every member in this house has received copies of advertisements from the Vancouver papers showing substantial reductions in the prices of electrical appliances. There is no thanks due to the Tory party for this, because they fought the abolition of resale price maintenance so vigorously in a filibuster last fall.


Mr. Fulton:: Resale price maintenance has nothing to do with it.


James Sinclair: I have been searching for the hon. member for Kamloops (Mr. Fulton) since parliament opened. We are from the same province, and I thought perhaps he was ill. However, I am glad to hear that he is now back in sound voice. I well recall the brave stand on resale price maintenance which he announced for his party. He said they were not for it and were not opposed to it, but it took two weeks to make that stand in opposing legislation to end the practice. When the hon. member went home to his riding and met the housewives, I would have thought he would have said he was either for it or against it. I would have thought he would then have run down to the opening of parliament to show them that he was here and for or against something else.
I have not such a large manuscript as the leader of the opposition had for his speech. There is one other quotation from the financial critic of the opposition I would like to mention. I must admit that it is not a happy position to be the financial critic of this government's policies; to have to look back over his speeches to see where he forecast gloom, depression and the collapse of trade, and to realize that he has to stand up and do the same thing next year on equally bad ground. He is in a very difficult position, and so he may be inclined to exaggerate about all this money lying around loose for the government to use. I would be inclined to admit that, being a member supporting the government and the assistant to the Minister of Finance, I may be inclined to view things in too rosy a way. It is for that reason that I am pleased to have this impartial standard set up by the financial critic of the opposition by means of which we may test the budget.

On page 3222 of Hansard for July 8, 1946, the financial critic of the opposition had this to say:
Really the one inescapable test of the minister's budget is this: Does it help to create production? Does it encourage the investor to invest, the producer to produce, the workman to produce his maximum? So far as it does these things it is a success: so far as it does not, it is a failure.
Let us take these things in turn. First, there is production. The hon. member pointed out that this year we had the greatest gross national product in all our history, $21 billion. True, he said that part of that is due to higher prices and so the dollar value is up, but the real value is up 6 per cent. Any country that can increase its real national product by 6 per cent is doing very well, so we pass the first test.


James MacKerras Macdonnell: Will the hon. member permit a question?


James Sinclair: Perhaps the hon. member will permit me to finish my analysis, because he has set us such a good standard; it is so encouraging.
The second test concerns the investor. I think every Canadian knows we have had the greatest per capita capital investment of any country in the world, the greatest in our history. There has been' $4.5 billion in' new capital flowing into new factories, new mines, new transportation, new hydroelectric plants and so on in just the last year.
Only $800 million of that was foreign capital, and the remainder was Canadian., out of our own savings, personal and corporate.
Let us look at the savings of our people. After Korea they did fall to about 1 per cent of disposable personal income because of panic buying. Last year these savings rose to 5 per cent or $700 million, and this year the actual personal savings in Canada of disposable income is a record of 10 per cent or $1,400 million. This was exceeded in only one year in recent years and that was 1943 when we forced people to save through the compulsory savings plan and war bonds and they couldn't spend much money because of rationing.
We have dealt with production so now we come to the test, "the workman to produce his maximum". The financial critic did mention the fact that there has been spotty unemployment this year. He did not mention that, despite all that, on the over-all average, and it is the nation as a whole that must be assessed, in the past year we have had the highest level of employment, the highest level of wages and the best working conditions for Canadian labour in all our history. On the basis, therefore, of these impartial stan-
The Address-Mr. Sinclair dards set two or three years ago by the financial critic when he was again prophesying gloom and disaster, the budgets of the Minister of Finance have been a resounding success. I appreciate, of course, that his present standards are different.
There is one other point about this that I want to mention. Whenever I hear a .criticism of the surplus I think of the very easy task it would be for the financial critic and the leader of the opposition to speak in this debate if, instead of having surpluses, we had deficits, instead of having this excess revenue of 8 per cent because of steadily improving conditions, we had gone down in the hole by $722 million. If that were the case, during the present debate on the speech from the throne you would not be able to keep any of the Tories down, instead of seeing them fold up on their leader's amendment on the first day.
I feel that every member in the house should study these pages 110 and 111 of the public accounts because they show the financing record of all the parties that have been in power since confederation. The summary is here and it shows that in thirty-seven years of Tory rule since 1867 there have been only four years in which a Tory minister of finance managed to have a surplus and so lighten the burden of debt. In those years they managed to reduce the total debt by $28 million- Every other year the Tories were in power they added immeasurably to the public debt. We have been in power for forty-eight years, and in sixteen of those years there were surpluses by means of which we reduced the debt by $2,280 million.
In particular, I would refer members to the record on page 111, the record of this government and especially of this Minister of Finance in debt reduction since the end of the war. We ended the war with a net national debt of around $13.5 billion. Since that time we have, by the courageous policy of taxing for debt reduction in good times, reduced the net debt by $2.5 billion. At the 3 per cent rate that is a saving in interest alone of $75 million a year to all the people of Canada. It is for that reason more than anything else, the sound financial policy of this government, that money has flowed into this country for investment from every country in the world, and which has resulted in the Canadian dollar, out on the open, free markets of the world, being a better dollar than the United States dollar. That is the record, and that is the real test of our financial policies.


John George Diefenbaker: First a few words, Mr. Speaker, in regard to the
272	HOUSE OF
The Address-Mr. Diefenbaker speech to which we have just listened, delivered with that enthusiasm for which the hon. member is at all times distinguished, and with that freedom from notes to which he made such feeling reference.
He had no thought of speaking at all, Mr. Speaker, but I noted that by coincidence he had with him statistics that indicated that the preparatory research was not as momentary as he would have had the house believe. As I listened to my hon. friend speak in such feeling terms respecting retail price maintenance and about how wrong the Conservative party had been in its stand on that subject, my mind went out to British Columbia in the month of January when, following the last session of parliament, the British Columbia Liberal Association met. My hon. friend was one of those in attendance at that convention. The British Columbia Liberal Association took the stand on price maintenance that it could not approve what its members had done in the House of Commons.
He spoke of the reductions in the cost of living that are taking place. It is true that there has been a fall in the cost of living. According to the department of statistics, the reason for that is that the farmer is receiving lower prices. It is not prices on electrical goods or other goods, fixed by retail price maintenance, that are being reduced. It is the farmers' products which today are selling at lower prices than they sold for a few months ago. That is the reason for whatever reduction is taking place in the cost of living. The recent reduction, as a matter of fact, will not mean much to the people in the lower income tax brackets. When analysed, we find that the savings to a person making an expenditure for living of $2,000 a year will be 20 cents during the coming year. When my hon. friend stated-and his colleagues cheered him to the echo-how wonderful it is for the Canadian people to have so large a surplus he failed to explain that it meant that every Canadian during the first nine months of the year had to pay $50 more than was necessary for the cost of defence and the cost of government to secure the surplus.
I would suggest that he had better go back and talk to the people who are in the lower income brackets, and get their reaction.
He spoke about reduction of the national debt. When was that policy initiated? When the Minister of Finance last spring made his prophecy of a possible surplus of $30 million, there was no indication that hundreds of millions of dollars were going to be used for other purposes. Today, at a time when many people of this country are having
[Mr. Diefenbaker. 1

difficulty keeping up with the high cost of living, the Canadian dollar of which my bon. friend speaks in such fulsome terms, has a value of about 48 cents compared with its value ten years ago. It therefore comes with poor grace from those supporting the government that they should boast of the fact that they were able to take so much more from the Canadian people than they were authorized to take. As the hon. member for Greenwood (Mr. Macdonnell) pointed out, the result of the taxation that was imposed in 1951 was to increase the cost of living of Canadians. Why did not my hon. friend say what a mistake they made in connection with the additions to the cigarette tax? Why did he not answer the complaints that the added taxation one year ago has resulted in a diminishing return because it has become exorbitant and beyond any justification? Let him speak in any part of this country and try to justify the extra 20 per cent surcharge on income tax-when it was not needed. Instead of boasting about bow much they have taken from the Canadian people in the calendar year, one would have expected at least a degree of contriteness that is not as yet apparent, and a desire on the part of hon, members supporting the government to see a reduction in unnecessary taxation, a desire on the one hand to assure provision for the necessary defence preparations and the cost of government, and on the other hand, to relieve from the backs of the Canadian people that load of taxation which is making it difficult for Canadians in the low income brackets to carry on.
I intend now to deal with one or two matters of particular interest to the prairie provinces. First, however, I shall mention a matter that is of interest generally to every province in the dominion; I refer to a measure that is spoken of in anticipation in the speech from the throne, namely the redistribution measure which, if it is carried into effect in its present form, will penalize those of us who live on the prairies to a degree that can scarcely be justified.
I am one of those who believe in the constitution and the necessity for its maintenance in its entirety. In consequence of conditions over which we have no control, the province of Saskatchewan will lose five constituencies or a reduction in representation of 25 per cent to put it on a percentage basis. Manitoba is going to lose two constituencies. When I see what is taking place, I ask whether or not parliament should now take into consideration the need for a requisite constitutional amendment being brought into being that would assure fair and proper representation to those areas of the prairies which are now depleted of population but

to which population will return as soon as the great potential developments which are taking place are consummated.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
John George Diefenbaker: Mr. Speaker, at the recess hour I was dealing in a general way with the question of redistribution, and placing before the house a few personal views and suggestions. As I remember it, just at the adjournment hour I was referring to the need for the preservation and maintenance of the constitution of our country without which confederation cannot be maintained with that fairness that is requisite and in particular in the relations of the federal parliament with the provinces.
I believe this, that representations should be made to the provinces, and that there should be consultations with them with a view to arriving at some equitable arrangement that would assure that those portions of our country in which the population has been decreasing recently would not have their representation fall below a fixed and a requisite level.
In 1946 the Minister of Citizenship and Immigration (Mr. Harris) was chairman of the committee.


Mr. Harris (Grey-Bruce):: No; in 1947 I was vice-chairman.


John George Diefenbaker: I was a year out. I made the suggestion then that, having regard to the plans of the government to alter the basis of representation, the provinces had the right to be consulted. However, that was not the view of the present Prime Minister (Mr. St. Laurent), the prime minister of that time, or indeed of the government. The view taken was that the question of representation was one that affects parliament alone, that it was a federal matter and did not require consultation with or, much less, consent of the provinces. If that is the view of the government now, then this matter could be dealt with through amendment to the constitution in respect of federal matters which now fall within the jurisdiction of parliament.
I am not one who believes that it is a matter for parliament alone. I still adhere to the view that the provinces have a right to be consulted in the matter of determining any change in the basis of representation. For that reason, on behalf of the people on the prairies who are particularly affected at this time, I suggest the calling of a dominion-provincial conference in order to assure
The Address-Mr. Diefenbaker
agreement that the provinces who will otherwise lose representation shall not have representation reduced to the numbers which would be the result if the ordinary basis of representation is applied.
You ask me what, in general, I suggest. During the dinner recess I tried as clearly as I could to make a summary of the representation I would like to have, and I offer this merely for the purpose of consideration. The prairie provinces have very large constituencies. On the basis of size even now, it is difficult for any member to represent some of the rural constituencies. It will be that much worse if the representation is reduced by one-quarter or, in other words, if there is an increase by one-quarter in the present areas of the constituencies.
The same argument applies in respect of the constituency represented by the hon. member for Yukon-Mackenzie River (Mr. Simmons). He represents an empire, an area far beyond the possibilities of proper representation by any man. I submit that careful thought should be given to the division of that area in northern Canada into two constituencies.
There is a principle in the constitution now recognized in the maritime provinces that, regardless of population, the representation of the provinces shall not fall below a certain level. Without in any way interfering with the necessary increases that will fall to other provinces in the dominion, by reason of increase in their population, I think it is not unfair to suggest a minimum number of members for each and every province beyond which regardless of population representation would not go.
Without in any way constituting a travesty on the fabric of confederation, this would assure reasonable representation and would deny the injustice that will be done to the prairies if by agreement with the provinces the present system, a system which is manmade and therefore can be man-unmade, is not changed.
I place this before the house not as a considered but rather as a tentative basis. In no way will it deprive any of the provinces of Canada of proper representation; rather it would assure to all ten provinces that in the years ahead their representation in the parliament in Canada shall never fall below a set and fixed level.
I care not what one's party belief may be; there is no division on this question on the prairies. I am sure I am speaking for people outside the house who hold political views different from my own when I say that a reduction in the number of seats in the prairies is a denial of the consideration we
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The Address-Mr. Diefenbaker have a right to expect. It is a matter which a conference convened for the purpose should consider in order to ascertain whether something can be done to assure that we in Saskatchewan shall not have our representation reduced by one-quarter and in other provinces to a lesser degree.
I shall say more when the discussion takes place on second reading of the bill before the house. It is a matter which transcends party considerations. It is one that strikes at the very life of our western provinces and deserves every consideration on the part of the government to assure that in consultation with the provinces-after all, confederation is based upon agreement-some basis will be arrived at which will assure that representation shall not be diminished beyond a certain and fixed limit.
Having said that, I want now to pass on to one or two other matters that are of importance to the prairies. We had a lengthy discussion last week on hoof-and-mouth disease, and I shall refer to that later if I have the time. Another problem that faces us today is the storage and disposal of the damp and tough wheat that we have in such abundance.
First, something will have to be done in order to assure that it will be transported and dried. Something will have to be done now in order to assure the necessary storage facilities. I am not going into particulars, but I have here the Hansard for last fall when week after week I brought up the matter and pointed out the peril facing the western farmer, having regard to the fact that so much of his wheat, barley and oats was damp and so much was under the snow as a result of the inclement weather in the fall. Over and over again the Minister of Trade and Commerce (Mr. Howe) in semi-optimistic statements promised that there was nothing to worry about. On February 29 I asked him a question and his answer is reported at page 18 of Hansard as follows:
Additional drying capacity is being installed at the head of the lakes, and I believe at Vancouver. Unfortunately time will not permit much help from that source for this year. Arrangements have been made to ship ten million bushels of damp wheat from the prairies to Duluth to take advantage of drying capacity there.
The minister stated that he was hopeful there would be no spoilage, but as I see it that statement is not in accordance with the facts. The situation is assuming tragic proportions. With the approach of spring the prairie provinces are faced with a situation which may result in a loss of from $75 million to $100 million on crops that could be avoided even now provided the government, with its
IMr. Diefenbaker.]

monopoly power over marketing transport and storage of wheat and other grains, would act with dispatch.
The reason we are in the position in which we are is that in the 1950 crop there was a great deal of damp and tough wheat, the difference being two to three per cent in extra moisture. That wheat was stored in the elevators on the prairies. Those elevators were not cleared out and when this present crop came along many of the elevators were full or half full with wheat from the previous year. Nothing effective was done on the part of the wheat board or the government to meet a situation that every farmer realized was facing the west. We in the opposition asked over and over again that something be done. I oan remember my hon. friends to the left asking for the appointment of a transport controller throughout the year 1951. But nothing was done until August. The hon. member for Souris (Mr. Ross) asked for that several times and the answer given was one of indifference and apathy.
All through the fall we in this house endeavoured to bring to the attention of the Minister of Trade and Commerce and the government the terrible prospect in western Canada. Too many of our freight cars were in the United States and there was a great shortage of cars, particularly on the Canadian Pacific lines. There were no available storage facilities in the line elevators. We asked that something be done to provide payment to the farmers for storage so that he could arrange his own storage facilities, but nothing was done.
Now we find ourselves in the prairies with 28 per cent of all wheat, and 24 per cent of all oats and barley as damp or tough. We find 28 per cent of Saskatchewan wheat and barley still unharvested on the farm, with the percentage being 33 per cent in Alberta, and 6 per cent in Manitoba. The total figures exceed a hundred millions of bushels.
The elevators are glutted. Surely action is demanded even at this late date. The loss is going to be severe. It would have been much better had the government realized the situation earlier. I suggest certain action now. I would say that there should be a conference, not only of the provinces but of the dominion and representatives of the elevator companies. I know there was a conference in Regina recently but that (* onf ere nee could not act because it did not have the power.
The time has come to arrange further markets for this wheat. We should do under the Colombo plan what we have done for

Greece. We have made a gift of 750,000 bushels of grade 5 wheat to Greece and I suggest that a substantially greater amount should be given to India and the countries of the east under the Colombo plan.
In an area in Saskatchewan now under quarantine, that one might call the animal leper colony, a complete embargo exists which is serious for the people in that area. The embargo which is in effect outside of that area should be lifted so that feed grain could go to the United States. There are farmefs in my constituency who could find a market over there, but they are denied that market by an act of the government which forbade some time ago the export to the United States of wheat for feed purposes. They need it there. The agricultural agent of the Chicago and Northwestern railroad said recently that the United States will be short of feed grain this year.
There are areas in Saskatchewan and in other western provinces which have not received their fair allocation of freight cars.
I suggest that something be done to divert cars that are being used to haul freight that will return a higher profit than wheat. Many of these cars should be diverted into the west in order to move a large portion of the crop that faces destruction unless we act now.
Among his optimistic statements the minister said that in February arrangements had been made to do something toward acquiring drying facilities in Duluth. He said that 14 million bushels would be sent to Duluth, but within a few days after one of the officials of the wheat board said that the most they could send there would be 10 million bushels. Churchill has not been used. Half a million bushels could have been sent up there to be dried even though it had to be hauled up and back.
The Minister of National Revenue (Mr. McCann) was asked last July, August and September to allow driers to be brought into Canada, free of duty. First the government took the attitude that that would not be permitted. Then they later receded from their position in that regard and allowed them to be brought in subject to refund, as I understand it.


Mr. McCann:: They never took the attitude that it be not permitted. At the time that the question was asked it was stated exactly what the law was.


John George Diefenbaker: I appreciate that. That is true. But under the emergency powers tariffs are changed from time to time and alterations made by order in council, the use of which has never been totally foreign to the purposes
10, 1952
The Address-Mr. Diefenbaker of this government. Finally the minister said he would let them in under certain circumstances. Then the farmers started to use these driers and the board of grain commissioners decided that driers might destroy the gluten content with the wheat having the odour of oil. What should have been done in the face of this emergency? Three months ago I asked the government whether, with its monopoly control of wheat marketing in this country and with the existence of an emergency, they would go ahead and build greater drying facilities in Vancouver, Calgary, Regina, Moose Jaw and elsewhere. Even yet that must be done. We face a situation on the prairies where there are still 150 million bushels of wheat under the snow which will not all be harvested unless conditions are ideal in the spring and if harvested will still not be brought to market because of the condition in which it will be. Use the facilities at Churchill. Use any facilities, but above all let us have an end to this policy of repeating optimistic statements week by week and month by month as has been done since last fall. Only the other day, when the minister spoke on March 7, did he finally admit that the situation was serious and said that the farmers should look after themselves at least in part. With the world asking for food, Mr. Speaker, surely we in this parliament are recreant unless we assure that a large portion, if not all, of that wheat is made available for world needs. We speak about possession of the H-bomb in the war of ideas against communism. What communism uses above everything else is the H-weapon, the weapon of hunger. That is a field in which communists operate in order to propagate their doctrine.
I feel that we should assure that marketing facilities are made available now and that a great portion of this otherwise unusable wheat is utilized, when shipping space is available, to carry out our contribution to the Colombo plan and at the same time assure that surpluses shall not pile up in this country. I place these matters before the house because I believe that we are faced with a dangerous situation on the prairies having regard to the number of bushels still unharvested and the larger number of bushels of damp wheat still on the farms in storage that in some cases is insufficient. It is a situation that is dangerous to the economy of the country. It is aggravated now in a smaller area around Regina. There the farmers find themselves in the position of having their cattle herds in the buffer area. They are unable to ship any fodder or the wheat that they have. There are no adequate storage
276	HOUSE OF
The Address-Mr. Diefenbaker facilities, and they are asking that special consideration be given to the area affected by the dread foot-and-mouth disease.
The government has the responsibility to act through the wheat board, because after all the wheat board is merely an agency of the government, now carrying out government policy. At maximum rates of drying the total amount that can be dried each week at Fort William, on the west coast and using the facilities available in Ontario, is a matter of 3,400,000 bushels a week. With approximately 100 million bushels of damp wheat on the prairies or in terminals, and with a large portion of the 150 million bushels of damp or tough wheat, barley and oats, at the present rate of going-and they are using the drying facilities at the maximum now- it will take them forty-five weeks.
Surely that indicates the need for immediate action. The farmers ask no contribution from parliament hut they ask that the government realize the situation and act at this time. If the government had acted last fall conditions would not be as fearsome as they are now. If the government had acted in November or December when we on this side of the house endeavoured1 to place the situation before parliament, we would not face a future on the prairies as dark as we do. But even now there is a challenge and an opportunity. The Minister of Trade and Commerce was a great elevator builder. He had experience during the days of war in getting things done with expedition because of the emergency. Surely the challenge of 100 million bushels and' more of damp and tough wheat on the prairies is enough to call upon all the resources and initiative of this nation so that even now the drying facilities will be increased1 to an extent that will assure that a great portion, if not all, of the wheat and coarse grains will be saved.
A moment ago I mentioned the question of foot-and-mouth disease around' Regina. I have had letter after letter pointing out their difficulties. The other day the Minister of Agriculture (Mr. Gardiner) announced that the spread of the disease was all over, and before his words bad gone over the C.B.C. three new cases broke out in various areas around Regina.


Mr. Prudham:: Can the hon. member quote the page of Hansard where he stated that?


John George Diefenbaker: I did not say it was in Hansard. Hansard does not go over the C.B.C.
I was speaking about an interview given by the minister which was 'also reported in the press of the country.


Douglas Charles Abbott: Did he say on the C.B.C. that it was all over?


John George Diefenbaker: What he said over the C.B.C. and in the press was that we were over the hump, that there were no new cases and none expected, and1 before he finished saying it there were three new cases.


James Arthur Ross: He said: it was entirely under control.


Douglas Charles Abbott: Why do you not quote from the broadcast?


John George Diefenbaker: Why do I not quote from the broadcast?


Douglas Charles Abbott: When the minister is not here it is very easy to paraphrase what he said.


John George Diefenbaker: If one were to try to keep before him all the broadcasts of all the ministers containing all the statements they have made of a similar nature-


Douglas Charles Abbott: Red: herring.


John George Diefenbaker: -it would be impossible to keep the file before one, and the minister knows that is true.


Douglas Charles Abbott: When I quote I quote; I do not paraphrase.


John George Diefenbaker: I leave it to hon. members of the house who read the papers. I hope my hon. friend the Minister of Mines and Technical Surveys does that occasionally. The Minister of Agriculture (Mr. Gardiner) indicated that it was all over. This is no criticism of him; it simply indicates the danger of this disease and the need of action. Many farmers in that area have written me in connection with the matter, and they have made a suggestion. This was what I wanted to pass on to the government when they became so susceptible to criticism. Incidentally, Mr. Speaker, did you ever notice that when there is any suggestion that the foot-and-mouth disease should not have spread and that three months should not have been allowed to pass without something being done, the government becomes very touchy and very susceptible. The suggestion I want to place before the government came in a letter from a gentleman within this buffer area. I am going to pass it on to the government because I think it has merit:
There is a large percentage of the cattle from this area soldi on the market as feeders and are resold to people in various places to be fattened. Now, I don't think anyone will want to take a chance on buying any feeder cattle from this quarantine area to put in feed lots for possibly a year or two, and I think we are just making it tough for ourselves and everyone concerned to expect them to. If all the cattle in the quarantine area were branded and numbered-


Some hon. Members:: Time.


Mr. Speaker:: Order.


Douglas Charles Abbott: Forty-five minutes.


John George Diefenbaker: All right; I did not know I had gone beyond my time.


Mr. Speaker:: I was calling the house to order. The hon. member for Lake Centre may continue.


Douglas Charles Abbott: Let him finish the letter.


John George Diefenbaker: I was trying to make a constructive suggestion.


Douglas Charles Abbott: You would think he was the only member of parliament who gets letters.


John George Diefenbaker: Very well; I will not pass this on. I thought the house would like to hear it.


Mr. Speaker:: There are altogether too many interruptions. The hon. member for Lake Centre may continue, and I would ask the house to permit him to finish without interruption. His time has not expired.


Douglas Charles Abbott: Good.


John George Diefenbaker: I always listen to my hon. friends but they appear to be touchy. This letter goes on:
If all the cattle In the quarantine area were branded and numbered and the government buy them all; as they were brought in to a packing plant in Regina, inspected and slaughtered immediately, their number then could be cancelled off the list and the authorities would know at all times how many cattle were still in the area and who they belonged to.
In that way the people in this area would avoid the loss that otherwise will fall upon them. In that letter I think there is a suggestion which will help the farmers in that buffer area who are as seriously affected as those in the quarantine area, because they are being denied the right to export any livestock. If this scheme were adopted a great deal of loss and personal discomfort on the part of these people would be obviated.


Hazen Robert Argue: Mr. Speaker, I agree with what has been said by the hon. member for Lake Centre (Mr. Diefenbaker) as to the steps the government might consider and take in regard to the redistribution of the representation in this House of Commons. It seems to me that a province such as Saskatchewan, which contains approximately 40 per cent of all the cultivated land in Canada, cannot be adequately represented by any fewer than the twenty members now representing it. The hon. member for Lake Centre has said it is his understanding that members from Saskatchewan belonging to all parties are agreed that our representation in parliament should not be reduced and that certainly it should not be reduced by five seats, or the equivalent of 25 per cent.
The Address-Mr. Argue
The Regina Leader-Post has given a good deal of thought and study to the matter of adequate representation for Saskatchewan. In an excellent editorial on January 17, which followed an editorial of a month previous along the same lines, it advanced what I feel were sound arguments in support of the proposition that the number of Saskatchewan seats should not be reduced. I do not intend to read that editorial, but I would like to quote one short paragraph from it:
The proposal advanced recently by this newspaper has since been widely endorsed that there should be a deviation from the representation by population in the House of Commons to forestall the threatened loss of five members of parliament by Saskatchewan and one by Manitoba.
The editorial goes on to point out that if Saskatchewan had within its boundaries a Montreal or Toronto, or some large city, by making the ridings within the urban areas a good deal larger by standard of population, the rural constituencies could be kept down to a manageable size, to an area that members could adequately represent. I think our problem in Saskatchewan is somewhat different from that of rural members in other provinces. In southwest Saskatchewan there are farmers in every part of the whole area. In some of the northern areas you get huge spaces where no one or almost no one lives. Within the settled part of Saskatchewan there are people on almost every section of land, and certainly people in every township. A member attempting to represent a rural constituency must travel thousands upon thousands of miles by car if he is to even partially cover his constituency.
I believe the government should consider the appointment of a royal commission to look into the matter of representation, to consider what representation each province should have by way of a floor. If we had representation by population purely and simply in Canada now perhaps there would be no argument, but other provinces and other areas have operative floors. The people of western Canada believe they too should be given a floor to provide them with some protection as to the number of representatives they will have in this parliament.
I have risen tonight chiefly to make a plea for a new deal, a square deal for western agriculture. I believe .there is room and need for many important improvements in present legislation. Before going on to deal with agriculture I want to point out some of the improvements in social security legislation that I believe all Canadians need and are willing and able to pay for. Last year parliament unanimously passed the Old Age Security Act and the Old Age Assistance
278	HOUSE OF
The Address-Mr. Argue Act, which considerably improved our pension legislation. But one thing the government and parliament did not do at that time was to provide a needed increase in the basic pension of $40 a month. There has been no increase in the basic pension since April, 1949. Since that time the cost of living has risen rapidly. Indeed the $40 has lost much of its purchasing power, and if there were no other reason to increase the $40 now than to provide the same purchasing power as it provided in 1949, that would be ample reason for increasing the old age pension immediately. I do not think parliament and the people of Canada should be content with raising the old age pension by a precise amount in order to maintain the purchasing power of that pension as related to some previous date. The old age pension in Canada at any time should be a measure of the production in Canada. Year after year we are producing more and more wealth, and as our production increases then the share of that production going to our elderly citizens through old age pensions should be comparably increased.
I believe a reasonable pension that could easily be paid at this time by the people of Canada would be $60 per month. I for one feel that the pension should be increased immediately, and that our senior citizens should not have to wait until a few months before an election to get whatever increase the government has in mind. The old age pensioner should get an increase now, and in my opinion a $20 per month increase is necessary to provide an adequate pension. Then a year from now, if inflation has continued, that $60 should be increased by an appropriate amount.


Mr. Cruickshank:: What pension do you pay
in Saskatchewan?


Hazen Robert Argue: We in Saskatchewan pay an old age pension supplement of $2.50 a month.


George Alexander Cruickshank: In British Columbia we pay $10 a month.


Hazen Robert Argue: That is all to the good. British Columbia is a wealthier province than Saskatchewan.


George Alexander Cruickshank: It is a better province, too.


Hazen Robert Argue: It is a wealthier province, but I do not think it is a better province. I am glad that British Columbia can pay $10 as a supplement. I should like to see them pay $20. Saskatchewan is providing $2.50 per month supplement to pensioners on a means test, and we also provide free medical services to the pensioners. If somebody asked me whether we were doing enough in

Saskatchewan I would be the first to say, no. But I am saying that we are doing more in Saskatchewan in relation to our resources than is the federal government of Canada in relation to its resources. So long as each province and each government does the very best it can, then I think none of us should have any complaint.


George Alexander Cruickshank: Why are they all leaving Saskatchewan?


Hazen Robert Argue: An hon. member reminds me that free hospitalization and medical care are also provided to certain of our pensioners in the province of Saskatchewan.
I go from a suggested improvement in old age pensions to improvements which I feel should be made in health facilities for the people of Canada. In 1945 the federal government laid down proposals to the provinces for a complete health insurance scheme. The people of Canada have waited seven years for the federal government to do anything substantial in the way of implementing that program. I believe the federal government should now offer the people of Canada a complete health program in co-operation with the provinces so that any province that is willing to co-operate in such a program can provide complete hospital and medical care for the people within that province.
In Saskatchewan we have a hospitalization program which, to put it moderately, is second to none. We have not yet gone far enough. We have a hospitalization program coupled with certain other medical benefits for all the people in Saskatchewan, but we would like to be able to provide a complete medical service now for all the people of our province. If the federal government would offer, as it did in 1945, concrete proposals whereby the federal government would co-operate with the province of Saskatchewan, we would have complete medical service in a short time. I want to tell the members of this house that we in Saskatchewan have not gone as far as we want to go in the way of providing better medical services. We feel that the federal government should adopt its own 1945 proposals and put them in legislative form. If the federal government does not bring in legislation to co-operate with the provinces in a health program, the people of Saskatchewan are not going to stand still. I say that, irrespective of political complexion, the people of Saskatchewan are a progressive people and are going to provide medical services step by step, even if the federal government continues to sit on its fat surplus and do nothing about a medical program.

I turn now to the third point in social security legislation which I believe should be improved. I have never spoken about family allowances without giving the federal government, under the leadership of Mackenzie King, along with the other members of parliament, full credit for bringing in the Family Allowances Act of 1944. I still give them full credit for having done that. This act provided a minimum payment of $5 per month and a maximum payment of $8 per month for each child. But since 1945, by allowing inflation to run wild, the government has gradually whittled down the purchasing power of that allowance by at least 40 per cent. If the federal government were to do no more now than to bring in an amendment to the Family Allowances Act which would restore the purchasing power of the family allowance, it would have to provide for an immediate increase of more than 60 per cent.
I give the government full credit for having introduced family allowances, but merely having introduced it is not good enough. I have on the order paper now a resolution in my name asking that family allowances be increased to the point that the 1945 purchasing power be restored. If that were done to an extent necessary to provide the same purchasing power as the allowance had when first introduced in 1944, the minimum family allowance payment would have to be increased from $5 to $8 per month and the maximum from $8 to $13 per month per child.
The government always says, where is the money going to come from? The Minister of Finance (Mr. Abbott) has a fairly healthy surplus of some $721 million. He says it is going to be cut in half by the end of the present fiscal year, but there is a surplus. Before this session is completed the minister will be given one hundred ideas as to how that surplus might be spent but I can see no better way than by the government improving the old age pensions, making provision for a complete health program and increasing family allowances. I know it would take some more money than the surplus alone to bring into effect all the suggestions I have made. I am sure that it would. The Minister of Finance-and I give him credit for this-was nevertheless able to devise a 2-2-2 formula for meeting the nomeans-test old age pension: 2 per cent more income tax, 2 per cent more corporation tax and 2 per cent of the existing sales tax earmarked for the Old Age Security Act and the Old Age Assistance Act. I do not think that 2-2-2 formula is really going to hurt anybody in Canada, but the revenue derived from it
The Address-Mr. Argue is going to help a great many elderly Canadian citizens, particularly because of the present inflationary period.
I for one believe that the finances necessary for a better social security program could be raised, to the extent of whatever is needed in addition to the surplus that now exists, that the Canadian people would be willing to pay whatever increased taxes may be necessary. What the people of Canada are asking for is some leadership from this government and for an opportunity to pay in to an over-all social security program that will provide them with some real security in the way of a better old age pension program, a health program for all, and increased family allowances.
I turn now from that subject, Mr. Speaker, in order to dwell for a short time on the things I feel that the farmers of western Canada need at the present time. In the past I have from time to time advanced various ideas in the house. Some of those ideas the government has accepted, sometimes fairly quickly and sometimes after quite a struggle and after a good deal of repetition. Many of those ideas the government has not accepted.
I can, however, name one or two that they have accepted, and I am glad they have done so. I refer, first of all, to their allowing farmers to deduct from their income fees paid to farmers' unions. I think that is a good thing, and I am glad the Minister of National Revenue (Mr. McCann) made that announcement the other day.
During the debate last year on the Canadian Wheat Board Act I proposed an amendment asking that the government wind up any oat, wheat or barley pool period within sixty days of the end of the pool period. The Minister of Trade and Commerce (Mr. Howe) said that he could not accept my amendment. He said the legislation as it was drafted was merely to handle dribs and drabs, a few thousand bushels of wheat here and there, or a few thousand bushels of other grain. I was glad, however, that the Minister of Trade and Commerce closed out the oat, wheat and barley pool even though, by so doing, he had to transfer some tens of millions of bushels, and that the final payments were made within a few months of the end of the crop year. I think he followed a good business practice by closing out those pools and paying out to farmers the money that rightly belongs to them. The minister has himself established a precedent that I hope he will continue to follow. While he was not willing to put into legislative form my suggested amendment, I was nevertheless pleased to see that, in practice, he adopted it.
280	HOUSE OF
The Address-Mr. Argue
As the hon. member for Lake Centre said this evening, one of the present problems- one that now amounts almost to a calamity for western farmers-is the matter of damp grain. The hon. member for Lake Centre outlined a number of suggestions that, as he said, probably would help to relieve this situation. I have not time to refer to those suggestions, but I think the government has overlooked one important method by which a great deal of this grain might be salvaged. I refer to the small grain drier.
By means of questions from this group and from other opposition groups, we attempted to get grain driers allowed in last fall duty free, but we did not succeed; but grain driers now come in duty free if they are to be used and kept in Canada. The board of grain commissioners and the Minister of Trade and Commerce last week pooh-poohed the idea that local farm grain driers were of any real value. May I say that there are two different types of grain driers. One that has been used is a large, expensive commercial grain drier, used in commerce to dry chemicals for the chemical industry. It is true that it is practically valueless for drying grain, certainly in its normal method of operation. Then there is the small grain drier, one that is produced in Nebraska. It has passed with flying colours all of the tests that I have read of in the press. It is able to dry fairly substantial quantities of grain and in good condition. I think that the board of grain commissioners should have inquired into these various farm grain driers, should have put them to proper tests and should have made a scientific appraisal of their value. Once having appraised their value, they should have promoted their use to as large an extent as possible.
I have a great deal of confidence in the ingenuity of the local farmer. If he were given some direction and encouragement, I believe he would be able to adapt for his own use a grain drier that might be extremely useful in saving his grain. But instead of making proper inquiries, sending out literature, and explaining to the farmers how the grain might best be dried on the farms, press statements went out from time to time saying: Beware of farm driers; farm driers are ruining the grain. Even the minister himself the other day said that in his opinion farm driers have no read place in this emergency. I think that a mistake was made in that regard by the Department of Trade and Commerce and by its agencies.
It will soon be time for Canada and other countries in the world to negotiate once again -as I hope they will-an international wheat agreement. We have had some experiences

with the British wheat agreement and with the present international wheat agreement. The farmers of western Canada are not at all satisfied with the treatment they received. They felt that they were entitled to a 25cent payment as a final payment on the five-year pool. They still think, as I do, that they are entitled to another $48 million at least, being 30 cents a bushel on the 160 million bushels of wheat sold in Canada to domestic consumers within that five-year period at a price below the price to Great Britain. When that debate was in progress, Mr. Speaker, we in this group attempted to have parliament approve a motion asking for a 25-cent a bushel payment, but Liberal members at that time turned the motion down. Last year it was my pleasure to ask, by way of a motion, for a $2 final payment, that is to provide a total price for the 1950 crop of $2 a bushel. I think that was a moderate request. I think it was a price that was probably still considerably less than parity. But once again, Mr. Speaker, Liberal members, exercising their judgment, decided to vote down that motion.
One of the worst features of the government's policy now with regard to wheat is the continued forced subsidization by western farmers of Canadian consumers because the price of domestic wheat is held to the international wheat agreement price.
Class II wheat today is over $2.30 a bushel. It has been up to $2.40 a bushel or more. Canadian consumers paid $2 a bushel for Canadian wheat in the last two years of the British wheat agreement and are today paying $1.80 per bushel. Since that time though the cost of production has gone up the government has continued its policy of forcing the wheat farmer to subsidize the consumer in Canada. I think it is time the government changed its policy so that the Canadian consumer would be removed from the back of the wheat farmer. I do not ask for higher prices for bread, or that the consumer be forced to pay a higher price for domestic wheat; but I do feel that any subsidizing of wheat should be done by the federal government. It should not be a subsidy extracted by the government from the wheat producers of western Canada.
Some mention was made this afternoon as to the government's policy on floor prices, particularly in view of the outbreak of foot-and-mouth disease. We in this group have always supported a parity price. We believe that the Agricultural Prices Support Act, with the $200 million that was to be appropriated for the purposes of that act, could and should be used to provide fair floor prices for farmers from one end of Canada to the other.

But what has the government's policy been with relation to floor prices? When the floor drops out of any agricultural product, and the price goes so low that production is discouraged the Minister of Agriculture then comes in and establishes what he calls a floor under the commodity concerned. For instance, the floor price, so-called, under eggs is 38 cents a dozen. It means to the farmer in my area who produces eggs a price of 25 cents a dozen-and that even when the mercury reaches 35 or 40 degrees below zero.
That is not an adequate floor price. The Canadian Federation of Agriculture have asked for a floor price of 44 cents a dozen. In the debate last fall-I believe it was December 17-the Minister of Agriculture said that the floor price under hogs at that time was $32.50 a hundredweight for Wiltshire sides at Halifax. That would mean $27.50 a hundredweight, dressed, at Winnipeg. That was not an adequate floor price, and the farmers said to the minister that they should have something better. Instead of the minister announcing a more adequate floor price, the Minister of Resources and Development (Mr. Winters), who was then Acting Minister of Agriculture, announced on February 16 of this year a new floor at $26 for grade A hogs at the public stockyards in Toronto and Montreal. I see in the most recent issue of the Free Press that the price for hogs at Winnipeg is $24.50 a hundredweight.
In other words the floor has been lowered. The government has changed the floor price and, instead of improving it, because of the increased cost of production, has once again reduced that floor.
Now we are faced with the calamity of the foot-and-mouth disease, with provincial and the United States embargo barriers placed against the movement of livestock. Once again the market price to the farmer is in great jeopardy. What has the government offered the farmer by way of a proper floor price at this time? Absolutely nothing.
In announcing the price the Minister of Resources and Development said in part:
It is not in the interests of producers to allow unsaleable surpluses to develop, and should it be found that the policy was having such an effect, it would be reviewed.
Surpluses may well develop now, in the light of the foot-and-mouth disease outbreak and the closing off of the American market to Canadian livestock. What is the promise by the government to the farmers of Canada? It is that if the hog surplus increases they are going to review the present floor price,
The Address-Mr. Argue with that in mind. To me that means only one thing, and that is another reduction in the floor price under hogs.
I am glad to support the amendment of the hon. member for Selkirk (Mr. Bryce) in which he asks that in this emergency a federal authority be established to provide floor prices under livestock in Canada, to control retail prices of meats and to provide for equitable distribution of meats within Canada. Certainly when we are facing an emergency, as we are now, when the American market is lost, the federal government should bring forward adequate floor prices.
There are some further matters with which I would like to deal, but as my time is drawing to a close I shall not elaborate upon
them.	I was about to refer to the delay in getting a report on the South Saskatchewan river development project. I read the letter tabled a few days ago by the Prime Minister (Mr. St. Laurent), and written by one of the commissioners. In my opinion the commissioners are doing an excellent job under the terms of reference. Those terms of reference, roughly, were to inquire into all the new costs that might be entailed in the project, to see whether all the engineering- surveys are up to date and adequate, to see if there are any other uses to which the waters of the South Saskatchewan might be put and
then,	if they run out of work, see if there is not some other way the federal government can spend that $100 million on some other project that might happen to be of equal value to the people of Canada.
The commissioners are doing a good job. They are making all the inquiries. In the meantime the months are going by, the construction season is coming on, and once again there will be a further postponement in the development of that necessary project. I was pleased to stand in my place in the house and support the St. Lawrence seaway development. I do not withdraw my support from that development in any way; but surely if the Canadian people can afford $800 million or a billion dollars, or some other colossal figure on a project that, in the main, will help the people of central Canada, this government can afford $66 million or thereabouts on a project that is necessary for the welfare of agriculture in western Canada.
Another beef we have in the west-


James Joseph McCann: "Beef" is right.


Hazen Robert Argue: I refer to the government's record in connection with the collection of farm income tax. In the two minutes left at my disposal I shall not go over the speech I made last fall in which I discussed in detail

The Address-Mr. Murphy what the result of this policy has been. However, at that time I placed on the record figures showing that in 1949 the average income tax paid by a Saskatchewan farmer was $53, that it was almost $29 from the Manitoba farmer, $12 from the Ontario farmer and 38 cents from the Quebec farmer.
I admitted that there were reasons for a part of the disparity, but I am asking the minister what possible reason there could be for a Manitoba farmer, for example, with a net income of $2,678 paying almost $29, whereas the Ontario farmer with a net income of $2,730-in other words a greater income than the farmer in Manitoba-pays only $12 in income tax. I do not want to go on producing figures to suggest, as I said at that time, the government was playing politics with the income tax, that this was something that approached a scandal.


James Joseph McCann: The hon. member is just as wrong now as he was last fall.


Hazen Robert Argue: I challenge the minister to
refute my accusations. I challenge him to tell me what is wrong with that statement I made and the interpretation I placed upon that statement. Does the minister challenge the figures? I do not think he does because they are from the dominion bureau of statistics. They are his own figures. I have never heard any farmer in western Canada complain about being required to pay his full income tax, in accordance with the laws of the country, but we object to being forced to pay our full share when apparently farmers in other parts of Canada are allowed to go along and pay very little in the way of income tax.
Just one final thought before I sit down. I want to agree with one further statement of the hon. member for Lake Centre, that this government should consider ways and means of distributing the food surpluses of Canada to the hungry peoples of the world. We have entered into a defence program, and I do not withdraw any of the support I have given to it, but I do say to the government that one of the most important ways to promote democracy and good will throughout the world, one of the most positive things this government could do toward achieving peace in the world would be to allow Canadian farmers to produce to the limit and then make provision for the movement of any surplus food_ production we may have to the hungry and needy peoples of the world.


Mr. J. W. Murphy (Lambion West):: Mr. Speaker, for the first three days of last week we dealt with the calamity which fell upon this country when it was discovered that we

had to combat the terrible hoof-and-mouth disease. It was no surprise to me when charges were made about the inefficiency of the Department of Agriculture. I regret having to say this, but along with the hon. member for Lambton-Kent (Mr. MacKenzie) I live in a county where the Newcastle disease was first discovered some few years ago and I saw how it was handled by this Department of Agriculture, the branch having to do with the Animal Contagious Diseases Act and the Food and Drugs Act. In the fiscal year 1952 a sum of $4,346,000 was allocated to this branch, and that is not peanuts.
When that unfortunate outbreak occurred the young lad who was trying to make a living with his hatchery suffered a greater loss in proportion than many of those who are suffering under this hoof-and-mouth disease. The treatment which he received from this particular department deserves no commendation by any member of the house, much less any person in the Dominion of Canada. When the matter that has been under discussion is referred to the committee on agriculture I hope they will not hesitate to look up the departmental files on this other matter. They may not want to divulge this information, but when we are going to investigate this department we should try to get to the root of it. They did not stop the spread of Newcastle disease in Canada. It may be that even with their bungling perchance this other disease will not spread beyond the infected area.
At this session we have witnessed, for the first time to my knowledge, the rather unusual spectacle of the Prime Minister (Mr. St. Laurent) taking part in the debate on the address in the speech from the throne, indicating that he was quite irritated because of a large advertisement which had appeared in the press concerning washing machines, the duty on washing machines and the excise tax on washing machines. He did not refer to the number of unemployed who were unemployed because of the excise tax on washing machines. He simply referred to the advertisement which was there for anyone to see. It did not make good reading to the Prime Minister and it was referred to this afternoon by the hon. member for Greenwood (Mr. Macdonnell). In the course of that reference we found the Minister of Finance (Mr. Abbott) wondering who inserted it, because he is sort of lobby-eyed these days.
The next episode we were faced with occurred just a short time later when the Minister of Finance got to his feet to try to throw out a smoke screen by saying that we were faced with lobbying, first by the automobile association and, second, by the

cigarette and tobacco manufacturers. I want to tell the Minister of Finance that there are people in this country who are going to lose what they have got together over the course of their lifetime because of the bungling that has occurred in regard to this hoof-and-mouth disease. Those people are going to fight with their backs to the wall. They do not go to war to lose a battle, they go to war to win one and this applies to the automobile industry or any industry.
I have no patience with people who will lobby for any particular special interest without regard for the general welfare of the country as a whole.


An hon. Member:: Hear, hear.


Joseph Warner Murphy: If the hon. member will just keep still until he has a chance to speak, I will listen to whatever he has to say. Thus far I have not heard anything worth listening to coming from him. The Minister of Finance complained bitterly about this lobbying. As I said a moment ago, I do not think any hon. member is in favour of certain types of lobbying, the sort of thing that exists on the other side and no doubt in other parts of this world. I notice the Minister of Finance is not here, nor is his parliamentary assistant.


An hon. Member:: He is right behind you.


Joseph Warner Murphy: Let him come in then. He is a creature of this lobbying idea because of his fiscal policy. He has forced people to make representations and yet he squawked this afternoon because of this advertisement in connection with washing machines. He complained that it was put out by lobbyists. Why should not these people who have been put out of work make representations to the Minister of Finance in order to protect their jobs? They are not the only ones affected.
The minister spoke about the cigarette manufacturers. I say in all sincerity that the only reason he spoke of those two representations was to hide from the public of this country the fact that they are being overtaxed and, second, the calamity which faces us through this hoof-and-mouth disease. The minister referred to the automobile industry making these representations. I think they were indiscreet-


Douglas Charles Abbott: My hon. friend was not here when I spoke, but if he had listened to my speech he would have known that I have no complaint to make about the automobile industry making representations to me. I welcome that. What I complained about was that automobile dealers should try to influence members of parliament by making radio
The Address-Mr. Murphy speeches and one thing and another, which presumably they are not able to think up for themselves.


An hon. Member:: Who is making this speech?


Joseph Warner Murphy: That is just fine. I am glad the minister recognizes that what has been said by him may have been misinterpreted. Moreover I was in the house when he spoke.
I do not think any member of parliament misinterpreted what he said nor did they misinterpret the brief that was presented by these people. What I maintain is that through the minister's high excise tax on automobiles -and he knows it just as well as I do- thousands of people in the automobile industry were thrown out of work and the automobile dealers suffered terribly. I have a letter here which he might like to read. I would not like to put it on the record but it is from one of our good dealers in the city of Sarnia.


An hon. Member:: Why not put it on the record?


Joseph Warner Murphy: If the hon. member will keep still for a few minutes I will get going nicely. This is the letter.


Douglas Charles Abbott: I was not listening to you but I came in at your invitation.


Joseph Warner Murphy: Thank you very much. I am glad you did.


An hon. Member:: He was talking for about ten minutes behind the curtain.


Joseph Warner Murphy: I would rather see the minister sitting in his seat where I can see his smile and laugh. This letter to me is dated the 8th of January, after the brief to which the minister referred was sent to the automobile dealers association.


Douglas Charles Abbott: I hope this fellow did not try to confuse you with too many facts and figures.


Edmund Davie Fulton: We are used to the Minister of Finance confusing us.


Joseph Warner Murphy: A lot of people in this country will have to take sterner measures than they have in order to convince the Minister of Finance he is on the wrong track. I do not like to hear any minister say that he is not going to be convinced by that sort of thing. I do not blame anybody in this country for trying to protect their own interests. That is what they are doing and the minister has caused them to do it.


Douglas Charles Abbott: My only objection was to their trying to make Charlie McCarthys of members of parliament.
284	HOUSE OF
The Address-Mr. Murphy


Joseph Warner Murphy: You would be the first Charlie McCarthy. If you ask me, you are the Charlie McCarthy of those advisers of yours. The letter reads as follows:
The first six months of 1951 we had a net profit before taxes of $61,000. The last six months of 1951 we operated at a large loss each and every month so that our first six months' profit has vanished. I have statements to prove this condition, and from 1946 to 1950 inclusive I paid the government a nice size income tax but for the year 1951 it will be very small. I can truthfully say the taxes and credit regulations of 50 per cent down with balance in twelve months have crippled1 all dealers' operations.
Is it any wonder they protest? I dislike the idea of these people being called lobbyists. Maybe they are in a way but I do not for one minute criticize them for making representations through their association to the Minister of Finance. He says he welcomes such recommendations, interviews and so on. He says he has hundreds of them. I do not know what time he has left for anything else if he has that many. It is no wonder we have a surplus. The budget was not properly prepared. Maybe he has also had lobbyists from the soft drink industry. I will read an excerpt or two from certain letters I received in the last few days. They also have been suffering from high taxes. One letter I have is from Sarnia, a fast-growing area where business should be increasing. I-t reads in part as follows:
Our loss in business in 1951 as compared to 1950 was 10,958 cases or a decrease of 11-2 per cent. This, after a steady increase every year since our inception, is most discouraging . . .
Then he speaks about the high excise taxes and asks for relief. I do not blame these people. I do not blame anybody, who is suffering because of any action of the government, for making strong representations either to the Minister of Finance or to other members of parliament. He speaks about cigarettes. If anyone in this house or in this country knows he made a bad blunder when he imposed the extra excise tax on cigarettes a year ago it is the Minister of Finance. Even the Prime Minister said that they would have to make some changes in the taxes although he thought there would not be any over-all reduction in taxes. Probably he had been visiting farms in Ontario where the farmers have lost $1,000, $2,000 or $5,000 in the last few weeks as a result of the hoof-and-mouth disease in western Canada. Maybe he visited some of the industrial areas where employees have been out of work for months. Maybe he has looked at the statements of some of the firms in business in Canada last year and has seen their decreased earnings. Then he comes to that conclusion. After the minister introduced his budget in the first


session of 1951 I said that he would be disappointed in the 1951 returns from the cigarette industry, and he is.


Douglas Charles Abbott: Are you sure?


Joseph Warner Murphy: Instead of getting the millions that he anticipated I feel satisfied he will get a lot less.


Douglas Charles Abbott: It is not doing too badly.


Joseph Warner Murphy: What is more, as a result we have lost part of our export market. The tobacco growers have already agreed to decrease their acreage by one-third. That is not a healthy situation. Possibly the Prime Minister or the Minister of Finance has visited that area and has learned about the smaller incomes these people are going to get. Possibly the Prime Minister knew that, when he said we are not going to decrease taxes next year. I have no hesitation in saying tonight that the only way the government is going to recoup the revenue lost in connection with the cigarette industry because of increased smuggling and the smaller consumption of Canadian cigarettes is if the tax is reduced so that a package of twenty cigarettes will sell for 30 cents for say a period of a year. I do not say how much longer they should remain at that price but I cannot see for one minute how this industry, which has meant so much to the economy of Canada, will be revived otherwise. We have been two decades building up the tobacco industry and it has been shattered, you might say, in one year.
There are other matters I should like to discuss if I have time but now I want to make a few other observations. A suggestion I should like to make, and one which I think warrants the consideration of the members of this house, has to do with the advisability of referring estimates presented to parliament to a committee for detailed study. Through such action it would be possible to bring before such a committee senior civil servants of the Department of Finance and other departments, and thereby give members of the house the opportunity to ascertain the premises and forecasts upon which taxation proposals are based. I make this observation before I get into the meat of my argument for obvious reasons. Experience in the past years has shown that there has been a definite tendency to underestimate the gross national production, the gross national income, and the consumer turnover in Canada, and this has resulted in the forecasts of revenues by the Minister of Finance being very considerably under the actual revenues received.

I agree that it is nice to have a buoyant economy which results in nearly full employment and production greater than anticipated, but the fact remains that members of this house, when they authorize the levy of taxes on the Canadian people, should have more information as to the anticipated tempo of business upon which these taxes are to be levied. Members should know certain things. Will the gross national production in Canada in 1952 be in the neighbourhood of $22 billion, $23 billion or $24 billion? Will the gross national income be in the neighbourhood of $18 billion, as now forecast, or will it be $19 billion?
Only by having access to the best information available in this field can members of the house conscientiously say that the tax levels proposed by the Minister of Finance are reasonable and will result in raising the revenue to cover the expenditures voted by parliament.
One thing further such a committee could do would be to ascertain from those responsible in the various departments the full extent of efforts made to curtail or defer unnecessary non-defence expenditures at this time. We were assured by the Minister of Finance in his last budget speech that nondefence expenditures would be deferred. According to the last financial report available to us from the comptroller of the treasury, covering the first nine months of the present fiscal year, these non-defence expenditures, which were to be curtailed in view of the heavy burden of our rearmament, show an increase of $37-4 million, even after allowance was made in the estimates for the increased cost of old age and blind pensions, family allowances and other essential services which -must be maintained. If we are to take an effective step to curtail non-defence expenditures in this country, that step must be taken when the estimates are brought before this house and before the expenditures are made, not two or three years later when the facts become known through the public accounts.	[DOT]


Mr. Studer:: What is the hon. member quoting from?


Joseph Warner Murphy: Perhaps the hon. gentleman did not like my reference to the Prime Minister and the Minister of Finance.


Irvin William Studer: No; we did not like the
reference to meat balls.


Joseph Warner Murphy: Do you know what this reminds me of, Mr. Speaker? A little boy was having his breakfast and left two prunes on his plate. His mother said: "I want you to eat those prunes; they are good for you."
The Address-Mr. Murphy He refused, so she said, "If you don't eat the prunes I will tell God on you". Just then it began to thunder, with lightning to beat the band, and the little boy went to the window and said, "That's an awful fuss you are making, God, over two prunes."
Since parliament convened we have been told by the Minister of Finance and the Prime Minister that the Canadian people cannot expect very much in the way of tax reductions in the coming fiscal year. The reason advanced as to why it is necessary to continue the present high level of taxation is the uncertain international situation. On the surface this looks like a plausible reason. Unfortunately, however, analysis of the facts of our financial structure does not bear out the necessity for continued high taxation. When the present excessively high taxation levels were established by the Minister of Finance in his budget of April 10, 1951, they were set to yield, we were told, a surplus of $30 million. They were set on an anticipated gross national production of $20 billion, on a forecast gross national income of $16-5 billion or thereabouts, and on a forecast consumer turnover of approximately $12 billion. It now turns out that these forecasts were considerably short. The gross national production, instead of $20 billion, was $21-5 billion. The gross national income, instead of $16-5 billion, turned out to be more than $17 billion. The consumer turnover, instead of $12 billion, turned out to be more than $13 billion.
As a result the forecast of a surplus of $30 million has now been exceeded many times, even after making due allowance for the inability of the government to spend all they budgeted for with regard to defence, something they were told during the budget debate last year they would be unable to do. Now we are told by the Minister of Finance and the Prime Minister that it will be necessary to continue these high levels of taxation except in certain individual cases where adjustments may be necessary, no doubt because of the unemployment which has arisen as a direct result of excessive taxation and its effects upon markets. Today the forecast of gross national production in Canada for the coming year is $23 billion, as -compared with $20 billion a year ago when these taxation levels were set. The forecast for gross national income is $18 billion, as compared to the less than $17 billion when the Minister of Finance said these high levels of taxation were necessary. For this year the consumer turnover is estimated at $14 billion, as against the $12 billion forecast a year ago.

The Address-Mr. Murphy
It is obvious, therefore, that if the present rates of taxation, which the Prime Minister and the Minister of Finance say may be continued, resulted in a surplus of $700 million for the first nine months of the present fiscal year, and allowing for additional expenditures which may come in the last few months of the present year, to continue those levels on the increased forecasts for 1952 could not help but result in a surplus of hundreds of millions of dollars for the next fiscal year.
The Minister of Finance tells us that he was wrong, perhaps, but that it was a good thing because the money has been used for the retirement of debt. Recently in a broadcast his parliamentary assistant said this retirement of debt was a brave thing. Never once did the Minister of Finance or his parliamentary assistant stand up in this parliament and say, "I propose to levy high taxation on the people of Canada, at a time when they are burdened with the highest cost of living in their lives, for the purpose of debt reduction." I would say this is budgeting under false pretences. Debt reduction as a fiscal policy is all right in its place, but there is a time and place for it. Debt reduction as a fiscal policy of this government should be on the authority of this parliament. If the Minister of Finance wants to continue his high level of taxation at this time for the purpose of debt reduction, then when he brings down his budget it will be his responsibility to obtain the endorsation of this parliament for that purpose.
Further, in view of the increased forecast for 1952 gross national production, gross national income and consumer turnover, and the direct relationship this bears to the system of indirect and regressive taxation built up by this government, this parliament must give serious consideration to the taxation proposals of the minister when he brings down his budget. At the present time in this country our indirect taxes are rapidly climbing to a point equal to our direct taxes. Many of these indirect or hidden taxes, such as the 25 per cent increase in the sales tax this government brought in a year ago, are regressive taxes which have a direct detrimental effect upon the cost of living in this country.
I am quite in accord with the belief that Canada should play its full part in the North Atlantic Treaty Organization. I am aware that this is going to cost this country a considerable sum of money and that this commitment must be met as far as possible out of taxation. But in view of the fact that during the present year this country was 
unable to spend the money for defence and for rearmament which this parliament voted, caution should be exercised in the coming budget in order to not again overestimate our expenditures simply for the purpose of creating among our people and among our allies a false sense of security. Otherwise the levels of taxation will be set on a basis which cannot help but result in huge surpluses extracted from the people of Canada at a time when they are experiencing the highest cost of living in their history; and further, extracted from business in this country at a time when we are experiencing the greatest industrial expansion in history, when those same Canadian enterprises should be able to invest in the expansion of Canada, were they left enough from their earnings after paying the taxes that are levied upon them. This point was very ably emphasized this afternoon by the hon. member for Greenwood (Mr. Macdonnell).
Today we are fortunate in that we are receiving a very much accelerated inflow of capital for development purposes. I welcome this as necessary for the development of this country. I would point out, however, that existing Canadian enterprises should be participating in this development to a greater extent than is the case today. We welcome this United States and other capital into this country for development purposes. We are receiving this capital in Canada because we have given the assurance that both the capital and the earnings can be withdrawn if and when desired. Should that demand for withdrawal of capital come at a time when our imports exceed our exports, the demand for gold and foreign exchange to meet the commitment could be a serious drain on the Canadian economy.
It would seem to me advisable that as much Canadian capital as possible should be available for investment in the industrial expansion of this nation, because in that way we will considerably reduce the future drain on gold or foreign exchange in this country as the earnings from that invested capital become available for distribution. This possibility is by no means remote, because today, were it not for the inflow of capital to this country to counterbalance our excess of imports over exports, our dollar and gold reserve position would be under serious strain.
It is perfectly evident from the statement of the Prime Minister and the Minister of Finance that no election is planned for this year. We recall what happened prior to 1949-it has been referred to more than once today-when the taxpayers were told of the

great reduction in taxation this government was able to accomplish. These reductions in taxes should come this year, and not be held back to suit the convenience of the Liberal party's political machine in this country. That is what happened in 1949, and we want no repetition of that in 1953 or 1954. I believe we should have finished with this political budgeting.
One admission that both the Minister of Finance (Mr. Abbott) and the Prime Minister (Mr. St. Laurent) have made, however, is that certain adjustments are necessary in the present taxation level. It was almost impossible to escape that admission. As a result of this excessive taxation today, or what the parliamentary assistant (Mr. Sinclair) calls "this brave fiscal policy", we have pockets of unemployment in the textile industry, the automobile industry, the electrical goods industry, and there are forecasts of other pockets rapidly developing in other phases of our economy. We have the spectacle of the Minister of Finance putting on this exorbitant, ill-advised tobacco tax and handing the Minister of National Revenue (Mr. McCann) a taxation measure which, in effect, is proving unenforceable. It is resulting in smuggling in this country reminiscent of the days of bootlegging. It is just one example of the dangers involved in excessive taxation which was expected to result in increased revenues, but which has acted in reverse.
Another problem of vital interest to the Canadian people resulting from excessive federal taxation is the situation arising within the municipalities of this country. Today, municipal authorities are finding it extremely difficult to operate under the revenues available to them. I believe almost every member will agree with that statement. Excessive taxation at the federal level, and particularly the hidden or turnover taxes, is levied on the very people who have the responsibility of meeting the obligations involved in our municipal structure of government. Today in most of our larger centres the demand for housing creates the necessity for heavy expenditures to provide the services essential to any housing project.
Another rapidly increasing burden is the cost of education. I very much fear that unless this problem is faced, first by the federal authorities where the initial action must be taken, the municipalities are going to be forced into demanding the right to levy a sales tax or some other indirect or hidden tax in order to meet their obligations. Should that situation arise in this country and we experience an extension of these regressive forms of indirect taxation, the
The Address-Mr. Murphy obligations on an individual Canadian home owner or a businessman, as a large municipal taxpayer, will be very serious.
In all probability, Mr. Speaker, there will be meetings this year between the dominion and those provinces that have not already signed the dominion-provincial agreement. Coming from a municipality which is developing rapidly-I think that applies to many municipalities in this country-I should like to say that the municipal viewpoint should be seriously considered in those meetings. In most areas taxation levels are so high that it does not pay to own property. Most members will agree with me that these taxes are bound to increase as our population and industrial development increase. It seems to me that, so far as the province of Ontario is concerned in any event, the predicament of these municipalities should be seriously considered. We know that over the last few years the federal government has been taking an increasingly large share of revenue from our national income, and at the expense of the lower levels of government, particularly the municipal level.
I do hope that when these agreements are under consideration there will be no restrictions imposed upon municipalities resorting to other forms of taxation, as has been done in other agreements. The federal government is taking such a large share of the revenue that the municipalities are badly handicapped. I believe it is well known that such a restriction is contained in those agreements already signed and, with one or two exceptions, no municipality will have the authority to raise additional revenue. I am not advocating that municipalities should impose sales taxes, but I do say that the predicament in which these municipalities find themselves should be considered.
I wish to take a few minutes, Mr. Speaker, to deal with a situation that exists in my riding as well as some other ridings in the Dominion of Canada. In Sarnia we are proud to have the great Polymer Corporation, which is of great importance to the people of this country as well as the other democratic nations with whom we are allied. In the autumn session of 1949 we had before us the Abbott formula for payments by crown companies in lieu of taxes. We all welcomed that, Mr. Speaker, and I do not think there was a member in this house who could possibly object to the fairness of the formula. I say that because I know the minister will not consider our exchange of a few minutes ago as anything other than good fun.
Any industry in any municipality brings with it a responsibility to supply services such
288	HOUSE OF
The Address-Mr. Murphy as education and that sort of thing. We want the industry, in fact we welcome the industry. Up until 1949 we did not have this formula to guide us. Now crown companies within the municipalities must come to an agreement to make a payment to the municipality in lieu of taxes on a basis that is fair and equitable. No one could quarrel with that. In Sarnia we have this $50 million or $60 million chemical empire of such importance, and 1 think it is now recognized that they must accept their responsibility in that municipality. As hon. members will recall, I have made representations on the floor of this house on several occasions since 1945. I knew what was happening. For instance, in my own area out along the lakeshore where we had a one-roomed school, today we have five rooms. The fathers of those children work at Polymer or at some other industry. There is an example of the problem facing the municipalities.
Up until last year, Mr. Speaker, Polymer in particular paid to the township council- that is before this municipality was incorporated into the city-the small amount of $10,000 or $25,000. For the year 1951 they paid the city of Sarnia the sum of $45,000. It happens that Polymer Corporation is situated between the Dow Chemical and the Imperial Chemical, so there could be no more fair basis for the application of the Abbott formula. Here are three chemical industries with Polymer in the centre. As I said last December when the Minister of Finance and the Minister of Trade and Commerce were both in their seats, if the Dow Chemical were paying $40,000 or $45,000 then Polymer would be expected to pay five to seven times that amount. I do not think there could be any quarrel with that because I have been through these plants. There are crotvn corporations not only in Sarnia but elsewnere in the dominion. That is the reason I think this thing must be applied fairly. Last year they made this payment. I say to you, Mr. Speaker, I think that either the government or the executive of the Polymer Corporation were not quite fair with the city of Sarnia when they settled on that basis. The mayor said in January of this year that, he did not know that crown companies were required to pay taxes; or rather, he said that crown companies were not required to pay taxes or any payment, in lieu of taxes, notwithstanding the fact that I told him last June that he must make his arrangements with the crown corporation-that is the Polymer Corporation-for payment in lieu of taxes; and I sent him the Hansard which included the reference to the subject made by the Minister of Finance which included the Abbott


formula. I assume that this year there will be a settlement for payment in lieu of taxes on a different basis. The point I am raising, Mr. Speaker, is this. I do not think it is fair for my municipality or any other municipality in the Dominion of Canada to be treated in that way by the dominion government, fair and equitable as is the Abbott formula; and I think that it should have been interpreted in that way by the government. If perchance the mayor did not know, as he should have, for I told him and sent him the formula, that they were subject to tax, I think that a responsible and fair government and a fair executive should say:	We are
responsible and we will pay our fair share. I should like to see that this matter receives the consideration which it deserves not only in the city of Sarnia but elsewhere and that the same fair principle be applied to any crown company from coast to coast in this country of ours.


David Arnold Croll: Mr. Speaker, the year 1951 was a historic one for immigration in this country. I take the occasion to congratulate the minister and the government upon the excellent record of bringing into this country last year approximately
200.000	immigrants. The previous bumper year was in 1913 when we brought in 400,000 immigrants, and in 1928 when we brought in
166.000	immigrants. My purpose in rising was to indicate support to the government so that our immigration policy will not be a flash in the pan but rather that we shall encourage the government to continue bringing immigrants into this country in large numbers.
I said that 1951 was the biggest year since 1913. That statement sounds impressive until we look at the figures in the intervening years. Then we realize that, forty years ago, we admitted to this country more than twice as many people as we admitted in 1951. I think it is interesting for the house to know what happened to those 200,000 immigrants. The exact figure is 194,391. Of this number 114,786 are workers. The rest are dependents. They increased the working force in Canada by 2 per cent. Of that number, 25,890 went to the farms; 33,682 were skilled workers; 6,531 were domestics and 31,007 were unskilled and semi-skilled persons who did little to aggravate our present seasonal unemployment. There are those in our country who say we should cut down immigration and that we cannot absorb such an inflow as we had in the year 1951. I think it is our duty in this house to show them that they are wrong.
Time and again it has been proven that immigration benefits a country. Immigrants do

not take jobs; they make jobs. I am greatly impressed by an argument that was used by the Prime Minister (Mr. St. Laurent) and by the Minister of Citizenship and Immigration (Mr. Harris). This was the argument. It is that in 1949-50 the unemployment peak was higher than the peak this year, although the number of immigrants brought in during 1949 was approximately 100,000 less than the number brought in in 1951. While I am at it I think I might as well clear up what is in the minds of a great number, if not all, of the members of this house. It should be remembered that even during the height of our economic activity there were between 150,000 and 250,000 persons seasonally unemployed each winter in this country.
In the face of this knowledge that I have given the house, I wanted to make the house aware of the fact that from 1945 to 1950 immigrants have brought to this country $300 million in new capital, have established 75 industries providing at least 6,000 new jobs. Our worst unemployment periods were from 1931 to 1940 when we had no immigration. Our highest employment in the early part of the century was when we had a record amount of immigration. I think it is true that immigrants cannot be absorbed as easily today as they were in the days when we had land available for everyone. Yet work on the land is available today to the extent of the 20,000 that are needed immediately on the farms of this country. We are now an industrial economy; it is a little different from an agricultural economy. Our immigrants need to be placed rather than absorbed. All that the immigrant asks is that he be accepted and that he be understood. Immigrants are not asking for impressive receptions or a protected relationship. They are lonely people who come to this new environment, these new conditions, trying to make a new life for themselves and to become Canadians as quickly as possible.
We cannot move forward in our economic development without the addition annually to our population of a large number of the same kind of people who have in the past demonstrated their skill, their ability, and their loyalty to this country. We are one of the world's major trading nations. We used to be third in the export-import market; we are now fourth. France has recently jumped ahead of us; and present figures indicate that Germany is breathing down our neck. Canada is first in exports and imports, on a per capita basis. Nevertheless, I think it is important that we should, if it is at all possible, win back our former position of third greatest trading nation in the world rather than the fourth. To accomplish that purpose we 55704-19
The Address-Mr. Croll need more people. There are some people who are blaming the immigrants for unemployment. Immigrants are not to blame for that temporary condition. Some were being so unkind as to blame the immigrants for the hoof-and-mouth disease. It is extremely easy to make scapegoats of them because they are not in a good position to defend themselves unless we, as members of the house, speak up for them and for justice. They too suffer through unemployment.
Any talk of flooding this country with cheap labour is unworthy of those people who are telling that tale. The workers benefits, whether they are union benefits or non-union, are the concern of all of us in the house, and are zealously guarded. I have not heard of any evidence that any of the immigrants have been under-cutting the market.
I think it would be interesting for the house to know what I think is labour's traditional position on the immigration policy. Labour has always supported immigration, with the following provisos: That immigration will not reduce the standard of living of the workers who have worked so hard to achieve that standard; that there will not be created in this country a pool of cheap and docile labour; that the immigration policy is designed to develop the resources of this country so as to give additional work to our own people.
That is my understanding of their position, and that I understand is the government's policy. I think there should be a meeting of minds on that. I point this out further to the unions: the majority of those who are at present coming in as immigrants are from countries where trade unions are old, strong and powerful-perhaps not quite as democratic in some of the countries as are our trade unions. But here is an opportunity for the unions to enlist them; here is new blood to help them hold the gains that they have already made and which from time to time of course they will improve.
Unemployment in this country at the moment is a problem. In the main it is seasonal. Some part of it is due to the temporary saturation of the markets in some of our industries, some of it is due to the reluctance on the part of manufacturers to reduce their margins of profit. Credit restrictions to control inflation and, to some extent, excise taxes, have had some effect.


Mr. Ferguson:: May I ask a question? Does not the hon. member believe, too, that it is the reluctance on the part of the government to reduce taxes that is accountable for some of the unemployment?

The Address-Mr. Croll


David Arnold Croll: I have said that credit restrictions to control inflation and excise taxes to some extent have had some effect. Production dislocation arising out of defence production and a shortage of materials in some industries- all of these have contributed to some extent to unemployment. I believe that all that will soon pass, already there are signs of its passing. In the interval there is provision made for people who are unemployed, though I must agree that unemployment insurance is no substitute for a job. And was never meant to be.
But those people who say that we ought to bring over to this country only those people we can immediately place are saying only, in effect, that we ought to move the national employment service to some cities in Europe, when we need twenty carpenters that we ask for twenty carpenters, and bring them in, and when we need twenty bricklayers that we bring them over.
Well, that is not an immigration policy; that will not build up our country. I wonder if the anti-immigrationists believe that Canada is already overcrowded, when we have a land area greater than the United States but have only one-tenth of its population. Canada is just the reverse of the old woman who lived in a shoe: We have so few children we don't know what to do. We are a country of wide-open spaces, and we have not even begun to fill them.
I often wonder why we live in fear of things to come, and why we do not face such problems as immigration with courage and with confidence. I will admit that the city of Toronto is getting a bit crowded. But can we say the same thing for the province of Ontario or the province of Alberta?
I dug up some interesting figures. I shall now repeat them slowly because I believe they are very interesting. They show that prior to 1930, 53 per cent of the immigrants that came to this country went to the prairie provinces and British Columbia, 40 per cent went to Ontario and Quebec and 7 per cent to the maritime provinces. In 1951, 55 per cent of the immigrants came to Ontario, 22 per cent to Quebec, thus giving the two central provinces 77 per cent of the immigrants. Instead of the 53 per cent they had prior to 1930, the prairie provinces and British Columbia received only 13 per cent, and the maritime provinces 10 per cent.
That is a reversal of the historic trend in this country. Not only will it bring to us economic headaches but, as was indicated from the floor of the house tonight, we see the political problems it is raising in our country.


Mr. Brooks:: How many of those immigrants stayed in Canada? The hon. member told us the number who had gone to Ontario and other parts of Canada in recent years. How many remained in Canada?


David Arnold Croll: Later on 1 shall give the figure showing how many have gone to the United States, but I cannot tell whether or not they were immigrants. Probably not. It is not possible to give that figure, because I do not think they are kept in that way. However, I shall give the figures asked for at a later point in my speech.
Those who are opposed to immigration want us to believe that in this country there are just so many jobs, so many homes, so many apartments, so many suits of clothes, so many pairs of shoes, and so many loaves of bread. They reason that if we admit more people there will not be enough to go around. Yet at the same time there are more people employed in this country today than ever before.
Returning to the subject of population for a moment: The population of Canada is a little more than 14 million. In the last ten years there has been an increase of 2,502,774, or 21-8 per cent. Only British Columbia is well above the national average. Ontario and Quebec are just at the national average. The over-all increase in population in the prairie provinces in ten years has been 4-7 per cent; in Alberta it has been 17-6 per cent, in Manitoba, 5-8 per cent, and in Saskatchewan there has been a loss of 7 [DOT] 5 per cent. British Columbia has had an increase of 41 per cent, Ontario has increased by 20-5 per cent, Quebec by 20-4 per cent, the maritime provinces by 9-8 per cent.
Speaking of the prairie provinces particularly, we have there a total area of 753,497 square miles inhabited by 2,537,549 people, occupying an area half the size of India with a population half the size of Switzerland. Today a nation more than twice as large in population as it was in 1913, and many times as strong, is taking in only half the number of immigrants we took in at that time. I merely point out to the house that it is time we burst these bonds of caution. We have to take a firm stand in this country on immigration because we can produce more homes, more suits of clothing, more pairs of shoes and more loaves of bread. All that increased activity will make for more jobs. The answer to that is more people.
Has Canada progressed since 1900? It has, because we have more than three times the population we had at the beginning of the century. We have used wisely and intelligently our natural resources and we have taken advantage of our opportunities. Unless

we continue to increase our population we shall not continue to grow and prosper. I think we should set our sights at 25 million, and I do not mean at the end of the century. Our population experts in the bureau of statistics can tell us what Canada's natural increase will be in the next twenty years. The difference between that figure and 25 million can be made up only in one way, that is by immigration. We can achieve that by an all-out effort.
I am convinced that the country wants more of the right kind of immigration, the kind that we have been getting particularly this year. Dozens of important representative bodies have gone on record during the last five years to that effect. I do not deny that quite a large number of people have come to Canada. Every one of them has been a welcome addition to this country. From 1945 to 1950 Canada admitted 568,000 immigrants, an average of 95,000 a year. I now give my friend the figure he asked for. During that same period 314,600 persons left Canada, by the back door I think, to go to the United States or to other places. Our net total gain was 268,100. Who those people are I have no way of knowing, nor has the bureau of statistics, but those are the figures I was able to obtain and I think they are authentic.
Does anyone seriously contend that these new Canadians have not benefited this country and themselves? It is just common logic that we can absorb and profitably use many more. People are the greatest asset that any country could have.


Alfred Johnson Brooks: Why is it that we cannot hold our own people here?


Julian Harcourt Ferguson: The Liberal government.


David Arnold Croll: This is an old problem because we have always had the great magnet of the United States with its larger salaries and greater opportunities. It must be said that we are holding them better now than we ever did before. We are holding our professional people and our trained people much better than we ever did before. I think we are holding most of the other people also, because there are more opportunities today than ever before. I hope that that trend will some day reverse itself, as my hon. friend fully understands, living as he does in. the maritimes so close to the United States.


Alfred Johnson Brooks: We send our raw materials there and our people follow them.


David Arnold Croll: My argument of course is that if we have the people here we can use our own raw materials and do our own manufacturing. What we need in this country is an added perspective, one that will take a 55704-191
The Address-Mr. Croll good look at the sweeping panorama of the years that lie ahead, one that will show such short-term problems as unemployment and economic upheaval against the long-term goal of a nation living up to its destiny and its potential. Birth and growth call for some degree of pain. Those who cry out against large-scale immigration are unmindful of something we have heard repeated often in this house and this country but which appears sometimes to have lost its significance, that the true wealth of a country is its people.
It is a little strange that some people should be concerned about the arrival of immigrants in Canada. It seems to me that the time to start worrying is when people do not want to come to this country. A few years ago Canadians could look at well-established frontiers of their country and marvel at the space available for millions of newcomers. Since the war we have uncovered a fabulous new frontier in the northwest, we have added an island province, we have pushed our northeastern frontiers beyond Quebec into the rediscovered Labrador. Our mineral and agricultural frontiers have opened up beyond our dreams. This is the time for immigrants, if ever we needed them. For without people the fields are fallow, the factories are idle and the mines and forests are useless.
I want to say one word particularly with respect to British immigration. I think these figures will be found interesting. Until 1925, 62 per cent of our immigrants were British; by 1948 the percentage had fallen to 35; by 1951 it had fallen to 17. I think at this time we should examine the situation to find out the reason why British immigrants do not come and what we can do to correct a situation which needs correcting. I am one of those who hold the opinion that we shall regret it in the days to come if we do not sufficiently stock this country with British people.
First, of course, are the restrictions on money. The British do not permit much money to leave their country. Then the British government is not too helpful when it comes to immigration. They do not want to lose their skilled people and technicians, that is the kind of people for whom we have the greatest attraction. I know a firm in Toronto that brought over a couple of hundred skilled people. They sent to England, brought them to this country, paid them good salaries under contract. They no sooner completed their contract, the Americans came over and offered almost double the salaries. They left. The firm in Toronto could not possibly match the salaries that were offered.

The Address-Mr. Croll
I think the government can do a little more than they have done with respect to British immigration.


Some hon. Members:: Hear, hear.


David Arnold Croll: At the present time the government advances four-fifths of the fare of the head of the family only. The family must wait in England until the father or the head repays the four-fifths of the fare the government has advanced and has earned enough money to pay the full fare for the rest of his family. Our scheme is very attractive to single people, but it is not so attractive to family people, and they are the kind we want.
As against that we have to match what Australia offers. Australia will transport all members of a family on payment of $30 per head. They pay the balance. It is a gift which does not need to be repaid. The result is that many immigrants who want to keep their families together are going to Australia. Last year we obtained 13,427 British immigrants and during the same time Australia obtained 75,000. As I have said, ours is a good plan for single men but it does not help the family man. Another difficulty about immigration is the shortage of transport between Great Britain and Canada. It is easier to get transport from the continent than it is from Britain. We are able to charter vessels which do not meet British requirements but do meet continental needs. I think it is well for the house to know that it is easier to bring immigrants to Canada in the wintertime because transport is available, the tourist traffic is not quite so heavy. During the summertime it is very difficult to obtain transport. Consequently we sometimes find ourselves, when we are subject to seasonal unemployment, with more immigrants on our hands than we can readily handle, but that is a passing phase.
Last year we spent $6 million to assist British immigrants whereas Australia spent $40 million. The difficulty of course is that we have a revolving fund of $6 million and when the $6 million is used up there is no further assistance for these immigrants. Last year the fund ran short in November, and during November and December there was no money available for immigrants.


Julian Harcourt Ferguson: No immigration policy.


David Arnold Croll: Something special should be done with respect to British immigration which all of us in this house want to encourage as much as possible.


Mr. Hodgson:: Could the hon. member give us the same comparative figures for British immigration with respect to Australia and Canada for 1946 and 1947?


David Arnold Croll: I can give the figures for all immigrants but I cannot give the figures for British immigrants. I thought this particular year would prove my point. I repeat, what good after all are all our natural resources, what good are our industries and what good are our millions of acres of land unless we have in Canada hands to work them, to consume their production and to share our obligations, both national and international? To oppose immigration is against reason, against humanity and against good plain selfinterest. I think the opponents of immigration are suffering from a case of national myopia which is a very bad disease for a Canadian to have. There are people in this country who have homes, jobs, three meals a day and yet they say no more immigration. They are hopelessly wrong. If we are to listen to them we will be doing Canada a disservice which will be felt some day just as twenty-five years of very little immigration between the wars was felt in 1940 when we did not have enough hands to do the necessary jobs.
We have before us a unique opportunity. For the second time in a century we have the opportunity to populate this country on a large scale. We took advantage of the first opportunity before the first war. This is the second and probably the last opportunity that we shall have. We have already let six years slip away without fully taking advantage of the situation. But we have suddenly come to life. We have a selective planned immigration policy geared to our absorptive capacity. I endorse it, encourage it and support it, and I ask the government to keep them coming to this country.


Julian Harcourt Ferguson: May I ask a question? You said we have a plan. Are you positive that this government has a plan, a sane immigration policy? Are you positive of that? I have never heard of it and they never have.


David Arnold Croll: I am as positive of that as I can possibly be. I am satisfied that at the present time the government has a most excellent immigration plan. It is bringing people into this country, and the right kind of people. It may bring them in at the wrong time, but that is due to conditions that are very difficult to control. However, the over-all policy is a very sane one and the effect is being felt in Canada and appreciated.


Julian Harcourt Ferguson: Is it an adequate plan?


Mr. Gauthier (Portneuf):: Keep quiet.


David Arnold Croll: As to whether or not it is adequate, what I am saying to the house is, for the time being let us continue to bring them in at 200,000 or better a year, but certainly let us not cut that down. Getting back to immigration, I was saying that we had not taken full advantage of our opportunities. One does not know how much time there is left for immigration. One thing is certain. We will never build a greater Canada on lost chances. I want to make it clear that we cannot afford to lower our health and ideological standards. We only ask of the potential immigrant that he be sound physically and mentally, and by mentally sound I do not merely mean that he be sane but that he behave in a democratic manner, that he believe in democracy and conduct himself in a democratic fashion, that he keep his bargain with Canada, that he honour his commitment to go to work, and that he should make a bargain with himself to work harder in this country than he has ever worked before.
That is the kind of people we need. If he does that there is room for him in Canada, we want him, and he will become a good Canadian. No responsible person can advocate unlimited immigration. It would wreck the economy and social harmony in this country. But we cannot stand a cut-back at this time. To cut back on immigration is to cut back on our economic development. We have a glorious future in Canada which we can readily share with others. I think it will only be glorious if there are more and more people here with whom to share it. We are budgeting in this country for people as we budget for everything else. We are planning our Canadian family and we believe in large families. We need more Canadians. In order to have more Canadians we need more immigrants, and we need them now. I think the policy of the government is a wise one. I ask them to hold firm and to keep these immigrants coming. This country will be everlastingly indebted to them.
Since 1945 some of us in this house have been urging the government to do what they are now doing, and now we hear some rumblings in the country that they are going too fast. I say to the government: Do not believe it. There is ample and complete support for the present immigration policy. Let me close by reminding the house of something we know full well. Years ago Sir Wilfrid Laurier said that the twentieth century belonged to Canada. Like so many words of that great and far-seeing Liberal, this prophecy is coming true day by day. With half the
10, 1952
The Address-Mr. Dinsdale century over we find today that the world is our oyster. Our voices are heard in the councils of the world. Our prestige is high. On every side we hear our praises sung. We are fourth amongst the trading nations of the world and first on a per capita basis. Our standard of living is high, second only to that of the United States. Our finances are in excellent condition. Our diplomacy, exercised always in the interests of a cleaner and better world-the only kind of world in which Canada can flourish-has been masterfully handled by a statesman whose greatness is sometimes more fully recognized at the council tables of the world than here at home. I feel certain that my generation shares Sir Wilfrid Laurier's optimism. Our great need today is people and more people. I ask the government to keep them coming.


Mr. W. G. Dinsdale (Brandon):: I realize, Mr. Speaker, that entering the debate at this hour of the day is rather a difficult assignment, particularly when so many hon. members have folded their tents like the Arabs and silently stolen away. But I do want to take some part in the traditional debate on the speech from the throne.
Our session has been under way now for over a week. We have moved from the note of solemnity to a note of crisis, and now we are emphasizing the critical part of our discussion. As I look back at the debate which took place during the first three days of last week arising out of the foot-and-mouth disease crisis, I rather regret that I did not take some small part in that discussion; because as we consider the implications of that outbreak its ramifications become increasingly obvious. I must confess, however, that at that time foot-and-mouth disease was only a name to me. I must say I was greatly surprised to discover from the discussion that apparently very little was known of the details of that disease by those responsible for its control and elimination.
As the debate proceeded an old adage constantly recurred to me, which goes something like this.	For	the	want of a nail	theshoe was lost.	For	the	want	of	a shoe	thehorse was lost.	For	the	want	of	a horse	therider was lost.	For	the	want	of	a rider	the
battle was lost; and out of the loss of that battle a great nation entered into decline. It seemed to me that the negligence, which became increasingly obvious as the debate proceeded, is going to have very serious implications for the livestock industry of this country, and, as a matter of fact, has already had very serious consequences.

The Address-Mr. Dinsdale
From these few remarks I think hon. members will agree it is fairly obvious that I am still a comparatively new member of this house. It will be seen that I still place a little credence in the notion that governments are infallible, that governments do not make mistakes. From the layman's viewpoint that notion is cultivated today to an extent too great to be good for the political health of the nation; for the closer we come to the deliberations of this assembly the more we realize that the idol has feet of clay.
I would agree with the Prime Minister (Mr. St. Laurent), who said the other day that actually the government has no cure-all for the problems of the world. That becomes increasingly obvious the closer you get to the situation. Yet, as was pointed out by the hon. member for Winnipeg North Centre (Mr. Knowles) earlier today, there has been an attempt to convey the impression, especially at election time, that governments are all knowledgeable, that governments are infallible-and particularly this government- when it comes to the handling of the social and political problems of the nation.
There is a real difficulty in cultivating public opinion today. It is a difficulty of communication, because the world with which we have to deal is largely out of reach, out of sight and out of mind. As a matter of fact, most of us are forced to look at a complex world by means of fixed images, or what we sometimes call stereotypes. Today these fixed images or stereotypes are readily established in the minds of the public through such means of communication as the press, the radio and the cinema, though they tell me that with the advent of television in the United States the politician is finding it increasingly difficult to befuddle the public. Television seems to have the happy faculty of getting to the character of the individual, and in the contact between the public and the politician it introduces an intimacy which is even closer than the contact made in the constituency itself, or when the politician is out stumping in connection with election activities. But up to the present it has been easy, by means of press, radio and cinema, to establish just the required impression in the thinking of the public; almost to manipulate public opinion in any desired direction.
If there has been any feeling that this government is infallible; if there has been any feeling that this government has a cure-all for the problems of the world, I would say that impression has been deliberately cultivated, particularly during election campaigns. Today governments do take much

credit for prevailing circumstances. Fortunately during this post-war period Canada has been riding the crest of an amazing wave of prosperity. I know the notion is abroad that what we experienced in Canada during and since the war has been the result of the benign, benevolent and progressive policies of the party in power. On the other hand, as an example-and this might also apply to other opposition groups-the party with which I am affiliated is almost synonymous with depression and everything that is bad for the health of the nation. I remember, for example, recently fighting the great battle of dates when an attempt was made to establish 1930 as the year in which the great depression began, though of course it is quite obvious that 1929 was the year of the onset of that depression. The reason for an attempt to establish the 1930 date of course is politically obvious. I believe we saw some of the same tactics in the speech delivered this afternoon by the member for Coast-Capilano (Mr. Sinclair). So assiduously and successfully has this attempt been made through the various media of communication I have mentioned that the opinion seems to be established that everything lovely in our present way of life is the direct product of government administration. For a time, I was under the impression that even the Almighty Himself had joined the government party. It was only last June that I had this opinion dissipated. Just before June 25 last, several members of the cabinet visited my constituency. I must say that we were honoured in having so many distinguished visitors. It became necessary to cover the constituency by airplane and give our message to the people by that method. I am told by one mother that, having heard a voice coming from the loud speaker in the airplane, her little girl rushed in and said, "Mother, God is telling everybody to vote for Mr. Dinsdale." Up to that point, I was under the impression the Almighty had abandoned us and joined the other side.
What is the real cause of the rather prosperous circumstances in which Canada finds herself at the moment? It is unexpected prosperity because all the experts, all the economists, were calculating for a recession immediately following the war. This condition results from such unexpected things as the backlog of demand, and perhaps more from the fact that during the war the centre of world influence, politically and economically, shifted from the old world and is now firmly lodged on this continent. This situation results also from the fact that during world war II

Canada was one of the great arsenals supplying all the material needs of modern warfare, and from the fact that in this country we have the richest resources of any nation in the world. This was effectively pointed out to us by the member for Calgary West (Mr. Nickle) in his maiden speech the other night. He gave us information concerning the development of the oil industry since 1947, particularly in Alberta, which was quite staggering and entirely new to most of the members in the house. Rather than give credit to any particular political regime for the situation in which Canada finds herself today, we should come to the conclusion that it is due to accidents of history and geography more than it is to deliberate government planning. After listening to the speech delivered a few minutes ago by the member for Spadina (Mr. Croll), I am almost forced to the conclusion that had another group been in power Canada might have made greater strides, particularly in the field of immigration which supplies the basic ingredient for development in any country, namely human resources.
The situation is changing today. As we listened to the criticisms of the throne speech and of government policy-some of them have been quite effective-I felt that it was obvious that we are now in a period that might be referred to as a time of uneasy balance between the forces of inflation and those of deflation. For the first time since world war II the government is actually facing major difficulties. Yet there is still a spirit of easy optimism which perhaps is not justified by conditions that prevail in Canada today. From statements in the speech from the throne it would appear that that spirit of easy optimism still prevails in government circles. We find this statement in that speech:
At home our economy remains very buoyant. External trade and capital investment have reached record levels. Generally speaking employment remains at a high level. Inflationary pressures are still being strongly felt and require the maintenance of anti-inflationary measures.
This statement illustrates the easy optimism that has prevailed in Canada during these wonderful post-war years. Yet as we listened to the discussion today, I am sure there has been a growing feeling that the problems of inflation, which are closely connected with the problem of high taxation and the spreading unemployment, are not of merely transient significance. I think there are some deeper trends involved. I could go on, and I will later, to discuss farm problems, because the constituency I represent is basically an agricultural one.
10, 1952	295
The Address-Mr. Dinsdale
It is hardly necessary for me to deal in detail with inflation, high taxation and unemployment. Those subjects have been covered several times in the speeches today, but I should like to say that this feeling of buoyancy to which reference is made in the speech from the throne is more artificial than real. One of the common characteristics of inflation is that buoyant effect. In earlier periods when economies became completely bankrupt as a result of uncontrolled inflation, such occasions as the great south sea bubble, economies became so buoyant that they floated away. To say in these casual and easy terms that the economy remains buoyant, and refer to some of these major difficulties I have described, is to be rather overly optimistic at this time. Certainly the citizens of Canada on fixed incomes, the pensioners or recipients of war veterans allowance, would not concur in the idea that the economy is buoyant today.
I could dwell at length on some of the things that have come to my attention, particularly from the war veterans who are faced with the necessity of living on the meagre allowance permitted under the War Veterans Allowance Act. Changes in that act are to be considered during this session.
I only hope that the brief presented by the Canadian Legion will be seriously considered. I feel that the Canadian Legion, in all its presentations on behalf of the Canadian veteran, has demonstrated a spirit of responsibility and moderation, and obviously should be the group which is in closest touch with the needs of the ex-serviceman.
I would say that this deliberate psychological effect that the government has tried to cultivate in having the impression given that all is for the best in the best of all possible worlds has been one of the biggest contributions to inflation. Quite often the economist, skilled in economics which is known among social scientists as the dismal science, makes gross errors in calculations because he refuses to recognize the influence of the psychological effect. In concealing, during times of special need, the facts of the situation and in suggesting that all is well and rosy in the garden and that everything will continue to be so under the best of all possible governments, there is cultivated an easy optimism in the thinking of the public, which makes it more difficult than it otherwise would be to deal with the effects of runaway or uncontrolled inflation. But notwithstanding that situation, we find that last year the standard of living remained the same as it was in 1950. There seems to have been a certain degree of self-control on the part of the consuming public. Connected with that fact, we must not forget the credit restrictions.

. The Address-Mr. Dinsdale It should be noted that the consumer saved twice as much in 1951 as he did in 1950. No doubt that fact too is associated with credit restrictions and might be described partly as a buyer's strike or a refusal to pay the prices demanded or the prices required as a result of the imposition of some of these excise taxes and hidden taxes that we have been discussing. Certainly I think the fact that the consumer has deliberately curtailed his expenditures and increased his savings gives the lie to the suggestion that the consuming public must be relieved of the surplus money it may have. We can come to no other conclusion than that this suggestion is made because the citizens of Canada are not to be trusted with the handling of their own hard-earned money. I say that the consuming public has given the lie to that statement by the record that has emerged from the statistical analysis for 1951.
As to taxation, we shall have plenty of opportunity to discuss that subject when the debate is taking place on the budget. I think it is significant, however, that the experts tell us that 25 per cent of a nation's income is a maximum for healthy taxation. Information has recently been given to the effect that on all levels of government, federal, provincial and local-that is, national taxation-has reached something like 40 per cent of the income, a fact which would tend to suggest that we have reached the point of diminishing return with regard to this method of gathering revenue for public expenditures. It is obvious that this is the situation. Time and again we have had it pointed out that initiative and productivity have been stymied as a result of the present policies of high taxation.
I am not going to dwell any longer on that point because it has been dealt with adequately already. I want to move briefly to a discussion of unemployment. That topic has also been mentioned on several occasions. I merely want to give a personal experience which occurred while I was in the city of Toronto just a week ago when I was invited there to take some small part in connection with the opening of education week. There I saw for the first time since the thirties a breadline consisting of some 200 men who were lined up outside a well-known church,
Woodgreen United Church, whose pastor is Rev. Ray McCleary; they were there for the purpose of receiving Sunday evening dinner. I was informed that this practice had been going on all during the winter. It was quite a shock to me, because it was the first time I had seen a breadline in Canada since the thirties and I happen to be one of the members of the depression generation who had some personal experience of the economic conditions prevailing during that period. With this easy attitude of optimism, this situation is passed off as a seasonal problem, and we are informed that everything will be well as soon as we take up the slack in our economy resulting from the dislocations which are inevitable as we move into an increased armament and defence program. We are told that as soon as that slack is removed, all will be well and all will be rosy in the garden again. We have had certain information brought before us by the hon. member for Lanark (Mr. Blair) in dealing with unemployment in the textile industry. The information he placed on the record would tend to suggest that there is a threat of permanent unemployment in this one particular industry unless the government takes more drastic action than has been taken up to the present time.
I indicated that I wanted to say something about farm problems. This aspect has been discussed today, particularly by the hon. member for Lake Centre (Mr. Diefenbaker) and the hon. member for Assiniboia (Mr. Argue). These matters have been forced upon our attention by the outbreak of foot-and-mouth disease to which reference has already been made.
I am informed, Mr. Speaker, that the hour is now eleven o'clock. I should, therefore, like to move the adjournment of the debate.
On motion of Mr. Dinsdale the debate was adjourned.



BUSINESS OF THE HOUSE

Mr. Fournier (Hull):: Tomorrow we will continue this debate.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday, March 11, 1952