1952-05-02

Right Hon. J. G. Gardiner (Minister of Agriculture):: I should like to refer to the question of privilege that was raised by the hon. member for Lake Centre (Mr. Diefen-baker). I do not think it is necessary for me to read what appears in yesterday's Hansard, other than the significant remarks which were made. I stated:
I understand that the matter referred to by the hon. member was discussed in the committee this morning, and my hon. friend wishes to have the documents which were tabled in the committee tabled here as well. That will be done.
After that statement was made the member for Lake Centre said this:
There are still some, other than those tabled in the committee. There are still the certificates of analyses that were ordered to be tabled here, and they have not been tabled in the committee as yet, nor have they been tabled here. The place where those documents were to be tabled was the House of Commons, and I am asking now particularly for these certificates of analyses, none of which was included in the return tabled.
I have in my hand sessional paper No. 169-F, Tuesday, April 29, 1952, and in it is listed the documents which were tabled. Among the documents tabled is the Department of Agriculture production, "Certificates, health of animals division, specimen record for inspectors, identification numbers 1, 2, 3, 4, 5, 6, 7, 8, and 9; disease suspected, infectious stomatitis; owner of animals"-and so on. This is the statement of analysis, and it is here.
After we went back to the committee yesterday afternoon, the certificate was found to be on the record already, both as tabled in the house and as tabled in the committee. I wish to draw to the attention of the house the fact that there was no effort made to withhold this from either the house or the committee. It was on the record yesterday when these statements were made, and is still there.
With regard to the other documents which were tabled in the committee but which were not here, I have them on my desk. There is this large sheet and this larger file, which I thought had everything in it and I still think has everything in it called for by the order
placed on the Orders of the Day on March 3. I have added to it this small file about which there is some question as to whether it was required by any order. Nevertheless it is here and was tabled in the committee. I should like to lay it on the table now.
The suggestion was made that there are some other documents. I have had all the records checked for any documents that by any stretch of the imagination could be said to have anything to do with the intention of the order. There are some communications here which have to do with the effect of the quarantine on grain, and things of that kind which were not thought to be included in the records asked for and which may mean something or may not mean very much so far as the desires of the hon. member and others may be concerned.
Then there are the records with regard to following the man who was employed by Mr. Waas; this was done under special investigation. They were on files separate from the others and they are here as well. I am going to put those on the table. Whether or not they have any bearing on the request can be decided.
I could find only one other communication of any kind which might have reference to the matter and which some of the opposition members might desire to have. It is a communication from Mr. Taggart to Dr. Childs when he was at Regina, asking him to come back to Ottawa on February 20, the day on which it was finally decided in the minds of everyone here that the malady could be foot-and-mouth disease. That document is one which was wired, from Mr. Taggart to Dr. Childs, to Regina; and when he came back he had the wire, of course. This is the wire and I hereby table it.
That is everything that I know of, and everything that anyone in the department believes could be required by the order. It is all here and will be put before the committee.


Mr. Coldwell:: May I ask the minister a question? Is the report on Willi Bruntjen, the German immigrant, a mounted police report?


James Garfield Gardiner: No, it is not a mounted police report, although there are some things on it that refer to mounted policemen. It is the report of the following of the immigrant employee of Mr. Waas. I hope I am not
1806	HOUSE OF
Inquiries of the Ministry tabling something which it has already been decided by the house is privileged because it is a mounted police document. I do not think I am, however.



DIPLOMATIC INSTRUMENTS


Mr. Jean Lesage (Parliamentary Assistant to the Secretary of State for External Affairs):: Mr. Speaker, on behalf of the Secretary of State for External Affairs (Mr. Pearson) I beg leave to table copies, in English and in French, of the following diplomatic instruments:
1.	Exchange of notes, March 16, 1951, amending paragraph 4 of the annex to the Australia-Canada air transport agreement of June 11, 1946.
2.	Exchange of notes (November 26, 1951) between Canada and South Africa constituting an agreement concerning the avoidance of double taxation on income derived from the operation of ships and aircraft.
3. Exchange of notes (February 13 and March 19, 1952) confirming the recommendation of March 1950, made by the permanent joint board on defence concerning bases in Newfoundland leased to the United States.
4. Exchange of notes (January 22 and March 22, 1952) between Canada and Monaco concluding a non-immigrant visa modification agreement between the two countries.



IRRIGATION


[Stage Direction]
On the orders of the day:
Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, yesterday the hon. member for Lake Centre (Mr. Diefenbaker) asked a question, part of which is in the following terms:
Is the Prime Minister in a position to advise regarding the commencement of the sittings of the commission on the South Saskatchewan river project, and also whether sittings will be held in Saskatchewan as it has been determined will take place in Manitoba and Alberta?
I take it that by "sittings" the hon. member meant public hearings.


Mr. Diefenbaker:: Yes; that is what I meant.


Mr.   Si. Laureni@: I have now received from the secretary of the royal commission the following information. Public hearings are being held in Lethbridge today, May 2, and if not completed will continue tomorrow, May 3. The commission is meeting with the Manitoba government on May 9 for the purpose of discussing a submission which that government might wish to make, and also


to discuss the question whether it would be desirable to have public hearings in Manitoba.
The Saskatchewan government has filed an interim submission with the royal commission but has reserved the right to submit more material later. The intention is that arrangements will be made for this further information to be presented at a later date, and that the question whether or not there should then be public hearings in Saskatchewan will be considered between the commission and the Saskatchewan government or others who may wish to appear.


John George Diefenbaker: I want to thank the Prime Minister and to suggest this. If there are not to be private sittings in Saskatchewan, various municipal bodies and civic bodies want to make representations and they should know that they can make them direct to the commission.


Louis Stephen St-Laurent: I am sure that this statement which the hon. member has made in the house will get publicity and will serve as notice to those who may wish to make submissions that they can do so, and that it is perhaps rather urgent that they do not take too much time about it because we are all anxious to have the proceedings completed and to get a report as soon as possible.


John George Diefenbaker: That is right.


Major James William Coldwell: Is it not a fact that it has already been decided that there would be public hearings in Saskatchewan? My understanding-and I got it from one of the members of the government-is that there would be public hearings.	[DOT]


Louis Stephen St-Laurent: The information I get is that the commission is desirous of getting all the information that may be helpful, but does not want to take more time than is required to reach a proper decision.



LIVESTOCK


[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: I wish to direct a question to the Minister of Justice. Has the minister yet given consideration to the legality of provincial restrictions on the movement of livestock? Will the government test the constitutionality of such restrictions?


Hon. Siuart S. Garson (Minisler of Jusiice):: I wish to thank the hon. member for having given me notice of his question, although it did not reach me until about four minutes to three.

In reply to the hon. member's first question, I may say that as long as the possibility exists of an amicable withdrawal of the provincial restrictions on the movement of livestock, we have not formulated an opinion concerning their legality. In reply to the second question may I say that this will depend upon the actions of the provincial governments and our own views as to the constitutionality of the individual provincial restrictions.



ASSURANCE TO PRODUCERS OF FLOOR PRICE ON CATTLE AND HOGS

[Stage Direction]
On the orders of the day:
James Garfield Gardiner: The hon. member for Calgary East (Mr. Harkness) asked me a question yesterday which I was unable to answer then, but which I can answer now. His question was to this effect: whether or not a report had been made by my parliamentary assistant, who had just been in Calgary, on the conditions existing in the market there, and what had been arranged as a result of the visit.
In the first place I want to congratulate my assistant on having carried through a very successful mission in Calgary. He, with Jack Byers of our staff and Mr. Youngman of our pasture services in the west, went to Calgary to discuss there the possibility of dealing with the fact that heavy beef was on that market in such quantities that it made it very difficult for producers to receive reasonable prices, and the further fact that there might be a possibility of putting some of the lighter cattle on our pastures.
When the parliamentary assistant arrived there he found that the main problem was the heavy beef. He negotiated with the packing houses and with those who had the heavy beef, and finally arranged that we would take the frozen sides of that beef off the market at the floor price. That arrangement was made both in Calgary and in Edmonton. He also found that, up to date, the lighter cattle, at least in so far as they were in the feeder class, were being taken rather freely back to the farms by those who could feed them, and for the time being there is no necessity of putting the lighter cattle on our pastures. Nevertheless he left Mr. Byers there with instructions to watch the movement of cattle and deal with those problems as they come up. My understanding is that as a result of those arrangements beef is being maintained at the floor on those markets.
Inquiries of the Ministry GERM WARFARE



PRESS REPORT AS TO STATEMENT OF TORONTO CONTROLLER

[Stage Direction]
On the orders of the day:
Mr. J. H. Ferguson (Simcoe North):: I wish to direct a question to the Minister of Justice. In view of the Globe and Mail newspaper's statement that ex-controller Stewart Smith of the city of Toronto is reputed to have made a statement that the troops associated with our troops fighting in Korea are now using germ gas-


Mr. Riley:: Question.


Julian Harcourt Ferguson: -is there any law in
Canada-


Daniel Aloysius Riley: Question.


Julian Harcourt Ferguson: You could not answer if I asked it of you.


Daniel Aloysius Riley: You do not know how to ask it.


Mr. Speaker:: Order.


Julian Harcourt Ferguson: Is there any law in Canada to bring this man either to prove or disprove his statement with regard to the associates of our forces in Korea-


Mr. Speaker:: Order.


Julian Harcourt Ferguson: -when we consider in
Canada that these men are now at war in Korea?


Mr. Speaker:: Order.


Stuart Sinclair Garson: I want to thank the hon. member for the implication in his remark that perhaps I could answer his question, but I am afraid his confidence is misplaced; for what he is asking me is a legal opinion upon a statement which I have not yet examined. I shall be glad to have a look at it and bring an answer down on Monday.



COMBINES INVESTIGATION ACT


[Stage Direction]
On the orders of the day:
John George Diefenbaker: I
should like to direct a question to the Minister of Justice. I did not give him notice, but I know my confidence will not be misplaced. Is the investigation of the wire and cable companies, to be made by Mr. Goldenberg under the combines act, to be carried out as a result of the action of the minister directly, or of the combines commissioner, or of the complaints of private citizens? What is the alleged wrongdoing that is to be investigated?


Stuart Sinclair Garson: In reply to my hon. friend's question I may

The Budget-Mr. Abbott say that this inquiry, like the majority of inquiries conducted under the act, is conducted on the initiative of the commissioner himself, on the basis of complaints from certain individuals.
With regard to the other points that my hon. friend has raised, I regret that I cannot make a statement regarding them because it is not the practice to disclose any information such as that asked for until the final report has been received from the combines commissioner.



THE BUDGET


[Stage Direction]
The house resumed, from Thursday, May 1, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Greenwood), and the amendment to the amendment of Mr. Coldwell.
Hon. Douglas Abbott (Minister of Finance):: Mr. Speaker, as a general rule I do not intervene at this stage of the budget debate; I wait to make any comments I may have until some of the amendments or subamendments have been disposed of. I am doing so today only because I understand that while I was away for some days last week the leader of the opposition (Mr. Drew) and the hon. member for Eglinton (Mr. Fleming) referred to that absence and expressed disapproval of the fact that I was not present in the house during the course of the debate at that time. Therefore I am going to take a minute or two today, if I may-I think I should-to indicate to the house the circumstances under which I was absent.
I have always felt it to be the duty of any public man, any member of parliament, to make a certain number of speeches to organizations outside the house in order to discuss matters of public interest, and in the course of that duty I have always felt that I should try to make one or possibly two speeches a year in the United States, because of the close interest which exists between the two countries.
Some two or three months ago, I think it was, I received an invitation from the United States chamber of commerce to speak to their fortieth annual meeting in Washington. As hon. members know, the chamber is perhaps the largest single organization of businessmen in the United States. I appreciated the invitation, and it seemed to me it might be a suitable opportunity to express


my views which I thought needed to be brought to the attention of businessmen in the United States. Therefore I accepted the invitation, subject of course to the usual reservation that if my parliamentary duties prevented my going I would not go.
I brought down the budget on April 8. We adjourned over Easter. On the Tuesday following our coming back here the budget debate was opened. I was able to be here. I listened to the very interesting speech of my hon. and genial friend, the official financial critic of the opposition (Mr. Macdonnell); I listened to the speech made by my friend the leader of the C.C.F. party (Mr. Coldwell) and my friend the leader of the Social Credit party (Mr. Low), and to a number of other interesting speeches which were made on that day.
In listening to the three gentlemen to whom I first referred I felt that I had got at that time a picture of the general views of the three parties with respect to the budgetary proposals which I had made. I am fortunate in having a capable parliamentary assistant; I had a competent and capable Acting Minister of Finance in the person of my colleague, the Minister of Justice (Mr. Garson), and I felt that under the circumstances it would perhaps be not unreasonable if I were to fulfil the speaking engagement to which I have referred.
I am not telling hon. members anything they do not know when I say that as a rule in the budget debate a good many speeches are made which have not very much to do with budgetary matters. We had an outstanding example of that yesterday evening-


Mr. Cruickshank:: How do you like that?


Mr. Fleming:: You refer to your colleague, the Minister of National Health and Welfare (Mr. Martin).


Douglas Charles Abbott: -when my friend the leader of the opposition spent over an hour telling us what he thought about family allowances seven or eight years ago. I was going to ask him the question whether he thought that had anything to do with the budget, but the circumstances were such that I was not able to put the question to him.


George Alexander Cruickshank: It is never too late to hope, though.


Julian Harcourt Ferguson: Ask your parliamentary assistant; perhaps he can tell you.


Douglas Charles Abbott: I must say, Mr. Speaker, that I enjoyed listening to the speech, but frankly I do not concede it to be my duty as Minister of Finance to sit in the house, or necessarily to be in the house, to listen to speeches of that kind.

However, be that as it may, I felt that I could safely and properly fulfil this speaking engagement in Washington. I could have gone down to Washington the afternoon before the day I was to make the speech- it was to be a luncheon-and come back the next day. As it happened, and as I am certain hon. members know, the Canadian chamber of commerce and the United States chamber of commerce have a joint committee composed of the members of the two chambers, known as the U.S.-Canada committee. It has been in existence for some years. They meet twice a year, once in Canada and once in the United States, just before the meetings of their parent bodies, and they discuss matters of particular interest to our two countries.
The chairman of the Canadian chamber this year, an old friend of mine and classmate at McGill, was good enough to ask myself and my wife to go down to the meeting of the U.S.-Canada committee, which was held at White Sulphur Springs just prior to the meeting in Washington of the United States chamber of commerce. And may I say, in parenthesis, that these organizations select delightful places to hold these meetings. I decided to accept the invitation.
I was very glad indeed to go, because I found the meetings of this joint committee, which are unofficial meetings of course, most interesting. Among other guests they had invited there were the deputy minister of fisheries, Dr. Bates, and a former distinguished civil servant, Dr. Camsell. Two of the items they were discussing were fisheries and the development of the Northwest Territories. I might say, if I may interject this, that I was proud of our civil servants, and the way in which both Dr. Bates and Dr. Camsell contributed to those discussions. I was happy to have the opportunity to sit in with them.
As I said last night, the weather was not too good; it rained most of the time. For reasons which the house will know, I was not able to get away in January, because I had to go to London to attend a meeting of finance ministers. After the first of February I am pretty well tied up with the preparation of the estimates and the budget. So I welcomed this opportunity to get down there for two or three days and to take part in those discussions. Then I went to Washington and made my speech to the chamber of commerce Wednesday noon and left that afternoon.
Those are the circumstances under which I visited the United States, a visit which has been the subject of some criticism by my 55704-115
The Budget-Mr. Garson hon. friend the leader of the opposition and the hon. member for Eglinton.
Contrary to what the leader of the opposition said last night, that there was no member of the government who was in the house to answer questions which might be put, certainly my parliamentary assistant was here every day. I regret that these two gentlemen felt they had to bring this matter up in the house. Of course they were quite within their rights in so doing; but since they have done it, I did feel that I owed to the house and to myself the explanation I have given this afternoon. I am quite ready to leave it to the judgment of the house, and to that of the constituents whom I have represented here for a little over twelve years, whether the public interest has suffered as a result of my trip to the chamber of commerce meeting in the United States.


Stuart Sinclair Garson: Mr. Speaker, I had not intended to take part in this debate. However, during the course of the proceedings last night, as I am informed, my name was taken in vain for, I think, the third or fourth time in connection with the ordnance fire of last June. And, having regard to the fact that my recollection of a certain interview which I had with the hon. member for Peterborough West (Mr. Fraser) is quite different from his, I think in fairness to the truth, and to my own position in the matter, I should place on record my recollection of the case in question.
The first of two statements with which I should like to deal is one which was made by the hon. member for Peterborough West to the Ottawa Journal, in these terms:
Even before the serious central ordnance depot fire in Ottawa last year I went to Defence Minister Claxton and Justice Minister Garson and told them I had people willing to testify paint was being openly offered for sale by men in uniform in Ottawa.
Now, Mr. Speaker, the first point I should like to make in connection with that statement is that the hon. member did not see me before the ordnance depot fire, because the only occasion upon which he came to see me at all in the matter was to discuss the ordnance fire, and he could not discuss it until it had occurred. Therefore he must have seen me after it occurred.


Mr. Fraser:: Mr. Speaker, may I just correct that? I spoke to the Ottawa Journal when they called me and I said that I had spoken to the minister. I did not indicate the time. I think it was after the fire.


Some hon. Members:: Oh, oh.

The Budget-Mr. Garson


Gordon Knapman Fraser: Just a minute. And I told the minister alter we sipoke-


Stuart Sinclair Garson: Let me tell the story in my own way. My hon. friend told the minister, when a few days ago I happened by accident to meet him in the elevator in this builaing, and said, "What do you mean by saying that I met you before the fire? You know perfectly well that you met me after the fire, because you came to me to discuss the fire." The hon. member agreed.


Gordon Knapman Fraser: Yes, I agreed.


Stuart Sinclair Garson: Exactly. But between the time this was published in the Ottawa Journal and the time I accosted the hon. member in the elevator he was very reticent and mum on the question, and never made any correction concerning the time of our meeting.
Then, as to the second part of the hon. member's statement published in the Ottawa Journal which, in my view, is quite incorrect, the hon. member has never at any time given to me or mentioned to me the name of anyone willing to testify that paint or anything else was being openly offered for sale by men in uniform in Ottawa.


Gordon Knapman Fraser: I told you there were men in-


Some hon. Members:: Sit down.


Stuart Sinclair Garson: My hon. friend will have the privilege of replying afterwards, if he wishes to. In the meantime, unless he wishes to raise a point of privilege, I think I should have the floor.
Now, this first correction, namely that he did not see me before the fire, is borne out by a second statement which has been made in this connection by no less a dignitary than the leader of the opposition, who, basing his remarks upon information furnished to him by the hon. member for Peterborough West, is reported at page 1797 of yesterday's Hansard as stating that the hon. member for Peterborough West saw me on June 6-and that is four days after the fire, not before it.
I suggest, in respect of a conversation which my hon. friend says consisted of his walking across the floor of the house and sitting down beside me, and speaking to me while the debate was in progress-so that I would be in the position of having one ear on the debate and one ear listening to my hon. friend's remarks-that that is not a very satisfactory basis ten months later upon which to base the sort of charges that he has made in the public press of this country. I suggest that if the hon. member's recollection of their interview is not any more accurate than it is concerning when it took place, that it is very inaccurate indeed.


There is no doubt as to when the interview took place; and I do not think there will be any doubt, if my hon. friend will refresh his memory, as to what he said during that interview. He came to me, and he went on to emphasize what he had already commented on in the Ottawa Journal, namely, that in these ordnance fires, after the first fire had been officially put out and was smoking, another fire took place in another part of the warehouse. He said in that connection that that to him was an indication that the origin of the fire was incendiary. He said in that connection that rumours were going around the Ottawa streets and through the valley to the effect that people had been offered ordnance goods for sale by military personnel. He said, "I want you or the authorities to conduct this investigation upon the hypothesis that this fire was incendiary in character and that it was set by military personnel in order to cover up thefts of stocks from the warehouse, which thefts they wanted to hide by the fact that the warehouse had been burned down."
It is rather difficult to cast one's mind back to a conversation some ten months ago and to recollect all that passed back and forth. I think my hon. friend will recall that I told him then that the fire was under investigation by competent experts and that it seemed to me, as one who was inexpert, that in any inquiry of this sort it would be almost routine for the experts, among the various theories which they might advance as to what the cause of the fire was, to consider as one of those theories that it was incendiary and that perhaps it was set in order to cover shortage in the warehouse stocks.
I certainly did not think that the hon. gentleman's idea, if he will permit me to say now what I was too polite to say then, was of any world-shattering character. I did not think that it contributed very much to the solution of the matter. The conversation ended pretty much with that.
With regard to the hon. gentleman's statement that he offered to furnish to me the names of men who would swear that military stores had been offered on the streets of Ottawa, as I said before, my recollections certainly do not agree with those of the hon. gentleman. But in saying that I want to be fair. I do not claim that my memory has any greater retentive power than his, nor do I question for a moment his good faith in relying upon his own memory. But I must confess that the thing that puzzles me after this lapse of ten months is that I do not have these names. I have never had these names. I am perfectly certain that I have never refused the tender of these names by

the hon. gentleman or by any other living person. Whether his memory is right or whether my memory is right, the fact is that he did not furnish these names to me either orally or in writing when he spoke to me on June 6, 1951, or at any other time.
Let us assume that the information as set out in the statement of the leader of the opposition or in the statement which my hon. friend gave to the press is one hundred per cent correct-which, if I may say without offence to these hon. gentlemen, I will not admit. As I say, let us assume that it is all correct. It is to this effect: He walked across the floor of the house, sat down beside me, had a conversation, said he had people who were prepared to swear this, did not give me their names then or ever, and then walked back and resumed his seat. Never from that time until now, in writing or orally or in any other way, has he offered to supply these names or to submit them and say, "Would you like to send them on to the police?" He never had any further conversation with me at all.
Now after ten months have elapsed he makes these charges in the public press from coast to coast upon the basis of that conversation. Let us assume that this matter is as important as all these weighty charges would indicate; and it is indeed very important. My hon. friend walked across the floor of the house to speak to me. One of the responsibilities of members is to pay the minimum amount of attention to the proceedings of the house. If he had thought that I was perhaps a bit inattentive to his alleged offer to furnish the names of these witnesses and that it was most important that those names should be further investigated, why could he have not said, "Listen, you are not paying attention to me as I raise this question". Or why could he not have later written me a letter saying, "here are the names of these witnesses"? Instead of that we had this one conversation, then there was a complete lapse of ten months, and then these all-out charges were hurled through the press of the country. As one member of the house may I say that while my hon. friend may be within his lawful rights, this is conduct to which as one exposed to it I must object.


Gordon Knapman Fraser: Mr. Speaker, I welcome this opportunity to say a word about this matter. What the minister has said regarding the Ottawa Journal is quite true. They got the information from me by telephone. I told them I had spoken to the Minister of Justice (Mr. Garson) and to the Minister of National Defence (Mr. Claxton). I told them that according to the information I had, ordnance stores had been sold around Ottawa. That is absolutely true. It was 55704-115J
The Budget-Mr. Fraser given over the telephone and that statement is true. I never saw the Ottawa Journal until the late afternoon of the day on which the statement was made and the motion moved in the house.
Between the time that that was moved and the following day at noon, when I was called home hurriedly because of sickness, I had no opportunity to see the minister. But I did see the minister and spoke to him and he agreed that I had talked to him about this matter. I agreed with him that it was on account of the million dollar fire in the ordnance stores that I had spoken to him. I happen to have the date of that conversation here in a file which has just been put on my desk. The date was June 6.
I spoke to the minister and told him that I had information regarding paint, raincoats and other things having been stolen and sold in Ottawa. I told him that I had heard, not from one but from more than one who had been in my office. I said that I had had a man in my office that day who was willing to swear to this matter and testify that this stuff was being sold.


George Alexander Cruickshank: Who was that man?


An hon. Member:: What was the man's name?


Gordon Knapman Fraser: The minister has never at any time asked me the name of that party. It was not up to me as a member of parliament to give it to him.


Some hon. Members:: Oh, oh.


George Alexander Cruickshank: You took an oath.


Gordon Knapman Fraser: Oh, no.


George Alexander Cruickshank: You took an oath as a member of parliament.


Gordon Knapman Fraser: It was not up to me to
investigate. I told the minister that I knew of men who were willing to testify. It was entirely up to the minister to ask me for their names, and he was not interested to do so.


Mr. Sinnott:: What a flimsy excuse!


Gordon Knapman Fraser: I went away from his desk absolutely frustrated. I thought that the government did not give a darn what happened to ordnance stores so far as fires and the materials in those stores were concerned.


Mr. Mutch:: You were born frustrated.


Gordon Knapman Fraser: On the 13th of the month the Minister of National Defence (Mr. Claxton) was sitting in a seat near me, and the hon. member for Eglinton (Mr. Fleming) was sitting in the seat next to me.


George Alexander Cruickshank: He has moved up one
seat now.
1812	HOUSE OF
The Budget-Mr. Fraser


Gordon Knapman Fraser: I told the Minister of National Defence on the 13th of June last year, with respect to the fire in the ordnance stores which occurred on the 2nd of June, a Saturday night-


John Sylvester Aloysius Sinnott: We all knew that.


Gordon Knapman Fraser: You are lucky to know that much. I could tell a story about "I know that" some time, and it would just fit your case.


Mr. Speaker:: Order.


Gordon Knapman Fraser: The fire occurred on the 2nd of June, a Saturday night. According to my information, some five officers and their men fought the fire for three hours before an alarm was sent to the Ottawa fire department.


Mr. Claxton:: That is not so.


Gordon Knapman Fraser: At five o'clock the next morning another fire broke out in the other end of the building, which certainly shows there was something wrong some place.


John Sylvester Aloysius Sinnott: Who told you that?


An hon. Member:: The hon. member for Springfield (Mr. Sinnott).


Gordon Knapman Fraser: The Minister of Justice seems to think that I should have told him the names of the men.


John Sylvester Aloysius Sinnott: Why not?


Gordon Knapman Fraser: According to my observations, I do not think mounted police carry on in that way. I remember that during the last war, when there were spies in Canada, I told the chief commissioner of the mounted police about a case in Hamilton. Shortly afterwards I received a letter in which he said that there was nothing to it. However, I understand that some weeks afterwards they picked up thirty-six people in a house on Catharine street in Hamilton who were considered to be spies.
The reason I did not press the matter was that I thought that the Minister of Justice was having his department and the mounted police investigate my information that thefts had taken place. I thought the matter was under investigation but evidently it was not. In the case which took place some years ago to which I have referred, the matter was investigated and they discovered that I was right.


George Alexander Cruickshank: That would be the only time.


Gordon Knapman Fraser: In the present instance it is only the minister's word against mine. That is all it is.


Stuart Sinclair Garson: With reference to the point about which my hon. friend is speaking, have I his permission to interrupt on a question of privilege?


Some hon. Members:: No.


Gordon Knapman Fraser: I interrupted the minister, and I am quite willing that he should say what he wants to say.


Stuart Sinclair Garson: On a question of privilege, if I may offer a suggestion by way of correction of my hon. friend, it is not a case of my hon. friend's word against mine, because he admits he did not give me the names of these people.


Mr. Rowe:: You admit you did not ask him. Did you ask for them?


Gordon Knapman Fraser: I have told the minister why I did not give the names to him. When I told him about the matter he paid practically no attention to me.


William Earl Rowe: Did you ever ask him?


Gordon Knapman Fraser: I did not think that was becoming of a man supposed to be the head of the Department of Justice and the mounted police. It is his department that should investigate. I thought he would send the mounted police to my office. I would have willingly given the names.


John Sylvester Aloysius Sinnott: You are looking for publicity.


George Alexander Cruickshank: It would have been dangerous if he had done that.


Gordon Knapman Fraser: I would have willingly given the names.


Stuart Sinclair Garson: May I ask my hon. friend a question?


Gordon Knapman Fraser: Certainly.


Stuart Sinclair Garson: Is it his position that he would not voluntarily give the names to me but he would give them to policemen if I sent them to his office?


An hon. Member:: Did the minister ask for them?


Gordon Knapman Fraser: I always like to be correct. I would not give names to the minister when sitting in his seat in the house because I did not have them with me. I had them in a locked file in my office.


William Earl Rowe: If you had asked for them you would have got them.


George Alexander Cruickshank: Why did you not unlock the file?


William Earl Rowe: He would if he had been asked to do so.


George Alexander Cruickshank: He does not need to be
asked; he is a member of parliament.


William Earl Rowe: Does every member of parliament tell everything he knows?


Gordon Knapman Fraser: I know that this man offered to testify. I know he certainly would not come to my office, sit down and allow me to take notes of what he had to say unless he was really an honest citizen and would back up what he had to say. From what he told me it was not only his word that was concerned but there were others who would have supported him. I wrote a letter to him dated the 14th of June in which I said I had spoken personally to the Minister of National Defence the day before when he had come over to our side of the house and sat down beside me. I said in my letter that I had asked him about stocktaking at ordnance, and that the minister had said they were not stocktaking when the fire took place. I told the minister that according to the men who came to my office, paint was being sold from ordnance stores. I said the minister had said that the allegations about shortages in stores could not be true because at the last inventory, shortages amounted to only one-third of one per cent.
I am not much at mathematics, although I used to be pretty good, but the government have involved us in such huge figures that millions are not millions any more. We are into the billions. In answer to a question of mine in the house the minister said that the expenditure on the buildings and one thing and another amounted to billions. If I am correct one-third of one per cent of $1 billion would be $3,333,000. The minister said that their expenditure on buildings and so forth amounted to billions. Therefore the loss last year must have been away up in the millions of dollars. That is not chicken feed. It is the money of the taxpayers that pays for these buildings and stores, and it is no wonder that our taxes are so high when such fires take place.


An hon. Member:: It has to be more than $3 million to interest this crowd.


Gordon Knapman Fraser: Somebody has put a note on my desk to the effect that the Minister of Justice has treated the information I gave him in the same way that he treated the flour milling report.


An hon. Member:: How funny!


William Earl Rowe: Funny, but true.


George Alexander Cruickshank: Don't tear up that note.


Gordon Knapman Fraser: I did not know that the minister was going to speak on this matter today. My file is upstairs. I only have a few notes here. From what I can find out, between the time I told the Minister of Justice and the time I told the Minister of National
The Budget-Mr. Fraser Defence, absolutely nothing was done. When the Minister of National Defence spoke on this matter on April 21 he referred to Crown Assets Disposal Corporation. The third man who came to me said that from what he could make out Crown Assets Disposal Corporation would sell machinery and other things to an individual to be turned over out of national defence stores. However, when the order for that material would reach ordnance it was generally altered, and other articles were added to it. A year ago in the public accounts committee I asked how the department kept its inventories. I think there must be something definitely wrong with the way they check inventories and keep track of material. Personally, I feel a different system of bookkeeping should be installed, because I have been told of many cases of theft during the war since this news appeared in the press. In Toronto during the war we were told of tires being given to the men so they would not have to buy them for their automobiles.
We had a fire here in the ordnance depot on New Year's eve this year. I shall read from a report in the Ottawa Journal of April 16:
Upwards of three hundred persons, many of them civilians, were attending two New Year's eve parties in No. 26 central ordnance depot, Plouffe park, the night of the $20,000 fire which raged through the southeast sector of the building.
This was revealed this morning as the trial of Pte. Hector Davis, 17-year-old Aylmer soldier charged with arson in connection with the blaze, began . . .
The officer on duty the night of the fire told the court he had made only one tour of duty through the depot instead of the usual two because he had1 been given the extra task of greeting party-goers.
Personally, I would think there is some laxity there in not having the proper supervision. Another thing that I would suggest to the Minister of National Defence (Mr. Claxton) is that he should not have the sergeants or officers messes in an ordnance building. They should be contained in a separate building so that the ordnance building could be properly patrolled. You cannot patrol an ordnance depot, or any other place for that matter, if you have three hundred people inside of it.
When I spoke to the Minister of Justice and the Minister of National Defence, I told them that raincoats were being sold at a certain place in Ottawa. I mentioned one place where they were sold, but I shall not mention it in the house. The minister can get the name from me afterwards if he has forgotten. I also said that one man that had been in to see me had been offered twenty gallons of paint at $4 per gallon. He knew it was from ordnance, because the man was in uniform.
1814	HOUSE OF
The Budget-Mr. Fraser
I first mentioned the fire in the ordnance depot on the Monday after it occurred, that would be on the 4th of June last year. Between that time and the time I spoke to the Minister of National Defence I had five men in my office to see me personally, and I had three telephone calls, all giving me information.


Stuart Sinclair Garson: I wonder if my hon. friend will supply us with the names of those gentlemen now?


Gordon Knapman Fraser: I told you last year I had them up in my office. I am not going to name names here because I would not know whether they would wish to testify a year later. The minister must remember that there have been many changes in the ordnance here in Ottawa since that time.


Stuart Sinclair Garson: May I suggest to my hon. friend that he let us have the names of these gentlemen.


Gordon Knapman Fraser: I have been asking about these fires for a long time.


Stuart Sinclair Garson: What about the names?


Gordon Knapman Fraser: I am not putting them on the record. Do you think that would help the case? I just wonder if the minister-


Stuart Sinclair Garson: We can form our own opinion of the validity of the hon. member's assertions.


Gordon Knapman Fraser: These men came to me in confidence. On the 6th of June I was willing to give the names. I still have them.


Mr. Brooks:: Would not the statute of limitations run against them now? Does the minister intend to prosecute now or does the statute of limitations prevent that?


Stuart Sinclair Garson: There is no statute of limitations.


Gordon Knapman Fraser: Dong before the ordnance fire I was asking questions. I asked about the fire loss, 1949-50, and during that time it amounted to $1,173,000. The following fiscal year which ended on March 31, 1951, the fire loss amounted to $1,126,000. I personally feel, Mr. Speaker, that if the Minister of Justice had paid attention to what I said on June 6 there would have been a number of convictions for theft, not only in the Ottawa ordnance-I think they call it No. 46-but also in other places in Ontario. Since this case has broken, Mr. Speaker, other fires have happened and other thefts have been noted. I do hope the Minister of National Defence and his officers will have a little better co-operation with the men in the ordnance department and other


parts of the defence organization to make sure that these things do not happen again.


William Earl Rowe: They might at least have saved the tracks at Petawawa.


Gordon Knapman Fraser: Yes, one member says that they might at least have saved the tracks. I understand that at Petawawa they even stole the weigh scales so as to weigh the scrap metal and other things to make sure the men in the camp got their proper rake-off on what was stolen.
As I said before, Mr. Speaker, it is a case of the word of the Minister of Justice against mine. He has acknowledged that I had spoken to him on June 6 of last year, and I did. I spoke to the Minister of National Defence on June 13 of last year. He has not denied that, and I do not see how he could. I was surprised at the defence minister saying at that time that there could not be anything in it at all because our losses are only one-third of one per cent. When you are dealing in millions of dollars, that is a great deal of money. I know that you, Mr. Speaker, being a Scotsman will realize that. I thank you very much.


Brooke Claxton: In a moment or two, Mr. Speaker, I shall refer to the remarks of the hon. member for Peterborough West (Mr. Fraser). Before that I should like to refer to the speech delivered last night by the hon. leader of the opposition (Mr. Drew) in which he saw fit to repeat in this house speeches made elsewhere regarding what he calls "wholesale looting" in the Canadian army. Hon. members will recall that this was the subject of a motion to adjourn the house on April 21. At page 1424 of Hansard the hon. member moved the adjournment of the house for the purpose of discussing "a definite matter of urgent public importance." It is interesting to note that having moved to adjourn the house on the score of urgency-if the hon. member for Peterborough West (Mr. Fraser) wants to continue his speech, perhaps he will do so.


Gordon Knapman Fraser: It was the Minister of Justice (Mr. Garson) who butted in, not I.


Brooke Claxton: The leader of the opposition moved to adjourn the house on the ground of urgency and then made this speech raising this subject again some thirteen days later. Hon. member and other hon. members will recall that in the house just previously that day I had made a statement on thefts at Petawawa. I announced the appointment of Mr. George S. Currie, a prominent chartered accountant and a man of outstanding integrity-as I think the hon. member for Greenwood (Mr. Macdonnell) and another hon.

member admitted-to investigate this matter. It may be of interest if I put on the record the telegram asking him to act. It reads as follows:
George S. Currie, Esq., C.A.,
Aldred Building,
Montreal.
Ottawa, April 21, 1952.
Confirming telephone please undertake immediate investigation and report earliest possible date into deficiencies and other irregularities engineering detachment at Petawawa and related matters there or elsewhere both to determine cause and make recommendations regarding security and accounting for stores equipment and services so as to prevent recurrence with any additional powers or terms of reference which are necessary to make complete and thorough investigation and report.
Brooke Claxton,
Minister of National Defence
Later that day I received the following telegram:
I am pleased to undertake the investigation referred to in your telegram of today's date and am making plans to commence immediately.
Mr. Currie began his work immediately and is now at work.


William Earl Rowe: Mr. Speaker, will the minister permit a question?


Brooke Claxton: Yes.


William Earl Rowe: Under what authority or statute was Mr. Currie appointed?


Brooke Claxton: I was just going to come to that matter. The leader of the opposition (Mr. Drew) asked under what authority that was done. It is under the authority of section 4 of the National Defence Act. The provision for the payment with respect to services of a professional and similar character is made in the defence estimates and will be made in consequence of a minute of the treasury board.
Mr. Currie had been deputy minister of national defence. He had served with distinction in the first world war and we felt that no better man could be found to do this job if we searched the length and breadth of the country. In my statement of April 21 I added this:
... if in the course of its work the select committee on defence expenditure would like to look into stockkeeping, accounting or auditing procedure, or any other matter relating to its work, on the spot and anywhere, all facilities will be provided.
The terms of reference of this committee are quite broad enough to permit of this. Let me read them:
That a select committee be appointed to examine all expenditure of public moneys for national defence and all commitments for expenditure for national defence since March 31, 1950, and to report from time to time their observations and opinions thereon, and in particular, what, if any, economies consistent with the execution of the policy decided
The Budget-Mr. Claxton
by the government may be effected therein, with power to send for persons, papers and records and to examine witnesses; and that notwithstanding standing order 65, the committee shall consist of twenty-six members to be designated by the house at a later date.
The terms of reference of the select committee on defence expenditure were modelled on those of the committee set up during several years of the war to deal with war expenditure. Let me read those terms:
Resolved that a select committee be appointed to examine the expenditure out of moneys provided by parliament for the defence services, and for other services directly connected with the war and to report from time to time their observations and opinions thereon and in particular what, if any, economies consistent with the execution of the policy decided by the government may be effected therein, with power to send for persons, papers and records and to examine witnesses; and that notwithstanding standing order 65, the committee shall consist of twenty-six members to be designated by the house at a later date.
The committee's terms of reference are, I submit, ample to look into the accounting and stocktaking procedures affecting or controlling expenditures in order to suggest any economies that may be made. Obviously the committee has power to visit places, if it wishes to do so, in exactly the same way as was done by the war expenditures committee during the war. In my statement I offered to provide all the necessary facilities for that purpose. That went without saying but I thought it was a good thing to make that clear. That will be done if and when the committee determines that it is desirable.
In his speech last night the leader of the opposition (Mr. Drew) referred to what the hon. member for Peterborough West had been stated to have said to the Minister of Justice and myself. In his remarks the leader of the opposition gave a correction of the statement as it appeared in the Ottawa Journal for April 14, 1952. In that paper the hon. member for Peterborough West is reported, within quotations, to have said:
Even before the serious central ordnance depot fire in Ottawa last year I went to Defence Minister Claxton and Justice Minister Garson and told them I had people willing to testify paint was being openly offered for sale by men in uniform in Ottawa.
Mr. Speaker, it was one thing for the hon. member to come to us, as he now admits, after the fire. However, had it been true that he came to us before the fire and had we then done nothing about it, that was indeed a serious charge; but that was the way it appeared in the press and that is the way it was referred to in several places throughout the country, until the leader of the opposition last night gave the corrected statement which I was happy indeed to get. But there is no concealing how serious it would have
1816	HOUSE OF
The Budget-Mr. Claxton been had the Minister of Justice and I been told of this situation before the fire and had done nothing about it. It now turns out, however, that-in accordance with the statement of the leader of the opposition and of the hon. member for Peterborough West as he made it today-the report in the Journal is not in accordance with what the hon. member for Peterborough West said today. It now appears that he told the Minister of Justice what the Minister of Justice said on June 6, some three days after the fire; and he told me, according to his statement here in the house, what he said on June 13. The hon. member for Peterborough West came to me in the house, as he says, and said: I have heard that paint and some other things are being sold out of the ordnance stores and that the fire was probably set because of the fear of a stocktaking which would result in those thefts being discovered. That was what he said. And as the Minister of Justice has indicated, if it was true that there were thefts of substantial amounts, and if it was true that there were shortages, then that was a reasonable suggestion as to the cause of the fire which would have occurred to everyone. At that time the fire had been under investigation from the early morning o June 3. There were two fires that night. Both were caught in consequence of alarms instantly given, not as the hon. member for Peterborough West said, but instantly given, and fought with skill and courage by both the Ottawa fire department and the members of the armed forces.
The second of these fires broke out at about four o'clock in the morning in quite a different part of the buildings, and it likewise caused serious damage. There were representatives of the Ottawa fire department, of the fire marshal of the armed forces, of the provost corps of the armed forces, of the R.C.M.P. and of the fire investigation bureau representing the Canadian Fire Underwriters, at my invitation, from almost the time of the fire. The fire was investigated. People were interviewed for months covering every aspect of it, regarding rumours of deficiencies that might have led to someone setting fire to these premises in order to avoid discovery.
Now, what I told the hon. member for Peterborough West that day, on or about June 13, was that a stocktaking had recently been held in the part of the building where the consumable stores such as paint were contained, and where the fire occurred. This stocktaking indicated a very small deficiency relatively to what is usually found in a section of a warehouse containing consumable


stores such as paint, wrapping paper, washing materials and the like. The deficiency was less than 1 per cent; so that-and this is the point I made-it was unlikely, in view of the relative smallness of the deficiency, that anyone could have set fire to that particular place for the purpose of concealing the deficiency, particularly when a stocktaking had taken place within a matter of weeks.


Gordon Knapman Fraser: That is different from what I understood you said.


Brooke Claxton: We can each give our impression. Then the hon. member said he had been told of this by people who had informed him. I suggest to you, Mr. Speaker, that if an hon. member, or any member of the public, tells me, after a fire of substantial proportions, that he has anyone who can bring anything to bear on the cause of that fire, I will say: Let us have his name.


Gordon Knapman Fraser: You never asked me.


Brooke Claxton: Well, that is your impression; my impression is that I did ask the name.


Gordon Knapman Fraser: I had a witness.


Mr. Robertson:: Let us have it now.


Brooke Claxton: And that would be the most natural thing in the world. However, the point is this at this time we had police actively at work. They stayed on this job for months after, and it was an easy thing, as the Minister of Justice had pointed out, for the hon. member for Peterborough West to have spoken again either to the Minister of Justice, or to myself, or to have written to us about the matter if it was of the consequence that he says it was. I submit, Mr. Speaker, that to say that he felt frustrated is hardly a good reason for not taking the positive action of coming to the assistance of those responsible for the enforcement of law, as might have been done so easily.
If he was frustrated then, why does he cease to be frustrated now and make this statement at this late stage? If the hon. member sees fit to do it, I would be glad to have any names he has on conditions of confidence so that we can turn them over to the police and see what the situation is.
What may have given rise to all this was something that has not so far been mentioned, and it is of some consequence. It is that already at the ordnance depot there had been prosecutions for theft of rope, leather, shirts, boots, paint brushes, overalls, kit bags and so on, which were found in the possession of Morris Levinson, a junk dealer of Ottawa, and Harry Altman who operated a war surplus store in Ottawa. The value of the stores is estimated at $3,000. On March 22,

after a prolonged investigation, three soldiers and two civilian receivers were charged in civil court. Harry Altman was convicted but the sentence was quashed in the appeal court. Morris Levinson and the three soldiers were found guilty and sentenced to fines or imprisonment. That was just three months before this event occurred, so that what the hon. member said was hardly news at that time. What would have been useful would have been to have the advantage of any leads other than those which probably arose out of published reports or private knowledge of the investigation and prosecutions which had already taken place.
There were a number of stories current following the Plouffe park fire: one, that jeep and other automobile parts had been sold around Ottawa from Plouffe park. Jeep and automobile parts are not even kept at Plouffe park. In order to meet some of these statements at the time I authorized a statement to be made on July 10 as follows:
Jeep and other automobile parts are not even kept at Plouffe park. There is no truth whatsoever to the report that the loss of military clothing in the fire would delay the organization and training of the 27th Canadian infantry brigade group. The fact is that no military clothing was stored in the burned section of the depot and none was lost. There was not one garment or any type of clothing or equipment stored in this part of the building. Neither is there any truth in the rumours that there were stock shortages in the area where the fire occurred. Stocktaking in the area concerned was completed on April 13, 1951, and deficiencies were less than one-half of one per cent-and these were for a year and four months of operation-considered to be a remarkably good showing for materials like paints, cleaning and packing materials, and other similar consumable stores.
We have had professional assistance from time to time from firms. of accountants to advise us with regard to accounting procedure and the like. One such was James C. Thompson of Peat, Marwick, Mitchell and Company who, under cover of letter dated April 17, to Mr. E. B. Armstrong, assistant deputy minister (finance), Department of National Defence, Ottawa, Ontario, wrote:
Dear Mr. Armstrong:
In connection with our recent examination of accounting for stores at 26 COD, Ottawa, I wish to confirm my statement to you that during the course of our investigation we found no evidence to suggest that the recent fires at the depot were in any way instituted to cover up shortages of stores. While we are not in a position to state how the fires arose, we do not believe that there was any connection between such fires and the accounting for stores and materials.
Mr. Speaker, the motion of the leader of the opposition to adjourn the house was not allowed but the next day he made a statement in the Ottawa Journal covering generally the same grounds.
The Budget-Mr. Claxton
In the same Ottawa Journal we have a report referring to the last fire. This states that a soldier employed in the ordnance depot had been convicted of setting the last fire, and sentenced to two years less one day.
Because it has some bearing on fires and thefts, it is important that we should have some perspective to our discussion. When I ask that the house follow me in this part of my speech, I do not want anyone to think for one moment that I want to diminish the seriousness of the charges that have been or may be laid, or of offences such as those that have been described, whether they be the theft of public property, the fraudulent use of public property and services, or arson. These are dreadful things; and I can assure the house that those of us in the Department of National Defence have done, are doing and will do everything we can to prevent them, to detect them and, where we find them, to make sure that the law takes its full course.
But when we have exaggerated statements of the extent of fire losses it is important to have a sense of proportion. I deplore the size of fire losses. We do everything possible to reduce fire losses by fire drills, fire fighting equipment, fire prevention campaigns, fire education campaigns and co-operation with the civil authorities. But fires still occur.
I would point out that it is difficult to compare the situation of military buildings with that of civilian buildings. Military buildings to a great extent are of temporary construction. A lot of them are wartime buildings, with the wood dried out and impregnated with oil. Military operations are frequently related to activities' that use dangerous materials, such as explosives, fires for forges or for metal work, and stoves for local heating. Then, in many of those wartime buildings there is imperfect wiring, and the like.
So that I suggest it would be natural to expect that, under the law of averages, the losses of military buildings might be higher than those in settled areas. But I do submit that it is difficult indeed to make comparisons of figures because of different methods of valuation and different methods of accounting.
I mention these figures for purposes of illustration only. I may say they are the only figures those concerned with the matter in the department or in the other offices concerned with statistics have been able to give me. These are the figures for 1949, the last year in respect of which figures for civilian valuations and losses are available.
In the cities of Halifax, Montreal, Ottawa, Toronto, Winnipeg and Vancouver the assessed

The Budget-Mr. Claxton value of real estate in 1949 was $4,229,300,000. In the same year the comparable value of property in the Department of National Defence was $1,229 million. By taking 65 per cent of the cost of national defence property, to put it on some sort of basis of comparison with the assessed value of real estate in these municipalities, we arrive at the figure of $844,400,000.
In that year fire losses in the armed forces for buildings and contents amounted to $1,074,485, or 13/100 of 1 per cent of the valuation, as I have arrived at it. Fire losses to civilian buildings and contents in the cities mentioned totalled $11,336,700, or 27/100 of 1 per cent of the assessed value of the civilian property.
The ratio in 1950 for the service buildings was 13/100 and in 1951 it was 12/100 of 1 per cent.


Mr. Green:: Would there not be several million more people around civilian buildings?


Brooke Claxton: Yes, but I think that would lead to more effective prevention and detection measures, and more fire fighting apparatus.
I wish to leave the question of fires there and, against that background, say a word about the matter of losses through thefts.


Howard Charles Green: Before the minister leaves the subject of fires, would he tell us what the losses by fires were in 1950 and 1951?


Brooke Claxton: I just gave them.


Howard Charles Green: And up to date in 1952, in defence property.


Brooke Claxton: I just gave them for the earlier years. I have not the figure for 1952, but it is higher this year.


Howard Charles Green: I thought the minister said that figure was for 1949.


Brooke Claxton: After I had given the figures for 1949. I gave the ratio of service losses later. I have not the actual figures here, but they were put on Hansard, in a return made some time ago.


Howard Charles Green: I thought the only figures the minister gave were for 1949.


Brooke Claxton: I gave ratios for later years. It is important to appreciate how the scale of defence operations has changed since Korea. Measured in terms of money, our defence appropriation before Korea was $425 million. Today, since Korea it is $2,001 million, or nearly five times as large. Measured in terms of manpower it has increased from 47,000 to 96,000, and in civilian employees from 26,000 to 40,000.

During that time we have had hundreds of millions of dollars' worth of contracts placed and under way, not only for equipment and stores but also for buildings. At the moment there are under way in Canada 513 major contracts, 22 of which are at Petawawa. I suggest to hon. members this means that in every military establishment, hardly without exception, we have a situation whereby, in addition to ordinary military operations on a greatly expanded scale, we have construction going on to a degree which can be compared only to the peak of wartime activity. Swarms of civilian workmen are employed by the civilian contractors, and numbers of service and civilian workmen are employed on different parts of development projects.
It does not require any great imagination or experience in this kind of operation to realize that this is an exceedingly difficult one in which to maintain proper security with regard to certain types of equipment. When we think of other activities on a somewhat similar scale, such as for example the Canadian National Railways, we see that even they do not compare in magnitude with what is going on in defence. Last year the C.N.R. had an inventory in December of stores and supplies of $94 million. I do not suggest that these figures are comparable, but in defence we have in stores, either in the main depots or with the units, equipment and supplies to a value of which may run to one billion dollars. This inventory figure of $94 million for the C.N.R. was adjusted for losses of $18,344. The C.N.R. had claims for losses of freight by theft of $110,103 and had unallocated losses of freight amounting to another $278,375. That despite the fact that its operations are carried on along railway rights of way behind fences and in compact and well-guarded yards, stations and warehouses.
In the armed forces, we have several different types of accounting bodies which hold stores. First of all there is the ordnance which operates mainly at the central ordnance depots, No. 25 in Montreal, No. 26 here and No. 27 at London. It makes issue to units. Then we have the army service corps which handles food, oil, gasoline and the like. There is the Royal Canadian Electrical and Mechanical Engineers which has charge of parts for automobiles and the repair of equipment which these units receive from ordnance. The engineers have the equipment which they use in the field companies. There are medical and dental stores as well. All these have a rather similar accounting procedure.

The articles they have are susceptible of accurate and efficient stocktaking, stockkeeping and accounting procedures. Then we come to another class, the class of surplus stores or salvage obtained by engineer works companies. Commodities come into the hands of the engineers in this way: At a camp like Borden or Petawawa some wartime huts have to be replaced by new houses and barracks. Wartime equipment whiclfis wearing out has to be replaced in huts which have been renovated. Equipment such as stoves, sinks and shower stalls is put into the hands of the engineers but until the procedures which we developed in 1949 are made effective salvage equipment of this kind was not put expressly on their charge.
This equipment is examined to see what will be disposed of and what will be put into good condition and kept for future need. The thefts at Petawawa were principally related to this type of equipment, being either scrap or equipment that was in the hands of the engineers but not on their charge and awaiting a decision as to whether it would be disposed of or put on charge. When I mention to you that the operations carried on by the work service engineers has increased from a program of some $30 million in 1949 to $300 million in 1951 you will see that the scale of their operations has increased out of all recognition.
Mention has been made before of Farnham. The leader of the opposition (Mr. Drew) is reported on page 1797 of Hansard of May 1 as having said:
That camp disappeared except for a few of the walls and the foundations which could not be conveniently moved. Of more than 100 wooden structures-and very solid wooden structures they were -in that huge camp area, an undisclosed number had been lifted intact from their foundations by a heavy-tracked vehicle and sold for prices ranging from $25 to $50 to farmers and other residents in the eastern townships at that time.
Perhaps the leader of the opposition and others who have referred to this have had in mind the first reference to it which appeared in the press when the Gazette of December 14, 1945, had headlines such as this: "Army Reveals Farnham Camp Looted, $50,000 in Huts, Fittings Missing". Then followed a rather extensive report.
What are the facts about Farnham? Farnham was a summer camp built in 1940 primarily for use by troops in tents. Erected on it were some cookhouses, bath houses, latrines, store rooms, offices and the like. They were spread over an area of six square miles. The cost in 1940, including clearing, excavating and services, was $96,344.40. The camp was used during six years of war. It was declared to be surplus to military requirements in 1946 and in the ordinary course it
The Budget-Mr. Claxton would have been disposed of through War Assets Corporation as it was at the time.
However in 1947 I froze all disposal procedures while we had another look because of the changes in the international situation and the build-up of the armed forces. From the time when the camp ceased to be occupied in 1946 until 1949 a good part of the plumbing and other fixtures was removed by army engineers for authorized use in other establishments. Two civilian guards were charged with looking after the property but unfortunately they removed a good part of what was left and sold it to residents in the district. That was discovered and they were prosecuted. A court of inquiry was held and it was found that the value of the material stolen and not recovered was $3,500. It was found also that it would not have been possible to ensure the safety of the camp without employing sixteen men which would have meant an expenditure of about $32,000 a year. It is clear from this that what should have been done was either to let the camp go-to sale or to let it walk off. We could not do that and we put in two guards. Unfortunately they proved to be untrustworthy.


Howard Charles Green: Were they convicted?


Brooke Claxton: One was convicted and the other has not yet been tried. He chose a speedy trial and the prosecution is still in the hands of the provincial authorities. It would not be proper at this time to go into the question of Petawawa any further. The matter is now before the courts, and I do not think anyone would regard it as appropriate or useful, even if it were in order, to refer further to it. The leader of the opposition (Mr. Drew) referred to a baby tank being lifted. We have no evidence of that whatever. We do not know what is meant by a "baby tank". The only tank part that his reference may have been intended to cover is part of a cupola of a tank that has been used for years as a target for Piat firing. It has been immobilized of course and has been unworkable for years. It appears that one of the civilian scrap buyers may have removed some part of that. The story is that when asked about it he said it was part of a load of scrap that formed a part of his order.
I referred the other day to the theft of soil pipe. I am informed that was not on charge to the Department of National Defence but to the Central Mortgage and Housing Corporation as part of its operations, and that Central Mortgage and Housing Corporation was in process of turning it over to national defence to be used by the works services of the engineers. References have been made by the hon. member for Peterborough West

The Budget-Mr. Claxton (Mr. Fraser) to improvements in accounting procedure. I want to assure him that changes are constantly being made in every type of operation having to do with accounting procedure. With the assistance of treasury officials, members of the civil service commission and outside aid, as well as officers of the department who include some chartered accountants and others expert in this field, changes are being made steadily from time to time.
With respect to the question of stores- and I think hon. members will agree that is the most difficult kind of article to keep under effective control-this matter was the subject of a study made in 1949 when the chief auditor of the Department of National Defence consulted three leading civilian firms, Anglin-Norcross, the Foundation Company of Canada Limited and Hill-Clark-Francis Limited. I am informed that these firms thought that the system we had worked out was all right. It was worked out after a study had been made of the United States system which was largely adopted by us with adaptations for use in Canada. I understand that system is quite similar to the one subsequently adopted in the United Kingdom and Australia. It is a cost accounting system with various elements accounting for materials and supplies, job cost, real property records, installed engineering fixture records and works feature cost records.
The plan was to establish this system progressively during the years 1950 and 1951 but, as I have indicated, the tremendous expansion of the activities of the works branch, as well as of others in the armed forces, has delayed the full establishment of the system, but it is now being pressed forward. Unfortunately, or fortunately, the administrative staff of national defence was not increased nearly in proportion to the operational forces, and yet it still had to deal with an all-time peacetime peak load. That task has taxed both personnel and equipment. The result is as I related to the house in the statement I made, and I have nothing further to add at this time. The matter is the subject of an inquiry by Mr. George S. Currie, and no doubt it will be inquired into later by the special committee on defence expenditures. The matter will be developed further as the cases proceed in the court. With respect to discrepancies, irregularities and dishonest practices, those are the subject of further investigation, and if it should develop that there is reason to believe that criminal offences have been committed, charges will be laid.
I only wish to add that the hon. member for Greenwood (Mr. Macdonnell), the hon. member for Kootenay West (Mr. Herridge) and perhaps one or two others have asked


questions or made statements about defence matters during the course of this debate. I propose to deal with those in detail at the next convenient opportunity or else ask my parliamentary assistant to do so when he returns. Finally, the leader of the opposition (Mr. Drew) suggested that some other tribunal should be set up to look into these matters. I have mentioned those already in existence, but I do suggest to*the house that if there is one proper tribunal to deal with this kind of question it is the tribunal that is dealing with it now, the tribunal of parliament.


Howard Charles Green: May I ask the minister a question? Early in his remarks the minister gave the authority under which Mr. Currie was appointed to make an investigation. I understood him to say it was section 4 of the National Defence Act. I should like to have confirmation of his statement because that section does not seem to deal with the point at all.


Brooke Claxton: I asked the deputy minister of justice and treasury officials about this matter. I am informed it is the practice for ministers to engage professional assistance of this kind by virtue of general responsibility for the conduct of their departments, and payment is provided by a vote therefor. We have an appropriate vote, and it would be authorized by the treasury board.


Howard Charles Green: Has there been any order in council passed or any authority of any nature?


Brooke Claxton: No.


Howard Charles Green: The section to which the minister referred reads as follows:
The minister shall have the control and management of the Canadian forces, the defence research board and of all matters relating to national defence including preparation for civil defence against enemy action, and shall be responsible for the construction and maintenance of all defence establishments and works for the defence of Canada.
That is the section.


Brooke Claxton: Yes.


Howard Charles Green: Would Mr. Currie have any authority to investigate the actions of the minister or deputy minister?


Brooke Claxton: He can investigate anything he likes.


Mr. Drew:: Since I asked the original question, may I ask the minister whether there is any other authority under which Mr. Currie has been appointed other than section 4.


Brooke Claxton: No, I think that is all.


George Alexander Drew: Would the minister explain what authority Mr. Currie would have to call witnesses or to compel the production of documents, records or anything of that kind?


Brooke Claxton: It may be taken, Mr. Speaker, that since we have invited this investigation, and engaged a man of the integrity and competence of Mr. Currie to conduct it, he will have full access to all records within the Department of National Defence. If his investigation should require that he should look elsewhere for records or to summon witnesses whom he cannot get through other means, then my telegram to him indicated that steps would be taken to see that he had adequate powers.


William Earl Rowe: Mr. Speaker, I am sure that this afternoon we have listened with some interest and keen concern to the three members of the cabinet who spoke. It is rather strange that, despite the fact we received somewhat of a lecture from the Minister of Finance (Mr. Abbott) that all speeches should be relevant to the budget, at least two of the three speeches and half of the other were as irrelevant as they were defensive.


Mr. Langlois (Gaspe):: In reply to your leader.


William Earl Rowe: My leader has never had to make as many defensive speeches as we had to listen to this afternoon.


Douglas Charles Abbott: He made a pretty good defence last night. He spent most of last night on the defensive.


William Earl Rowe: If he was irrelevant last night, then you were both irrelevant and defensive today-


Douglas Charles Abbott: I did not say he was irrelevant.


William Earl Rowe: -because you never once
touched on the budget, and you did not even tell us about your trip.


Douglas Charles Abbott: I do not like to make as lengthy speeches as the leader of the opposition (Mr. Drew).


William Earl Rowe: I am very sorry that the weather was not better. I am not too critical personally, however, about your visit to the United States-


Some hon. Members:: Hear, hear.


William Earl Rowe: -because I learned something from your speech there that you had never said in parliament. It is always an advantage to hear cabinet ministers speaking in other places while parliament is in session, because they are speaking more freely than they would in their very responsible and dignified positions in this house. It does not help parliamentary responsibility, however, or aid in instructing the rest of the house.
The Budget-Mr. Rowe
I am not going to follow the defensive speeches of the Minister of Justice (Mr. Garson) or the Minister of National Defence (Mr. Claxton). I noticed that the longer the Minister of Justice talked the more involved he became, and the more he defended the more he had to defend. I quite realize the heat with which he crossed the floor, and I am glad that the language of the minister and the hon. member for Peterborough West (Mr. Fraser) was not placed on the record, because when they are not on their feet they are both capable of describing each other. I do feel, however, that it is rather novel that the minister of defence should be on the defensive so much this afternoon.
I know that we have had the laughs and jeers of those who have been the yes men of this government, and who express such brilliant gibes when they are sitting down but express so little when they are standing up, no matter what is stolen or burnt. As the minister has said, I know that the loss is only a small portion of what we are spending-2 per cent or a half of one per cent. A million or two here or there: it just cannot be possible that it is disappearing. In fact, the Minister of Finance is always more sure that his budget is right if it is large enough. The larger it is the more he can boast about its greatness. The more burdensome it is on the people, the more certain he is that he needs the money.
I have read the budget, and I have listened with interest to some of the speeches that have been made. I have not heard them all, but judging from those I have heard from those who sit to your right behind the government, I am at least consoled by the fact that I did not miss very much in the ones I did not hear. I feel that the government seems to have given us a budget which the taxpayers of this country accept, Mr. Speaker, but it contains the highest taxation and is the largest budget this country has ever known. If it is conspicuous by its size, it is even more conspicuous by its vagueness and its lack of relationship to any fiscal policy. In fact, I have been waiting in vain to hear from the Minister of Finance, or his rather fluent assistant, any description of fiscal policy.


Mr. Sinclair:: You are so seldom here you would not hear it if we did give it.


William Earl Rowe: I was here long before the hon. member, and I have been here long enough to know that if he were speaking every day I would not be here as often as I am, because I would not be missing very much. I have watched the hon. member since he came into the house. I know that he is so sure of himself that he likes to hear himself very

The Budget-Mr. Rowe often, and always did. But, Mr. Speaker, I am not sure that the noise a member makes is any indication of his contribution to this house. I have heard the hon. member many times, and he is becoming about as efficient as some of those who jibe when they are sitting down. He is generally good at that. However, as he progresses and attains a dignified role, he may live to learn that it does not pay.
I wish to Wring to the attention of this house the fact that we are carrying a burden which I think is dangerous. In bringing down his budget I must say that the Minister of Finance has almost become a magician. You have all seen the advertisement throughout the years for the old Magic baking powder.
I believe we might call this a kind of magic budget powder, because it convinces the taxpayer who does not look into the matter very much, except when he is making out his income tax form, that he is paying less than he was. The minister very clearly showed the people that their taxes were going to be reduced, yet through some magic formula he showed that our revenues are going to be higher. I have listened to many budgets, and to many ministers since the days of the Hon. Mr. Robb. I must give my congenial friend the Minister of Finance top marks and the grand championship for being able to take from the people with one hand, give to them with the other hand, and yet show them that they pay less while he receives more. I think it is very clever. My dear old friend the Hon. Mr. Robb, whom the present minister knew very well, was not a lawyer and so was never able to convince people as the present minister can that they were paying less but he was receiving more. However, Mr. Speaker, civil government and civil administration by the government, in a country the size of Canada, which is a growing country, is a great burden on our development. I refer to civil administration itself, the bare necessities that need to be paid for, in order to run the affairs of this dominion.
But there is something on top of that. There is not an hon. member in the house who does not realize and appreciate the tenseness of these times. They realize that we might be thrust into war at almost any moment and that suddenly, like a lightning flash in the night, our whole existence might be threatened. Independently of party, there is not an hon. member in this house who is not ready at all times to co-operate with the government and to try to help constructively in order to see that the money is properly spent and that preparedness for an awful day such as that which may come sooner than we think shall go full steam ahead and indeed

be the first obligation on the Canadian people. That is our duty to ourselves, to our people, to our country and to civilization itself.
The amounts that are mentioned are tremendous. To speak again of the days that I was referring to, this budget now before the house is eleven times larger than the budget which was introduced when I entered this house. It is just eleven times as large as that one. You are taking eleven times as much from the people. Despite the need for defence, the government has gone on and on with regard to expenditures. The Minister of National Health and Welfare (Mr. Martin) no doubt must have a new way for spending money on social security and the welfare state almost every time there is a cabinet meeting.
I see the Minister of Finance smiling. I will credit him with this virtue: he is not quite as wildly extravagant as are some of his colleagues. Nevertheless, he is not as careful as I should like to see him be. At a time when the defence obligations of this country are so essential and so vital to our very existence, surely we should at least be careful about superimposing upon those obligations other forms of obligation that may well-nigh threaten the economic progress of this country.
On top of all the defence obligations we have not only a social security or welfare state program but a debt reduction program and a surplus-provision program as well. The surplus last year was twice as great as was the whole budget in 1925. I am referring to the surplus alone. Mr. Speaker, I am not going to use just my own words, although I have had some experience in watching budgets and in trying to make a business pay. I have also had a lifetime's experience trying to make a farm pay, and I certainly have had the normal experiences in watching what makes progress possible.
Coming from that great city of Montreal, the Minister of Finance has watched business grow. I must credit him with knowing at least some of the essential and fundamental necessities in connection with keeping a business flourishing. He said:
X wish to emphasize however that we cannot have all these and reduce budgets too. Canada can afford these things we are doing but only at the cost of forgoing expansion or improvement somewhere else. Trying to do them all will only result in inflation. We must all hold some of our projects and programs in reserve even though they are sensible or indeed profitable.
What he is saying there is merely this. If we are going to do all the things some of his politically-minded colleagues would suggest, and are going to give everybody everything that is asked for, are going to give as many people as many things for nothing as they

wish at election time-if we are going to do all these things we are going to be in difficulty.
We must reduce other projects if we are going to spend more recklessly than ever before for civil administration. Never has a government spent as recklessly and wildly as has this government in connection with civil administration; never before has a government ventured in peacetime, or even in wartime, to spend so much on a defence program. Never before has a government ever ventured to spend so much on the welfare state. Never before has a government superimposed all these things, one upon the other, and ventured to have a surplus which is twice the size of some of our former budgets, and then planned to tell the people: We are reducing debt at the same time.
Mr. Speaker, not even a financial magician like the Minister of Finance can make that game last. When he tells you that he can do it only by retarding the economic progress of this country-when he makes that admission -it is time to stop, look and listen. The signals are out

and they are there in their tragic nakedness-warning us to view the future with great concern, if not alarm.
Mr. Speaker, the only way in which this country can ever afford to maintain the social services of the welfare state for which the pattern has been made is by an extension in industry and production such as we have never yet known. Even if there were a slight falling off, what would happen? The minister on another occasion said that he felt that we were in a very dangerous period when we had to tax industry 50 per cent of their net earnings or when we had to tax industry 50 per cent. He has made that statement on various occasions. Yet he now glibly tells us: We are going to take 54-6 per cent from the industries of this country. Where is expansion going to come if the minister is correct? From his long experience in his professional and civil life before he came into this house, he states exactly what is so true, namely that it can be done only at the expense of economic expansion.
Mr. Speaker, I hope that the members of this house-those who are interested enough to be here this afternoon-will weigh that consideration seriously and ask themselves the question: Where do we go from here?
Mr. Speaker, it is true that we have been experiencing an all-time high in prosperity brought about by conditions and for reasons beyond the control of this government. Do not let anyone-even the most hard-boiled supporter of this government-think that the government has brought about this so-called
The Budget-Mr. Rowe prosperity or that they have made it possible for the Canadian dollar to be worth 2 per cent more than the United States dollar. This is a strong and powerful country. It has been said that some people are born to greatness, some achieve greatness and some have greatness thrust upon them. Canada as a nation has had greatness handed to her. Canada is a great country. It must be strong in order to stand a government as reckless as is the government we have had for the last few years.
Seriously, Mr. Speaker, there is a matter that I wish to direct to the attention of the Minister of Finance. He smiles. I am glad that he can do so. That is one of the happy faculties he has. He can smile even in the face of possible tragedy, whether it be political or financial. And it is a good thing he can. Many people in Canada- will not be able to smile if he keeps on taxing them. I agree with him that he has no other course but to levy the taxes he is levying if he is to meet all the political obligations, you might call them, and all the things that will have popular appeal up and down the highways and byways of this country, because they must be paid for.
May I point out that today the textile industry is more or less in the doldrums and unemployment increasing; the leather industry is in a very serious condition today, and so is the lumber industry. That industry is threatened, and orders are falling off tremendously. I could add some others that the Minister of Finance knows very well are going to seriously affect his tax returns next year. He knows very well, Mr. Speaker, that we cannot continue to tax the people as we have been taxed, and expect this condition to grow better.
This government expects next year to take at least 30 per cent more from income than they took last year. Superimposed on that is a 2 per cent social security tax, amounting to an additional $214 million. It is pretty hard to see where there is any tax relief in sight and as these industries fail to pay the volume of taxes, there is little chance of the rate being reduced. However, I am aware that next year the government will likely try very hard to reduce taxation. Election year is always a great year for the taxpayer, and I am sure that the government will bend every effort next year to budget for a small surplus. In fact we will likely be told next year that a surplus is unnecessary, that a surplus increases extravagance and encourages spending. We will likely be told that we do not need to budget for a surplus. I can only say this in advance: The public will be waiting anxiously before an election is announced to hear the clarion call for an

The Budget-Mr. Rowe election; for next year's budget will tell whether there is to be an election or not. There has not been a budget by this government, or by the party that is now in power, in the last three elections in which they have not handed out hard-earned cash or reduced taxes or handed some form of bonus or a subsidy to get themselves reinstated because of the fear of losing power for the sake of power alone.
I said there is very little relationship between taxation, fiscal policy and the budget. Before I leave the taxes I do wish to say that I regret very much the minister did not see fit to allow deductions for hospitalization and medical expenses. I urge upon him that when the resolutions are up he reconsider it and allow the expenditures to be deductible before income taxes are paid.


Mr. Macdonnell (Greenwood):: He is waiting for an election.


William Earl Rowe: As the hon. member for Greenwood has said, he is saving that as an election touch; in fact, it would be a very neat election idea, and along with that it would be very attractive. It would please the doctors, the nurses and the hospitals. It would please many people. If you cannot do it in any other way I urge you now to make that concession before the election, because the country needs it. I know that you allow any of us who wish to contribute to hospitals or to other charitable causes, to our churches and so on, to deduct those contributions from income tax.


Douglas Charles Abbott: Up to 10 per cent of your income.


William Earl Rowe: Yes. Not many of us want to give much more than that.


Douglas Charles Abbott: Not many of us do.


William Earl Rowe: No. I leave it to the minister's own judgment to say whether deductions for medical expenses are not just as fair as charitable donations. If a person can afford to pay the medical expenses not of his dependents but of someone else's children, if he can afford to pay a thousand dollars, and some do, or five thousand dollars to a hospital for medical expenses, that ought to be deducted before income tax. If it were a charitable gift it would be deductible. Surely, if you want to pay $1,000 for the medical expenses of some crippled child, whether he belongs to your own family or not, it should be deductible from income tax just in the same way as $1,000 paid to a hospital drive is deductible. I compliment the hon. member for Winnipeg North Centre (Mr. Knowles) on bringing this matter before

the house. I am glad that everybody supported it except the Minister of Finance. I am sorry that after receiving such support it was turned down toy the Minister of Finance. Again I urge upon him not to wait until an election year. Do it this year. There will be a lot of sickness this year. The minister is imposing heavier taxes on the people. Business is not as good as it was. There is a lot of unemployment. Many people need help this year. I plead with the minister again to reconsider and bring it in this year. As someone said to my right, better late than never. If you cannot bring it in this year, bring it in as an election sop, and it will still be good in 1953 or 1954, because if the government is defeated our party will carry out those good intentions.
I have been alarmed, Mr. Speaker, and I know the Minister of Finance has expressed his alarm, at what is going to happen to our business and to our expansion program that is so vital and necessary if this young country is to grow as it should. I am alarmed at the fact that there is no relationship between fiscal policy and this budget similar to what there should be and has been in other years.
It has been suggested that we should have a careful study made of our whole trade situation, especially international trade, and with that I am in full accord. I think you will recall, Mr. Speaker, that several years ago, and in fact on two or three different occasions, I urged that we should have an empire trade conference. It has been suggested very vigorously recently by our leader and by the hon. member for Lake Centre, but the government has paid very little attention to it. I would ask the Minister of Finance to reconsider that request. I believe every other party in the house has suggested that it would be bound to do some good. I recall the empire trade agreements of 1932. While these were difficult years, there is no one who remembers the proceedings of that conference who will not agree that the agreements were of great benefit to Canada at that time and for many years after.
At the present time the United Kingdom is studying where she can buy her goods, and we have given very little co-operation. In 1951 we purchased $31,900,000 worth of goods per month from the United Kingdom. At the present time, even though she is buying over $60 million worth per month from us, we have reduced our purchases from Britain by at least one-third, or approximately $10 million a month. On the other hand, the United Kingdom has sent her trade commissioners all over the world, and not long ago, when this great drive was

put on by red China and Russia, representatives of eighteen different countries visited Russia.
I believe Sir John Boyd Orr of Great Britain has within the last few months negotiated contracts to a value of $50 million with the countries behind the iron curtain. I have been wondering what is going to happen in this country. Great Britain is buying from us this year at a rate of $10 million per month less. It is now estimated that we will sell $70 million less of goods to Australia and to New Zealand than we sold last year.
Britain is buying lumber from countries behind the iron curtain; she is buying grain from the same countries; and she is trading her textiles to those countries, while our textile mills are closing. We have a situation which, if not dangerous, is certainly critical. But in the policies we hear from the government with respect to the expansion of trade we do not hear a word that would encourage enterprise. Indeed, in the words of the Minister of Finance, that expansion must be reduced.
The only expansion we see is in the welfare state. The only expansion to which the government adheres is that recommended by the Minister of National Health and Welfare (Mr. Martin), who would spend all we make, and give even more away. So, if the government takes any credit for the kind of prosperity that has been thrust upon it, it must also admit that it has given very little opportunity for the development of any expansion program for the future.
Yes, it is truly said that the power to tax is the power to destroy. The government knows that now, if it did not know it before. I was amused when the Minister of Finance rose in his place and reduced the taxes he had increased at an earlier time on tobacco and cigarettes. And we will recall that there are reasons for his having done that. His reason for the reduction was that he had put the rate up so high that he collected a million dollars less in revenue. That, of course, is possible. I venture to say that if he raises the rates on personal and corporation income tax in the next year-and of course he will not do that, because it will be getting closer to an election;-he will have exactly the same condition, in general, as he had in connection with cigarettes and tobacco. The minister knows that in respect of those two commodities his revenues fell to the extent of a million dollars, because he increased the taxes to a point where sales dropped. That is possible in business.
I agree with the minister that when one gets above a 50 per cent tax on the business life of
The Budget-Mr. Rowe this country he is reaching the danger zone. That is why there are signs of curtailment and fears among the people who hold to the view that, by expansion and productivity, perhaps we could weather the storm of the future, no matter how severe it may be.
I am not going to speak at greater length. I would urge the government to reconsider some of its proposals, and to beware of the dangers ahead. There are many signs that are not good. I shall not do more than make a passing reference to the government's tendency to spend more because it knows it is going to have a big surplus. For instance, last year they spent about $17 million advertising themselves, about $4,500,000 on telephones and telegrams. In fact, they spent so fast that, when the surplus got too large, it was spent so that in the last few months before the budget it was half gone.
This year the minister says the surplus might be $9 million. But no one in this country knows what it will be-and, if one may judge by his record, the Minister of Finance does not know whether there will be a surplus of $9 million or $300 million, or a deficit. I venture to say however that if it is $300 million, instead of spending $17 million on publicity before an election, it may spend $34 million.
This is what creeps in when there are large surpluses. If there ever was a time both in business and in government when budgets were important, that time is now. They are important in family life, and as they apply to schools, churches and other enterprises. But they are vastly more important when related to our national business.
Every business in this country is taking stock today, and trying to economize all along the line. They are watching every dollar of expenditure for purposes of maintenance and repairs, and looking carefully at programs for expansion. I know of many industries that have reduced their expansion programs because they see danger signs. They see a tax of over 54-6 per cent on everything they make. They see increased interest rates, and they believe that with decreasing business it is time to take stock and to cut out extravagance.
Today our farmers are afraid of things in addition to the foot-and-mouth disease, because that disease has not done to the beef cattle industry much more harm than the sale of oleomargarine has done to the dairy industry. The importations of oils for oleomargarine have almost ruined the dairy industry, while the foot-and-mouth disease is threatening the beef industry.

The Budget-Mr. Rowe
Lack of fiscal policy on the part of the government has ruined several industries; yet we find among government members very little concern. We see extravagance in almost every department. This afternoon we have listened to three ministers defending themselves, arguing as to whether someone told them about a theft before a fire or after a fire, arguing whether it was started at one end of the building or at the other end, and admitting that it started in two different places-but no one knowing how much had been stolen in between the two fires.
We have today the spectacle of more civil
servants than were ever employed before, with
40.000	additional in the Department of National Defence alone-almost as many as there are soldiers. Those employees are falling over each other, and yet there were not enough left to patrol valuable property on New Year's eve. Is it any wonder that in some places nearly everything that was not nailed down was stolen?
Someone told me today-and I could scarcely believe it myself; and after the crossexamination between the 'hon. member for Peterborough West (Mr. Fraser) and the Minister of Justice (Mr. Garson) I am almost afraid to say what I heard; and I shall not give the names-but I was told that a skating rink was stolen from the defence department, including even the ice. Now, I can hardly believe that that could be true.
We do know however that millions of dollars' worth of equipment has been stolen from Petawawa. I want to know what these
40.000	civil servants are doing, now that they are on the payroll. Is one watching the other? As someone has pointed out, they have even stolen scales to weigh what they had stolen. Someone else says that they were sending telegrams to each other. It is bad enough to steal rolling stock; it is a bold thief who will tear up rails; but it is a bolder thief who will steal scales to weigh the scrap iron he has taken.
Well, that is the spectacle. These are burdensome figures. They arise from the taxation threatening to cripple industry in this country. They are coming from taxation that threatens to retard enterprise on the part of the individual. They are coming from taxation that threatens the very life of this country. And I say quite sincerely and seriously, even if it was the last thing I ever said in the house, that no matter what party is in power after the next election-and I have seen many changes; and I can hear the rumbling in the mulberry bushes even now-


An hon. Member:: You are not making any forecasts, are you?


William Earl Rowe: Forecasts are dangerous. I can hear the rumbling in the mulberry bushes now when you hear three ministers apologizing in one afternoon. You can hear it, and it comes awfully fast. It comes and hangs down around your ears before you know it is there. This government is powerful, but the larger they are the harder they fall. When they start tumbling they will fall over each other so fast in defeat that you will not be able to distinguish among them.


Stuart Sinclair Garson: You should know from experience.


William Earl Rowe: You have had some experience yourself. It is true that I have had more experience than my hon. friend, but at the same time they will fall so fast that you will not be able to distinguish among them the really bright one like the Minister of Finance and the duller ones who think more when they are sitting down than when they are up speaking. They will all look alike when the tide turns. I know it seems to be a fine thing to them to adopt the tactics they have adopted. The Minister of Finance is looking a lot older since he came down here.


An hon. Member:: The Minister of Justice.


William Earl Rowe: Yes, the Minister of Justice. The Minister of Finance looks younger every time he gives us one of his budgets. He looks even younger today than when he first came here. All these tactics do not disturb me. I think of Sir John Macdonald who said that you always find the most sticks under the best fruit trees. Whether it is the leader of the Social Credit group or the leader of the C.C.F. party that they start knocking and making those little chips of personality they will find that those persons grow larger and more influential all the time. The same game was played with one of the greatest statesmen this country has ever produced, the Right Hon. Arthur Meighen. I well remember the whispers of death and all the other games that were played. They tried to play the same game with that great leader Sir Robert Borden. They are trying to play the same game now with the leader of our party. They tried it before he became premier of Ontario, and then in three elections, which he won. They are trying to play the same game now.
It is all part of their tactics, wise or otherwise. I say that advisedly, without casting any reflection on anyone. I am not going to point out the ones who do it or who have devised the plan, but I do say that their tactics are becoming conspicuous to the public of this country. The respect which we pay

personally to the Prime Minister (Mr. St. Laurent) of this country as leader of your party can be distinguished from the type of respect you pay to the great leader that we have, who I believe will be the next prime minister of this dominion.
On this side we are not at all ashamed, we are not at all disturbed because we know they are simply the old tactics. When the tide turns they will find that they have not worked. The public will then be looking for someone to replace the government who have fallen in spite of themselves. The government is growing weary. It is a government without a policy. It is a government which is carrying on extravagant and wasteful expenditures. It is a government which is trying to carry on five different avenues of expenditure at one time, like a juggler at the circus trying to keep five balls in the air.
The public will consider that it is time for a change. When it is time for a change they will not talk about some of the petty tactics that have been used or about what somebody said eight or ten years ago. They will ask whom they can get to replace the great Prime Minister whom we all respect as a gentleman. It is the same type of campaign that has been used in by-elections and general elections-they say that the Conservative party cannot form a cabinet.


An hon. Member:: Hear, hear.


William Earl Rowe: Hear them saying, "hear, hear." God has been good to those wonderful men to your right, but surely he did not place all the ability in this country in the old Grit party. I think the Lord had better judgment than that. I know that that has been said many times before, but I know the people will look for a leader who has outstanding ability, who has unchallenged integrity, who knows where he is going, who is not afraid to fight or to lead. Our leader probably would be more popular if he were more fearful. He would probably be more popular if he told everybody everything they wanted to hear. He would probably be more popular if he would try to enlarge the welfare state and make it bigger than ever.


Mr. Deputy Speaker:: I am sorry to interrupt the hon. gentleman, but his time expired at 5.41.


Some hon. Members:: Go ahead.


Mr. Deputy Speaker:: Has the hon. member unanimous consent?


Some hon. Members:: Agreed.


Mr. Fournier (Hull):: Go ahead.


Stuart Sinclair Garson: We want Rowe.
The Budget-Mr. Rowe


Douglas Charles Abbott: The hon. member was so carried away with his enthusiasm that he lost track of the time.


William Earl Rowe: It was not that, but I did not want to establish any precedent in this house.


An hon. Member:: Go ahead.


William Earl Rowe: I appreciate very much the fact that, after what I have said, the Minister of Justice is ready to say, "we want Rowe." I would not join your cabinet even if you did ask me. I must correct the Minister of Finance and tell him that I have not been carried away with my enthusiasm. Apparently they have been so carried away with my logic that the Minister of Justice is saying that he wants to hear more. I am not going to speak about my enthusiasm or logic, but I do want to say that I appreciate the courtesy that has been extended to me to continue. I appreciate the hearing that has been given to me by the few that are here.


An hon. Member:: On your own side too.


William Earl Rowe: I want to leave with the Minister of Finance a fair warning of the signs on the horizon. He should urge this government to do what any sound business enterprise must do today, count the cost and expand rather than retard your enterprise. The minister should send out his men to find what can be done to encourage industry to expand. I know that even my hon. friends to my left will agree that the only job security labour can have is by an expanded industrial productivity.
As the Minister of Finance has said, we cannot have that if you continue to tax and tax and tax. The power to tax is the power to destroy and to continue to tax as you are taxing now, while it may not destroy entirely, will retard; and then when times change, as they are changing in many industries, the crushing burden will fall, not only on that industry but on the welfare state. The two per cent will look pretty small with which to pay old age pensions when there is not much from which to take the two per cent. Things will be different when your income is shrinking. The old age pensioner should be aware of those political apostles who for the sake of power, and power alone, are ready to say, "We will give you twice as much again if you will only continue to vote for us." There are only so many shekels in the pot. Do not kill the goose that lays the golden egg because she is not laying as well as she was.

The Budget-Mr. Gagnon (Translation):


Mr. Paul E. Gagnon (Chicoutimi):: Mr. Speaker, on April 8, after lengthy and laboured compilations intended to explain the mistakes that he made in the budget estimates, the hon. minister stated that for the sixth consecutive year we have a surplus. Instead, in my opinion, he should have said that for the sixth consecutive year we tax our people more than is necessary. Such great revenue surpluses over expenses as have been piled up in 1951 by this regime, while municipalities and school boards must resort to provincial grants in order to meet their obligations because they are unable to make both ends meet, show clearly and definitely that the central power unfairly appropriates fiscal sources which do not belong to it.
For the government thus to pile up money surpluses when our workers are working their hearts out to make both ends meet is unthinkable, and it was only natural for our people to expect to be relieved of a substantial part of the tax burden.
Alas! the federal government is an ogre and it will relax its grip only to claw more strongly at the Canadian taxpayer. They assume all rights, assume responsibilities beyond their purview only to gain an electoral advantage by extending their paternalism to fields outside their jurisdiction.
Out of every dollar paid in taxes by the Canadian taxpayer 77 cents go into the coffers of the federal treasury. From 1945 to 1951 inclusive, the federal government has collected in taxes the amount of $9,988,624,394 of which $2,810,440,687 came from the province of Quebec.
Out of this amount, $4,810,343,705 were paid as income tax of which $1,212,530,887 were paid by my fellow citizens of Quebec.
It is not surprising, then, that provinces and municipalities, through lack of funds, should be unable to proceed to the development of any material projects which would improve living conditions of the community or make up for shortcomings in the social security program.
The unavowed aim of the Ottawa government is to reduce if it can the provinces to beggary and to bankruptcy, while depriving them of the revenue which they urgently require to achieve the task entrusted to them by the constitution.
In economic life, large corporations do not act differently. They begin by engaging in unbridled competition against their rivals.

Having reduced them to indigence or to an extremely perilous position, the large corporations supplant them by absorbing them. Thus we see the strong swallowing the weak. But should not things condemned in economic life also be considered reprehensible in politics and in national life, wonders that distinguished Montreal journalist, Leopold Richer.
Making use of his talents as a juggler, the Minister of Finance attempted to persuade the people that income tax would be lowered by 6 per cent, whereas the load of taxation will actually be heavier in 1952 than in 1951.
I do not like that way of doing things any more than I like the attitude of the Minister of National Revenue who announced as a gift the refunding of income tax to millions of taxpayers who had paid too much during the last fiscal year.
In doing so, the minister is not making gifts to anyone. He is simply refunding to the taxpayer part of the money to which he is entitled, money of which he was unfairly deprived on his pay cheque.
I say part of the money, because the government has had free use of the money for a certain period and refunds it without paying interest, while it demands a high rate of interest from those who owe it anything.
During fifty-two weeks the government takes away too much from the workman, the small wage earner and collects millions of dollars that do not belong to it, but when the time comes to return that money to its rightful owners, it adopts an attitude of liberality.
These are expensive refunds for the country. Considering the staff and the paper work needed in connection with that operation, the delays and the correspondence resulting from it, we find that the refunds made by the government bear heavily upon the population.
The request of the CTCC asking the federal authorities in the memorandum it has submitted this year to set the exemption from income tax at $1,500 for single people and at $3,000 for married people with a reduction of $400 for each child is reasonable and sensible.
Those who govern us must protect the family and allow all those who ensure the continuity of the race and consequently the strength and prosperity of our country to meet the appalling cost of their needs and to fulfil the obligations which they have towards their children. It is a factor which should not have been disregarded and which should be kept in mind while our next budget is being prepared.

The Minister of Finance would be well inspired besides to consider what help should be received by parents who direct their sons and their daughters towards our high schools and our universities where they receive the finishing touch to their education.
Every student who is 21 years old and who has no personal income should be classified as a dependent. But the government exerts more pressure than ever on the unfortunate father at the precise moment when his children's education becomes more expensive; as a result, many gifted and richly talented students are unable to complete their education and cannot enter the career they might otherwise have chosen.
The Budget-Mr. Gagnon ter, has cost our people, up to now, over $100 million not to mention the dead and wounded, and tortures of all kinds.
Our government is neglecting peace and the works of peace for the benefit of warlike ventures.
I cannot approve that policy and shall vote accordingly.
(Text):


Mr. Speaker:: I declare the amendment to the amendment lost.


Mr. Johnston:: I was paired with the hon. member for Halton (Mr. Cleaver). Had I voted, I would have voted' for the amendment to the amendment.


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


Mr. Noseworthy:: Mr. Speaker, will you call it six o'clock?
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.

Mr. Deputy Speaker:: May I remind the house that there are several bills on the order paper which are to be considered in committee of the whole. Shall I consider all these bills in one motion, or is it the wish of the house to have them considered separately? First of all, there is the bill to incorporate the Boundary Pipeline Corporation; then there is the bill respecting the Royal Canadian Academy of Arts and then divorce bills.


Howard Charles Green: I would suggest that they be taken separately, Your Honour.


Mr. Deputy Speaker:: I am informed that in committee of the whole they will be taken one by one. Once the motion is carried that 1 leave the chair for the house to resolve itself into committee of the whole these bills will be called by the chairman one by one. Therefore they will be studied separately. It is customary under standing order 110, when several bills are reported from standing committees, for one motion to be made to have them all referred to the committee of the whole, in which case each is studied separately.



PRIVATE BILLS


[Stage Direction]
The house in committee on Bill No. 62, to incorporate Boundary Pipeline Corporation- Mr. Larson-Mr. Beaudoin in the chair.

On section 1-Incorporation.
Mr. Nickle:: Mr. Chairman, the specific task of the House of Commons at this time is to decide for or against the incorporation of Boundary Pipeline Corporation, whose sponsors are seeking the right to build a natural gas pipe line in southern Alberta as far east as Winnipeg. To arrive at a decision on this particular bill, parliament I believe must first make up its mind on a much broader and far more important issue; that is the issue of a national gas policy, the framework upon which the actual structure of pipe lines may be built and upon which to establish our attitude towards the Boundary Pipeline bill and the many other matters which will, over the years ahead, be a proper concern of parliament.
The purpose of a national gas policy may be summed up in these words: The mating of areas with proved and potential natural gas reserves to the market areas inside and outside Canada, subject to the marriages being economically sound, and the provisos that the matchmaking be planned to bring the maximum possible benefits to the areas of gas reserves, the Canadian gas consumers, and the Canadian economy as a whole. This involves getting gas to as many Canadians as possible.
An effective gas policy will help provide adequate incentives for continuing exploration to increase the nation's proved gas resources; an effective gas policy will also directly and favourably affect the rate of petroleum reserves discovered in Canada, the growth of petro-chemical and other industries based upon the by-products of gas and petroleum, and the growth of other industries within Canada that may use gas as a fuel.
At the present time the only province in Canada with gas reserves big enough to be wedded to outside markets is my home province of Alberta. Like many proud parents, my home province has been reluctant to recognize that its gas progeny are getting big enough and numerous enough to warrant marriage to some outside markets. Recently, however, Alberta approved what might be called the engagement of its Peace river gas reserves to the Pacific coast market. The coming marriage may be expected to set a precedent for others.
Before going on let me mention the great importance of the coal industry to the national economy in both peace and war. In view of *the fact that gas export will reduce to some degree markets for Canadian coal in areas now served, and the fact that national interest requires that the coal industry be maintained in a reasonable state of health, the government should take, coincident with

Boundary Pipeline Corporation Stuart (Charlotte)
Valois Viau Ward Weaver Weir Welbourn Whitman Winkler Winters Wood-89.

building a gas pipe line, all possible steps to expand marketing areas for Canadian coal, and speed research for new uses of coal.
I recognize the right of provinces producing natural gas to fully protect their own long-term supply from their own resources, and their right to determine the fields or areas from which gas may be exported, based upon surplus of reserves over local needs in such areas and/or the desirability of exporting dry gas in order to obtain valuable by-products contained in the raw or wet gas of certain fields. The Canadian government, however, has the right and the responsibility of determining the disposition of natural gas declared surplus of its own needs by any province. A national gas policy, if it is to serve Canada to the best advantage, must take into account a number of factors. First, it must recognize the right of provinces possessing gas reserves to reap a maximum possible benefit from them, and in so doing in a material degree determine route of pipe lines. Second, it must recognize the national interest which, in some circumstances, will mean supplying all gas to one section of the country rather than to another, or to some section of the United States instead of to some gas-hungry portion of Canada. Thirdly, it must recognize the economic facts of life-the relationships in distance and terrain between gas fields and prospective markets, both in Canada and the United States; the costs of getting, transporting and selling gas; competition with other fuels; the need of incentives to keep finding more gas reserves. Fourthly, it must recognize the political facts of life, which in some degree reshape economy both in Canada and in our neighbour to the south.
In the light of these facts there are certain guiding principles upon which parliament should grant incorporation to companies seeking the right to build interprovincial or international gas pipe lines, and upon which the board of transport commissioners, or some other appropriate body, should recommend to the government the granting of permits for the construction of such lines. Among these principles should be: a sound economic basis to support the pipe line; preference to be given to serving Canadian markets wherever feasible, construction on Canadian soil wherever feasible, of pipe lines between Canadian fields of origin and the most distant market to be served; construction on Canadian soil of a maximum possible mileage of a pipe line, if a portion or all of the gas is to serve a foreign market.
A national gas policy must recognize that export to the United States may be given
Boundary Pipeline Corporation favourable consideration under certain conditions. For example, there are United States markets essential to the economic operation of pipe lines to certain Canadian markets which are inadequate in themselves to support a pipe line project. We should not bar export in cases where exchange agreements could be made for an equal volume of United States gas to supply Canadian markets far distant from our own fields, provided the exchange is on a long-term basis, guaranteed at a lower cost than the gas from Canadian sources. Nor should we bar United States markets in the near vicinity of Canadian gas fields which, by reason of their location or type, do not economically fit into the Canadian supply picture. Nor should we bar United States markets whose serving with Canadian gas could provide very material Canadian national defence or economic benefits.
Another important phase of the national gas policy should be the ensuring of very material Canadian participation in pipe line projects. It is desirable that a substantial percentage of equity stock and bonds or debentures be made available for purchase by Canadian corporations and investors. Weight should be given to the degree of Canadian financial participation planned when the appropriate authorities consider each pipe line application. Weight should also be given to the extent of participation by pipe line sponsors in the exploration for and development of natural gas resources in Canada. In other words, are they seeking gas for all o part of the proposed pipe line's need?
Of Canada's provinces, only Alberta has the great majority of its urban population served with natural gas, and only Alberta has a growing surplus over and above its own long-term requirements. Its gas reserves are spread over a territory exceeding 120,000 square miles, stretching from the American border into the northern Peace river and Athabasca river regions, and stretching from British Columbia to Saskatchewan. The number of known gas areas in Alberta now exceeds 150, and the number is increasing at the average rate of one new discovery per week.
Northeastern British Columbia, adjoining Alberta's Peace river area to the west, became a promising gas area because of small discoveries a year or two ago. In recent months northeast British Columbia has come through with what looks like a major gas field in the Fort St. John area. This region, now separated from any large markets by hundreds of miles of small population territory, is taking on growing importance in the planning for pipe lines.

Boundary Pipeline Corporation
Western Pipe Lines Limited would build a line having, by its fifth year, an indicated market of some 70 billion cubic feet yearly, and increasing thereafter. Of that total about 154 billion-or 22 per cent-would service southern Saskatchewan and Manitoba cities as far east as Winnipeg. The other 55 billion cubic feet, or some 78 per cent of the total, would be delivered at the American border south of Winnipeg to Northern Natural Gas Company, for use in the Minneapolis-St. Paul area. A contract has already been signed between Western and Northern for a year-round steady supply of about 150,000,000 cubic feet daily, this being subject of course to Western getting the right to construct a pipe line from Alberta. Northern is a United States firm already operating large scale gas transport and distributing pipe lines from the midcontinent United States as far north as Minneapolis. Western's plan is economically sound only if it gets the large United States outlet in addition to the market of the Canadian prairies, according to sponsors of the company.
There is a third proposal for a pipe line eastward from Alberta-that of Boundary Pipeline Corporation, whose bill for incorporation is now before this house. Its sponsors propose a 16-inch diameter pipe line from southeastern Alberta to Winnipeg, a much smaller scale project than either Trans-Canada or Western. I am opposed to the bill on several grounds. The Boundary pipe line project is condemned by its limited size, the very fact which its sponsors have ^presented as its virtue. Even if a small .[DOT]size pipe line from Alberta to Winnipeg [DOT]were an economic project-which I question
__the proposition falls far short of meeting
Canada's best interest because:
First, it would open up only a limited market for the rapidly growing gas reserves of the west. It would not, for example, open a market of sufficient volume to allow the Pincher Creek field and its by-product industries to develop on an economic basis. Small scale export eastward would not meet the increasingly urgent market need for Pincher and the host of other south and central Alberta gas fields.
Secondly, the Boundary project would penalize consumers of Saskatchewan and Manitoba. A small scale line would have to sell gas at substantially higher prices than would a major project.
Thirdly, acceptance of the Boundary project could delay, perhaps for years, the securing ,of gas in large volume for Ontario and Quebec, either toy direct pipe line from the west, or by gas exchange with the United
States.
[Mr. Nickle.i
I question whether a line built to serve the cities and towns of southern Saskatchewan and Manitoba would be economic. In other words, I doubt whether it could serve a large enough market, or deliver gas at a low enough price to compete with other fuels, to obtain adequate revenue to recover its cost.
Eliminating Boundary, we would have two projects to choose between, both of large size that would open major markets for Alberta gas, and would deliver gas to southern Saskatchewan and Manitoba at lower cost than would a limited project like that proposed by Boundary. Which would best guarantee gas supplies to Ontario and Quebec, and bring the broadest benefit to Canada? The answer is not quite as simple as it might appear at first glance.
The all-Canadian route proposed by Trans-Canada Pipe Lines offers as its advantages: a major construction project all within the country; the only economic means of delivering gas to Canada's lakehead cities, and the potential mining and pulp and paper markets north of the great lakes; and possibly greater security of gas supply for the mass markets of southern Ontario and Quebec. The disadvantage of the Trans-Canada project is that the cost of gas to consumers in southern Ontario and Quebec would be somewhat higher than cost of gas that might reach these markets from the United States. These higher costs would stem from the comparatively limited markets en route to eastern Canada, the long distance, and the nature of terrain and climate that would make construction and operating costs higher than for a line from the mid-continent United States.
That brings us to the question: Can a supply of gas be obtained from the United States? Unless a long-term firm gas exchange can be worked out, it would be better for eastern Canada to have a guaranteed supply of gas from Alberta at higher cost than to have lower priced gas from the United States but no guarantee of continued supply.
Much has been said about gas exchange in recent years, and is continuing to be said, in the United States and Canada by sponsors of pipe lines and distributors of gas. I do not recall, however, any statements on this matter made by the governments of the two countries. There is a pressing need for a decision on this at government level, because within a comparatively short time Canada will likely have to choose between a Win-nipeg-Minneapolis and an all-Canada pipe line eastward from Alberta. There are also the facts that: (1) Alberta and Canada have already authorized, and have started, export of 10 billion cubic feet of gas yearly to

defence industries in Montana; (2) southern Ontario gas distributors are again seeking even short-term supplies of United States gas for their increasingly urgent needs; (3) in order to give Vancouver gas, Canada is seeking the right to export large volumes of gas to the United States Pacific northwest; and (4) the United States apparently desires Alberta gas for its atomic energy installations in Washington and Idaho.
In the light of these several facts, and in order that a sound national gas policy might be evolved, I suggest to the government that it immediately initiate negotiations with the government of the United States to determine whether or not a large-scale, long-term firm agreement is feasible for exchange of natural gas.
May I further suggest that, in order to facilitate the execution of a sound national gas policy, the government should immediately instruct Dr. George S. Hume and Alexis Ignatieff, geological survey of Canada authorities on our natural gas, to make a detailed re-survey of gas reserves, proved, probable and possible. Such a survey could probably be completed in three to four months. It would supplement the excellent, detailed reports on Alberta gas reserves, as of last December 31, prepared by the Alberta petroleum and natural gas conservation board. The Hume-Ignatieff re-survey should cover, in addition to Alberta, the known and potential gas resources of northeast British Columbia, the Yukon and Northwest Territories, Saskatchewan and Manitoba. Such a survey should be supplemented from time to time by revisions based on new gas discoveries, and further evalua:ion of fields already discovered. Such information would be of tremendous value in shaping the specific detail and carrying out of a national gas policy.


Mr. Herridge:: Once again, Mr. Chairman, we find this house giving consideration to a bill which would provide a charter for another company that wishes to build a pipe line in Canada. Before proceeding I must say that I was greatly interested in noting with what intent interest the members on the government side of the house listened to the hon. member for Calgary West when he was speaking just before I rose. At this point I might say that I think the committee is most fortunate to have a member who is as well informed as is the hon. member for Calgary West on the technical aspects of natural gas transportation and marketing.
This bill, Mr. Chairman, is entitled "An act to incorporate Boundary Pipeline Corporation". Why are we getting this succession of bills to incorporate pipe line companies
2, 1952	1837
Boundary Pipeline Corporation during the last two or three years? Why such interest in the transportation of Canadian natural gas? Why, on occasion, repeatedly in the committee and sometimes in the house, is there a suggestion that there is great haste to get the bills passed and to let the companies get the charters? I just want to read briefly from a report that I have here in my hand. I might say that one of the major witnesses for this company, when asked what the purpose of the company was, said that they were anxious to give service to the people of Alberta, Saskatchewan and Manitoba. I do not question the fact that if the pipe line were built they would give service in this respect to these people. But that is not their prime motive. Their prime motive is to be found in the fact that it is a profitable investment to get a charter to build a pipe line in Canada. I am not questioning the motive; it is a legitimate one as things are today. We must, however, realize that this American capital is being attracted to Canada because there are opportunities to make good profits

and guaranteed profits-in a public utility of this type.
I have in my hand the 27th annual report to the shareholders, 1951, of the International Utilities Corporation. I will just read two or three short paragraphs to indicate what valuable things these charters are and for which provision is made when the House of Commons passes a bill that gives a company the right to build a pipe line. Reading from page 3 of the report I find the following:
The past year was marked by many developments favourable to the long range outlook for our corporation and its subsidiaries in Alberta, Canada . . . The business of the subsidiaries for the year 1951 was again at record levels. Gross operating revenues increased nearly 16 per cent, $14,221,000. Despite substantially higher income taxes-*
I presume the Minister of Finance hears that.
-increased allowances for depreciation and higher operating costs, consolidated net income reached $1,700,000, an increase of $210,000 over 1950. In addition, net profit on the sale of investment securities amounted to $263,000.
Then again:
Consolidated net income was equal to $2.07 per share, exclusive of investment profits, and $2.39 per share, including investment profits, based on the average number of shares outstanding. This compares with $1.90 per share reported in 1950. Computed on the shares outstanding at the year-end, consolidated net income was equal to $1.80 per share excluding investment profits, and $2.08 per share including such profits.
We in this group, Mr. Chairman, have continually advocated and suggested that these private carriers of oil and gas should be publicly owned. We believe that the main transmission lines used for the transporting of oil and natural gas in this country should

The Budget-Mr. Noseworthy be nationally owned, and that those nationally owned lines would sell the gas to the various companies concerned-and the same with oil -or would charge a fee for the transmission of gas or oil for the various companies using this service. If we had social ownership of the means of transportation through pipe lines of oil and natural gas in Canada today, I believe we would not have this unplanned competition for charters. We would not have applications being made for charters over the same route, or this duplication of charters, or this possibility to secure charters through the House of Commons and to sell them without building a foot of pipe line because of the right vested in the charter. In our opinion-that is, in the opinion of this group- if we had socially-owned pipe lines for the transmission of oil and gas in Canada we could plan the distribution of Canadian oil and Canadian gas in a proper and efficient manner, at possibly a lower cost to the consumer, without the duplication and the competition and, shall I say, the lack of planning that exists at the present time when company after company makes application for a charter over the same route, and sometimes conflicting with the legitimate interests of another company and so on.
I see that it is now nine o'clock, Mr. Chairman, and I should like to move that progress be reported.
Section stands.
Progress reported.


Mr. Deputy Speaker:: The hour for private and public bills having expired, the house will now resume the business which was under consideration at six o'clock.



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Greenwood).
Joseph William Noseworthy: Mr. Speaker, in an earlier speech in this debate I dealt with several features of the budget itself. Tonight I want to discuss housing. That is a phase of our economy for which the budget makes no provisions commensurate with the need existing today. The housing problem is today, as it has been for several years, our No. 1 domestic problem. With the single exception of national defence, there is no subject before this house that is of more vital importance to greater numbers of people than is that of housing. The need

is growing greater year by year. There are more than twice as many Canadians today without homes as there were in 1939. In that year the shortage was estimated at
225.000.	Today the shortage of houses is officially estimated at anywhere from 500,000 to 700,000. Only a few days ago the mayor of Windsor reported that more than 4,000 families in that city were not properly housed. At the same time we heard the mayor of Ottawa claiming that 4,000 families in this city were living in shelters that were below provincial housing standards. The Winnipeg city council special housing committee is reported in the Winnipeg Free Press of January 12 as saying that in that city today there is a permanent population of inadequately housed people. Since 1946 that city's housing committee has received 8,634 new applicants. The reapplications over these years total well over
20.000,	indicating that there are in that city many thousands who have been without homes for the last five or six years. A considerable number of applicants, the report states, are living in one-room slum dwellings with three or more children. Seven families, the report states, at the No. 3 wireless project are living in four rooms with seven or more children.
I had the occasion some months ago to visit the city of Brantford, the city that is represented by our highly esteemed Speaker in this house. That city is very prosperous, and in many respects a very beautiful industrial city. It is surrounded by some of the finest countryside we have in the province of Ontario. Yet here, out on the dilapidated airport just outside the city, hundreds of citizens with their families were crowded into what had once been barracks and other buildings used by the air force, crowded into small apartments with nothing but beaverboard partitions between them. The partitions were so thin that every sound that was made in one apartment could be heard through the walls in the other. There was no privacy. There were no playing fields for the children. When the soldiers occupied these buildings during world war II there was a well-kept playing field. There was a recreation centre; there was a swimming pool. When Brantford is obliged to use that as emergency shelter for the citizens there are no playing fields for the children. I saw puddles of water knee-deep out in front of some of the shelters. There was not a blade of grass to be seen anywhere there in midsummer. There was no swimming pool. The children were playing around the cement remains of what had once been a swimming pool for the air force. The conditions in Brantford could be duplicated in most of our larger cities and suburbs.

Anyone who has driven along No. 2 highway west of Toronto, through Mimico, through Long Branch, and has seen the trailer camps and has seen the emergency shelters out at Long Branch, will know that the conditions in Brantford, in Winnipeg and in Ottawa are duplicated in Toronto and elsewhere. Mr. McClaskey, regional supervisor for Ontario of the Central Mortgage and Housing Corporation, told the Ontario association of real estate boards at Niagara Falls on February 19 that in his personal opinion Ontario alone needed today 450,000 housing units. Premier Frost stated in the Ontario legislature that for a number of years the province of Ontario will need 40,000 to 50,000 new homes each year if we are to begin to catch up with the demand for family accommodation. Mr. Earle Sheppard, president of the Ontario association of architects, stated to the council of that association, as reported in the Daily Commercial News for February 18, that the failure of house building to keep pace with industrial growth in Ontario was prejudicing the future of defence production. The value of contracts, awarded for factory construction, showed an increase last year over 1950 of 250 per cent, while the value of home building contracts showed a decline of 7 per cent.
He went on to say, according to the report:
It was absurd to concentrate on industrial construction and neglect the provision of housing for workers. Mr. Sheppard asked how can we get volume production of defence and other essential items if there are no places or only inadequate places for people to live? Every month hundreds of families move to or are formed in our great industrial centres. The time wasted in searching for accommodation and the worry caused by living in cramped unhealthy quarters result in reduced productivity. The housing shortage has plagued us ever since the end of the war, he said, and there is no sign of a concerted effort to solve it.
The Canadian Builder for March, 1952, has
this to say in an editorial:
Never has Canada's need for new housing units been so pressing as in 1951. There were about 150,000 marriages during 1951. Immigration stood at the highest point since before world war I, probably including 35,000 family units among the 170,000 newcomers. Natural increase of births over deaths was about 250,000.
This would seem to indicate that we could have done with at least 150,000 new family dwelling units last year. However, actual completions, according to dominion bureau of statistics figures were only in the nature of 80,000; starts were about 70,000; while total under construction at December 31 stood at around 50,000.
We have no right, Mr. Speaker, when we are today spending $2 billion to protect our way of life, to force tens of thousands of children, who will be our future citizens and probably soldiers in a future war or wars, to live in such ramshackle slums as they are living in today. I wish some of the cities and
The Budget-Mr. Noseworthy boards of trade who invite members of parliament to visit their cities and large industrial concerns would take some of the cabinet ministers and some members of parliament through the emergency shelters in those cities and suburbs. I wish the Minister of National Health and Welfare (Mr. Martin) could be taken on some of those trips. I am sure that the minister, full as he is of the milk of human kindness, once he became aware of the situation, would never sit idly by and see that situation grow worse from year to year. He must know that a few millions spent now on good housing would save his department many millions by way of medical bills and hospital bills in years to come.
. Mr. Sheppard said, in his report, that there is no concerted effort being made today to solve our housing problem. For six years since the war, now nearly seven years, governments at three levels in this country have all been playing a pass-the-buck game with our housing problem. They are still unable to reach any sort of agreement on the division of costs for building within the municipalities.
Housing has now become a national problem, a problem of grave national concern to provincial and municipal governments as well as to the federal government. One reason why there has been no concerted effort is that this Liberal government just cannot make up its mind where it is going, so far as housing is concerned. It cannot make up its mind whether it is getting into the housing business, or getting out of it.
The Prime Minister (Mr. St. Laurent) does not want the government to go into the landlord business, nor does he want it to go into the business of building subsidized low-rental housing. The explanation the Prime Minister gave the Trades and Labour Congress a few weeks ago was a unique one, one that is rather difficult to understand. According to press reports, the reason he gave is that there could not be enough of this type of housing to go round, and he said he did not like to see a system whereby any government or any political machine would have the selection of those who were to get houses.
It is rather difficult to follow the Prime Minister, or to understand what he means. Does he fear that eventually his successor to the leadership of the Liberal party will not be able to control political patronage within the party as well as he controls it at the present time? Or does he foresee a day when possibly some other party may come into power, and will be subjected to the lures of political patronage, more than is the Liberal government? What I suspect was his meaning is that today political patronage

The Budget- Mr. Noseworthy has become such an integral part of Liberal practice that the Prime Minister just cannot visualize a government housing authority that would select applicants for low-rental housing on any basis other than that of political patronage.
Even if we accept the Prime Minister's implied confession as genuine and realistic, and not an excuse for the government to keep out of subsidized low-rental housing, I would point out that the selection of tenants on the basis of political patronage could not be much worse than the system prevailing across this country today in connection with the allotting of government contracts and the appointment of government employees in connection with anything that comes under the authority of the government.
Under such a system, even with Liberal political patronage applied to the selection of houses, at least Liberals would get those houses. Probably they would get the new ones, and there would be some old ones left for the Conservatives and the C.C.F.'ers. Even that would be an improvement upon the present system.
Incidentally the Prime Minister is in excellent Liberal company when he takes this position regarding subsidized houses. In the latter part of March the Toronto metropolitan house builders association sent out what the press called a "ringing challenge" to all the speculating and contracting house builders in the greater Toronto area to get together and "to do something quick" to forestall the passage of proposed provincial legislation which would enlarge present assistance to subsidized rental housing. The national home builders association, according to the press statement, sent out a similar call to the Canadian Chamber of Commerce, to the Canadian Manufacturers Association, to the Canadian Association of Real Estate Boards and to the Ontario Property Owners Association to oppose provincial legislation that could promote subsidized rental housing.
These are the people who agree with the Prime Minister when he says we do not want low-rental subsidized housing. Those of us who support subsidized low-rental housing also have some fairly respectable friends. Our friends may not be as affluent as those who support the Prime Minister, but nevertheless they are good and substantial citizens. For example we have the president of the government housing authority, Central Mortgage and Housing Corporation.
Mr. Mansur, in his address to the Winnipeg convention of the national home builders association, is reported in the daily press to have said that there is a definite need for
public rental housing in Canada. Then, the labour congresses in Canada have supported public rental housing for years-and I include the Trades and Labour Congress and the Canadian Congress of Labour. In the briefs they presented to the government on March 26 and 27 both these organizations advocated subsidized low-rental housing as at least a partial answer to our housing problem.
A conference was called in Toronto early in March by the Ontario command (housing committee) of the Canadian Legion. It was comprised of representatives of welfare agencies, churches, labour and the construction industry. That conference passed a resolution proposing that the federal government pay subsidies to promote house building. Rev. W. W. Judd, general secretary of the council of social services for the Church of England, said at that conference:
The time has come when a further degree of subsidization is necessary. Housing is a social problem, not an individual one, it is the responsibility of the whole community.
In 1947 the Canadian Council of Churches took up the question of housing. This council is composed of all the Protestant churches in Canada and the following resolution was passed at that time:
The Canadian Council of Churches, believing that bad housing conditions are detrimental to healthy personal, moral and social life, and that public assistance is necessary to finance the building of homes for families with low incomes, urges the federal government to institute a national low rental housing program which will provide decent housing for low income families at rents they can afford to pay.
That was in 1947. At their annual meeting in Montreal in November, 1951, they passed the following resolution:
In the name of Christ, and for the sake of the health and morale of our people, we urge upon all levels of Canadian government, federal, provincial and municipal, the necessity and urgency of providing decent housing for people earning moderate or low wages and salaries, through an effective public housing program which will produce low cost and low rental dwelling units.
What is clear is that real estate boards and associations of speculative builders all support the position taken by the Prime Minister regarding subsidized housing. Trade unions, the Canadian Legion, the Canadian Council of Churches and responsible municipal and other officials concerned with housing do not support the government's reluctance tc provide low rental housing. On one occasion the Prime Minister is reported to have said that he did not want the government to become a landlord for a great number of citizens. The real estate boards and associations of speculative builders, along with the Prime Minister I presume, think that such a course would be socialism. I submit that

whether that be socialism or not, this government is already in the landlord business of necessity and against the wishes of the Prime Minister.
In 1951 the federal government was renting, mostly to second world war veterans, close to 25,000 houses. In that year they collected rentals amounting to $13,200,000. The government has found the rental business fairly prosperous. Of that 25,000 houses there were only 21 rental accounts more than three months in arrears and the total arrears amounted to only $413.
The reluctance of the Prime Minister and the government to go into the landlord business in compliance with the wishes of the real estate boards has had the effect of reduc ing the number of houses it has for rent. Last year, even with the 25,000 houses it has for rent, there were 14,000 fewer houses than in 1951. The government's policy of selling wartime houses which has been going on for a number of years, while not reducing the actual number of houses available, has made it increasingly difficult for many veterans who formerly occupied these houses to find accommodation.
I said that there has been no concerted action on the part of governments at the different levels, on the one hand, and on the part of the lending institutions, on the other. This is chiefly because the government does not know where it is going in the matter of housing. The government is torn between its allegiance to real estate boards, speculative builders, lending institutions, private enterprise and those who want to continue to build for the upper third income group, on the one hand, and the hundreds of thousands of those in the lower income brackets who six years after the war are still without housing.
The present situation constitutes a national emergency which is getting worse. Fewer houses were built in 1951 than in 1950. There is every indication that without some drastic change in government policy there will be fewer houses built in 1952 than there were in 1951. New housing starts to date are only 55 per cent of the 1950-51 level. The carryover on January 1, 1952, was only 46,000 as compared with 60,000 on January 1, 1951. The houses that are being built are being built for sale and for those in the upper third income group only.
Mr. Hignett, the regional supervisor of Central Mortgage and Housing Corporation, is reported in the Winnipeg Tribune of April 12 as saying that $3,300 is the minimum annual income required to maintain the payments on the lowest price houses being built in Canadian cities today, that is, four-roomed bungalows costing $8,500 with a monthly carrying charge of $63.50. He points out that 55704-117
The Budget-Mr. Noseworthy only those in the upper third income group today can afford to buy such houses. Today Central Mortgage and Housing Corporation is serving only the upper third income group.
The condition is daily becoming worse. Building costs have increased 125 per cent since 1939, and during the same period wages increased 93 per cent. That is not all. Dr. Firestone of the Department of Trade and Commerce forecasts that building costs will advance another 20 per cent by 1955. This means that an increase of $10 in the monthly carrying charges will shut out of the home buying market all those with annual incomes below $3,500. It will shut off from assistance from Central Mortgage and Housing Corporation those with incomes less than that amount. Any change which will reduce the monthly carrying charge by $10 will, on the other hand, bring many thousands back into the home purchasing field.
It is sometimes argued that the building of houses for those in the higher income groups provides vacant older houses which those in the lower income groups can move into. Apart altogether from the social stigma that would result from forcing those in the lower income groups into old houses, and even old houses would be better than none, there are a number of other factors. Old houses, like new houses, have greatly increased in price. Down payments on these houses are usually large and interest rates are usually high. There is no assistance provided by Central Mortgage and Housing Corporation in the purchase of old houses. All these factors add up to a very grave situation for the houseless low wage earner.
I have said that housing is a social problem. If the hundreds of thousands living in cellars and garrets, in slums, trailers, emergency shelters and emergency makeshifts for houses are to be properly housed, we must adopt public policies that are not normally associated with an economically operated business activity. In other words, houses must be built and sold or rented at prices that bear some relation to the occupant's income regardless of whether or not that price will bring dividends in dollars and cents on the capital invested. There are values that accrue to a society of happy and contentedly housed people that can never be measured in dollars and cents. For one thing, a happy and contentedly housed people are one of our greatest offensive weapons against communism. I want to quote again what the Canadian Council of Churches has to say on this subject. On page 2 of their report there is the following:
Experience proves that emotional strains imposed on the crowded family group, major and minor delinquent behaviour among children when they stay away from home because of its discomforts,

The Budget-Mr. Noseworthy undermining of health through unsanitary housing conditions, and marriages delayed or dangerously strained by doubling up as a result of the housing shortage, all these produce conditions which are harmful to healthy personal and social life. The churches are convinced that the present housing shortage in Canada is one of the greatest single factors in contributing to shattered homes and families, and that the toll of broken homes and separated families will continue to mount unless immediate steps are taken to solve the low wage earner's housing problem.
Judge Allan Fraser of the Ottawa juvenile court claims that the housing shortage is "the greatest single factor" contributing to the breakdown in Canadian family life. In an address before the Ottawa Optimist Club, Judge Fraser said that he knew personally of housing conditions in the capital that were not fit for animals. "There are families of nine and ten trying to live in two rooms, with the father and mother sleeping on the floor," he said.
In Hamilton, Mayor Lloyd D. Jackson recently declared that "the story of housing in this city is absolutely heartbreaking. I can hardly begin to describe it." Miss E. Duffy, of the Hamilton Children's Aid Society, said that parents in increasng numbers were being forced to board their children out, and even part with them entirely because of their inability to get decent homes for them. "It is most important for the future of the children of Hamilton," she said, "that some remedy to the situation be found at once. Present conditions are contributing to child neglect, and our efforts to help parents improve their way of life are practically nullified by the seriousness of this housing emergency."
Just think for a moment of a country that can put $2 billion a year into the defence of our way of life, yet leave tens of thousands of children to be brought up in a way of life that is not becoming to a civilized democratic country! You may ask: What is the answer? There is no simple answer to that problem, as the minister in charge of this department well knows. I submit that first of all as a country, as a people and as a government we should recognize that housing is a social problem and that adequate housing will contribute values to society that cannot be measured in terms of interest or dividends on the money invested. I suggest in the second place that the minister and the cabinet should make up their collective mind as to where they are going in the matter of housing, whether the government is getting into or out of the housing business. If it is getting into the housing business, then subsidized low rental housing must be provided. I do not think that the Prime Minister's political patronage argument against it is a good reason for the government's refusal. More effective co-operation between governments at various levels is necessary to make section 35 of the National Housing Act operative.
If the government is going out of the housing business, if it is going to leave it to private enterprise to solve the problem, then the government must take such measures as will induce private enterprise to provide

society with an adequate building program. There are two difficulties that appear to have stood in the way of housing during the past year. The first one was the cost to the municipalities of providing serviced land and servicing the communities in which houses would be built. The second was lack of mortgage finance. When you consider that a housing program such as we carried out in 1949 and 1950, when we built about 90,000 houses, requires at least 25,000 acres of serviced land, you can realize the burden that is thrown upon the municipalities. Municipalities are loath to take advantage of the facilities of section 35 of the National Housing Act for the purchase and servicing of land for low rental housing.
The mayor of Windsor is reported to have said in the Ontario legislature that the present land assembly plan, under which the federal, provincial and municipal governments share the cost of acquiring and servicing land for building, is only scratching the surface and not meeting the real problem. Since every 500 new houses require a new school, municipalities are faced with additional costs for education. Numerous resolutions by organizations interested in housing have called for the federal and provincial governments to bear the full cost of education and social or welfare services within the municipalities. If it were possible for the federal government to provide relief by way of federal aid to education part of that difficulty would be removed. If the government were willing to get together with the provincial ministers of education to ascertain if some formula could not be worked out whereby this government may assure the provinces a part of the cost of education, the municipalities would then be able to devote more of their revenues to housing.


Mr. Deputy Speaker:: Order. I must inform the hon. member that his time has now expired.


Mr. E. A. McCusker (Regina City):: Mr. Speaker, the budget address was clearly and ably presented by its author the Minister of Finance (Mr. Abbott). It was vigorously criticized by the financial experts of the opposition, but they should not be reproached or feel too depressed if their criticisms made little impression upon this house or upon the public at large. Much time, I think perhaps too much time, has been spent in this discussion so I shall be brief.
The best indication of the soundness of a budget is the reaction of the taxpayers. Our taxpayers are a fairly intelligent lot. They realize that taxes form the great source of revenue for a government, and that if we are going to spend $2 billion on national defence,

a billion and a half on health and security and still find enough money to run the country, someone must pay taxes. They did not expect substantial tax reductions at this time. True, certain industries were suffering. They made representations to Ottawa during the year, and they obtained relief. When I was home at Easter I received calls from many people expressing appreciation for what had been done. In fact, I only received one letter of complaint from an individual in the civil service stating that he thought civil servants were the forgotten people, and asking me for an appointment to discuss their case when I next returned to Regina.
No one denies that taxes are high, but everyone realizes we are better able to pay taxes now than at any other time in our history. People believe also in the pay-as-you-go system. Never have people been better paid, better fed, better clothed and, may I say, better governed than they are in Canada today under this Liberal government. I was surprised at the remarks of the hon. member for Rosetown-Biggar (Mr. Coldwell). He and his associates generally claim to be the friend of the little man. But let them not forget there are some little men in business, and the little men in business needed this tax relief to protect their businesses and save them from bankruptcy. Let me suggest to him and his associates that they should ascertain the facts before they pass judgment.
I should like to discuss a matter of great importance. Almost a year ago a royal commission was appointed to study the South Saskatchewan river dam and irrigation project. It consisted of Dr. T. G. Hogg of Toronto, chairman; Mr. G. A. Gaherty, Calgary; and Dr. John A. Widtsoe, Salt Lake City, Utah; and Mr. B. T. Richardson, Ottawa, secretary. Here is the order in council under which they were appointed, and here are the terms of reference. The commission was to conduct an inquiry into the following matters, namely, whether the economic and social returns to Canada and to the Canadian people on the investment in the proposed South Saskatchewan river project would be commensurate with the cost thereof, and whether the said project represents the most profitable and desirable use which could be made of the physical resources involved. I maintain, Mr. Speaker, that the inquiry is on the South Saskatchewan river project and the possibility of building a safe dam in a proper location and the economic soundness of the proposed irrigation and power project.
There is a sixth paragraph in the order, by whom it was suggested I do not know, but it tends to make this direction ambiguous 55704-U7i
The Budget-Mr. McCusker and leave it entirely to the commission to determine its terms of reference. This project has been studied and reported upon for fifteen years. Under the direction of the Department of Agriculture, men of the staff of the P.F.R.A. have studied and prepared reports on every phase of this project. I should like to put some of their names on the record. They are: Dr. L. B. Thomson, director, P.F.R.A.; Dr. C. C. Spence, senior economist, dominion Department of Agriculture, Edmonton; Mr. G. L. MacKenzie, chief engineer, P.F.R.A.; Mr. G. M. Munro, assistant chief engineer, P.F.R.A.; Mr. A. E. Palmer, superintendent, dominion experimental station, Lethbridge; Mr. G. W. Parkinson, chief of design section, P.F.R.A.; Mr. J. G. Watson, construction engineer, P.F.R.A.; Mr. R. Peterson, soils mechanic and materials engineer, P.F.R.A.; and Dr. J. D. A. Mollard, engineering geologist, P.F.R.A.
In addition, they had as consultants such eminent engineers as Major General H. B. Ferguson, Washington, D.C.; Dr. A. Casa-grande, Harvard university, Cambridge, Massachusetts; Mr. L. F. Harza, construction engineer, Harza Engineering Company, Chicago; Dr. J. A. Widtsoe, irrigation and soils expert, Salt Lake City, Utah. They had two eminent contracting engineers-D. S. MacDonald and W. B. Ramsay-as consultants. Mr. Speaker, on my desk are reports upon the work done and recommendations made by these men. These reports are all available to the commission.
The commission met in Washington a few weeks ago where all these men and many others were available for consultation. They were in western Canada last year and they are there now consulting the governments of the three prairie provinces. Why they should waste time consulting governments whose views are already well known is beyond me. It is well known that a royal commission should deliberate very carefully before bringing down a report, but in this case all the evidence has been accumulated and presented to them so the process of arriving at a conclusion should not be a lengthy one. I would earnestly ask the government, therefore, to modify the terms of reference if necessary to see that a report on this project is made in the very near future. When this report is made, if it be the desire of the government that the commission report on other things I shall have no objection to their sitting longer.
After the remarks made by the Prime Minister today I was inclined to eliminate this portion of my address, but later in the

The Budget-Mr. McCusker day I saw a statement made by Mr. Richardson, the secretary of the royal commission, as it appeared in the Regina Leader of April 26. The article states:
He said public hearings in Saskatchewan were being planned tor the "near future."
The Saskatchewan hearings will be held after the commission has examined the mass of engineering and technical data it has assembled.
It is expected the commission will make its report this year.
Well, gentlemen, I think we should not delay much longer in getting a report. Mr. Speaker, at a time when we are spending four and a half billion dollars per year we cannot hesitate for a moment to develop our natural resources wherever we may find them. It is only through the aggressive development of these natural resources that we can ever hope to meet our ever-increasing expenditures.
Since I have been in this house I have been watching-I am glad to see the member for Rosetown-Biggar and I hope he will come in and sit down along with the member for Winnipeg North Centre (Mr. Knowles) and the member for Moose Jaw (Mr. Thatcher). I am glad to see them here because I wish to discuss the C.C.F. tonight. In Ottawa, the C.C.F. appear mostly as a group of benign individuals exuding honesty and benevolence. In Saskatchewan, where they form the government, they appear in their real character, and may I say a not very attractive character. During the Easter recess I spent a few days in Vancouver, British Columbia. The C.C.F. of British Columbia were in convention, and announced their platform for the forthcoming election. Under the leadership of Mr. Winch and son, they decided to go "full out" for nationalization.


Joseph William Noseworthy: No provincial election speeches.


Mr. Gibson:: Giving away other people's money.


Emmett Andrew McCusker: Hydroelectric, mining, lumber, pulp and paper, fishing-all industries were to be nationalized. Hospitalization, although very expensive in British Columbia today, was to be given at a much reduced rate and medical care was to be entirely free. One must give them credit for boldly telling of their intentions. Their intentions are similar to those of the C.C.F. in Saskatchewan when they first came into power. In fact, Mr. Fines, the financial expert of the C.C.F., was in British Columbia at that time. Was he there in an advisory capacity or was his visit purely a coincidence?

When the C.C.F. came into power under Hon. Mr. Douglas in Saskatchewan, they proceeded with their program of nationalization. What has been the result?


Joseph William Noseworthy: Good government.


Emmett Andrew McCusker: Failure.


An hon. Member:: The people must like it.


Emmett Andrew McCusker: Transportation is a monopoly and should have been a profitable one. Their capital was given to them by the government. They had no interest charges to pay. Yet they have made no money.


Mr. Thaicher:: Certainly they made money.


An hon. Member:: Let him make his speech.


Emmett Andrew McCusker: I have not seen this year's statement but last year the only part of that system which made money was the lunch counter in the bus station in Regina.


Wilbert Ross Thatcher: The company had an over-all
profit.


Emmett Andrew McCusker: Then as to the box factory in Prince Albert, Mr. Mitchell, the owner had trouble with his men. They struck. The government told him that unless he settled immediately they would expropriate the property. He said: Do that. They did. What resulted? It is failure.


Wilbert Ross Thatcher: It was not failure.


Emmett Andrew McCusker: The fish filleting plant has practically ruined the fishing industry in northern Saskatchewan. As to the lumber business I will not repeat what the hon. member for Meadow Lake (Mr. Harrison) said. He covered that situation some time ago and explained what a mess they have made of it.


Wilbert Ross Thatcher: It is doing very well.


Emmett Andrew McCusker: As to the sodium sulphate plant, they sank $1 million into that.


Wilbert Ross Thatcher: What is the production of that plant?


Emmett Andrew McCusker: They had to close it down last fall and call upon their competitors, v horn they had tried to put out of business by making them pay high royalties, for assistance in filling their contracts. Then what about the woollen mill in Moose Jaw? The hon. member ought to know about that.


Wilbert Ross Thatcher: It employed 125 people.


Emmett Andrew McCusker: Financially it is a failure. The tannery was a failure and was closed down. As to the shoe factory, this was a good investment. They brought in an expert to run it and after they closed it down I asked him why. He said: I will tell you. It

should have prospered. It is a good little plant. I am experienced in that business but they gave me so many superintendents and sales managers that they ran the business into the ground. They advertised it for sale. The advertisement read: "A flrst-class opportunity for an experienced person." They sold it.
Then comes the insurance company. They initiated a cheap packet coverage for cars- one the line companies had difficulty to compete with. They lost heavily in that venture.


Wilbert Ross Thatcher: The lowest insurance rates in Canada.


Emmett Andrew McCusker: Yes, but the company is practically broke as a result.


Wilbert Ross Thatcher: It is not.


Emmett Andrew McCusker: I must not forget the brickyard because I have been named in Saskatchewan as being involved in that.


William Earl Rowe: Have you some shares in it?


Emmett Andrew McCusker: I happened to be president of International Clay Products. When I was overseas they told my solicitor that we would sell the plant to them or they would expropriate it. My solicitors went ahead with the other officers of the company and effected the sale to them at a very reasonable price. Since that time they have put half a million dollars into it. Last year, a little over a year ago, I went west. I was driving west alone and I met Mr. Sykes of the Journal. He said: I have a two weeks holiday. I asked: How would you like to accompany me out west? He said: Fine. As we drove out through Estevan we stopped to see this old brick plant. I hardly knew it. It was modernized. Half a million dollars should modernize a plant. I said: How many bricks are you making a day now? The answer was: 56,000. In the old days, with the old obsolescent machinery we used to turn out approximately 100,000. I said: How many men do you employ? The answer was: 96. We employed 80. I said: How is it that with 96 men, and all this modern machinery, you are making about half the bricks we used to turn out in a day? He said: It takes a lot of men to run those labour-saving devices.


Some hon. Members:: Oh, oh.


Emmett Andrew McCusker: There are two public utilities listed here which were established in the old days by a Liberal government.


Wilbert Ross Thatcher: They were always losing money in those days.


Emmett Andrew McCusker: They are the telephone and power corporation. They were alone and
The Budget-Mr. McCusker set aside and managed separately from the other crown corporations until the picture painted of the crown corporations was so bad that they decided to link them up. Now when you say: How are the crown corporations doing, they say: "Fine"; and that is what I wanted to tell you about. They are being financed with profits made from the telephone and the power company, profits that should be used to extend power lines and to extend the facilities of the telephone company.


Wilbert Ross Thatcher: Will the hon. member permit a question?


Emmett Andrew McCusker: You just sit down for a moment. I am going to deal with you shortly. Time does not permit me to dwell at any length upon this formidable list of failures. What has resulted from that? Private enterprise was driven from the province. When the C.C.F. came into power in Saskatchewan Imperial Oil had five drilling rigs and seis-mographic crews working in Saskatchewan seeking oil. On account of the confiscatory legislation that was envisaged, they pulled out and went to Alberta and those crews are responsible for the discovery of Leduc, Red-water and three other major fields. It would have been rather nice to have those discoveries made in Saskatchewan.


Wilbert Ross Thatcher: How much oil was discovered under the Liberals in Saskatchewan?


Emmett Andrew McCusker: Finally, becoming alarmed at the loss of population in Saskatchewan compared to the other provinces, and impressed by the developments taking place in Alberta and Manitoba under free enterprise, the C.C.F. decided to drop the nationalization program and to attempt to bring capital to the province. They promised the oil company the same deal they were getting in Alberta.


Wilbert Ross Thatcher: Do you object to that?


Emmett Andrew McCusker: Not at all. I think it is excellent. Just wait. Do not be impatient. You will hear the rest of it. They promised the oil companies the same deal as they were receiving in Alberta. The big companies swarmed in, seeking leases, for it is felt that the potential oil and gas resources of Saskatchewan are equal to those of Alberta. What happened? Instead of allowing the legitimate oil companies to bid for the choice leases, they gave a concession of 9 million acres to a Mr. X of Montreal. He paid one-tenth of a cent an acre for the lease. He was not a legitimate operator. He disposed of his acreage to the legitimate companies, who had been trying to get them

The Budget-Mr. McCusker before, at a handsome cash profit and retained a royalty of 2h per cent on 9 million acres. Here comes the joker. The C.C.F. government claimed they did not know this gentleman, that he was a perfect stranger. Yet he walks in and gets 9 million acres and goes away with a 2-J per cent royalty on them. I asked this question, as do the people of Saskatchewan: Who are his hidden associates? Dr. Schumiatcher, Q.C., then legal adviser to the premier of Saskatchewan and the government, formed several companies and applied for leases. He left the government employment on the eve of having those leases granted; they were leases amounting to hundreds of thousands of acres of oil land and a large acreage, 250 square miles, of uranium leases in the most favoured portion of Saskatchewan. Who are his associates? Now, gentlemen, you may get some idea of what is going on there with a C.C.F. government in power when I tell you this. During the short session of the Saskatchewan legislature a little over a year ago the government slipped through an amendment to the assembly act, which permitted members of the legislature to obtain leases of oil and mineral lands from the government. In fact I am told it went further; a member could hold leases through an agent, and that agent did not have to make known the names of those for whom he was acting. The storm of public opinion rose so high over this that the Saskatchewan government hastened to repeal the legislation at the last session of the legislature. A measure of comedy was added to this particular type of proceedings when the provincial treasurer, the Hon. Mr. Fines, produced and tabled affidavits to the effect that all the C.C.F. members of the legislature were honest men.


Wilbert Ross Thatcher: That is more than I can say for the parliamentary assistant.


Emmett Andrew McCusker: But the bug of private enterprise-or should I, in these times of agriculture investigation, call it the virus-


Mr. Speaker:: Order. I do not know whether I misunderstood the remark that was made about somebody being dishonest.


Wilbert Ross Thatcher: You did not. I withdraw.


Emmett Andrew McCusker: Thank you, I had not heard it. I do not pay much attention to what he says, anyway. The bug of private enterprise,: or should I say in these times of agriculture investigation the virus of private enterprise, had now entered the veins of Premier Douglas and finance minister Fines. They gazed with envy upon the neon lights advertising Famous Players and Rank movies, and so they decided to build a theatre for themselves.


Wilbert Ross Thatcher: You are pretty courageous to attack them down here.


Emmett Andrew McCusker: Soon we see a company formed with Mr. Bodnoff, one of Mr. Douglas's constituents from Weyburn, as president, Mr. Douglas and Mr. Fines as shareholders and directors and Mr. Schumiatcher as secretary-treasurer, to build a theatre under the stars, the Sunset Drive-in. This was built with the above-named officers holding a large mortgage upon it.
Of course it was purely a coincidence that Mr. Bodnoff received a very large loan of $75,000 from the Saskatchewan government insurance company a short time previous to the formation of the theatre company. We all know now that the Saskatchewan government insurance company


Major James William Coldwell: I rise to a point of order.
I am not objecting to what the hon. gentleman is saying, but I do not think it requires very much courage to stand in this house and attack people who have no chance to reply in this house.


Emmett Andrew McCusker: I am expecting you to defend them. I will come to that in a moment. You are their leader; I am expecting you to defend them.


Major James William Coldwell: No. I am not using this parliament for provincial politics. I will do that in Regina, in your own constituency.


Emmett Andrew McCusker: When-


Major James William Coldwell: Just cowardly.


Emmett Andrew McCusker: No, there is nothing
cowardly about it because this will be right on their doorsteps tomorrow morning.


Wilbert Ross Thatcher: You flatter yourself.


Mr. Speaker:: I doubt whether any hon. member should accuse another hon. member in this house of being a coward.


Major James William Coldwell: If you insist that I must withdraw then I will withdraw, but I keep my own opinion.


Emmett Andrew McCusker: I do not care what the hon. member says. Nobody pays any attention to him in Saskatchewan.


Wilbert Ross Thatcher: See how much attention they will pay to you next time.


Emmett Andrew McCusker: Let us go on with this: I know it is hard to take. I am showing you C.C.F. socialism with the veneer off.


George Alexander Drew: Liberals in a hurry.


Emmett Andrew McCusker: We all know that the Saskatchewan government insurance company comes under the department of the provincial treasurer, Mr. Fines. When he was asked

in the Saskatchewan legislature why this money was not placed in farm loans Mr. Fines is reported to have stated that they did not yield a high enough rate of interest, and so it goes on. The virus of private enterprise, once it got into their blood, spread just as rapidly and has been just as persistent as that of foot-and-mouth disease.
Another cabinet minister has gone into the hotel business. I want to read an editorial. Hon. members are objecting that I was giving too much attention to Saskatchewan. I will come right into this house. This is from the Leader-Post and is an editorial of April 28, headed "C.C.F. inconsistency", and reads as follows:
Redistribution should not be the "business" of parliament, nor of a parliamentary committee, Mr. Stanley Knowles, C.C.F. member for Winnipeg North Centre-


Mr. Speaker:: I understand that the question of redistribution has been referred to a committee.


Emmett Andrew McCusker: It is redistribution in
Saskatchewan that I am talking about, Mr. Speaker. I will not read the first paragraph which has to do with the statement of Mr. Knowles, and is no doubt the official view of the socialist party. The next paragraphs set out how redistribution is carried out in this house and I shall not refer to it. But since the rest applies to Saskatchewan I would like to read it, sir, with your permission:
Aside from the merits of Mr. Knowles' proposal, a point of interest to Saskatchewan is the wide gulf between C.C.F. talk in Ottawa and C.C.F. action in Regina.
Saskatchewan under the C.C.F. government had a redistribution a year ago, in preparation for the forthcoming election. Was it handled by an independent commission? The answer is "no." Was it handled by a committee of members, with representation thereon from both sides of the house? Again, the answer is "no." The only members who had anything to do with it were C.C.F.'ers, behind closed doors where the boundaries were drawn under the eagle eye of provincial treasurer Fines. Eventually, Mr. Fines, on behalf of the government, told the legislature where the boundaries of the constituencies were to go, and that is where they went, except for a few minor changes.
The Saskatchewan opposition did not go as far as to request an "independent commission" such as the federal C.C.F.'ers talk about. It moved an amendment to the redistribution bill asking that the present Ottawa procedure be followed, that instead of the government presenting redistribution as a fait accompli a special select committee of the house be established to redraw the boundaries with both sides of the house represented thereon.
I will not read the whole editorial. It was refused. This is what happened:
Saskatchewan polls that went Liberal in 1948 were lopped off here, and others which gave the C.C.F. a majority were added there to strengthen the shaky seats. Robert Walker, who won Hanley with a 51 majority in 1948, was fixed up with a majority of 166 if the people vote again as they
The Budget-Mr. McCusker
did in 1948. Shellbrook's boundaries were shifted to raise the C.C.F. majority from 175 in 1948 to a potential 388. Touchwood was lifted from an actual C.C.F. majority of 168 in 1948 to a potential 413 in 1952, or whenever the election is held. Kerrobert-Kindersley's potential C.C.F. majority was raised from 178 to 436.
And so it goes on. I just wanted to show you, Mr. Speaker, that performance is a little bit different from talk. The reason we have lost population is that we have a government which has brought -about a lack of industrial and business opportunity; a government which has passed farm security legislation which has made it impossible for our young men to obtain a loan to buy a farm; a government which prefers to use the people's money to develop movie theatres rather than to develop agriculture.
I should like the hon. member for Rose-town-Biggar to state which, if either, of these groups he supports, the radical group o-n the coast or the capitalistic group in Regina. I am amazed that he can support either. Is he trying to walk a tigh-t rope between them? Obviously he should disown one or the other, or both.
I hate to mention the name of the hon. member for Moose Jaw, whose independent stand in this house last week sent a convulsive shudder down the spine of the leader of the C.C.F.-a tremour which was recorded in the press throughout Canada. This reaction, of course, amazed all hon. members of this house who had heard the hon. member for Rosetown-Biggar (Mr. Coldwell) attack the Liberal members, on the radio and in this chamber, for their honourable conduct towards their leader who, by the way, has never in any way attempted to interfere with our duties and privileges as members and who, moreover, never expects Liberal members to have their speeches vetted by him before they deliver them.
What happened to the poor member for Moose Jaw? He was summoned to the whipping post and emerged from that ordeal so thoroughly shaken that he was heard to mutter as he walked back to his room- "Mea culpa, mea culpa, mea maxima culpa". He then dashed off an iron curtain confession of guilt and a new profession of faith. But what an ordeal that must have been for the usually loquacious gentleman who now sits in his room or in his seat in this chamber, in gloomy silence. In fact, tonight I have been one of the first to cheer him back a little bit towards normalcy.
Can it be that the leader of the C.C.F., seeing the Saskatchewan trend and seeing the free enterpriser in the bench behind him becoming bolder, feared a contest for leadership?

The Budget-Mr. J. O. Gour


Major James William Coldwell: What a parody! What a parody!
(Translation):


Mr. J. O. Gour (Russell):: Mr. Speaker, it gives me pleasure to congratulate the hon. Minister of Finance (Mr. Abbott) on the farsighted budget he has laid before us. Every Canadian should congratulate the minister and also every member of the cabinet for having given the country such good administration and having shown a sixth consecutive surplus; thus they have reduced the national debt by $2,544 million, which means a saving of more than $62 million in interest charges for the Canadian people.
No, the minister need not be ashamed of showing such a wonderful surplus and I challenge our opponents to criticize it with worthy arguments to support them. As a matter of fact it is a government's duty, in time of peace and prosperity, to show a surplus in order to reduce the huge debts we have had to make, while we were forced to defend our country and civilization in order to ensure security to our fellow countrymen.
This year, the hon. minister has done even better for we have a surplus in a year that is, at it were, a semi-war year since more than $1,441 million was spent for our armies in Korea and elsewhere, again to provide for the security and the defence of this country and other countries which also want to defend liberty against the threat of communism.
Mr. Speaker, I am in favour of piling up surpluses in peacetime and during periods of prosperity like the one we now enjoy in this country because we were compelled to run the country into debt to the amount of $2 to $3 billion each year in wartime. Should we again be compelled by our enemy to defend our country we would be in a better financial position.
If we are now enjoying great prosperity it is mostly due to the sound administration of the Liberal government as opposed to the administration we had between 1930 and 1935, during which period a Tory government directed the country's business until it was gotten rid of at the general election of 1935. What a good thing that was for everybody!
The people of Canada were then experiencing the worst industrial stagnation in its history, most of the workers being unemployed and many farmers and businessmen having gone bankrupt. These people were not then complaining about taxation, because they were not earning enough money to take care of their own needs.
The picture is altogether different today when Canada has undergone a thorough transformation; as a matter of fact, most of our towns and rural areas have improved out of all recognition. Consequently, I say that we should continue to proceed along the lines of good government and harbour no worry.
However, I find, like anyone else, that a budget amounting to $4 billion and a half represents a tremendous expenditure for a population of 14 million people scattered as it is over ten different provinces and the large spaces of a country such as ours.
With the permission of the house, I will review the reasons compelling our government to impose such high taxation. First of all let us see what conditions are in other countries in order to find out if we are paying more or less taxes than the people of these other countries.
Let us see, in the first place, how our friends from the United States fare. This country, with a population of over 150 million people, is one of the most advanced and the richest in all kinds of raw materials. Furthermore, due to its geographical situation, this country is able to grow all the products it requires. Its clever and resourceful people pay, on the whole, much higher taxes than our own. In spite of this, the United States have shown a large deficit for many years.
I now wish to quote from the New York Herald Tribune:
A New York paper praises Canadian taxation policy.
The New York Herald Tribune states, in an editorial, that Canada's answer to the threat of inflation places that country ahead of the United States on the road to secure stability.
In pointing out a few taxation adjustments announced last week in the Canadian budget, the newspaper adds that the people responsible for the preparation of the taxation program in the United States could take note of Canadian methods.
The willingness of the Canadian people to accept the bad news of a level of taxation high enough to offset an expanded budget is proof that they realize the fact that a taxation program which contributes to economic stability is an adequate program.
It is not by accident that since the war the Canadian dollar has reached parity with the American dollar, that the public debt of Canada has been reduced, that the American investments in Canada have greatly increased and healthier economic conditions than in the United States have been maintained.
Canada did not merely stick to a payment in cash policy. Having accepted the gross burden of taxation required to balance its budget, Canada has centred its attention on improving the efficiency and fairness of its taxation.
I challenge our opponents to say that they are not proud to realize that their Canadian money is worth more than any other money in the world, and that foreign capital is flow-

ing into Canada. Therefore, were it not for these governmental restrictions, we would get thousands of requests from citizens of other countries who would like to settle in Canada. While I am dealing with immigration, and though I am not opposed to it, far from it,
I would nevertheless like to suggest to the government that we should not proceed with too much haste in this connection, for I cannot see how we could receive more than 100 thousand emigrants a year, which, added to the natural increase of our Canadian population, would bring it up by 200 or 300 thousand a year. We must be logical and give these people employment.
But let us return to the reasons for levying taxes for an amount of $4 billion and a half. First there is an amount of $2,100 million for the defence of our country and for assisting less favoured people. I do understand that the amount is quite high for a population of 14 million. I hope that the threat to peace will subside and that we shall soon be in a position to reduce our armament program.
But what did our opponents say, and more particularly the hon. member for Carleton (Mr. Drew), leader of the opposition? At the time of the invasion in Korea, in June, 1950, we were accused of not spending enough, we were told that we should be spending two or three times as much, that we were endangering the security of the country. Several members of the opposition even asserted in the house and at public meetings that we should have more than 200,000 men under arms and that we should resort immediately to conscription. Some of them went so far as to say that we should be a member of the Atlantic pact. To hear them speak, one would think that there should foe Canadians on guard duty all around the world. Really, Mr. Speaker, if the government were to listen to everything that is said by the leader and the Tory members, they would believe that the expenditure should not be $2,100 million but much more than $3 billion for defence alone. Our armed forces would comprise not a mere 100,000 men but 250,000 or even 300,000.
While I am speaking of the armed forces, I think it would be a mistake to accelerate the tempo of enlistments. We must, of course, fulfil our commitments, but we must also avoid subscribing to new obligations. It is a good thing to furnish war equipment, food and so forth; but it seems to me that
The Budget-Mr. J. O. Gour it would be still a better policy to draw the line as far as the sending of soldiers abroad is concerned.
Those countries have a right to expect our help and besides, by helping them, we actually protect ourselves; but let it be admitted that their population is ten times as high as ours, that they are at home and that their supply of raw materials is insufficient to employ their population. And while we open our doors to some of their youth, most of whom are of the same age as our young soldiers, our own young men are fighting on the battlefields. That is why I repeat, Mr. Speaker, it is all very well and also quite natural to help but we must not send more soldiers than we have now, except in the case where the danger should become greater.
I would not forgive myself if I did not refute the criticisms directed against us by the opposition and, for the most part, by the second and third oppositions and by many members who pretend to be independent but are greater Tories than the Tories themselves on the amount we are compelled to spend for the administration of the country, in addition to defence expenditures.
Mr. Speaker, I have made what I consider a fairly accurate calculation of what the amount would be if the government were to agree to all the expenditures they suggest. We would need a budget of more than six billion. Oh, how generous are our friends of the opposition! They are always prepared to suggest increases of all kinds, pensions, better wages for government employees, subsidies here and subsidies there, subsidies for everybody. If the water level rises and overflows in the springtime, in some little creek, the government should carry it away to some other place. To hear them tell it, one would think the government was a huge mountain of gold and that the only thing to do is to help oneself.
Mr. Speaker, the hon. members who endorse the policy of the Liberal government are as generous and sympathetic as the hon. members of the opposition when it comes to helping others, to making contributions out of their own pockets, and I challenge our opponents to find a single Liberal member who is not in favour of all social measures intended to help people of slender means, to give adequate salaries to the civil servants, to help our farmers through subsidies, our workers, etc., as well as foster education. We want adequate pay for our servicemen, we take care of our returned soldiers, we help our hospitals, we give fair treatment and an adequate salary to our workers, in

The Budget-Mr. J. O. Gour short, we promote by all possible means the development of our country and make sure that all Canadians will be treated justly so that our national unity will be preserved. But-and there is a "but" which we must not forget-all social laws ever adopted in this country have been sponsored by a Liberal administration. Every dollar spent by the government must be repaid by the Canadian people. That is why it is necessary to collect taxes and that is why we must not go faster than our resources will allow us to go.
And then after requesting that over $6 billion be given, contributed and spent, they turn around and accuse us of overtaxing the people. I understand that the role of the opposition consists in criticizing. Now, my good friends, be serious. During the Korean invasion, you had a fair game and you said that the danger was impending. Any man who is close to danger is ready to take any means, like during a thunder-storm we fear the thunder, and as we are good fellows we implore the protection of Divine Providence. Unfortunately, too often after the storm we forget to give thanks, yet sometimes people die without sufficient preparation. It is the same as far as the Korean war is concerned. Because things look a little better now, some are bound to forget and to blame us for too much preparation and, for the rest of the budget, we are blamed again after having been asked to spend twice as much or three or four times as much.
I say, Mr. Speaker, that no single member of this house who is a supporter of the Liberal government welcomes high taxation more than anyone else. To begin with, we also pay taxes, as well as our opponents and our friends who have elected us, not to mention those who have given their voice to our opponents. Most of the hon. members in this house wish to be re-elected with a greater majority. Then we must make new friends and keep such friends as we had before. Consequently, we want our families where the head of the family has many dependents to be taxed less, to receive a bigger family allowance, certainly less taxation for everybody, a pension for the disabled as soon as possible, an increased old age pension, etc., etc. But, where shall we find the money and yet incur no deficit? It is true that we have a surplus but that is a good investment for all Canadians. To support this contention I quote an article which appeared in the London Times: (Text):
I have a newspaper article headed, "Financial Strength of Canada Helping Buttress

Free World". It is dated April 15, quotes the London Times, and reads as follows:
The financial strength of Canada is helping to buttress the entire free world, the London Times says today. "Clearly Canada Is exceptionally favoured by fortune; but prosperity as well as adversity is a test of statesmanship, and much credit is due to Mr. St. Laurent's government for the happy condition of the nation's affairs," the Times says. "Canada may be congratulated the more wholeheartedly by her friends because her financial strength helps to buttress the entire free world."
(Translation):
To be able to enjoy prosperity, the finances of the country at least must be in good condition. In case of war we would be in a better position to defend our country and if peace should continue, as it is our wish, and if the markets where we sell our products become less profitable, our country will have to be in a sound financial position to undertake in due time vast projects to help the development of our natural resources and to ensure employment for our workers.
Mr. Speaker, before concluding I wish to ask the Minister of Agriculture who is not in his seat at the moment, but who will certainly read this request, to consider closely the prices of our farm products, because during the last few months the prices of cheese, beef, pork, eggs, poultry and milch cows went down by more than 25 per cent. Even now the price of the hide of a month or month-and-a-half old milk-fed calf is only 40 cents. We must remember that that requires an hour and a half of work by the farmer to skin a calf and that children's shoes sell at $2 to $4 and shoes for grown-ups sell at $10 to $15, which means first of all . . .
(Text):
If I may say it in English-fifteen hours of work for a farmer and ten calf skins for a pair of child's shoes...
(Translation):
. . . and forty-five hours of work and thirty calf hides for adults. Obviously, there is something wrong with our shoe manufacturers. I have investigated the matter personally and I was told that they have lowered the prices of hides and shoes considerably, but that they have increased wages. I think that they too need a wider margin of profit. Which means that at the present time our farmers are producing at cost, since there has been practically no reduction in the price of what they have to buy. Almost everywhere we see wage increases, which makes them think that the price of goods they have to buy will go up, since inevitably, when an industry increases its wages, it also increases the price of its products propor-

tionately. The railways and all the other means of transportation are charging exorbitant rates on all freight. So our farmers are leaving their farms. Statistics are there to prove it. That is why there is a shortage of housing in our cities. Such a condition can throw our economy out of balance and cause unemployment, and even a certain lack of balance in our society.
Agricultural loans are inadequate in Ontario. The provincial government actually neglects the Ontario farmer. The loans should be increased by at least 50 per cent. Instead of lending $4,000 on a farm, we should lend $6,000. It would be much easier then for the head of a family to purchase farms on his sons' behalf, for one needs more than $12,000 to buy the farm, the cattle and the necessary machinery. Such an improvement in the law would encourage farmers' sons to remain on the land, which would be an excellent thing for all Canadians.
I would feel remiss in my duty if I failed to remind our excellent minister of national health to see to it that bilingual old age pension cheques be distributed throughout Canada. I feel sure that there is not one of us who would not be in favour of unity and justice at home.
(Text):
I am of the opinion that there is not an hon. member who is not in favour of unity, good understanding and justice in this country.
(Translation):
We are descended from two great races with a glorious past. In this land of our ancestors, we speak French and English and we have been living in harmony for centuries; have we not become allies in several wars, standing together in the defence of freedom? Why should Canadians not be able to live side by side and respect one another?
To achieve that end, we must be treated equally well. Then let us have bilingual cheques, like bilingual currency. School legislation, although it comes under the jurisdiction of the provinces, should be applied without any discrimination as to race or language, and not as in British Columbia. This also holds true as far as religion is concerned. That would be in the greatest interest of Canada. Let us follow the example set by our young men, either French or English-speaking, who have shed their blood and made the supreme sacrifice at the front to defend their country, their race and their religion. We, who represent them all, should
The Budget-Mr. Gillis not fear to pass legislation accordingly and endow this country with a distinctively Canadian flag.
I conclude by asking Divine Providence to protect the health of our Prime Minister, who is widely known as a man of superior qualities and a great Christian.
(Text):


Mr. Clarence Gillis (Cape Breton South):: Mr. Speaker, ordinarily I would only speak on the subject of the budget once, but sitting in the house listening to the speeches made, one begins to feel like a steam boiler. Since you have not got a safety valve, when you get up to a certain pressure the only way to relieve it is to say something about the things that are bothering you. I should like to say two things about the speech made tonight by the member for Regina City (Mr. McCusker). I am sure he would not want to mislead the house or make an inaccurate statement.
Tonight the hon. member used the figure of one and a half billion dollars as the contribution made by the federal government in the field of social security. I am sure that the parliamentary assistant to the Minister of National Health and Welfare knows that figure is not correct. When he uses that figure of one and a half billion dollars he is including the provincial government's contribution, the money spent by the municipalities in the field of health and welfare as well as private contributions that are allocated for that purpose. I want to correct the record on that, and I am sure the parliamentary assistant would want me to do so. The federal government is not spending one and a half billion dollars; that is the total amount of money that goes into that field in Canada from the agencies that I have mentioned. The second thing I should like to put on the record is the position of the small industry in Saskatchewan operated by the Saskatchewan government. Now, it is not my prerogative to defend the Saskatchewan government in this house. There are five members from that province who are capable of doing that. The reason I am interested in the industrial set-up is that in my last election that was the only issue in the campaign in my riding, based on a statement made in the house by the member for Lake Centre (Mr. Diefenfoaker) just before adjournment. The Saskatchewan industrial set-up was a complete washout so far as the hon. member was concerned. Fortunately, I had just returned from Saskatchewan where I had spent two weeks, much of it in Regina with the men who were

The Budget-Mr. Gillis responsible for setting up and maintaining these small industries. I had the facts and figures in my pocket at the time the member for Lake Centre made that speech.
Immediately following the hon. member's speech I rose and put the facts and figures I had obtained from the men in Saskatchewan on the record. I have kept in touch with that industry ever since. If the parliamentary assistant to the Minister of National Health and Welfare will look at the budget speech made by the provincial treasurer of Saskatchewan in 1952, he will find that in the over-all operation of industry under the management of the provincial government there was a net profit of $3'5 million. Those are the figures the provincial treasurer gave the legislature.


Emmett Andrew McCusker: I do not want to interrupt the hon. member, but will he permit a question?


Clarence Gillis: Yes.


Emmett Andrew McCusker: I wanted to ask him through you, Mr. Speaker, if he included in that the telephone company and the power corporation?


Clarence Gillis: It was all-inclusive.


Emmett Andrew McCusker: That is the statement which I made. I think I said that the crown corporations standing alone did not carry themselves but they had lumped in with them, for the purpose of accounting, the telephone company and power corporation which were old corporations making large profits, and therefore it showed as though the whole scheme of crown corporations were making a profit; in fact the latter two concealed the actual deficits of the first.


Clarence Gillis: I am not going to argue about the details. What I am interested in is this. At the time the Saskatchewan government took over the power operations in that province it was a dead loss, and the telephone company was in the same position. I am sure the hon. member will agree with me that the position of industry in that province at that time was nil. If I belonged to that province, regardless of politics, I would have to give the government credit for taking the initiative and trying to set up small industry on the prairies to create employment. There has been a wide expansion of power in that province since the government took over. 1 believe it is all to the good. I wish that the Nova Scotia government, with the resources it has available, would undertake a similar development. Regardless of the fact that it is a Liberal government, I would be one of the first to pitch in and help.


Alfred Johnson Brooks: And New Brunswick too.


Clarence Gillis: And the province of New Brunswick also. I merely say that because I am interested in the Saskatchewan government's efforts to put some industries on the prairies; that has never been attempted before. Of course these men were inexperienced and were feeling their way. Nevertheless, there are a lot of people who have employment in these little industries today, regardless of whether the money was made in power, in telephones or in the over-all picture. Some sections will lose.
For instance, take the Dominion Steel and Coal, a huge free enterprise octopus that stretches across this country. It has twenty-six subsidiary organizations, and you will find that many of those subsidiaries are losing money while others are making money. The over-all picture enables that huge organization to remain solvent, and in a position to employ thousands of people. I compliment the Saskatchewan government on that particular matter for creating employment and experimenting with industry. The men lacked experience, but I think they have made a very great success of it. I just wanted to straighten out the record on those two points.
There is another matter, Mr. Speaker, that I should like to develop rather fully and that is the question of whether there will be another fall session. The recriminations that the Prime Minister (Mr. St. Laurent) has to take, the accusations that the house is being prolonged for the purpose of giving members another indemnity-one hears those things. So far as I am concerned, as one member of this house, Mr. Speaker, I do not think that those accusations are justified. On June 8, 1951, I spoke on this question and pointed out that, so far as I was concerned, a second session was necessary, and I put the legislation that still remained untouched on the record. That prediction in June turned out to be correct because hon. members were here in December. They had a two-day recess for Christmas, and the business was not completed then, or not as it should have been.
Today is the 65th day of this session. If the session prorogued tonight, hon. members could go home and draw their full indemnities. What does that mean? It means that in the years gone by the anticipated length of the session was 65 days, and hon. members could complete their business when they were dealing only with the problems of Canada with 8 million or 9 million people. They did not then have the problems of the world to contend with as we have today. Anyone who takes a look at that order paper which I have in my hand-and I refer to today's order paper-and looks over the 34 items of legislation that are still on it, to

say nothing about the legislation that is yet to be brought forward in this session, such as amendments to the Criminal Code, the Combines Investigation Act, with regard to immigration, unemployment insurance, and all those things that will have to be dealt with-


Mr. Blackmore:: And all the estimates.


Clarence Gillis: -and who thinks that that agenda can be completed by the end of June, is not figuring on giving that legislation much consideration. Then you have all of the estimates to handle in addition to the legislation that is on the order paper and the other items that we know must be brought in. In the light of all that, I am obliged to rise and say something about it. I think the Prime Minister (Mr. St. Laurent) has been fair, considerate and understanding as far as the members of the house are concerned. In addition to that, he wants to give everybody in this house an opportunity of examining that legislation, and not just rushing it through at the last minute.
On the question of remuneration, I want to compliment the hon. member for Simcoe North (Mr. Ferguson) who got to his feet here last evening and made a strong speech on that subject. When you take a look at the legislatures, for example, what do you find? I have in my hand a clipping-and it is dated May 1-which shows that in the province of N wfoundland the members of the legislature increased the indemnity to $3,000 a year. In the province of Ontario I think the indemnity is about $3,900. I think $3,000 is fairly well the indemnity across the country. In its last session the Ontario legislature sat for less than seven weeks. You must consider the fact that members of parliament come here from all over this country, many of them with businesses, many of them with law offices. You are not able to work here. Premier Frost recently made the statement that he figures that being a member of the Ontario legislature is a full-time job and that it is not possible to carry on as they have in the past and just consider it a part-time job.
As I said in June last year, we have arrived at the position in this country when members of parliament are going to have to make up their minds whether they are going to work for the people of Canada and accept the responsibilities that have been given them as members of parliament or whether they are going to stay home and look after their practice, if they are lawyers, their businesses if they are businessmen or their farms if they are farmers in some other part of the country. They just cannot do a good job either here
The Budget-Mr. Gillis or at home having regard to the time that must be spent in this parliament at the present time.
I am saying that because I think that the criticism and the kicking around that the Prime Minister has taken in the last few days is completely unjustified. I do not think he merits it, and I think it is up to the individual members of this parliament to show that they appreciate the fact that he has some understanding of and consideration for them, both with respect to the time they must spend in the house and as to the inadequacy of their compensation.
I think the time has come in this country when the government of Canada and the members of this House of Commons must do something. I do not believe in just putting the gun to the cabinet and saying: You must do it. As a member of this House of Commons I think I have some responsibility in the matter and should be prepared to express my opinion on it. I think it is a full-time job. I think the members of this House of Commons should be paid an adequate indemnity so that they might be able to do the kind of job that the people who elected them expect them to do.
I have in my hand the set-up in the United States as it affects our opposite numbers in that country. I am just going to put it on the record:
Beginning in January, 1947, the compensation of senators, representatives in congress, delegates from the territories and the resident commissioner from Puerto Rico is at the rate of $12,500 per annum each; and the compensation of the speaker of the house of representatives and the vice-president of the United States is at the rate of $20,000 per annum each. Whenever there is no vice-president, the president of the senate for the time being is entitled to the compensation provided by law for the vice-president. Starting also in January, 1947, each member of either house receives an additional $2,500 per annum as an expense allowance for which no accounting is made. Beginning at the same time the government contributes to an annuity which a retiring member of congress may receive after six years of service and attainment of the age of 62 years, or upon retirement for disability after five years of service.
I should like to ask hon. members of this house if they think that a member of the House of Commons who has to spend the amount of time that we have to spend in Ottawa doing the business of the country is not as good a representative or is not performing just as good a job as is his opposite number in the United States? Do you think the people of Canada, with regard to what their members should receive, are any more parsimonious than are the people of the United States? I do not think so. In this house I have stated a good many times that, as to the riding I represent, the only question I have ever been asked on the subject of

The Budget-Mr. Gillis remuneration is: How do you get by on it? How do you manage it in Ottawa for six, seven, eight or nine months of the year, maintain a family in this part of the country, and get by on the amount of money that you get?
There is no question as to what the member of parliament should be entitled to. I think the situation is the same in every riding of this country, if the member of parliament faced up to his responsibility and tried to have the people that he represents see the parliamentary job as it is today, under circumstances that have drastically changed over the last ten years.
I see that it is eleven o'clock, Mr. Speaker, and I move the adjournment of the debate.
On motion of Mr. Gillis the debate was adjourned.



BUSINESS OF THE HOUSE

Alphonse Fournier: On Monday we will continue the debate on the budget. If this debate were concluded, we would proceed with Bills Nos. 182, 183, 184 and 181. Those bills relate to veterans matters.


Howard Charles Green: In that order?


Alphonse Fournier: In that order.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Monday, May 5, 1952