1952-04-25

Hon. Robert H. Winters (Minister of Resources and Development):: On April 7, 1952, as indicated in Hansard at page 1163, the hon. member for Mackenzie (Mr. Ferrie) requested me to table the correspondence between the government of the province of Saskatchewan and the federal government with regard to No. 35 highway from Nipa-win to Flin Flon in the years 1951 and 1952.
There has been no correspondence during this period' on the highway from. Nipawin to Flin Flon as such, but there has been an exchange of correspondence on that portion of the road between Flin Flon and Denare Beach.
I beg leave to table this correspondence.



FOREIGN EXCHANGE


Mr. James Sinclair (Parliamentary Assistant to the Minister of Finance):: 

TRANS-CANADA HIGHWAY CORRESPONDENCE BETWEEN DOMINION GOVERNMENT AND BRITISH COLUMBIA

Robert Henry Winters: I beg leave to table parliamentary return No. 18, moved by Mr. Fulton, correspondence exchanged between the dominion government and the government of the province of British Columbia concerning the trans-Canada highway agreement and regarding the removal of tolls.
I might say here, Mr. Speaker, that there have been some exchanges with respeot to various details which are not included in this correspondence because of the relatively large amount of work involved in reproducing the documents. I have, however, spoken to the hon, member on this point and I believe he will find in the correspondence I am now tabling all the information he requires.



AGREEMENT WITH PROVINCE OF NOVA SCOTIA

[Stage Direction]
On the orders of the day:
Mr. P. C. Black (Cumberland):: I should like to direct a question to the Minister of Resources and Development. Is any headway being made in the matter of entering into an agreement with the province of Nova Scotia for the construction of the trans-Canada highway through Nova Scotia and Cape Breton island?


Robert Henry Winters: I have had
discussions recently with the minister of highways and public works for Nova Scotia. I can report only that I believe the government of Nova Scotia is giving favourable consideration to signing an agreement.



DOMINION DRAMA FESTIVAL


[Stage Direction]
On the orders of the day:
Mr. M. J. Coldwell (Rosetown-Biggar):: should like to direct a question to the Prime Minister. Will the government give immediate consideration to giving financial support to the dominion drama festival in accordance with the suggestion made by the Massey commission? I am asking this because of reported offers of sponsorship which many people consider to be undesirable.


Right Hon. L. S. St. Laurent (Prime Minister):: The government has been giving, and is giving, consideration to all the recommendations in the Massey report, and as policy is formulated with respect to them it has been, and will continue to be, announced. But the hon. member knows that it has not been the custom to announce policy of that kind in reply to questions in the house.
1592	HOUSE OF
The Budget-Mr. Blair THE BUDGET



ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE

[Stage Direction]
The house resumed, from Thursday, April 24, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell ("Greenwood), and the amendment to the amendment of Mr. Coldwell.
Mr. W. G. Blair (Lanark):: Mr. Speaker, the debate on the budget affords me an opportunity to bring to the attention of this house the serious situation which is now threatening the stability and welfare of the entire dairy industry. Matters of grave concern have now *reached a crucial point, and for that reason it is urgent that a review be made of the position of this industry which is so important in our Canadian economy.
In this same debate a year ago I pointed out dangers threatening the prosperity of this industry, which since that time have contributed to a situation which demands prompt action on the part of the government.
Dairying is one of the most important industries in Canada, and provides two million Canadians with either all or part of their livelihood. This number includes those who are engaged in production, processing and distribution, as well as supplying equipment and various services. Of the farm population in Canada, 450,000 farmers are dependent on receipts from the dairy industry as a source of income. It contributes more than $600 million to our national commerce. A large area of Canada is peculiarly suited to this form of farming. On many of these farms dairying is the only type of f arming that will provide sufficient cash income to maintain families. If the dairy industry is not prosperous, then these farms will be abandoned. Many of these farmers are in districts some distance from other milk markets, which limits their production to either cheese or butter.
Not only is it an important branch of agriculture, but it is an industry which is important to mixed farming. Conservation of soil is dependent to a large degree on a healthy dairy and livestock industry. The upkeep of dairy herds is one of the most important factors in soil conservation and fertility maintenance.
There is a great lack of understanding between the consumer public and those engaged in the industry. It is a year-round business providing considerable employment for hired labour and a cash return throughout the year. It is not generally realized that


it requires years of labour to build up a good dairy herd, and long hours of work to secure high production. It is an expensive proposition, as the purchase price of a good dairy stock and upkeep of barns and silos requires considerable outlay of cash. It is an industry of long hours, as cows must be tended and milked twice daily through seven days in the week, and there is added to this work the care of milk in order that it may reach the market in a satisfactory condition. When prices are high, consumers are more conscious of food prices, and there is an inclination on their part to blame rising costs on the farmers.
Some seem to forget that the dairy farmer begins his work early in the morning and finishes late at night for six days, with another four hours on Sunday. On the basis of a 12-hour day-and many farmers work over this time-with four hours additional on Sunday, the total amount of time adds up approximately to a 75-hour week. There is no arrangement made for overtime in this industry. These actual facts as to food costs and the price received by farmers for their products should be considered. Dairy farmers to the number of 450,000, together with their families, and all the people from whom they buy, consume large amounts of manufactured products. If the income of this large group is so reduced that their buying power is impaired, it will have a marked effect on the manufacturing industry.
A comparison of prices between the years 1939 and 1951 is interesting. In 1939 it took the average man 15-6 minutes of labour to buy one quart of milk. In 1951 it took only 10-1 minutes of labour. On the basis of 100 in August 1939, the index of consumer prices of milk products was 125-4 in October 1941; of meat and eggs, 130-6, and of all foods, 124-1. In the latter part of 1951 milk products stood at 213-4, meat and eggs, 354-9, and all foods, 251-5. It is to be noted that dairy foods have not increased in price proportionately. At the same time the cost of labour to the dairy farmer increased 181 per cent from 1941 to 1951, and in that period his own food costs were 82 per cent higher. Dairy farmers are now in a position where they have to compete with industry for labour.
In the same period the average farm price for 100 pounds of milk increased 78 per cent. The cow population has declined 2-4 per cent, and the Canadian population has increased 21-6 per cent in ten years. During the same ten years the per capita consumption of milk has fallen 18 per cent in Canada, notwithstanding the fact that the protein value of two quarts of milk equals that of a pound of choice beef at a much lower price.

Prices of other commodities have climbed in the spiral of inflation. It is admitted that the dairy farmer is receiving more for his products than he did ten years ago, yet the increase received has not kept pace with increased costs. Farm labour wages, higher food costs, maintenance of herd and buildings, competition from cheap vegetable oils, and the general increase in the cost of living, have added to his difficulties. Better public relations between consumer and producer would do much to create a better understanding.
Importation of vegetable oils into Canada has threatened the dairy industry on an increasing scale in the past three years. This is borne out by the following table of importation of vegetable oils into Canada:
Imports of Vegetable Oils into Canada
Average
Value
Quantity Value per pound
All vegetable oils (pounds) $ (cents) March 1-Dec.	31, 1949	124,289,500	17,576,955	14-1Calendar year	1950	...	190,697,200	30,663,719 16 1Calendar year	1951	...	158,391,500	35,057,238 22 1
The production of margarine in Canada is shown in the following table:
Thousands
Calendar year	of pounds
1949		 73,958
1950		 94,032
1951		 105,151
Not only has there been an increase in the importation of edible oils, but the prices of oils as of April 1952 show a considerable decrease. I give you the following table in pointing out the low prices for these products at the present time as compared with the existing prices last year:
Prices as of April 19	1951	1952Coconut oil	
18-25	7-54Soya bean	
20-5	8-5Cotton seed	
23-5	10
Soya beans were imported duty free. All copra used in making coconut oil was imported duty free.
I am not entering into a controversy on the merits of these products', but I present these figures for the purpose of showing the competition which faces the dairy industry through the manufacture and sale of edible oil produced in Canada. These imported oils produced by cheap labour have replaced about one-quarter of what was once the dairy farmer's butter market. It is reported that "filled fluid milk" with the cream replaced by imported oils could be expected to find a place on the Ontario market soon.
There are other factors which have brought the present situation in the dairy industry to the point where it constitutes a national emergency. There is grave uncertainty among
The Budget-Mr. Blair dairy producers. This applies particularly to the cheese branch of the industry. The industry itself has had no control over the forces which have caused the present situation, which certainly was not of its own making. The factors which enter into the present situation are: First, the outbreak of foot-and-mouth disease in Saskatchewan early in this year; second, the loss of the United Kingdom markets, which has been our traditional market for cheese ever since confederation; third, the quota imposed by the United States which has shut off further Canadian cheese exports there and has led New Zealand exporters to enter the Canadian market; fourth, the importation of large quantities of cheese from New Zealand.
The outbreak of foot-and-mouth disease will result in more dairy cows being kept on the farms, and hence larger quantities of milk will be placed on the market. For years there has been a market for Canadian milk cows, especially young heifers, in the United States. During the periods when prices for milk products were low many farmers added to their income in an excellent market by producing a certain number of milch cows for export. Owing to the outbreak of foot-and-mouth disease there can be no further export of dairy cows to the United States until we are clear of the disease and the embargo which resulted therefrom is lifted. The unfortunate further outbreak of this disease clearly indicates that the embargo will certainly not be lifted during this dairy season. These animals retained on Canadian farms will add to the amount of milk on the market. Not only will this apply to the cheese producers, but the price structure of other milk groups will be in danger if surplus milk is backed up into their market.
Last year Canada produced about 16,400 million pounds of milk. It is estimated that this year there will be an increase of 250 to 300 million pounds. This increase would amount to the equivalent of 29 million pounds of cheese or 14 million pounds of butter. The national dairy council estimates that the problem of marketing may cause 500 million pounds of milk to back up on the Canadian market. When this surplus milk comes on the market, much of it will be manufactured into butter and cheese. The government has taken butter, but so far has not stated where the surplus cheese will be sold. More milk production will mean more dairy products produced in all branches of the industry with no outside markets to take care of the surplus.
It will be difficult to handle all this milk which would normally go to cheese plants in the flush production season. Cheese factories have been closing all over the country in

The Budget-Mr. Blair the past few years and there are indications now that many more factories will not open this season. There is a shortage of trained cheese factory and creamery operators, and farm labour has become a serious problem. There must be some outlet for the sale of the surplus milk which will be produced during the coming season.
The loss of the United Kingdom markets has been a serious blow. This has been our traditional market for Cheddar cheese for sixty years. At one time we exported over 200 million pounds of cheese to Britain, but in the last year our exports have been cut down to 29 million. During both wars the industry was encouraged to produce to capacity. It had no knowledge that this longtime market would collapse. Without export markets for our cheese products it seems absurd that New Zealand cheese was imported into this country after it had become apparent that the cheese was not needed here and would cause distress on the Canadian markets.
The loss of the United States market by the quota imposed has prevented further Canadian cheese exports to that country. If the Canadian producer cannot avail himself of outside markets, the amount of New Zealand cheese which enters Canada will not only interfere with our marketing program, but will seriously demoralize the whole industry. Much of the cheese imported from New Zealand had originally been intended for the United States market to earn dollars for New Zealand. When the United States placed a quota on further cheese imports, it became available on the open market, and a considerable quantity was purchased by Canadian firms.
On April 21 of this year, as reported on page 1427 of Hansard, I asked the following question on the orders of the day and received the following answer:


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


Right Hon. J. G. Gardiner (Minister of Agriculture) :: I think it has been decided in the courts
that questions having to do with the price of milk are under the jurisdiction of the provincial governments. The question of cheese and milk in general has, I think, been fairly well taken care of by the government of Ontario. As to cheese production and' other related problems, they are dealt with accordingly.
On April 22, in answer to a similar question, the Minister of Agriculture stated:
There is a floor under butter of course, and as I said yesterday, there is a legalized position in Ontario in relation to cheese. Since most of the cheese is made in Ontario, the cheese position is well governed by that.

It would appear from the minister's answer that the onus for support prices or otherwise has been thrown on the government of the province of Ontario. Even there the marketing scheme could not toe expected to handle the present confused situation. I might point out that other provinces than Ontario are interested in the dairy industry.
The Minister of Agriculture has announced that the government is prepared to stand a loss of $6 million to support hog prices. In view of this statement there can be no reason for not supporting cheese. I have looked up the Milk Control Act, Revised Statutes of Ontario, 1950, chapter 233, and I find that the interpretation section contains the following:
(k) "milk" includes cream and such products of milk or cream as are manufactured or processed in any form, other than butter and cheese.
(m) "Processor" means a person engaged in the business of processing milk or manufacturing milk products, other than butter and cheese.
The Milk Control Act was amended in 1951 toy Bill No. 129, an act to amend the Milk Control Act. Section 3 of the amending legislation reads as follows:
Subsection 1 of section 5 of the Milk Control Act is amended by adding thereto the following clause: (hh) after a public hearing, prescribe maximum prices at which milk may be sold by retail in any market.
The words "other than butter and cheese" are to be noted. The question of a support program for agricultural products in this country is and has been recognized as a federal responsibility. For the Minister of Agriculture to endeavour to shift the responsibility to any province at this time is not consistent with his position on the question in the past nor with the policy of the government of which he is a member. I well recall, as does every other member of the house, the ringing phrases of the Minister of Agriculture when he assured Canadian farmers that a floor had been established below which prices would not be allowed to fall.
The situation today constitutes an emergency, the root causes of which are not confined to the dairy industry. If the cheese production branch is unable to market their product at a satisfactory price, then the whole industry will be affected. Something must be done to secure a market for surplus cheese at a fair price. Any loss in price will not only affect our dairy farmers but will have an effect on the whole Canadian economy. A satisfactory floor price below which prices will not be allowed to fall, thereby virtually destroying this essential industry, must toe assured to producers now.
Even this is only a partial answer. There must as well be an all-out sales effort by

the dairy trade and the government. Not only is a satisfactory floor price necessary, but some means must be found to dispose of surplus production. Failure to do so will give rise to a feeling of uncertainty which cannot help but spread to other related industries and in turn will reflect itself in unemployment in this country resulting from a lack of orders for farm machinery and other manufactured products.
I suggest further that the government again make representations to the United States government about the quota placed against imports of Canadian cheese, and the relationship this virtual embargo bears to our mutual agreement under the Geneva trade agreements. I for one have supported legislation to expand international trade, but if the application of escape clauses by other countries, who are also signatories to the Geneva agreement on tariffs and trade, is to continue to discriminate against Canadian producers, then I believe an obligation rests upon parliament to reappraise our position under this mutual agreement to expand trade.


Mr. H. R. Argue (Assiniboia):: Mr. Speaker, I listened with great interest to the speech which has just been delivered by the hon. member for Lanark (Mr. Blair). I certainly agree with him that the dairy industry in Canada is facing an emergency. Very little cheese is produced in the prairie provinces, but being a person interested in agriculture and the national good I cannot help but feel that the cheese industry has a just case and that the government should consider the steps that the hon. member has suggested.
The hon. member suggested that further representations might be made by Canada to the United States, and that if action was not obtained from the United States, parliament should perhaps reappraise its attitude toward the Geneva trade agreements. I do not know whether the hon. member is suggesting that Canada might take retaliatory action, but I hope the government will not take such action, because the erection of one embargo followed by a counter-embargo would probably lead to a series of embargoes between Canada and the United States, with serious consequences to our economy.
I think the government might explore the possibility of obtaining a market for cheese in the United Kingdom. We all know that the United Kingdom is short of Canadian dollars and that that is why they are unable to purchase our cheese at the present time. At various times in the past we in this group have suggested barter arrangements. The
The Budget-Mr. Argue government has always turned a deaf ear to such suggestions. I am thinking now of the farm machinery inquiry by a legislative committee that took place in Regina. The committee found that farm machinery prices of companies producing in Canada and companies from whom we get supplies but producing in the United States were very high indeed. It seems to me that Canada might well sell cheese to Great Britain on the understanding that the funds obtained from cheese would be used for the purchase of British agricultural machinery. A considerable quantity of British agricultural machinery is being used in the prairie provinces at the present time. I can say that it has worked quite satisfactorily on most farms and under most conditions.
The hon. member for Lanark suggested a floor price under cheese. If the government is prepared to place a floor price under such commodities as eggs, pork and beef, then I for one certainly feel that the cheese industry has an equal claim to a floor price. In establishing any such floor price I would hope that the government would set a price that would in fact pay the producer a reasonable price for his cheese and ensure that the cheese producer does in fact receive the floor price. We have floor prices now, but they are floor prices in name only. The packers by paying less than the floor price have made a sham of the government's floor prices. For example, the floor price under eggs is 38 cents a dozen, grade A large, going into storage in any part of Canada. In addition to the 38 cents, the government stands prepared to pay up to 5 cents to cover the cost of storage.
So the packers buying eggs obtain from the government a net price of 38 cents per dozen because the government will pay the storage costs.
The floor price of grade A large eggs to the packers in the city of Regina, for example, is 38 cents a dozen. When I was home at Easter our farmers were not getting 38 cents a dozen. Of course we could not expect all the eggs to be grade A large, nor would we expect the floor price to be that high. But farmers were not even getting 30 cents a dozen. On the average the price the farm wife is receiving for eggs in my part of Canada is 14 cents a dozen.
I would not have believed that such low prices could exist when the government was supposed to have established floor prices if I had not seen the actual receipts. In fairness I should point out that the 14 cents is for the average eggs produced, but those eggs were fresh and probably three-quarters

The Budget-Mr. Argue would be grade A large. That price of 14 cents a dozen to the farmers is nothing less than an insult, and will certainly force those egg producers right out of business.
The so-called floor price under pork is not too much better. The price has been established at $26 a hundredweight for grade A carcasses basis Toronto. That is supposed to provide a floor in Saskatchewan of $24.50 for grade A hogs. The packers in Saskatchewan are not paying that floor price but something close to it for grade A and B-l hogs; but all the farmers of my constituency are living in either the buffer zone or the quarantine zone established because of the outbreak of foot-and-mouth disease, and their market is severely curtailed. The market at Regina takes only the cattle and hogs that can be slaughtered and consumed within the quarantine area. People in the buffer zone have to take their hogs to the Moose Jaw market. That market is jammed; there is a long waiting list, and the farmers cannot market their hogs when they are at a weight to qualify as grade A or B-l.
The prices paid to a particular farmer in my constituency by Canada Packers at Moose Jaw for grade A were $25 in one instance and $24 in another. Prices for B-l hogs in one instance were $24 and in the other $23.60. On one of these slips there is a heavy hog. It was graded as a sow. Technically speaking it was not a sow at all; it was a female hog that was overweight. It had never raised a litter of pigs, so technically speaking it was not a sow but a gilt, and should have been graded in the heavy class. Here was a perfectly good hog from which will be obtained perfectly good pork, but the farmer received a price of $13.75 a hundredweight, rail grade. The government is prepared^ to accept canned pork at 63 cents a pound in cans. I will bet my bottom dollar that most of the hogs graded as heavies and sows, for which the farmer receives 14 cents a pound, will wind up in cains and the packers will receive 63 cents a pound for that pork, making a handsome profit.
So I say the government should establish an adequate floor price for cheese, but the government should also take steps to enforce existing floor prices. I would say the government should provide under the law that packers must pay the established floor price, and if a packing company refuses to do so it should be haled before the courts and fined accordingly. Without such a provision the packing companies are making a complete sham of the government's floor prices.
The government has announced a floor price under beef of $25 a hundredweight for


good steers at Toronto. The Minister of Agriculture (Mr. Gardiner) has told us that after freight is deducted that will give a floor price of $22.80 for choice steers at Saskatoon.


Mr. Howe:: Not choice steers-good steers.


Hazen Robert Argue: I accept the correction-good steers at Saskatoon. The floor price is not being extended to other grades of cattle, and the minister has advised farmers to keep their cattle on the farm, with the exception of those in good condition. Well, the cattle produced in my part of the country do not usually grade as choice or good steers. They usually grade as feeder steers, as cows or calves or something else. So the floor price under beef cannot possibly apply to more than a small percentage of the cattle normally marketed in my part of the country.


Mr. Ferrie:: The floor price is not under beef; it is under cattle.


Hazen Robert Argue: It is live cattle, and if I was giving the impression it was dressed weight I accept the correction. I am quite certain that the price of $22.80 per hundredweight at Saskatoon will result in a price a good deal lower than 20 cents a pound for animals shipped to market in Saskatchewan. That is my opinion, and we will soon find out whether or not I am right. In the light of the experience we have had with floor prices under eggs and under pork, I just do not believe the farmer is going to receive $22.80 a hundredweight at Saskatoon for good steers, even though such a floor price has been announced. I hope I am mistaken; but if the farmer gets that price it will be the first time any floor price under livestock or dairy products has been provided directly to the farmer.
Together with other members of the house, particularly those from Saskatchewan, I was sorry indeed to learn of the fresh outbreak of foot-and-mouth disease in Saskatchewan. It occurred at a farm only five or six miles from my own farm. I do not know the names of the people concerned; I have not seen their names in the press, but I know the area very well; it is a beef-producing area where there are lots of cattle. It has been said that the outbreaks around Regina were in areas where few cattle are produced. In the area where the new outbreak has occurred large numbers of cattle are produced, not by large ranchers but because almost every farmer has from ten to twenty head of beef cattle on his own farm, while some have upwards of a hundred head. Right alongside the place where the recent outbreak occurred lies the Key West Excel P.F.R.A. pasture that normally takes some 2,500 head

of cattle. I would say that perhaps 150 to 200 farmers make use of that pasture each year by placing in it 10, 15 or 20 head of cattle. The farmers in that area are producing beef cattle and they are depending upon the P.F.R.A. pasture on which to turn their livestock out in the summertime. They just do not have the pasture at home to take care of their cattle during the summer. A neighbour of mine has 60 head of cattle; he has 60 acres of pasture. It takes from 15 to 20 acres of pasture per head during the summer months. He therefore has at home one acre of pasture for each head of cattle. The community pasture cannot be opened until this disease is finally cleaned up; but that 60 acres of pasture that this farmer has is under water because we had a substantial run-off this spring. When I left the west last week his cattle were out in the stubble fields, as were the livestock of most of the other farmers in that area.
This matter of pasture is a real problem. I do not know how it is going to be met. If the P.F.R.A. pasture is not opened, I shall be surprised if feed does not have to be shipped into that area. Because of the fact that the P.F.R.A. pasture has been closed, those farmers are going to suffer increased expenditures because of having to provide feed for their cattle throughout the summer months. On the orders of the day a couple of days ago I asked the Minister of Agriculture whether the government would consider giving any compensation to farmers in that area who were thus affected. But when we in this group, during the present session, have asked for such compensation, we have received a negative reply, and along with it we have usually had a few smiles from a number of cabinet ministers. They seem to think that if compensation is extended to farmers other than those who have their animals slaughtered, the door is going to be opened and there will be no end to the amount of compensation that will have to be paid.
I feel, however, that an exception to that stand should be taken with regard to those farmers who live in the quarantine and the buffer zones. Certainly those farmers in my locality who are depending upon the P.F.R.A. pasture should have from the federal government assistance to provide necessary feed supplies through the summer months. I therefore appeal once again to the government to consider that aspect of the matter, to survey the situation, and, if the problem is as I have stated it, to come to the assistance of those farmers until such time as the P.F.R.A. pasture is reopened.
The Budget-Mr. Argue
I had risen this afternoon to make a few remarks on the budget, but after listening to the hon. member for Lanark (Mr. Blair) I thought I should mention something about floor prices, and in particular I thought I should say that I agree with his suggestion that a floor price be placed under cheese.
A great deal has already been said about the budget, and I am sure that anything I say will not be new. It seems to me that there are two main criticisms that can be levelled at the present budget. One is with regard to the statement of the Minister of Finance, (Mr. Abbott) when he introduced the budget, that taxes were being lowered. Along with the tables he placed on Hansard at page 1254, he forgot to place a table showing the income tax actually paid in 1951. If he had placed such a column on the record one would have then seen that instead of there being a decrease in the income taxes the effect of the budget is to increase by 6 per cent income tax for those in the lower brackets; that is, the amount of income tax paid, apart from the social security tax, in the year 1952 will be approximately 6 per cent higher than that paid in the year 1951. Without that explanation or without that table being placed in the budget, I say that the Minister of Finance was attempting to hoodwink the taxpayers of Canada. When taxpayers have paid all of their 1952 taxes they are going to learn that income taxes for 1952, as compared with those for 1951, have not been decreased by 6 per cent, as the minister stated, but rather have in fact been increased by approximately 6 per cent.
We in this group were particularly disappointed that the government did not follow the wish of the house and remove the 4 per cent provision with respect to medical expenses allowed for income tax deduction purposes. It was clearly the unanimous wish of parliament that the Minister of Finance allow all medical expenses as a deduction from income for taxation purposes. When the minister did not follow the unanimous wish expressed by this house he was thereby, in my opinion, making a mockery of parliament. According to their vote on the resolution presented by the hon, member for Winnipeg North Centre (Mr. Knowles), members of all parties in the house believe that all medical expenses should be deducted from income for taxation purposes. I believe the government should have followed the wish of parliament instead of having made a mockery of the members' wishes as expressed in that vote.
Last night the member for Moose Jaw stated that the government should endeavour in a
1598	HOUSE OF
The Budget-Mr. Argue number of ways to make substantial savings with respect to expenditures. He has a right, as any other member of our group has, to his own opinions, and has a right to express them. As to some of the savings that he advocated, I agree with him. As to some of the other savings he advocated, I disagree with him. In fairness I think it should be pointed out that of the $315 million total that he arrived at as the total which the government might save with respect to expenditures, seventy per cent of it, or $225 million, was a suggested saving in the Department of National Defence. Judging by the speeches I have heard from a number of members in this house and the comments I have heard outside the house, it may well be that the government could reduce the expenditures of the Department of National Defence 10 per cent and, by squeezing out inefficiency, get the same defence effort that is now being obtained.
The suggestion of the hon. member that a means test should in any way be applied to the old age pension or the family allowance is something with which I cannot agree. I do not believe the means test should be reapplied to the old age pension, no matter how generous that new means test may be. Hon. members know that the Prime Minister of Canada has reached the age of seventy, and is eligible for and is receiving the no-means-test old age pension. The Prime Minister of Canada is on an equal footing with every other Canadian resident aged seventy when it comes to receiving the old age pension. Because the Prime Minister and every other person who has been in Canada for twenty years and is seventy years of age are receiving that pension, the stigma of taking it has been removed.
I would not like to see a means test reapplied to the old age pension, because then you give some people the opportunity to say: "Oh, I am wealthy; I am making a lot of money; I can look after myself; I do not need the old age pension." And other people, because of circumstances, must apply for an old age pension, and when they receive the pension there is a stigma attached to it.
Likewise I do not want to see the means test applied to the family allowance. When I was first elected to the House of Commons a taxpayer with children who did not receive the family allowance was given a greater exemption in filing his income tax return than a parent who received the family allowance. The government then proposed to allow a smaller exemption for all taxpayers who had children of family allowance age. That meant that everyone in Canada with dependent children received family allowances, and was not allowed to claim a greater exemption for dependents because family allowance was not


accepted. The very wealthy took the family allowance cheques, and then the government took back through income tax a large part or all of or perhaps more than they received in family allowance. In my opinion, Mr. Speaker, that is the way old age pensions and family allowances should be paid. They should be paid to Canadian citizens as of right. And then for the wealthy the government should tax back a large part of those payments in income tax.
At various times I have suggested certain increases in expenditures, such as suggested in the resolution dealing with family allowance standing on the order paper in my name. I suppose if members advocate increases in government expenditures they might suggest to the government some ways in which the government might increase its own income to cover those expenditures. I was interested to read in the U.S. News and World Report of April 18, 1952, that corporation taxes in the United States are very much higher than corporation taxes in Canada. This article points out that corporation taxes of Canada amount to 50 per cent, or slightly more, of corporate profits, whereas corporation taxes in the United States are on the average about 60 per cent. In other words, corporate taxes in the United States are 20 per cent higher than they are in Canada. There, in my opinion, is where the government can get more than $200 million annually in additional revenue.
I believe there is a sound argument in Canada for a capital gains tax. Many people buy speculative stocks and shares, and over the last few years have made enormous profits that are not subject to income tax. I feel that a capital gains tax could well be applied to such gains, and the government could make good use of the additional revenue in providing for increased social security expenditures.
There is only one other subject that I wish to mention at this time. I see my time is running out; therefore I shall be able to make only a brief reference to it.


Mr. Casselman:: You have twelve minutes left.


Hazen Robert Argue: Thank you. I want to reply to the speech made by the Minister of National Revenue (Mr. McCann) in the house on Wednesday, April 12. In replying to a former speech of mine on the collection of income tax from farmers, the Minister of National Revenue had this to say, as reported on page 362 of Hansard:
However, it is not my purpose to quarrel with the various figures which have been presented, but rather to disagree emphatically with the conclusions which have been drawn from those figures.

In other words, the Minister of National Revenue accepted the accuracy of all of the statistics that I had placed on Hansard. I worked out a lot of these statistics in longhand, and I was afraid I might have made an error in one place or another. The minister says that these statistics are accurate enough. He goes on to say:
Criticism based on averages can be very misleading.
That was the point he was trying to make throughout his speech-that while the statistics I used were correct, my conclusions from those averages were wrong. In attempting to prove that my conclusions were wrong, the minister had this to say-I might say, the minister was attempting at that point to build up an argument as to why the amount of income tax paid by farmers in Quebec and Ontario is not as large as the amount of income tax paid by the farmers in western Canada. The minister said this:
In the first place the occupied farm land and the average area per farm is substantially greater in the prairie provinces than in eastern Canada.
The minister said that no one should use averages, because if he does he will come to wrong conclusions, and then he starts using averages himself. He goes on to say:
Furthermore, the average size of farms in the prairie provinces is from two and one-half to three and one-half times as large as those in Ontario and points east.
Once again the minister himself was using averages. But of course the minister should realize that the amount of income tax paid by a farmer has nothing whatever to do with the size of the farm itself. What counts is the net income resulting from the farmer's operations, and 50 acres of good productive agricultural land in the Niagara peninsula of Ontario will probably provide a farmer with a larger net income than 1,000 acres of grazing land in the constituency that I represent. Therefore, if one farmer's holdings are twenty times as large as some other farmer's holdings, that in itself has nothing to do with the relative amount of income tax the farmer pays.
I have some further statistics' to give the minister that I think prove that there is discrimination between the collections of farm income tax made in western Canada and in eastern Canada. I should like to quote again from the minister's speech at page 362. The minister says:
It may or may not be a fact that the taxation division is getting proportionately more of the tax actually payable from western farmers than from eastern farmers.
The Budget-Mr. Argue
The minister says he does not know; it may be the case; it may not be the case. Then he makes this statement at page 363, referring to eastern Canada:
The proportionately larger staffs are considered to be justified because the task of finding the comparatively few farmers who are actually taxable in an area such as Quebec is more difficult than in the west, and it is also more difficult to determine the actual income on which the tax should be based.
He says he does not know whether there is a larger proportion of the tax being paid in Ontario and Quebec than in western Canada, but admits it is more difficult to collect in Ontario and Quebec. Then he adds this:
In the more prosperous farming areas in the west the number of products dealt in is generally smaller, the majority of sales are made in large amounts mainly at one season of the year, and records of many of these sales are readily available.
The minister says, on the one hand, that he does not know whether the farmers of western Canada are paying a larger proportion of the tax than in Ontario and Quebec, but then goes on to say that it is easy to get at the farmers of the west, and that therefore it is no wonder that the tax collectors are doing a much more efficient job out west.
Well, if it is harder to get the tax in Ontario, one would expect that there would be relatively more assessors, based on the number of farmers, in this province. In other words, an assessor, one would expect, would have to look after less farmers in Ontario than an assessor would in say Manitoba, where it is easy to collect the tax from the farmer. Yet, while in Manitoba there is one inspector for every 1,520 farmers, in Ontario there is one for every 1,756 farmers. The minister stated that it is harder to assess the farmers in Ontario, that more work is involved, and that in many instances the records are not available. Yet the average income tax assessor in Ontario must deal with 236 more farmers than the average assessor in Manitoba.
While the income tax assessors did not find many farmers in Quebec from whom they obtained income tax, nevertheless the ones they did find paid reasonable taxes. The average income tax paid by taxable farmers in Quebec was $255 while the average in Saskatchewan was $331, and that in Manitoba was $242, or somewhat less than the Quebec average. There is a good deal more efficiency in over-all collections in Manitoba than there is in Quebec, because the average income tax collected in Manitoba was $242, while that in Quebec was $255.
Let us see how successful income tax inspectors were in Saskatchewan, on the

The Budget-Mr. Argue average. In that province there were 74 income tax inspectors in 1949 and 20,000 taxable returns were made. In other words each inspector was able to find 271 farmers who paid income tax. In Manitoba each income tax assessor obtained 183 farmers who paid income tax. In Quebec there are 23 assessors, each one of whom, in a whole year's work, found only nine farmers who were charged income tax. It took the income tax assessor in Quebec 52 weeks to find nine farmers, or one for every six weeks' work. I wonder what he was doing? Certainly he must have been asleep on the job. Yet, there are lucrative taxes to be collected in Quebec because the ones they did find paid $255, on an average. Each tax assessor in Quebec obtained taxes from farmers to the amount of $2,216 during the whole year. The salaries paid by the Department of National Revenue are, I venture to say, well over $3,000 a year. In addition to salary, travelling expenses incurred by income tax assessors are paid by the government. I am sure therefore that for the 23 income tax assessors the department has in Quebec the government spent $2 in 1949 for each $1 obtained from farmers by way of income tax.
The department asked 30,000 farmers to send in income tax returns, and the minister reported that only 14,000 complied with the request. But what about the other 16,000? Anyone in Saskatchewan who receives a letter from the income tax branch had better file his return right away, or someone will be out to see him. Why did not at least 95 per cent of those who were asked to file returns comply with that request? Perhaps the 14,000 said, "Well, we can afford to send in returns because we know we do not have any income tax to pay", while the ether 16,000, who might have had tax to pay, said, "We will not bother, because probably they will not ask us again."
On the average, each income tax assessor in Manitoba collected $44,000 by way of farm income tax in 1949: The average for each assessor in Quebec was $2,216. I suggest that the Minister of National Revenue (Mr. McCann) should do some transferring in his department. Our income tax inspectors in the west are good inspectors. They are efficient, they are doing their job and they are collecting a lot of income tax. On the other hand the ones in Quebec are an absolute failure, and those in Ontario are a near failure. I suggest therefore that the minister should send some of the Ontario inspectors out west, where most farmers now pay income tax whether they are asked to do so or not. He should send some of the Quebec inspectors out west, so that the income tax people out there could give them

some training. They could then be sent back to the east and, in those circumstances, I am sure the government would find that its income tax returns from farmers in the central provinces would improve considerably.
I am a farmer, and while I believe that farmers should be given certain further exemptions than are now provided, I do say that, as applies to other groups, once a law is established farmers should be required by government officials to comply with that law. I believe farmers in Quebec and Ontario are just as honest and as upright as those in any other part of Canada; but if income tax inspectors are falling down on their job, then I do not think we can blame the farmers if they do not shell out voluntarily. So I suggest to the Minister of National Revenue-


Mr. Deputy Speaker:: Order. I am sorry to interrupt the hon. member, but he has exhausted the time at his disposal.


Gladstone Mansfield Ferrie: Mr. Speaker, rising to take part in the debate, before entering upon the subject matter I intend to discuss I should like to make some few comments on what was said by the hon. member for Lanark (Mr. Blair).
Hon. members who come from western Canada have been told many times that, by accepting the wheat agreement, we have acted like socialists, that we have gone too far, and that we should go back and put grain on the open market. Today we have been given a good example of exactly what has happened in Ontario. At one time cheese, from the standpoint of marketing, was in the same position as wheat. However the cheese producers preferred to be independent of the government, to withhold cheese from the operations of any government department, and run the industry themselves. What did they do? Well, to make a long story short, they priced themselves out of the market.
It is time the farmers in the dairying industry in Ontario got together, and indicated their willingness to come, with hat in hand, and say, "We made a mistake, and we are willing to go back where we were before". I am sure that if they do that they will get some reward. It may not be just what they think they should get, but certainly they will be recognized. I know that there is no one in this country who has more feeling for the farmer in any part of Canada than the Minister of Agriculture (Mr. Gardiner).
I want to say a few words about the budget. I have never spoken on the budget before, but as far as I can see this is a good, sound budget. It does three things.

First, it has given us a sound dollar. The whole world is looking to Canada today, but that was not so two years ago. At that time our dollar was down to 90 cents, but now it is up. The great United States with its millions of people-150 million to 180 million, we do not know just how many exactly-is doing its utmost to produce and make its dollar worth as much as possible. In Canada we have 14 million people only but we have a sound dollar that today is even better than the United States dollar.
I want to say something about my constituency and a little about the constituency next to mine. We heard a wonderful speech the other day by the hon. member for Churchill (Mr. Weaver) who painted a great picture of his constituency and tried to give the people of eastern Canada some idea of what it actually is. He tried to indicate the great wealth there is up there, and I am sure that everyone realizes just what that means to Canada.
For a few minutes I am going to try to draw a similar picture in connection with my own constituency which runs alongside his. My constituency is 560 miles long and about 84 miles wide. We split the town of Flin Flon. There are 1,200 of my constituents who live in Flin Flon. I am going to try to give hon. members some idea of the country from Wollaston lake down to where agriculture starts. Some of the ministers have flown over this lake.
This great lake, which is close to the Northwest Territories, contains great fishing grounds. The fish must be flown out to Flin Flon. Then next we have Reindeer lake, another great fishing ground. Here the fish are flown out in the summertime and brought out by caterpillars in the winter. These lakes are miles and miles north of what we call civilization, Reindeer lake being some 200 miles north of Flin Flon.
Then you come down to the great mining areas. I should like to indicate something of what has happened just south of Flin Flon where a large area is being opened up. The Hudson Bay Mining and Smelting Development Company have claims totalling 8,350 acres. No one knows the value of the minerals in those acres. No doubt a big development is going to occur in that country and no one can begin to imagine the wealth that will be taken out of there.
We are asking that some attention be given to the construction of a railroad from Lynn Lake, north to Reindeer and Wollaston lakes, then to Athabaska and down to Prince George. That is asking quite a lot but if it were done it would open up one of the greatest mining territories in the world.
The Budget-Mr. Ferrie
East and north of Reindeer lake is found what is called green stone, and then south of Athabaska you find red stone. The green stone area is where most of the minerals are found and that is where they do most of their surveying and exploration work. Last year I mentioned that the area around Athabaska was one of the greatest mining areas to be found. They are developing uranium and other minerals. On the Saskatchewan side of Flin Flon they have taken out minerals to the value of many millions of dollars. Then they started investigating and found that the slag heap contained $90 million worth of a new kind of ore, so now they are going down into the Saskatchewan mine again. They are going to empty all the shafts, reprocess the material, extract this valuable ore-they do not tell us what it is-and then put the slag back into the mine again. In the Hudson Bay Mining and Smelting Company mine 3,500 feet down at the bottom of a shaft they have cut a drift inwards and have built a room there half as large as this chamber. It is 3,500 feet under the ground. They say that there is enough ore down there to last, at the rate they are taking it out now, for the next twenty years.
The reason I raise this matter is that we have 12,000 people in that area and they have no road leading westward. They have to travel east sixty miles to The Pas and then 150 miles south before they can go west. The Saskatchewan government have been asked to build a road from Nipawin to Flin Flon, and have said in the provincial legislature many times that it is up to the dominion government to build this road. But they have not asked the dominion government to build the road. They have not done anything about it. All they have done is to talk about it in the legislature in Regina. By no stretch of the imagination have they come to the point where they have said how much it would cost, how much they would be willing to pay themselves, and how much they wanted the dominion government to contribute.
I think this attitude is very unfair to the people who live in that northern area. They are entitled to a road running westward, and it is up to the provincial government of Saskatchewan to help those people to be able to travel westward. It is only fair and reasonable that the provincial government should do this. I would not mention this matter if it were not for the fact that it affects the people of my constituency. I have been trying to help them to get a road but the Saskatchewan minister of highways does not seem to want to help

The Budget-Mr. Ferrie these people who pay taxes and produce wealth for the province of Saskatchewan and also for the dominion.
I have told the house now about the fishing in the northern part of my constituency and the mining a few hundred miles farther south. Now I come to the region around Hudson Bay Junction where there is lumbering. The lumberman is having quite a hard time. As hon. members know, we have had a lot of trouble so far as lumbering in that district is concerned. The lumbermen and trappers around Hudson bay have had a pretty hard time during the past winter. I have not heard much kicking on their part, but they want things done in the proper way. They want a chance to go into the bush and produce a living for themselves, something that they cannot do at this time.
Farther south in my constituency we have an agricultural area which is one of the greatest agricultural regions in Canada. The development of the Carrot river delta is just beginning. I should like to say here that the hard work of the hon. member for Churchill (Mr. Weaver) has certainly been helpful. He has been able to get the Manitoba government to make representations to the federal government, and the federal government has utilized the P.F.R.A. to help to start the development of that part of the country. The hon. member for Churchill told the house yesterday that in this delta there are about 2,500,000 acres within his riding. The delta region runs [DOT]right across the Manitoba boundary into Saskatchewan between the Saskatchewan river and the Carrot river. In that area there is some of the finest agricultural land that there is any place in the world.
Last winter we drove in a motorcade from Carrot river to The Pas. We travelled by an old bush trail down to the river and drove fifteen miles up the river to the boundary between Saskatchewan and Manitoba. There were about fifty or sixty cars, and at the boundary all the people got out and had lunch at that spot. This part of the prairie is a wonderful piece of land. All it needs is draining. All it needs is a few million dollars to be spent on it, about $10 an acre, to make it a really productive area. I understand that Manitoba has made an agreement with the federal government with respect to the development of that part c, the delta within Manitoba. Why does the Saskatchewan minister of agriculture not do the same thing for the part of the area within his province? Saskatchewan will never be able to develop it. They will never be able to spend the money. There is one point to which they stick. They would rather let
[Mr. Ferried
the area go undeveloped than do away with the system of lease agreements. They want to lease the land instead of letting people homestead it or buy it. If they would turn the matter over to the federal Department of Agriculture, in a few years the P.F.R.A. administration would have at least 1,500,000 acres in the province of Saskatchewan producing. There would be a lot of good people in that part of the country and a lot of good business being carried on.
It is a shame to leave it the way it is now. It is a mess and some day they will have to pay for it. I hope that something will be done in the near future because we need development of that region. As the hon. member for Churchill told the house, there is about 20 to 40 feet of solid silt that has come down from the mountains and elsewhere on the prairies over a period of thousands of years and has settled there. It is a detriment to Canada that this land is not producing today. Where you see willows 3, 4, 5 and 6 inches through you know very well that there is something in that land and that it should be producing for the benefit of the people of Canada.
Before I leave that area, many times I have heard it said in this house and by people from eastern Canada that the Hudson Bay railway is always in the red. That is not a fair statement. I am sure the people here do not really understand the situation. The Hudson Bay railway starts about five miles north of The Pas, and from there up to Churchill it carries its own load. It does not belong to the C.N.R., as we always thought; it belongs to the government. The strangest thing about it is that the government has no rolling stock, so when they take something up to Churchill they have to rent the rolling stock. If they were to take that division and add Sherridon and Flin Flon, making it one division north of The Pas, I do not think it would ever be in the red again; it would always be in the black. They took the Temiscouata railway and added it to the C.N.R. The Canadian National was willing to take that line, and I do not see why the Canadian National should not take over the road from The Pas to Churchill. Then if there is any deficit the whole country meets it. I do not see why we should have to stand by and watch this part of the railway going into the red all the time. That is not right. All the development that has taken place in that north country could not have been undertaken but for the fact that this railroad was built north to Churchill. Many of us thought more lines should have been built, which would have led to even greater development, but no doubt that will come later. However, I think it is time the C.N.R.

realized that that is a part of the Canadian railway system which should be taken over and put in the black instead of the red.
Now I want to say a word in regard to a defence highway from Winnipeg to Edmonton. I spoke about this two years ago, and I am still of the opinion that something ought to be done about it. We are spending millions of dollars on radar equipment for the north; yet if we had to take a big gun from Winnipeg to Edmonton it could not be done under any circumstances. We have had one of the driest springs in many years, but even so, our best roads running through that country are very bad. The defence department should realize that the people on the prairies are entitled to some protection. They say there is no chance of an enemy coming from the north, that we will not be hurt that way. Well, if I were a minister I do not think I would agree with that. Look at Edmonton; then look at New York, Montreal and Toronto. You will see what a short distance it is by plane between those points. Edmonton has everything that might be needed for an army-oil, food for the troops, and lots of room to be able to watch all around. Once more I am asking that some consideration be given a highway from Winnipeg to Edmonton to help in the defence of western Canada.


Mr. Fair:: Why not go right through to the coast over the Yellowhead route, following the pipeline?


Gladstone Mansfield Ferrie: That is up to you fellows. That would not protect us at all, though I would be satisfied with the Yellowhead route.
In closing, Mr. Speaker, I want to say a few words in regard to the speech made last night by the hon. member for Moose Jaw (Mr. Thatcher). It matters little what was in his mind, but what he said was serious to those of us from western Canada who have fought for so many years to help the man who was not able to get a pension because he had the odd quarter section of land that perhaps was not producing anything and was not an awful lot of good to him, but which he did not want to turn over to the government. Some men were independent. They said, "All right; I will get along," and they got along on $4, $5 or $8 a month. I know one man over 70 who had a cow. You can hardly believe it, but he used to live the whole year on the milk he got from that cow, because he would not let them file a lien against his homestead. He had lost everything in one way or another. He was old and sick, and was not able to farm properly on his quarter section of land. We fought to have pensions given to people like that; and I want to say to the hon. member for Moose
The Budget-Mr. Ferrie Jaw that for what he said last evening he is absolutely a disgrace to Saskatchewan.


Mr. Deputy Speaker:: Order. I think the hon. member will realize that he should modify the expression he has just used in reference to the hon. member for Moose Jaw. I do not think he would want to say of any colleague that he was a disgrace to any part of Canada.


Gladstone Mansfield Ferrie: All right, Mr. Speaker; I will withdraw the statement. Perhaps I can put it in more flowery words and at the same time bring the facts home to him. He is young. He may be politically unwise, as one of his colleagues said. After all these years of hard fighting that we have done to get this matter into the position in which it now is, he may be able to think that we should say we should go back to a means test.


Mr. Thatcher:: On a point of order, Mr. Speaker, if the hon. member will permit me to make an explanation-


Gladstone Mansfield Ferrie: Yes.


Wilbert Ross Thatcher: -I should like to say that I certainly did not suggest that we should go back to the kind of means test we had previously. I should like to correct the hon. member. What I said was that I did not think it was sensible that the taxpayers of Canada should be paying a pension to people with incomes of $5,000, $6,000 or more a year. I am sure that the farmers that my hon. friend has spoken about would not come in that category.


James Sinclair: It is still a means test.


Gladstone Mansfield Ferrie: I take the hon. member's explanation; but as far as he is concerned, it is absolutely impossible to segregate those to whom it would apply and those to whom it would not.


Wilbert Ross Thatcher: Why?


Gladstone Mansfield Ferrie: If you are going to have a means test, you are going to have a means test; and that is all there is to it.


Wilbert Ross Thatcher: But there is a great deal of difference between the means test which we had previously and the one I suggested last night.


Some hon. Members:: Order.


Gladstone Mansfield Ferrie: You cannot have what my hon. friend suggests, and he knows it. I am not sure whether he was on that committee or not. In any event, he has heard many times that the application of the means test was to anybody and everybody; and that is all you can have. You cannot segregate those to

The Budget-Mr. Ferrie whom it will and will not apply; you cannot say you are going to have the means test apply to this man and not to that one. You have got to have the means test apply to all, to see whether they have that specified amount of money or whether they are receiving that specified salary. It is an absolute impossibility to have a means test unless you go back to where we were before; and we are certainly not going to do that.


Wilbert Ross Thatcher: I hope not.


Gladstone Mansfield Ferrie: Then there is another thing. The hon. member talked about savings. What do the savings mean? The hon. member made a statement about various savings. As far as he is concerned, the savings just meant that we were not going to get the services. That is all they meant. The hon. member for Moose Jaw said: All right, save; stop the services; stop Canada. Yet our great Saskatchewan is going ahead and is going to produce and produce. We are going to bring the wealth into the country. As the hon. member for Churchill told the house yesterday, there is great wealth in the north. In the great prairies wheat is being produced. We had 500 million bushels last year, as it was thought, and now we come to the point where there is 700 million bushels. We hear talk about the millions and billions that we are going to spend. We are not spending them foolishly. Do you want protection? As I told the hon. member for Winnipeg North (Mr. Stewart), he wanted to have his porridge and eat it. That is what the hon. member for Moose Jaw wants. He wants to have his porridge and eat it. He wants to make a fuss over what? He tries to make it over a few million dollars. What does the expenditure of a few million dollars mean? A few million dollars expenditure means the services to the people of Canada.
Coming down here from Saskatchewan, I was talking to a conductor and he said that one of the finest things that had ever happened to Canada was the surplus that we have; and that is a fact. We have that surplus. We are paying off the debt. I want to say this to the hon. member for Moose Jaw. If he had an 8 per cent surplus in his business, would he for one minute think that he was doing a good job? That is all you have got here with a great government that handles millions and billions of dollars. Surely we are today in a position to cut down our public debt and to render the services that are necessary to the people of Canada; and then, in the final analysis, we can say that we are ready, if the time comes that we should have to do so-and we pray God that we shall never have to-to put out money to help to keep the country going. If we come
[Mr. Ferried

to a depression, we are in a better position because we had surpluses; and a good businessman knows that.


Mr. W. G. Dinsdale (Brandon):: Mr. Speaker, at this stage in the budget debate I can readily come to the conclusion, after listening to the many speeches, that the members of the opposition groups are against the budget. As we have sized up the reaction from across the country, it seems also that there is a good deal of criticism in the regions beyond the confines of this chamber.
I have been vitally interested in the debate because it is my first budget debate, and budgets concern themselves with one of the basic functions of parliament, the collection and the spending of public money. I found the evening of April 8 a most interesting and entertaining one. We had a sense of the dramatic present in the chamber on that evening, a situation which does not prevail too frequently in the House of Commons. We had the galleries filled with tense and expectant taxpayers. I found the performance of the Minister of Finance to be quite an interesting one, almost up to the calibre of a Shakespearian actor. Since that time we have had such comments as a sleight-of-hand performance, Hallowe'en pranks, and the accusation of the use of a false face, the typical mask of the stage.
I have been intrigued with government spending for some years now, even before I came to this chamber. I have found myself somewhat bewildered by the astronomical proportions this spending was reaching, particularly in the post-war era. I assumed that on coming to the House of Commons I might gain a better knowledge of why all this money was necessary, where it all comes from, and where it all goes. From the comments I have heard thus far in the house, however, I am coming to the conclusion that after the debate is finished I shall still be asking those questions as to why it is all necessary and where it has all gone. For example, there is the fluctuating surplus that we have before us this year. It began as an estimated amount of, I think, $30 million; it grew, in certain newspaper reports, to something like $900 million; and finally, in the statement of the minister, it emerged as just a little over $300 million.
The other big item in the budget, the matter of defence spending, is of course going to be exceedingly difficult to pursue. It was my privilege to join the committee on defence spending just yesterday, and I can see that there is a real Sherlock Holmes problem involved in keeping track of, or gathering

information on, the devious ways of this huge amount of $2 billion for the purpose of defence preparations.
To get down to the main themes that have emerged in the discussion, they seem to be those of extravagant spending, and excessive taxation. Those are the two points emphasized in the amendment brought forward by the members of this party. I am sure that, in regard to the first-that of extravagant government spending-there has been considerable disappointment. For a time, with election rumours in the 'air, it was hoped that we might be favoured with a "sunshine budget" this year. There was hopeful optimism that we would see substantial cuts and economies; but as I listened to the presentation of the Minister of Finance I found that any suggestion of economy was strangely lacking in his speech. The conclusions seemed to be that any relief from the high level of taxation, and any reduction in government spending, must come from a reduction in the burden of defence expenditure, or else a steady increase in the wealth and incomes of the people, which would tend to make government spending and taxation seem relatively less heavy.
Hopeful optimism of this kind of course is to be expected from the taxpayer. Being realistic about the matter, if we had exercised sufficient foresight, I think we could have come to the conclusion that there actually could be, under the present government policy, no reduction in spending or in taxation. Increasing government expenditures are inevitable under a policy of expanding government control, power and influence. We all know that governments on all levels have tended to increase the degree of control in the affairs of the nation. From long experience, too, from the evidence of history, for example, we know that governments from time immemorial have been notoriously spendthrifts. Wherever they enlarge their activities it is to be expected that the cost of administration must go up. It is a sort of "easy come, easy go" proposition. As a matter of fact, it was this difficulty that first led to the establishment of the principle of no taxation without representation, one of the basic fundamental ideas behind responsible government.
We know, too, that political machines are costly and expensive; the larger they grow the greater the expense; the longer in office a party remains, again the greater the expense tends to be. Fortunately Canada has been free from major financial scandals such as those that emerge from time to time out of the complexities of the United States government, but perhaps that is due more to accidental circumstances than to higher moral
The Budget-Mr. Dinsdale standards. We are a smaller country and we can keep closer control of things; and the people, at least up until recent times through their parliamentary representatives, have been able to keep a fairly close watch on the treasury.
Under these circumstances we cannot expect that government spending and taxation will decrease. We find that, in the minister's presentation, the blame for increasing costs and spending, taxation and so forth, was placed upon the rise in social welfare expenditures and the increasing cost of our defence program. The hon. member for Moose Jaw (Mr. Thatcher) made reference to this last night in his remarks. He has already received honourable and dishonourable mention on several occasions since, so that I am going to be comparatively kind in the observations I am going to make on his speech. I was most interested in his presentation last night. He did point out where other economies might be effected to the extent, as we already well know, of $315 million in departments other than defence and social welfare, as well as an additional amount of $225 million in defence spending. A presentation of that kind will require detailed analysis, but no doubt amongst the suggestions that were put forward-and those suggestions were put forward in response to a direct challenge as to where economies might be effected-will be found some that are worth while. He has been criticized for attacking the present basis of our universal old age pension. He is quite capable of defending himself, and I do not have to continue on that point. But we are all of the opinion-as was indicated by the vote last fall-that the social welfare programs of t'he kind represented by the universal old age pension are necessary in the kind of world in which we live today.
Social welfare programs of necessity increased rapidly during the depression, and ever since the depression have expanded rapidly. In fact, it was the impact of the depression that gave the impetus to the idea of the social welfare state. The social welfare state is not entirely all good, nor is it entirely all bad. It is not a panacea. I think there are some very excellent points in its favour, and there are some very dangerous features in the notion of the welfare state. For example, it is possible that the huge expenditures that are involved in maintaining an expensive social welfare program can be used for political expediency. Under these circumstances it makes it very difficult to carry on successfully our form of democratic government, because the group responsible for the administration of these huge expenditures, by subtle insinuation, can

The Budget-Mr. Dinsdale suggest that these benefits are due to government largess. That has been a feature in the United States, and to a certain extent in Canada.
It is obvious that government functions are increasing. Services are increasing. The central government is assuming tasks, functions and responsibilities that were formerly performed by the family, by the church, by local governments and neighbourhood communities. This is all a part of the trend that is under way to more and more influence, power and control exercised by the central government.
As I have already indicated, it means considerable expense to the taxpayer. I would remind the house that this is but one solution to the social problems that emerged out of the depression, and it is not necessarily the only solution. I do not think that increasing government control is necessarily the final and absolute solution of all the problems that are facing our way of life and our civilization. Actually, you know, real social security cannot be bought. You cannot measure social security in terms of dollars and cents, as we tend to do. Actually, there is a tendency to confuse social security and financial security. If we look at the problem of the older citizens in our society-and his numbers have been increasing as the result of the increasing longevity due to medical science, better health services and so forth-we realize that the basic pension of $40 a month is not going to solve the real problems of our older citizens. I happen to be interested in such movements as Twilight clubs and other organizations that are trying to deal with the real problem of social security, that of giving our older citizens a meaningful place in society. The $40 a month is going to be of very little use to them, of very little value, if, as at present, they are forced to a large extent to live alone in a garret unwept, unhonoured and unsung, waiting for the grim reaper to come along with the proverbial scythe.
They want more than that. They want a meaningful place in society. Unfortunately, with the speed of modern industry and the demands of industrial life, they tend to become misplaced as a worker at a relatively early period in life, and this just at a time when they are beginning to enjoy a longer life span.
That problem is not going to be solved by minimum incomes of $40 a month. Those incomes are very important; but our responsibility to our older citizens will have to go much farther than this if we are really going to give them their proper place in society today. I do not believe that central governments, governments at the federal level, are


in a position to provide that type of social security. This is a problem that must be worked out by local communities. It is a problem the neighbourhood must work out. It is a problem that must be handled in the close face-to-face contacts of human relationships. This might be the time to start to consider the possibility of handling social problems by educational programs which encourage a solution at the individual and local level, rather than by an increased dependence on the super-state. So long as we move in the direction of state control we are going to find that government will become more expensive and, as a result, taxation will have to be imposed to meet ever growing demands.
I might have mentioned the work going on in the field of industrial relations. An entirely new experiment in human relations is taking place in modern industry, where there has been a great deal of bitterness and a great deal of dissatisfaction because the worker, like our older citizen, had lost his meaningful place. With the industrial revolution he became a part of the mechanized assembly line. The job he was doing did not make much sense, and did not have much meaning or purpose for him. The result has been that industry has been plagued by strikes and disturbances of various kinds.
We now discover that when the human factor is taken into consideration in industry, the problems between management and workers are considerably alleviated and softened. I have in mind the famous experiments conducted in the Hawthorne factory of the Western Electric Company, just outside Chicago, by Elton Mago one of the pioneers in the field of industrial relations. A very simple fact was demonstrated in a rather dramatic way. A special experimental group was gathered together and subjected to varied conditions of work-changed working hours, changed rates of pay, a five-day week-and so on. They were given all those other things peculiar to industry today; and it was found that, regardless of what was done, production continued to increase. Finally the experimenters reverted to the original conditions. They sorted out the X-quantity, which was the simple fact that, because of the special attention received, this experimental group had found a new meaning and purpose in the job they were doing, and as a result produced at the higher levels.
These are some of the major difficulties being faced by our industrial society. At the present time the only thing we have done, acting automatically and unconsciously, and following the line of least resistance, has been to-endeavour to solve these problems by state

control, government control, and by increasing government participation at all levels of life-family, industrial, business and what have you, with the inevitable results that are being criticized here today.
It is more expensive. It means excessive taxation even to the extent that taxation begins to interfere with individual initiative, and the productivity of business corporations as well as that of individual workers. All this has been glossed over, and an attempt has been made to justify the situation by the fact that Canada is enjoying an unprecedented period of prosperity. We have constant references to the fact that Canada is passing through prosperity such as she has never enjoyed before. The parliamentary assistant to the Minister of Finance (Mr. Sinclair) made reference to this the other day, upon which occasion he quoted certain United States authorities that were somewhat impressed by the economic state of affairs in Canada at the present time.
Of course there have been other references to Canada that have come out of the United States. We will recall that one American senator suggested that the United States might well annex Canada. For all we know, the laudatory references referred to by the parliamentary assistant might have been only a subtle continuation of this policy to win Canada into the American fold by flattery. I do not know.
The hon. member for Springfield (Mr. Sin-nott) also made reference to the level of prosperity Canada is enjoying, and justified the trend toward increasing government control in that fashion. The Minister of Justice (Mr. Garson) visited my constituency last week and, in a speech reported in the Brandon Sun for last Friday-I believe the date is April 18-made certain statements which were given this heading: "Present Prosperity of Canada Due To Government Policies." The news item goes on to say:
Hon. Stuart Garson, Minister of Justice, said in an address here-
That is, Brandon.
-Thursday that Canada's present prosperity results not from a favourable world atmosphere but from policies instituted by the Canadian government in conjunction with the governments of the United States, Great Britain and some European countries.
Well, now, what is the real explanation of Canada's prosperity? Actually we were quite unprepared for it following the war. Most economists-there were one or two who were right-basing their forecasts on what followed after world war I, were prepared for a recession, if not a depression, following world war II. The monetary policies adopted at that time reflected the gloomy forebodings of the economists. They were prepared to meet
The Budget-Mr. Dinsdale the impact of the anticipated depression or recession. But it never emerged. The monetary policies then established tended to contribute to and to aggravate the difficulty we have been having with inflation during the last two years.
Actually, very few of us had realized the tremendous changes that had occurred in connection with the world's economy as a result of the upheaval of world war II. We were still thinking in terms of the depression because Canada was still in its throes. We were only slowly emerging out of the depression in 1939. I should like to pose some questions. Where would Canada's prosperity be if we had lost the war? I am sure that the responsibility for the successful conclusion of world war II was more that of the armed forces than the result of any machinations of any government body. I hope we remember that when we come to discuss amendments to the War Veterans Allowance Act.
If the war had never occurred, what level of prosperity would Canada have been enjoying today? I have indicated that the war actually awakened Canada from her depression lethargy. The balance of economic power as well as political influence changed to a large extent from the old world to the new and Canada automatically fell heir to the results of this transition without any great effort on her part. It was a process that took place as a result of the devastating effects of a global war.
Where would our prosperity be if we were not favoured geographically as we are? Where would it be if we had not the natural resources that we are only now beginning to exploit? And a final question: Where would it be without the continued high level of United States capital investment in the exploitation of these resources? I have a statement here-unfortunately I have not the reference-which I should like to place on the record. It reads:
Foreign capital pouring into Canada has saved us from some most unpleasant consequences. Without this inflow we would have been getting dangerously short of credit in the United States and elsewhere. We would have been in a worse predicament even than four years ago when we had to curb buying and travelling in the United States and generally pull in our belts.
That crisis was brought on by buying far more from Uncle Sam than we were selling him. The same has been true in our trading of the last 12 months. Though our exports took rather an unexpected splurge in December, nevertheless we finished the year almost $125 millions behind. This deficit covered trade with all countries but the difference with the United States was most important. And in other international items, too, we were in the red, items such as net tourist travel, freight shipments, etc. All the figures are not in yet, but when they are our total deficit on current international account may be the largest ever.

The Budget-Mr. Dinsdale
Luckily for us, while we have been doing this extra shopping and travelling in the United States, shrewd Americans have been investing their dollars in our oil, iron ore, power, chemical and other resources. That's what has kept our credit sound. That's the reason our dollar is on top of the heap."
On April 23 the United States ambassador made a speech in Montreal, which was reported as follows:
Stanley Woodward, U.S. ambassador to Canada, today defended investment of U.S. capital in Quebec and said "denunciation of foreign capital trusts and unions have become a commonplace tactic" in this province only in recent years.
And again:
"Natural resources must be exploited if they are to be resources instead of buried treasure," he said.
"To do so requires large amounts of capital, technical knowledge, and a willingness to gamble on the outcome of often unprofitable explorations.
I think you will agree that my fellow countrymen have helped Quebec in these respects, and have contributed to the notable rise in the French-Canadian standard of living."
We are aware that there is considerable United States investment in Canada, particularly in connection with the development of our natural resources. This investment has played a large part in bringing about the present level of Canadian prosperity.
I have mentioned before that the prairie provinces do not believe in this myth of prosperity. We cannot believe in the myth of prosperity because of our population losses. We are a relatively depressed area. We have been losing population to the more favoured central provinces. Why should we be impressed with the prosperity that exists in Ontario and Quebec, when actually it is a relative thing so far as Canada as a whole is concerned?
We must consider the national viewpoint in this regard. As is well known by hon. members, Manitoba is faced with the loss of two representatives in the House of Commons because of the harsh necessities of redistribution. Our voice is going to be weaker rather than stronger as we endeavour to grapple with the complex problems of government. There has been no move on the part of the "have" provinces to assist the "have-not" provinces. In this regard the old doctrine of an eye for an eye and a tooth for a tooth unfortunately has been followed. You can understand then why we are not necessarily enthusiastic about this picture of overwhelming prosperity that is referred to from time to time.
There was one project in Manitoba that was assuming worth-while proportions as a tourist attraction. I refer to the international peace garden on the boundary between Manitoba and North Dakota. This project

has been stymied this year by the withdrawal of the federal grant of $15,000 just when it was becoming a profitable source of tourist dollars. Here we seem to have economy in reverse. I was surprised, as were other hon. members who are interested in this worthy project, and as were citizens right across the country, when this grant was withdrawn, especially when $50,000 is being provided for the United Nations doors or, to carry it to extreme, when $10,000 is being granted to an organization to promote a thrift campaign. I am sure that the spontaneous representations that have been made on behalf of this worthy project are sufficient indication to the members of the government of the feelings of the people right across Canada about this shortsightedness.
My time is running out. I was going to deal with one specific problem faced by the prairie provinces, but this matter was dealt with adequately by the hon. member for Assiniboia (Mr. Argue) this afternoon. I refer to farm income taxation. As I move around my constituency my attention is continually drawn to this problem. Ever since the matter was brought before the house last fall, as well as during the spring session of 1951, the farmer has become aware of the discrimination that exists. The explanations given have not been quite adequate so far as he is concerned. Saturday Night of January 26, 1952, contained an article which has brought forth some inquiries. I should like to quote one or two paragraphs as I think they will help to present an objective viewpoint of this matter. They read:
In 1949-the latest year for which you can get figures-23 employees of the income tax department collected an average of $255 from 200 farmers in the province of Quebec. There were in Quebec, according to the 1941 census, 134,000 "farmers and stockraisers." In the same year in Saskatchewan 74 income tax officials collected an average of $331 from 20,000 farmers. There were in Saskatchewan, according to the 1946 prairie census, 115,000 farmers. In Ontario, 92 officials collected an average of $242 from 8,010 farmers. There were in Ontario, according to the 1941 census, 161,600 "farmers and stockraisers" . . .
On the face of it, the collection of taxes from the farm population is highly inequitable in Canada; and those who are so minded attribute the inequality to the basest possible motives.
We have had an explanation of the situation in terms of the comparative difficulty of determining farm incomes in Ontario, and particularly in Quebec, with their smaller units; but these explanations have not entirely satisfied farmers on the prairies. One solution that has been put forward this afternoon is to increase the intensity of activity or interchange the personnel so that more effective administration of income tax affairs

can be carried out in those areas which at the moment seemingly are not being adequately covered.
I have been dealing largely with government extravagance, and the other side of the picture of course follows axiomatically. If you are spending lots of money you have got to collect lots of money notwithstanding the fact that the suggestion is often put forward that all these benefits are due to government largess. You have got to tax and tax heavily to realize the income necessary to meet the increased services of government. Today we are taxing to the extent of almost one-third of our national income. The distribution of the tax dollar between Ottawa, the provinces and the municipalities is something like 49 cents for Ottawa and 51 cents to meet the combined obligations of the provincial governments and the municipalities. With one-third of the national income drained off in federal taxation there has been a great deal of discussion concerning the prevailing state of affairs. We have heard protests from corporations which have put forward presentations that the level of taxation is resulting in a loss of productivity and producing a situation which can prove actually harmful to business development and activity in Canada.
But even the ordinary taxpayer is beginning to feel the pinch. As he moves toward greater dependence upon the state, he is beginning to feel that there is a price to pay, and protests are rising right across the country. We are becoming aware too that government spending is not sacrosanct. It contributes to inflationary effects as does excessive private spending. The problem seems to be that the government is not aware of the outcry. We get no clue that it is at least from the presentation of the Minister of Finance (Mr. Abbott). The major difficulty is that the sinner cannot see his sin. There is no repentance possible when there is no awareness of sin. It reminds me of the situation of the chap who had been a bit of a reprobate during his lifetime. His clergyman was trying to get him to repent as he neared the end. He said to the chap, "Do you renounce the devil and all his works?" The fellow replied very feebly and weakly that he did not think this was a time to be making bad friends of anybody. Maybe that is the explanation of government policy. If we were closer to an election than we think we are perhaps we would come to that conclusion. There is the situation as I see it. I have no difficulty at all in supporting the amendment submitted by the members of this group.


Mr. E. B. Huffman (Kent, Oni.):: The Budget-Mr. Huffman policy, and says that budgeting lor a $9 million surplus this year will only mean a difference of $21 million, so that this year we will have a surplus of $881 million. In one place he subtracts; in another he adds; in another he takes percentages when it is to the advantage of the speech he is making. If he wanted to be fair I should think he would use percentages in relation to the surplus. If you relate the $9 million surplus that has been budgeted for this year to the $30 million which was budgeted for last year, you will find that is three and one third times greater than the other. If you divide $902 million by that figure it will give you the sizeable surplus of around $300 million.
Then at page 1577 the hon. member for Broadview (Mr. Hees) had this to say:
-there is not the slightest doubt that we will end up this year with a surplus at least as great as the one we had at the end of the year just past.
For a long time this government has been trying to convince the opposition that the policies it has adopted have been in the best interests of our people. How has that been done? Some have called the Minister of Trade and Commerce (Mr. Howe) the super-optimist, the crystal gazer or the seer; but if you look back over the reports he has given this house from time to time you will find that they were honest reports of what he considered would take place within this country. It was not a case of being a crystal gazer; it was a case of taking the best available information. In this country we have an excellent bureau of statistics, which gathers facts from all over the world. They are able to give us the anticipated national production and the anticipated gross national income. In addition to the bureau of statistics, Canada has trade commissions in practically all the countries with which we are doing business, and I was very pleased to note that only last week three new trade commissions were opened in countries with which we had been doing some business but with which we hope to do a much greater volume of business. So it was not a case of crystal gazing; it was a case of placing facts before the house, and those facts have been among the best barometers this country has had. As far as I can ascertain, the reports the minister has presented in the house from time to time are the only thing conservative about him. Always at the conclusion of the fiscal year the gross national production and the gross national income have been higher than he indicated they would be.
Now I would like to say a word about production in this country. Unfortunately at the present time we have an outbreak of foot-and-mouth disease in Saskatchewan, tMr. Huffman.]
which has closed the natural outlet for our livestock products. As a result we cannot dispose of those products in the natural market, and the producers are suffering some hardship. I sincerely hope this difficulty will soon be overcome. I would like to suggest to the government one thing I believe is in our own interests, and which would help overcome such a situation as we face at present. There is no question but that our basic metals find a ready market today. The products of our forests also find a ready sale in foreign markets. I believe we should have more industry which would use our basic metals and forest products, thus providing for a greater popu-. lation which would consume our agricultural products. In that way we would avoid the surpluses of food we have at the present time. I realize that we cannot reach perfection immediately, but we are attempting to do what is in the best interests of all the people of Canada.
Speaking of opportunity within Canada, I note that the hon. member for Eglinton gave this quotation:
My father made your yoke heavy and I will add to your yoke-
On the same page he also quoted:
Cease to do evil, learn to do well.
The government of Canada is attempting to provide opportunities for the people of this country. Then it is up to the people of our country to accept the yoke of responsibility. I am certain that our people and those that have come from other countries, with the background that they have had, will certainly accept that yoke of responsibility and will go on and continue to make a greater and better Canada than we have at this time. The hon. member has stated that we should cease to do evil and seek to do well. I think we should continue on in the pattern we are going.


Mr. Stick:: The hon. member should have quoted, "To him that hath shall be given."


Mr. Brown (Essex West):: And "The devil can cite Scripture for his purpose".


Leonard T. Stick: Yes.


Edward Blake Huffman: I think it is always interesting that an absolutely honest report be placed before the people of Canada. I should like to congratulate the Minister of Trade and Commerce (Mr. Howe) on the report he gave on March 14, which appears at page 440 of Hansard. I should like to quote his remarks in part:
This is a convenient point at which to mention that the Department of Trade and Commerce has just completed its annual survey of investment intentions for the year 1952. Total private and public

investment is likely to be of the order of $5 billion, involving an increase of just under 10 per cent over the total of $4-6 billion for 1951 which was itself a record year.
And this is the part which I think was absolutely fair to the people:
Perhaps half of the increase over 1951 will represent physical volume and half higher prices.
This again just points to the fact that the 'bureau of statistics possibly realizes, as has been indicated in our papers just recently, that there is an increase in the price of steel of $3 a ton, and that fact cannot help affecting the economy within this country. We are developing steel within this country to a greater extent from day to day; but while we have to look to other countries to supply us with that commodity, we shall have to pay the price they ask. I therefore say that this is an honest report to the people of Canada when it says that one half represents physical volume and the other half represents higher prices.
As to this surplus that has been indicated here from time to time, there is always a question that has occurred to me, namely, when is a surplus not a surplus, In the province of Ontario from which I come I have noted that the premier and provincial treasurer was extremely happy to relate that he had a substantial surplus at the end of his fiscal year. I can truthfully say that when the government of Ontario went to the people of that province for a mandate, that certainly was. one feature that was spoken of as being a characteristic of good government. If it is an indication of good government in a province for it to have a surplus it should be an indication of good government in the federal field. In Ontario the error in estimating revenue was 16 per cent, while the federal Minister of Finance was in error only 8 per cent in estimating his revenue. In other words, Canada had an additional 8 per cent more revenue than was budgeted for while the province of Ontario has, 16 per cent more. What I should like to know is where is a surplus not regarded as a surplus. Within the province of Ontario it is taken as an indication of good government. I am certain that in this house the leaders of the same party could well commend the government of Canada for that surplus that has been provided rather than -try to discredit it at all times.
The two members that I have mentioned- the hon. member for Broadview and the hon. member for Eglinton-are now indicating that possibly at the end of this coming fiscal year this government will have a surplus; the size that has been indicated by the 55704-102J
The Budget-Mr. Huffman figures given by the hon. member for Eglinton is $881 million. To me this is indicating to the people of Canada and to the world at large that we have a sound financial position in Canada to which the outside world is looking with envy, and which our own people as well are most happy to go along with.
For a few minutes I should like to refer to the "Report of the Postmaster General for the year ended March 31, 1951". Here is one place that I think a bit of the surplus might well be used. In looking over this report- and this is the 100th anniversary of accepting from the British government the mail responsibility in Canada-I note that on page 19, under the heading of transportation, it is stated:
During the year $13,672,978 was spent on land mail services other than railway, an increase of $770,000 over the previous year; $13,985,713 on railway operations, an increase of $5,118,692 . . .
I realize that the government had to make with the railway companies a contract to carry the mail, but that proportion of increase is not comparable to the service that is provided by the land mail services of the Post Office Department. The amount that has been indicated of $770,000 is a small and insignificant increase, when we consider that there is a group of 14,000 rural mail couriers who, six days out of the week, are bringing the mails to approximately two million people and who provide an excellent service. I would recommend to the government that something be done for these people.
We find that many of these rural mail couriers have a handicap but they provide an excellent service. Under the present system, when their contract comes up for renewal, they are afraid to tender at a price that is comparable to the services they give, for fear that someone else may tender below them and they would lose that livelihood which they have obtained through the contract for some period of years. I think it is most unfortunate, with the type of contract that we have at the present time, that those people who have oftentimes provided 15 or 20 years of services are just not able to get the contract they should have. I would recommend to the government that a committee be set up to study all phases of this act as it affects these people, who under all hazards of weather and road conditions provide one of our most excellent services, to one-seventh of our population. They are couriers of goodwill. I recommend most strongly that the members of this government do their utmost to see that these people are taken care of in the manner in which they should be. They have only the members of this house to recommend to the government what should be done. On the basis of this very report the

Private Bills
railways were increased by $5 million, or practically 30 per cent, and the couriers have not been taken care of. As I have indicated before, it is up to the people within this chamber to do what they can to support those who supply one of the most excellent services in a most excellent manner.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.

[Stage Direction]
On the order:
House In committee on Bill No. 61, intituled: "An act respecting the British Northwestern Fire Insurance Company" (without amendment).-Mr. Henry.
Mr. Deputy Speaker:: I note on the order paper that there is another bill that has been referred to us from the banking and commerce committee, namely, Bill No. 92, to incorporate the Perth Mutual Fire Insurance Company. Is it the pleasure of the house to have both bills before the committee of the whole at the same time?


Some hon. Members:: Agreed.



BRITISH NORTHWESTERN FIRE INSURANCE COMPANY

[Stage Direction]
The house in committee on Bill No. 61, respecting the British Northwestern Fire Insurance Company-Mr. Henry-Mr. Beaudoin in the chair.
Section 1 agreed to.
Preamble agreed to.
On the title.
Mr. Herridge:: Can the sponsor of the bill tell the house the reason for the change of name?


Mr. Henry:: Mr. Chairman, this bill has been thoroughly investigated before the appropriate committee of the house. The reason for the change of name is to delete the word "fire" from the existing name of the company, to the end that the name of the company may be more consistent with the various lines of insurance sold by the company. In the beginning the company was engaged only in the fire insurance business; but at the present time it is engaged in the fire insurance business as well as the automobile insurance business, the casualty insurance business and the inland marine insurance business.


[Stage Direction]
Title agreed to.

Bill reported, read the third time and passed.

[Stage Direction]
The house in committee on Bill No. 92, to incorporate the Perth Mutual Fire Insurance Company-Mr. Corry-Mr. Beaudoin in the chair.
Sections 1 to 4 inclusive agreed to.
Preamble agreed, to.
Title agreed to.
Bill reported.
Mr. E. T. Apple whaite (Skeena):	Mr. Speaker, perhaps I have not been following the proceedings too carefully, but I understand that we have just reported Bill No. 92. I mention this matter only in case there may be some difficulty later. I think I followed the chairman in committee, and my understanding is that we passed the first four sections of the bill. According to the copy that I have before me of Bill No. 92, the bill has twenty clauses. If I am correct in my understanding I think perhaps we might avoid some little difficulty later, if we recommitted the bill at this time.
Mr. Deputy Speaker:: The hon. member
is quite right. Perhaps he will allow to stand the third reading of the bill which had only one clause, namely, Bill No. 61, respecting the British Northwestern Fire Insurance Company. As to the other bill, the hon. member for Skeena (Mr. Applewhaite) has reminded the Chair quite rightly that when the chairman in committee of the whole called this bill in committee, he inadvertently stopped at the fourth clause. Therefore, if the house permits me to do so, I will now leave the chair so that the house can resolve itself into committee of the Whole on the said bill, in order to consider the other clauses.


Some hon. Members:: Agreed.
The house again in committee on Bill No. 92, to incorporate the Perth Mutual Fire Insurance Company-Mr. Corry-Mr. Beaudoin in the chair.
Sections 5 to 20 inclusive agreed to.
Bill reported:, read the third time and passed.



SECOND READINGS


[Stage Direction]
Bill No. 65, for the relief of Florence Edith Holland Clarke.-Mr. Winkler.
Bill No. 76, for the relief of Phyllis Muriel Skelcher MacDonald.-Mr. Winkler.
Bill No. 82, for the relief of Phyllis Kaplan Holloway.-Mr. Winkler.

Bill No. 86, for the relief of William Young.-Mr. Winkler.
Bill No. 96, for the relief of Doris Jane Aitchison Birchenough.-Mr. Croll.
Bill No. 104, for the relief of Ada Vera Higgins Montgomery.-Mr. Croll.
Bill No. 105, for the relief of Priscilla Theresa Marie Laurin Minyaska.-Mr. Croll.
Bill No. 108, for the relief of Emilia Bigelis Kozakiewicz.-Mr. Weir.
Bill No. 117, for the relief of Giuseppa Manuri Bartucci.-Mr. Croll.
Bill No. 119, for the relief of Sylvia Grace Martin Corbett.-Mr. Winkler.
Bill No. 120, for the relief of Sarah Sybil Aaron Daugaard.-Mr. Winkler.
Bill No. 124, for the relief of Joseph Jacques Ernest Demers.-Mr. Winkler.
Bill No. 132, for the relief of Sam Feldstein, -Mr. Winkler.
Bill No. 138, for the relief of Mary Duncan Barlow.-Mr. Winkler.
Bill No. 173, for the relief of Rowena Ann Christena Turner Rae.-Mr. Winkler.
Bill No. 174, for the relief of Jozefa Majcher Wozniak.-Mr. Winkler.
Bill No. 177, for the relief of Esther Maron Feldman.-Mr. Winkler.


Mr. J. L. MacDougall (Vancouver-Burrard) moved: the third reading of Bill No. 2, to amend the Dominion Day Act and the Victoria Day Act.


Mr. H. P. Cavers (Lincoln):: Mr. Speaker, I move, seconded by the hon. member for Trinity-Conception (Mr. Stick):
That this bill be not now read a third time, but that it be referred back to the committee of the whole, with instructions that they have power to amend clause 1 of the said bill as adopted in the committee of the whole by deleting the words "preceding the twenty-third day of May" in the sixth line of the said clause relating to and dealing with the Victoria Day Act, and substituting therefor the following words: "immediately preceding the twenty-fifth day of May."


Mr. Donald M. Fleming (Eglinion):: Mr. Speaker, I think the purpose of this amendment will be acceptable, having regard to some slight misunderstanding as to the effect of the earlier amendment adopted in some haste on Tuesday evening in committee of the whole.
There is one other matter that occurs to me that the sponsors of the bill and of the amendment might consider when proposing that the bill be referred back to the committee of the whole, and that has to do with the title of the bill. The bill has now no bearing whatever upon the date upon which
Statutory Holidays
Dominion day is to be observed. Yet, if the item on the order paper is accurate, the title still includes a reference to Dominion day.


Leonard T. Stick: No, the 24th of May.


Donald Methuen Fleming: No. The title of the bill, as it appears on the order paper, includes a reference to the Dominion Day Act as well as to the Victoria Day Act. It still appears on the order paper as "Bill No. 2, an act to amend the Dominion Day Act and the Victoria Day Act".


Mr. Deputy Speaker:: Perhaps I might clear up the situation by explaining to the hon. member why the bill still bears the original title as it appears on the order paper. If he will read Beauchesne's third edition, citation 692, he will see that it states:
The title may also be amended in committee. When the committee have found it advisable to alter the title of the bill they will report the fact to the house, and the title will be amended on the motion for the final passage.
Therefore, the final passage of the bill is when the third reading takes place and it is moved that the bill do now pass and that the title be so and so. In other words, it has been amended, and the amendment has been reported to the house; but it will become official, so far as the amendment is concerned, and the struck off words will disappear from the order paper, when the motion is made for final passage. That is in accordance with this citation.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


Louis-René Beaudoin: The house again in committee of the whole on an act to amend the Dominion Day Act and the Victoria Day Act.


John Lorne MacDougall: Mr. Chairman, I move:
That clause 1 as adopted in committee of the whole be amended by deleting the words "preceding the twenty-third day of May" in the sixth line of the said clause, and substituting therefor the words "immediately preceding the twenty-fifth day of May."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Bill reported and read the third time.
John Lorne MacDougall: that the bill do now pass and that the title be as follows: An Act to amend the Victoria Day Act.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the order:
Second reading of Bill No. 5, an act to amend the Canadian Wheat Board Act, 1935 (Payment for farm storage).-Mr. Argue.
[Stage Direction]
The Budget-Mr. Catherwood
Hon. Alphonse Fournier (Minister of Public Works):: Mr. Speaker, there is an understanding that this bill will stand.


Mr. Speaker:: Stands.



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), and the amendment to the amendment of Mr. Coldwell.
Edward Blake Huffman: Mr. Speaker, when the house recessed at six o'clock there was one item I was about to mention, having to do with the land mail service of the Post Office Department.
I hold in my hand a Department of Labour wage schedule under date of October 30, 1951, setting out for the province of Ontario the wage scale for drivers of motor trucks.
I have related this figure to the amount of money that is paid to the land mail service, and X find that it amounts to approximately 21 cents a mile. Allowing for the time used by mail carriers in sorting mail, making deliveries and returning to the post office, the average according to this minimum wage scale would be approximately 29 cents a mile. Under these conditions I find that our mail carriers as a whole are not receiving the minimum indicated in this Department of Labour schedule. That is why I suggest that a committee be established to consider the whole problem of our mail carrier system, and I recommend that suggestion to the consideration of the government.


Mr. A. Earl Catherwood (Haldimand):: Mr. Speaker, the hon. member for Lanark (Mr. Blair) presented the case of the dairy farmer most effectively to the house this afternoon. To those hon. members who did not hear him speak I commend a reading and digesting of his remarks in Hansard. They threw considerable light on the situation of our dairy farmers. Tonight I should like to take up a few minutes of the time of the house to deal with marketing and our trading situation, particularly as applied to agriculture.
I have just returned from the Easter recess, as have many other hon. members, and I attended a number of meetings and auction sales in my riding. I talked with a great number of farmers about the agricultural situation, particularly about markets. I regret to say that the situation is not too favourable today from the point of view of the farmers.
[Mr. MacDougall.l
I find that dairy cattle which formerly sold for from $300 to $350 are now selling at from $100 to $150 less than formerly. I find that the beef cattle situation is also in a turmoil. We trust that the recent floor price placed on cattle will eventually clarify the situation, but at the present that situation is not too good. I found also that small pigs which formerly sold for from $11 to $12 are now going begging at about half that price. I found also that poultry producers are facing a rather unusual situation as to the future.
We are approaching the productive season in agriculture with uncertainty, misgivings and doubt as to just what the future holds in store. I realize that it is always nice to be optimistic like the hon. member for Kent, Ont., (Mr. Huffman) who just preceded me and who was most optimistic as to the future. He referred to the Minister of Trade and Commerce (Mr. Howe) and regardless of what we may think of the minister at times, I think we all agree that he is always most optimistic as well. But we have to face the facts. While I rather hesitate painting a dark picture and being accused of being an apostle of gloom, nevertheless I feel sure that the facts I intend to place before the government will be accepted in the spirit in which they are presented.
I listened with great interest to the Minister of Finance (Mr. Abbott) when he presented his budget early this month. I was especially interested in his remarks about our export trade, particularly as it affected our primary products. I had thought that the distress signals which are flying would have brought some remarks from him as regards this phase of our national economy, but I was disappointed. I felt that they warranted some specific reference in the budget speech.
I studied the minister's speech in Hansard most carefully and I find that he made only a brief reference to export trade. He said that all was not well but that the Minister of Trade and Commerce along with himself had every hope that exports in 1952 would equal or better those in 1951. The minister's reference to our continued loss of export markets might have been more correct if he had said that it is true that some of these markets have been lost but the Minister of Trade and Commerce and himself believed that we will export more because we are exporting materials for which there is a great demand in many parts of the world. But these conclusions hold little hope for our agricultural producer. Today we have lost many of our important outlets for agricultural products and unless something is done immediately to rehabilitate our export markets situation things will be serious indeed.

I should like to give a few figures in connection with certain agricultural products which were formerly shipped to England. In 1938 we supplied 27-5 per cent of the total British imports of barley; this market was completely lost in 1951 to Russia, which is now the largest supplier. In 1938 we supplied 93-9 per cent of the total British imports of oats; in 1945 we supplied 96 per cent; but in
1948	we lost this market to the iron curtain countries and other sterling areas.
In 1938 we supplied 254,000 hundredweight or 24 per cent of the British imports of beans, but by 1951 we were not shipping a single bean to Great Britain. In 1945 we supplied 43 per cent of the total British imports of beef. We lost this market to the Argentine republic but found an alternative market in the United States. As we all know, that market has been shut off owing to the foot-and-mouth disease. This is a recent example of what can happen to such an alternative market.
In 1938 we supplied 18-1 per cent of the British imports of bacon. As every hon. member knows, Great Britain provided one of our largest markets for bacon. This market was built up continuously from 1940 until by 1945 we were supplying 83 per cent of the total British imports. In 1946 we supplied 73 per cent; in 1947 we supplied 74-4 per cent; in 1948 we supplied 70 per cent. In
1949	we started to lose this market to Dent-mark, Poland and The Netherlands. In 1951 Canada supplied only 16,000 hundredweight of total British imports of over 4,426,000 hundredweight. Of that amount, Poland supplied 730,000 hundredweight, The Netherlands supplied 695,000 hundredweight and Denmark 2,953,000 hundredweight as compared to the 16,000 hundredweight obtained from Canada. Our percentage of this market is now considerably below the pre-war level of 1938. With respect to ham, in 1938 we supplied 34 per cent of total British imports. This market was steadily built up until 1947 when we supplied 78 per cent of their total imports. Now that market is lost. The hon. member for Lanark pointed out very clearly to us this afternoon the situation so far as cheese is concerned. In 1938 we supplied 23 per cent of total British imports of cheese. This market was built Up until in 1945, for example, we sold 1 million hundredweight or 31 per cent of the total British imports. There has been a steady decline in sales of cheese in this market until in 1951 our exports were reduced to 234,000 hundredweight out of total British imports of 3,384,000 hundredweight.
The Budget-Mr. Catherwood Turning to poultry, during the 1940's Canada built up an export market for poultry in the United Kingdom. In 1947 we supplied 107,000 hundredweight or 18 per cent of their total imports. We have now lost this market and iron curtain countries such as Poland and Hungary have become the principal suppliers. With respect to eggs, in 1945 Canada supplied 56 per cent of total British imports of shell eggs and 26 per cent of their dried egg imports. In 1948 we supplied 79 per cent. Now that market is completely lost to Poland, China and other sterling countries. As to condensed milk, in 1938 Canada supplied 56 per cent of Great Britain's total market. Now that market is lost to The Netherlands and other sterling countries. Finally I come to apples. In 1938 Canada supplied 42 per cent of the total British market. That market too has now disappeared.
The above examples of these important segments of our Canadian trade have been checked with the trade and navigation accounts of the United Kingdom tabled in the British House of Commons so there is no doubt as to the authenticity of these statements. It can be reasonably argued that it was inevitable that sooner or later our exports of agricultural products would revert to the pre-war levels. However, these figures indicate that not only have the 1938 levels been lowered but we are facing the most serious financial and trade crisis in our history. With Canada being the only dollar member of the commonwealth, her markets have been practically erased altogether. Exports of the products I have named together with a number of others are below the 1938 levels, and of late we have noted that England is now reducing tobacco imports by 75 per cent. This will mean a very serious blow to Canadian tobacco producers.
The United States as an alternative market has certainly not been very promising. Canada, together with other nations, has endeavoured to have the United States rescind its ban on dairy imports which was applied under an amendment to their defence production act. As all hon. members know, this action was contrary to the international obligations assumed by the United States as well as Canada and other countries under the Geneva agreement on tariffs and trade. We must admit that our wartime level of trade or even a moderately reduced level is dependent upon whether Canada's post-war position is as favourable as it was in pre-war days. The serious problem confronting Canadian producers is not to maintain wartime levels of trade or even moderately reduced levels. The fact is our trade has
1616	HOUSE OF
The Budget-Mr. Catherwood fallen away below the level of 1933, and even this low level will be again seriously reduced in 1952.
When this serious threat has been brought to the attention of the government they have always pointed to the alternative markets in the United States. It is true the United States has been an excellent market for our Canadian farm products. History of trade has shown, however, that whenever the United States has a surplus and Canada has a surplus, and both countries are anxious to market the same product, the United States raises its tariffs or uses some other device to prevent our exports from entering that country. In that way they exclude our products from the United States. The stability of the United States market as an alternative export market for our primary products is very questionable for the following reasons: First, the congress amendment to their defence production act, which restricted the importation of cheese and other dairy products, seriously affected Canada. This action was protested not only by Canada but by New Zealand, Norway, Australia, Denmark, France, The Netherlands and Italy. It was an open violation of the Geneva general agreement on tariffs and trade.
Notwithstanding President Truman's message to the nation of January, 1952, recommending the repeal of this amendment, no action has been taken. The matter comes up for discussion again in June but it is very doubtful that the amendment will be rescinded prior to the election which is to take place in that country in the fall of this year. A second reason is that there is a bill now before the United States Senate, which was introduced in February of this year, asking congress to protect United States farmers against imports of Canadian feed grain. This comes at a time when Canada has a large crop of coarse grain to market and there are many millions of bushels of damaged wheat for which we require substantial export markets.
A third reason is the escape clause provisions in the United States trade agreement extension act of 1951. This presents an ever ready threat to the stability of our exports to that country. Therefore with these unstable alternative outlets in the United States in constant danger of being cut off we realize how important that matter of Canadian export trade is to us when we stop to think that one out of every four Canadians earn their livelihood in industries connected with the export trade. It is definitely a matter of great national importance.
The Progressive Conservative party has suggested in and out of the house on many


occasions that the government should initiate action requesting that a trade and economic conference be held to be attended by the economists and other experts of the commonwealth countries to study this matter. We have suggested the following reasons which I think are most important: (a) to review normal channels of trade between member countries now lost or seriously threatened;
(b)	extension of trade channels now existing;
(c)	consideration of action towards convertibility of currency; (d) a review of the effects of present blocked sterling practices and the possibility of their removal; (e) the possibility of Canada purchasing within the sterling bloc raw materials now secured elsewhere, at least to the degree that Canada might regain its traditional markets for primary products in commonwealth countries; (f) to explore the possibilities for Canadian enterprise in the amazing commonwealth investment and resources as a source of supply for raw materials required by Canadian industry.
Unfortunately the government did not see fit to take the action that has been recommended by my leader and other members of the Conservative party. I repeat that today the situation facing our farmers is made more difficult because of the loss of the alternative market in the United States as a result of the unfortunate outbreak of foot-and-mouth disease. In this regard 1 should like to ask the government if they have seriously com sidered every possibility and every angle of negotiations and arrangements with the United Kingdom government and the government of the United States whereby exports of meats now being shipped from New Zealand and Australia to Great Britain might be diverted to the United States and comparable quantities might be shipped from Canada to England. As all hon. members know, under United States laws, meat from a country where there is a disease-infected area is not allowed into that country. But their regulations do not preclude imports from Australia and New Zealand, so it seems to me that these difficulties could be overcome by some arrangement similar to that which was worked out among the United States, Great Britain and Canada in connection with aluminum.
Our loss of markets has brought about a situation that strikes at the very roots of the agricultural economy of Canada. Constructive action is required immediately. No one believes for a moment that the government can do everything; that would be impossible; but the farmers of Canada feel that the government should do something. I suggest that the Minister of Trade and Commerce (Mr. Howe), who is also Minister of Defence Production, dispatch his departmental officials

or better still go himself immediately to the United Kingdom with the proposal that Canada divert some millions of dollars in defence orders to the United Kingdom, which in turn would permit them to purchase our bacon, our wheat, our cheese, our apples and other primary products of which we have been the traditional suppliers.
In passing, Mr. Speaker, 1 do not think we should wait any longer for the Department of National Defence to make its decision on the question of arms standardization.
I trust the government will give these few suggestions very careful consideration. These are matters which concern all of us. They concern every member of parliament. We as representatives of the people express our views in good faith and trust the government will consider our representations in the same spirit. If this is done and we approach these problems from the standpoint of the common good, then the prestige of parliament will be greatly enhanced in so doing.


Mr. Hector Dupuis (St. Mary):: Mr. Speaker,
I am going to endeavour to express myself in the English language, and I immediately beseech the indulgence of my English-speaking colleagues if I do not have exactly the words to please their ears. I will do my best to say what I think ought to be said on the questions presently occupying the attention of this house. It is the duty of every hon. member to express the opinions of his constituents, and I think I would fail in my duty if I did not make a few remarks on the budget. I have heard a lot of things said and I am sure I will not say anything new on this subject. On the other hand I consider it is right for me to bring to the attention of different departments matters which to my mind should be looked into, especially on behalf of the small people whom I represent, since 95 per cent of my constituents are what I would call middle-class citizens.
As I said a moment ago, I have heard a lot of things said about this budget. First of all, emphasis was placed upon the fact that the Minister of Finance (Mr. Abbott) comes along and declares a surplus for this fiscal year of $350 million, in round figures. Some people on the opposite side of this chamber claim that if the predictions of the minister had been right the burden of taxes on the shoulders of our citizens would have been lessened. Well, I am of the opinion of the minister when he declares that it is not a big error on his part to make a mistake which works out at about 1J per cent of the gross revenue of over $3,500 million. Of course if these things could be foreseen there would
The Budget-Mr. Dupuis be no particular reason for any Minister of Finance to declare a surplus just for the pleasure of taxing. On the other hand it is really providential that this surplus has been declared. I am not a big financier, but I think it is a good policy to pay our debts in times of prosperity and not wait for times of depression. After all, with the heavy expenditures this government has to face at the present time, particularly in connection with defence, one is amazed that our debt not only does not increase but actually decreases, which is far better for the economy of this country.
Of course I would have liked nothing better than to hear the minister declare that all taxes would be reduced. But while he is a very capable minister, I do not think he is such a miracle man as to be able to go ahead and spend more and more all the time, yet be able to take off part of the taxes already paid by the citizens. My policy is to pay as we go. I think that is better for any government. From my point of view it is not a good policy to have future generations taxed for expenditures we are making today. And no one has ever contested the necessity of those expenditures, especially for defence, because we know very well that by preparing ourselves and preventing a war we are assuring peace. Even if we have to spend money and send troops overseas, that is a protection because, as I have heard here before, it is better to settle these affairs far away than have an enemy come to this country. It is better to invest our money in preparation than to be forced by lack of preparation to face a war which would be disastrous not only to other countries but to our own country as well.
We hear that taxes are too high. Well, of course everybody knows they are high, but that does not prevent our good citizens from the western part of this country coming along and asking for more expenditures; asking millions for their wheat, for instance, and for other expenses we are supposed to meet. That does not prevent them asking for millions and more millions for the western part of this country. I have no objection to helping settle some of the problems that may be of a national nature, but on the other hand I do not like to see those same people coming along and reproaching us for putting on taxes when a big part of those taxes are to pay what they are asking for their pari of the country.


Mr. Blackmore:: Can you produce figures to prove what you are saying?


Hector Dupuis: I am very sorry but I cannol produce figures now for two reasons. Firs
1618	HOUSE OF
The Budget-Mr. Dupuis of all one cannot always have figures at one's finger tips, and secondly, I would not have time for the other remarks I desire to make. Any time the hon. member wants figures on that I shall let him have them. He will be astonished, I am sure, to see how far he went in asking for so much money, and he will be astonished to see how much the western part of this country has cost the eastern part. We never reproached hon. members for that. The hon. member does not know how far he went in requesting grants which were given to his part of the country.


Mr. Quelch:: What about assistance on feed grain, $130 million?


Hector Dupuis: Do you think for one moment that I can answer questions from three members at the same time? There will be occasions when I shall be able to tell you exactly what I think about your requests.
I shall endorse the actions of this government in giving grants, as long as the request is based on sound reasons. Tonight I am not ready to do that. In addition to that, I have asked hon. members for their indulgence because this is my first speech in English.
It is a little difficult for me to leave this subject, then gather my thoughts and return to it.


Wilbert Ross Thatcher: You are doing well; go
ahead.


Hector Dupuis: I thank you, but it is not compliments that I am looking for; but I do not want to get lost or else I shall have to return to French and the hon. member will not understand me.
Then, we have heard the leader of the apposition (Mr. Drew) crying about the thefts ivhich occurred at the Petawawa camp. Of course, there was about $50,000 worth of materials stolen. No one approves of that, out criminal charges will be laid. If hon. members opposite are going to emphasize -his little theft, I am going to tell the leader af the opposition as well as the other members in this chamber that this government went through the war from 1939 to 1945 without a scandal. I recall the war of 1914-18, nowever, when under a Conservative regime ;here were plenty of scandals. I recall our poor soldiers, who were fighting in Europe :or the same principles for which our soldiers ire fighting today, being given cardboard ihoes. I remember that in the Valcartier :amp goods worth thousands of dollars were :harged but not delivered, and that was mder a Conservative regime.
I do not believe the people should be left vith the impression that everything is wrong ind no steps have been taken to prevent such
TMr. Dupuis.]

thefts. I have been in commercial life myself. Some hon. members are businessmen and realize that thefts cannot be prevented. You know darn well-that is plain English, but I guess it will be allowed here-that some commercial firms even set aside a percentage of their revenue to pay for things that will be stolen. There is no scandal, therefore, in the disappearance of $50,000 worth of goods from that camp. If there is a scandal, it is only a shadowy thing compared with the scandals of the first war under a Conservative regime. I wanted to say that.
I have not heard a word from the opposition about the good things that this government has done.


Mr. Johnston:: It has not done anything.


Hector Dupuis: Tonight I have only about ten items to illustrate the good things that this government has done. If I had more time I could go through all the good things that this government has done.


Mr. Pouliot:: Pay no attention to the
hecklers.


Hector Dupuis: I may tell the hon. member for Temiscouata (Mr. Pouliot) that I really do not mind them. They get me used to the atmosphere. I was told when I came here that this house was very, very cool, but I find it is getting hot, so I like it.
Nothing was said, Mr. Speaker, about the good things this government has done. I understand that the opposition is not here to praise this government, but according to the point of view expressed by members on the other side they are not even here to make suggestions. I recall a member of this house going to a convention and saying, "Well, gentlemen, we certainly have good ideas for good government, but we are not going to say much now; we will explain them when the election comes around or else the government will adopt them as they have in the past." I hope hon. members opposite will not reproach this government for the good measures it has introduced because they came from the opposite side. I suppose we shall not hear any more suggestions, because they will wait until the next election.
I consider that one of the duties of the opposition is to make whatever suggestions they believe are for the benefit of this country. If they do not do that, then according to my belief the opposition is not fulfilling its duty.


John Horne Blackmore: You are exactly right.


Hector Dupuis: I like to get a few suggestions from the Social Credit party, too. I have not heard anything but criticism from them.


John Horne Blackmore: We have everything that counts.


Hector Dupuis: Perhaps you have a monopoly on good administration, but it has not proven to be so in your province.


John Horne Blackmore: You are just foolish now.


Hector Dupuis: If you think it is foolish, you can simply laugh at it. Any time the hon. member wants to meet me on any ground I shall be willing to answer him, but not tonight. I repeat that I am not a financier.
I am far from being a capitalist, as I know some on the other side of this chamber are.
I have always thought, however, that whenever your dollar was the best dollar on the monetary market, that meant good administration. Well, we did not hear any of the hon. members on the other side admitting the high position of our,foliar. They would not do it. There is a particular reason for that, and that is that they find it difficult to admit this government has done any good.
I am not going to say that everything this government has done has been good. I do not believe the government thinks that is so. But as I said when I first came into this house, when we judge a government or a party we put the good actions on one side of the balance and the bad actions on the other side. We weigh them, and when the good actions are heavier than the bad we vote for that government. That is what the people have done in past elections and that is what they are going to do in the coming election.
Is it not a sign of prosperity when money from foreign countries comes to Canada for investment? If that is not a sign of prosperity, then I know not a thing about finance. Let us take into account the high budgets of the provinces and the municipalities. Where does that money come from? Does it come simply from those provinces or from those municipalities? No, it is a reflection of the prosperity that is spreading right through this country. In 1939, Mr. Speaker, the province of Quebec had a budget of about $50 million -perhaps a little more or a little less, but let us call it $50 million. Now they have a budget of $200 million. Where does that come from? Simply by taxation? No; it comes simply by reason of the prosperity of the country, by reason of the increase in business. We hear all this criticism from the other side of the house. What is the use of all the time running down our country, and of always saying that this country is badly governed? Do you think that it will bring new industries here or will bring new investment capital by going ahead and making that kind of comment on the good actions that have been done by this government?
The Budget-Mr. Dupuis I think it is absolutely against the interests of our country not to place before the public and before other countries knowledge of the prosperity which has been the result of the direct action and the good policy of this Liberal government of which I am proud to be a part.
As to these provincial budgets and municipal budgets which amounted to $50 million in 1939 and which have risen to $200 million, some will say that that is inflation, All right. I do not know enough about inflation or deflation to speak on the subject, but I have lived in a situation which is much worse than inflation, from my point of view, and that was in a depression. I lived in a depression from 1930 to 1940. I was a member of the city council of Montreal and a member of the city executive. The relief costs in the city of Montreal alone were $1,500,000 per month. I would rather have a little bit of inflation than have that kind of depression. Was that under a Liberal government? No; it was under a Conservative government, under a leader who, when he was no longer prime minister, could think' of nothing better to do than go to England and invest his capital on the other side.


Jean-François Pouliot: With his top hat.


Hector Dupuis: We have lived in depression times. With all the investment of new capital, with all the prosperity that we have seen in this country, with all our natural resources, we are sure of not living again in such depression times if the people of this country continue to place their confidence in the heads of the Liberal party.
Let us now study the budget, properly speaking. I am not going to deal with all the items; but I have heard so many bad things said about it that I feel I must mention some of the good things. First of all, in my speech last year I mentioned certain things. I am sure that the Minister of Finance (Mr. Abbott) did not allow those tax reductions simply because the member for St. Mary spoke. But on the other hand I realize that he gave what I and some other members asked for, namely, a reduction in taxes on frigidaires, washing machines, radio sets, automobiles, tires, soft drinks and other items. Those reductions will certainly help the family budget. Then in addition, when we passed legislation to abolish resale price maintenance, that was something that also helped the family budget. We can see the effect of it today, because today you can buy a frigidaire for from $150 to $175 less than the former price, taking into account the 15 per cent tax reduction recently announced. There is a reduction of some $75

The Budget-Mr. Dupuis on a washing machine. That is what I consider to be good administration. That is what I call taking into account the wishes of the people as expressed through their representatives. That is what I call a democratic government, ready to listen to whatever good requests are made to it.
My hon. friends on the other side of the house did not mention all the good things in this budget. There are, of course, some little things that I myself would have liked to see abolished. But on the other hand, I do not think you can expect perfection from a government. I am darn sure-that is the way I talk to my people when I meet them on the street-or very sure, perhaps I should say, that the representatives of the people here would have liked the government to listen to the suggestion made by the hon. member for Winnipeg North Centre (Mr. Knowles) with respect to medical expenses. I myself would have liked to have that four per cent provision removed. But let us hope that this will be done in the near future. I am of the opinion that medical costs should be deductible from the amount taxable. Consider the situation of a man earning $4,000 a year. He pays some taxes. He pays for four years, five years or ten years-and it is only in order that he should do so-and he has no chance of getting any reimbursement. Whatever is left after payment of taxes, he just balances at the end of the year. Then one year he has bad luck, as I recall it, and he has $400 or $500 medical expenses to pay. There you are. He is up against it. He is in a bad situation. I hope this situation will be changed.
I am here to fulfil my duty, but that does not mean that I condemn the government with respect to everything. I am here to say what I think ought to be said. In my opinion this is one of the suggestions that ought to be listened to, and I hope it will be listened to in the near future. It is not only the member for St. Mary who speaks in this way. The other day in Le Canada, I read a comment of the correspondent for that paper. For those who do not know it, I may say that Le Canada is a Liberal paper in Montreal. I do not think that anybody who knows Le Canada will doubt that it is a Liberal paper. They said that some will be embarrassed by the amendment coming from the C.C.F. or the Social Credit group-I do not remember which it was-on the four per cent provision with respect to medical expenses. May I say that I am not at all embarrassed. After all, I am not going to vote against the government, in a vote of non-confidence, just simply because a couple of my points of view have not been accepted and when 98

per cent of the whole budget, under the present circumstances, is satisfactory and ought to be satisfactory to the whole of the people.
I really regret that the Minister of Finance has not seen his way clear to make a greater reduction in the tax on cigarettes. Bon. members of this house ought to know that if there is smuggling-and I am quite sure there is- a three-cent cut in the price of a package of cigarettes will not prevent it. I was under the impression that, in order to avoid all that smuggling, a package of cigarettes in this country should cost no more than 30 to 35 cents. Yet in our province anyway we are still paying 43 cents.
I have here an article published by the flue-cured tobacco marketing association of Ontario, in which it describes the smuggling of cigarettes as having reached unprecedented levels. It states, in #art:
"Few Canadians have any conception of the wide-open nature of this border," says the committee. "It is not only undefended, but as far as cigarette smuggling is concerned, it is also indefensible. Not only are there part-time customs stations which close at designated hours (usually after nightfall), but there are places where several trans-border roads lead through a town on either side of the main road manned by the customs."
The article closes in this way:
"Even now," the committee quotes a customs officer-
And a customs officer is a government employee who must know what he is talking about. He must know what he is up against when he is trying to do his duty.
"Even now," the committee quotes a customs officer, "we're too busy checking tourists to chase smugglers."
Citing the "Sherbrooke section" of the R.C.M.P. command as an example of a border hot spot the committee says that there are four or five smug routes into the section for every constable on the local establishment. "Even a cursory glance at a good map will show," says the committee, "that the unguarded roads and trails in the stretches between the ports are a much more obvious feature of the local landscape than the official customs points of entry."
The extent of smuggling is indicated by the number of people one sees every day smoking American cigarettes. I hope the Minister of Finance will be able to see his way clear to make a generous reduction in the cigarette tax. As I said earlier, I make these remarks, not by way of any real criticism of the government, but because it is my view that they should have looked after these two matters more properly. Let us hope that our wishes will come true in the near future.
I will vote against the amendment and the subamendment, because I am not going to support a vote of non-confidence in the government, and place myself alongside those whose ideas I do. not share. And I would give

some advice to my hon. friends in other parties: I am a Quebecer, a Montrealer, I know, of course, that those parties would like to have the support of the province of Quebec- and I do not hear anyone saying no.
If I were to vote for the amendment and the subamendment I would be saying, in effect, that these people ought to be supported in their vote of non-confidence against the government. Well, they cannot depend upon my vote, if they insist upon going ahead with the sort of suggestions they have been making in the past.
For instance, it was only recently that the hon. member for Winnipeg North Centre (Mr. Knowles) went ahead with his bill in which he insists upon imposing a divorce court upon the province of Quebec. Yet he knows perfectly well that Quebec has constitutional rights that they are ready to defend anywhere and at any time. So I repeat that the hon. member and his colleagues are not going to engage the confidence of the province of Quebec by acting in that way, and by trying to set aside those constitutional rights to which Quebec is entitled.
Then, other members of the C.C.F. have been making claims for federal grants for education in the provinces. This is another ground upon which federal members should not place their feet, because it touches one hundred per cent upon the autonomy of the provinces. Members of this house know very well that we are very ticklish about the question of autonomy.
After all, we have received some lessons that have taught us to be cautious, and not to do anything that would look like taking away or menacing the autonomy of any province. So I say to these gentlemen that if they wish to have the confidence of Quebec they will have to change their policy; they will have to mind their own business, in a way, and not try to take away from the province of Quebec those constitutional rights to which she is entitled.
We are often told that the federal government is trying to centralize. Well, I do not see suggestions for centralization coming as frequently from any quarter as it comes from hon. members on the opposite side of the house. I believe therefore that it would not be wise for me to give them my confidence, because I am not a centralizer. And because I am not a centralizer I am not going to vote with the champions of centralization in this country. Nor will I support those people who apparently do not know the first thing about all the measures they bring here affecting constitutional rights of citizens in this country.
The Budget-Mr. Dupuis
I have a few suggestions to make. When I rose in my place this evening I had no intention of trying to settle all the problems with which the government is faced. However, I did have a few observations to make and, as it is said in English, I shall proceed to get it off my chest. I hope in doing so I shall not hurt too deeply the feelings of hon. members in other parties. I speak only to explain my conduct, and to give my reasons for voting against the amendment and the subamendment, while at the same time offering some suggestions.
I have received many letters, some of which have come from unskilled workers asking for higher wages. These workers are earning at the present time 82 cents an hour. When one considers the high cost of living, he could not consider that a sufficient wage. The government ought to set an example by paying higher wages to those on low salaries, so that they may make both ends meet.
I know conditions are no worse than they have been under former governments, but it is my duty to ask for an increase, because I represent that class of workers, and I would not be doing my duty if, in my representations, I did not single them out.
As I have said before, there ought to be an upward revision of the salaries of civil servants in the lower grades. It may be that those in higher ranks earn enough so that they do not have serious financial problems. But this is not true of those in the lower grades, and it may be that some adjustment would be proper. I know, for instance, of some people doing a job in one department who find that they are paid less than those doing similar work in another department. Why should1 this condition remain?
These suggestions' are made in all good faith, and in the hope that at some time there may be a revision of the wages of the workers in these lower grades. I would hope that at some time we may have an end to all these war expenditures. There is no doubt, after all that it has done for the aged people, that this government will certainly take into consideration increasing the old age pension, other pensions and family allowances when war expenditures are not so heavy.
I would direct the attention of hon. members to the fact that $40 a month is not enough for the aged. I am sure every member on this side of the house will admit that they cannot go very far on $40. But, after all, it must be kept in mind that there have been some acts of amelioration by this government. There was a time when the aged were receiving only $20 a month. Then it was increased

The Budget-Mr. Dupuis to $30, and has finally reached $40. The age limit, which formerly stood at 65, is now placed at 70, and without a means test.
These things can be done step by step and I am quite sure in the near future the government will consider the advisability of amending the old age pensions, the family allowances, the veterans pensions and those paid to the C.N.R. employees and government employees. This government has shown its good will and its good intentions, and has actually carried out some of these changes.
I do compliment them for what they have done up to now, but I advise the ministers concerned not to stop where they are. They should give attention to the requests being made by these particular classes of people.
There is another matter about which I should like to speak. I do not want to exactly reproach the government about this, but I do want to say that I am not satisfied with the way cheques are sent out in the one language only. It would not cost much more to send out bilingual cheques. There are in my riding people named Smith, Warren and so on who cannot speak one word of English. They find it very diificult when they receive cheques or other documents in English.
I do not want to talk of my own personal affairs, but my wife was named Annie Rafferty and she cannot speak one word of English. Her grandfather who was bom in Ireland was brought up by a French family, in fact the family of Judge Cousineau in the city of Hull, and herself always lived in French-speaking circles and spoke French all the time and she just could not understand a document printed in English. I cannot see what good it does to send English documents to those with English names when it may be that they cannot speak English at all.
Just the other day I was speaking to a man in Ottawa named Lefebvre and he could not speak one word of French. I am not in favour of sending English documents to those with English names and French documents to those with French names when we could send out bilingual cheques which would be understood by everyone. In that way no mistakes would be made.
The next matter I want to take up is local in character, but it does have a bearing on the general situation throughout Canada. I refer to the tolls which are charged on the Jacques Cartier and Victoria bridges at Montreal. I understand that these are the only two bridges in Canada on which tolls are charged. The Victoria bridge has been paid for long ago. It is still quite narrow, although it was widened a few years ago. It is used considerably.


The Jacques Cartier bridge was built in 1930 and it showed deficits up to 1948 or 1949. But,, these deficits were not paid for by the dominion government alone; they were split among the federal government, the provincial government and the city of Montreal. As a result the city of Montreal has paid $2,850,000 up to date on the accumulated deficits on this bridge. As I say-, the tolls on all other bridges in Quebec and throughout Canada have been abolished. This is an anomaly which should be eliminated.
It is not fair to ask the people of Montreal and the suburbs to pay tolls when people using bridges in other parts of the country do not pay tolls. I will present a motion asking for the abolition of these tolls. If for some reason they cannot be abolished,
I would suggest that at least no charge be made for the passengers in the car. I know the Jacques Cartier bridge cost $21 million and there are still a few millions to be paid. If that charge was eliminated it would cost all the country only $233,000, which is not large as compared with $65 million for grain. That would give at least part justice to the residents of Montreal and the surrounding country.
If that cannot be done then I repeat the suggestion I made a few months ago that the province should be allowed to handle this bridge. Perhaps this could not be done in the case of the Victoria bridge because that is used by the Canadian National Railways, but the other bridge is only a highway bridge and it should be under the supervision of the roads department of the province of Quebec. If they were permitted to maintain the bridge it would settle all arguments. Part of the debt would have to be absorbed by Canada, but when you are thinking of justice you should not think only of figures. The chamber of commerce and other organizations in Montreal will be presenting petitions to the government to ask that this situation be corrected.
I do not know whether I should say this, but I am not invited to the caucuses of the Liberal party. That indicates that I am not considered to be a full member of the Liberal party. But I am old enough to have studied the history of my country and while there are many who may belong to political parties without knowing why-I am not referring only to Liberals-I know why I endorse this government. I have found that every time there has been prosperity in this country it was under a Liberal regime. It was under a Liberal administration. I do not know whether it is due to fate or bad administration on the part of the Conservative party but every time we have had a depression it has been when that party was in power. Therefore

why should I choose a party that always brings a depression with it when it is in power and cast aside a party that brings prosperity to the country?
I would not want to terminate my remarks without complimenting the Prime Minister (Mr. St. Laurent) and the Secretary of State for External Affairs (Mr. Pearson) on the honour recently bestowed upon them in having their names placed on a list of twenty-seven persons from among whom will be chosen the Nobel peace prize winner for 1951. The participation of the Prime Minister in the creation of the North Atlantic Treaty Organization and the part taken by these two Canadian statesmen certainly has been the reason for this distinction. I am sure I echo the views of every member of the house when I extend to them our sincere congratulations on this honour.


Mr. O. L. Jones (Yale):: 
unnecessarily high, as I will indicate in a moment, and that they should be reduced. But I do not believe for a moment that it is necessary to touch our social services in order to alleviate the present burden of taxes on the majority of Canadians. Indeed, it is a matter of knowing how to apportion in a fair way the expense of government, now that we have an expenditure of over $2 billion for defence. If, for example, the government had imposed heavier increases in personal income taxes at the higher levels, and had imposed an excess profits tax on corporations, the burdens now oppressing the lower income groups certainly could have been reduced. I am sure if the hon. member for Moose Jaw had paused long enough to consider these points he would have adopted an entirely different approach to the subject of reductions in government expenditure.
I wish to go on record, as disagreeing with my colleague's contention that a means test should be applied under the Old Age Security Act and in regard to family allowances. In fairness to my colleague I should point out that he did not advocate a return to the old type of means test, but did suggest a ceiling of $5,000. Again I believe if the hon. member had stopped to think he would have seen only too clearly what would be the consequences of such a policy. We have opposed a means test under these and other social security measures in order to get away from the social stigma that is always attached to a person in "receipt of a pension given on a charitable basis. The removal of the means test did away with that stigma, and I am rather proud of the fact that it has been removed. I was very happy to learn that the Prime Minister (Mr. St. Laurent) had applied for his old age security pension, by that action indicating to everyone that he was not putting himself above his fellow Canadians. I think the Prime Minister is to be commended on this, and I only hope that everyone, whatever their status in life, will foHow his example.
As the house knows, we of the C.C.F. have always favoured an old age pension without a means test. Indeed we were the first to come out and advocate such a plan for our senior citizens. If we have any criticism of the old age pensions now in effect it is that they are inadequate. The present $40 is unrealistic, as it bears little or no relation to the high cost of living. For this reason we have urged that an old, age pension of $60 a month should be given everyone 65 years and over. The government wEl say we are not able to increase those pensions at this time. Others may point out that those in the lower and middle income brackets are already harassed by taxes they cannot now

afford to bear. With this last statement I am in entire agreement. The lower and middle income groups are not only bearing the burden of heavy personal income taxes; it is also they who are most adversely affected by the sales and excise taxes. While we commend the minister for altering the excise tax we cannot help but regret that he did not see fit to reduce the sales tax, for it is this indirect tax above all which oppresses so many Canadians who earn relatively small incomes.
The financing of old age security, for example, should not be made to bear heavily upon those in the lower levels of income, whom the pension was intended to help in the first place. There is no reason why those individuals who make above $3,000 taxable income should have that portion of their income exempt from the social security tax. Why should a person making $10,000 per year, or $20,000 or $50,000, as the case may be, pay a maximum of only $30 for the current year, the same as an individual with a taxable income of only $3,000? Certainly this is an unfair way to allocate the burden of this social security tax. It is on these points that we differ with the government. It is not a question of whether we are able to afford these things; rather it is a matter of apportioning them fairly so they do not hurt those least able to bear further tax increases. I believe in the principle of ability to pay.
With regard to family allowances I am happy to note that my colleague the hon. member for Assiniboia (Mr. Argue) has a resolution on the order paper calling for an increase in these allowances so they will have the same value they had when the act was introduced some years ago. This is another example of our endeavour to increase all social security payments so they will be brought into line with the present high cost of living.
The hon. member for Moose Jaw suggested reductions in civil service pensions. This does not coincide with the policy of our party or with my own views. On the contrary we have urged from time to time that these pensions be increased in view of the high cost of living. As it is now these pension rates, like other social security rates, are meaningless in this inflationary period. Certainly a majority of the members of this party support the efforts of the civil servants to get adequate pensions.
While I have expressed disagreement with some of the statements made by the hon. member for Moose Jaw, I must say he outlined several methods by which the government could save money, and with those
The Budget-Mr. Jones suggestions I heartily agree. I have in mind particularly his reference to the costly luxury of maintaining a lieutenant governor in each province, and his request for a survey of all personnel both military and civilian, with a view to eliminating waste and overlapping. No one objects to paying for security, but we strongly object to waste whether in material or in personnel. Savings can and must be made if we are to build up our defences and at the same time maintain our social security and other essential services.
In conclusion may I point out that sheer necessity has forced us into a position that calls for a budget of $4,500 million, the highest peacetime budget in our history. Last year it was slightly less, but the people paid up willingly and handsomely, and we wound up with a surplus of close to $700 million. They will do the same thing again. There may be some grumbling, but very little; and this has been the case because we recognize the emergency. Should we ever again be faced with domestic problems such as we faced in the thirties, never let it be said that we cannot find the money to ease the situation. That fallacy has gone forever, as we have proved in the last two years. We have done it now and we can do it again.
Finally I commend the government on its pay-as-you-go policy. I think that is a sound way to carry on. When the emergency is over the government will find that the people have higher incomes, and possibly they will have a billion or two not needed for defence which can then be used to build homes for the lower income groups, so capitalized that they can be owned outright in a period of ten or twenty years. Keep up the high rates of taxation for a year or two until the housing needs of all the people of Canada have been financed with the money now going into defence production at the rate of $2 billion a year.


Mr. A. W. Stuart (Charlotte):: First, Mr. Speaker, I wish to congratulate the member for Moose Jaw (Mr. Thatcher) on the honest and able address he presented to this house last evening. I say that very sincerely because, as you know, my remarks are not always in praise of the government. For that reason, I realize it is not always easy to express one's honest opinion. Last evening we heard the member for Moose Jaw deliver a speech which rang with sincerity, and I believe he is to be congratulated by all those who were privileged to hear him.
For a few moments this evening I wish to deal with a problem that is perhaps outside my province, but one which has been misrepresented in this House of Commons. I

The Budget-Mr. A. W. Stuart refer to the cheese producers of Ontario. From information I have been able to obtain, I am convinced that it would be most difficult to arrive at a conclusion as to what this federal government could do about this situation which has been brought to the attention of the house on several occasions. The greater part of the cheese which is produced in Canada comes from an area between London, Ontario, and Three Rivers, Quebec, and the greater part of that would be manufactured in Ontario. May I remind the house that cheese is also produced in the maritime provinces, and the quality of that cheese is second to none. For that reason, I am making my few remarks at this time.
When I came to Ottawa in 1945 cheese was being marketed by the federal Department of Agriculture under a floor price which had been established under a wartime regulation in order that Britain's requirements would be met. From 1945 until 1950 this federal control was bitterly criticized by members sitting in the Progressive Conservative group. Their arguments were, and they are still on the record, that if cheese were taken from under federal control the price would automatically increase by 10, 20, 30 or 40-there were suggestions that it would even increase in value by 50 per cent. Month after month and year after year we listened to that criticism. In other words, the cheese producers did not appreciate this assistance from the federal Department of Agriculture. Consequently, two years ago, the Ontario cheese producers took the matter entirely out of the hands of the federal government. At this point I wish to add that the Ontario government had every right under our constitution to take this action. I believe no one would question their authority. I might add also that this is not the first time action of that type has been taken by the government of Ontario.
I remember some few years ago-I believe the leader of the official opposition (Mr. Drew) at the present time was the premier of Ontario then-it was decided the federal authorities had no judgment whatever so far as marketing Canadian products in Britain was concerned. There was a lot of comment in the press at that time, and it was very interesting reading. For that reason Ontario House was set up in the city of London. The staff was recommended and placed there by the government of Ontario. According to press reports at that time it appeared as though that organization would be able to sell ice to Eskimos. I could give another illustration. Shortly after the last war when we were bringing immigrants to this country from Europe, Ontario decided that the federal plan was outdated. The only thing that province could do was to set up its own system, 
and that was done. I do not believe we have any reason to criticize that action. I think the province had complete authority to do it. It would appear that on many occasions the government of Ontario has decided it was much more capable of handling problems than the federal government was. Again I say that I do not believe the federal government had any authority whatever to interfere in any of those activities I have mentioned.
Since the question of cheese production and marketing in Ontario has been discussed in this chamber on several occasions, I have endeavoured to find the answer to this problem. I am always interested in the welfare of the primary producers of this country. From information I have been able to obtain, it would appear that after the government of Ontario took the matter entirely out of the hands of the federal government-and this at the request of the cheese producers of Ontario-they established a floor price of 36 cents a pound for cheese. This action was taken just previous to the last provincial election. The results of that election would certainly indicate that the cheese producers of Ontario approved of the action taken by the provincial government. It would appear that the producers were happy over the 36 cents per pound floor price.
After the election, however, it was apparently found that the 36 cents per pound floor price was impossible to maintain. After having supplied the best markets in Canada these same producers, who were so dissatisfied with the treatment the federal department accorded them, again came to the federal government requesting it to take over their surplus production. This government is regularly criticized, and is now being criticized, for sunshine budgets just previous to elections and for lemon budgets just after elections. We have heard those expressions used in this chamber. After the ballots are counted, however, and. the results of a federal election are known, I would suggest that not a single case can be found where the federal government has ever gone to a provincial legislature requesting it to pull federal chestnuts out of the fire

in other words, passing the buck to the provincial legislature. It seems, however, that that does not apply when the shoe is on the other foot.
It would be most difficult and most unfair for the federal government to take over the surplus cheese in Ontario after, as I have said, the best markets have been supplied by this Ontario co-operative, and then have the federal department attempt to sell that surplus in competition with other cheese-producing provinces. The Ontario cheese producers asked the Ontario government for special

legislation to set up that co-operative to deal with cheese. The co-operative had the authority to compel delivery, and also to establish prices. If previous to the provincial election the floor price was set too high, why do the federal Progressive Conservative members now endeavour to hold the federal Department of Agriculture responsible? In my opinion this is an unfair advantage to try to take in this House of Commons. Under our constitution-and, I might say also, at the request of the cheese producers of Ontario -this is purely a problem for the legislature of that province. It in no way relates to this government.
Last year the Minister of Finance increased the tax on cigarettes. At the same time he placed a special tax on stoves, refrigerators and other household appliances. After a fair trial, which was a year, he decided-in this budget which was just brought down a few days ago-to remove the amount of the increase of 1951. Why does the provincial government of the province of Ontario refuse to acknowledge their mistake with regard to cheese? The federal Conservative members endeavoured to place the full responsibility for this mistake at the door of the Department of Agriculture here in Ottawa.
In conclusion, might I say that the Ontario government has established a floor price. This same organization compels the producers of cheese to deliver their product to the provincial co-operatives. Why should the federal government try to establish another floor price which would undoubtedly be below the one set by the provincial government of Ontario? Then the federal Progressive Conservative members could stand up and say: Your federal Department of Agriculture is responsible for the reduction in the price of cheese. To my mind, that is exactly the thing they are working for at the present time. I feel that the Department of Agriculture has every right in the world to deny them that privilege. To begin with, the federal government have no legal authority to do this, and I would not approve the federal government's going into the cheese business, not only in competition with the Ontario board but also with all other Canadian producers.
This information that I have taken a few minutes to put on the record this evening is a true picture of the action taken by the cheese producers of Ontario since 1945. Those who have criticized the federal Department of Agriculture for present-day conditions in the industry are well aware of the fact that they are dealing with a matter which is purely a problem for the provincial government of the province of Ontario and not for the federal Department of Agriculture.
The Budget-Mr. Nowlan


Mr. G. C. Nowlan (Annapolis-Kings):: Mr. Speaker, I am sure that this round of applause is for anyone who has the temerity to speak after ten o'clock. I trust by next week this house will have recovered the sanity which it showed during last session and will arrange to adjourn at this time so that no one else will be subjected to that ordeal.


Alphonse Fournier: Hear, hear.


George Clyde Nowlan: I speak particularly to the hon. member for Hull (Mr. Fournier) who now so sympathetically and loudly says "hear, hear".


Mr. Weir:: Will you reduce your speeches to thirty minutes?


George Clyde Nowlan: I will on this occasion, at any rate. However, Mr. Speaker, in rising to speak on this matter of the budget, I first should like to congratulate the Minister of Finance (Mr. Abbott) on the, as some others have said, admirable footwork which he displayed in delivering his address. Certainly it was a physical task of considerable dimension, as we all realize. I think he spoke for almost two hours in a way which held the interest of the house and reflected credit on himself at least in so far as the manner of his delivery was concerned. While I am speaking on manner of delivery, may I say that I think perhaps an encomium of praise should be passed out to the parliamentary assistant who spoke later on in the debate and who formerly on some occasions, like Don Quixote tilting at windmills, aimed his lance at every person who stuck his head up beyond the desk in this house and struck at him at least loudly and violently, if not always wisely. On this occasion he showed discretion, discrimination and a statesmanlike approach which suggested to me that he felt that possibly the hon. member for Springfield (Mr. Sinnott) had developed such talents as a financial critic that his position as financial assistant was in jeopardy and that in the case of the retirement of the present minister, possibly the hon. member for Springfield would be made minister of finance, rather than the parliamentary assistant. I think that consideration is undoubtedly responsible for that temperate display which we witnessed here the day before yesterday.
I am, of course, not going to refer to all of the happy allusions and appellations which have been used, from "Abbott's rabbit" to a score of others, or to what some have called a Hallowe'en budget. But certainly when the minister referred to this illusory reduction
1S28

The Budget-Mr. Nowlan of income tax, I remembered that ditty which some of us heard many years ago:
Last night I met upon the stair A little man who wasn't there.
He wasn't there again today.
My, how I wish he'd go away!
I am sure the reduction of 6 per cent which was presaged in the early part of the speech was something like this illusory man of which we have heard.
There is certainly no question that this country is suffering from a tremendous load of taxation. I am not going into the merits of that matter tonight, except to reiterate what was pointed out by the hon. member for Eglinton (Mr. Fleming) the other day, namely, that the reductions which were made and for which the minister took credit, were reductions of taxes which had been protested a year ago by the financial critic of the opposition, the hon. member for Greenwood (Mr. Macdonnell), the ho.n. member for Eglinton and all others on this side of the house. It is true that certain reductions have been made, but those were reductions in taxes which never should have been imposed in the first place.
When one today sees someone attempting to take credit for having reduced these taxes, shall we say, on electrical appliances, one must also think of those unfortunate young people who perhaps during this year have married, established homes for themselves, have bought those appliances with those additional taxes imposed on them, and who now find that through a vagary or a Whim of the Minister of Finance, someone else who has established a home this year fortunately will be able to replace them or buy them without paying the same taxes. Certainly there has been placed on some of those people a burden which I do not think they will forget too soon.
Not only is this tax burden a heavy one which, as the hon. member for Greenwood pointed out the other day, amounts to $1,715 or more than that on the head of every family in Canada, in federal taxes alone. That is a substantial burden. People talk about this country being prosperous today. They talk about the bank deposits. I am sure that some of these bank deposits' will increase on the 30th of this month when some of us have to go to the bank and borrow money with which to pay our income taxes. In the return for that month you will perhaps find a substantial increase in the bank deposits, but I think that most of us will find that it is an exceedingly illusory one indeed.
I want to speak for a moment about the way in which this tax is applied, with

regard to the primary producers, the farmers
and the fishermen who, as all those conversant with the act realize, have the so-called right to average their taxation over a period of years. I am not going into the technical provisions of that act, Mr. Speaker; but as most hon. members perhaps know, there were two prerequisites. First, you have to file your return on time every year; and that is certainly a proper one. Second, you must afterwards make application. You must apply for the right to average. I am suggesting this. If the farmer or fisherman is entitled to average if he files his return properly, why should he be debarred from taking advantage of that right merely because of his technical default in making application before the 30th day of April in any particular year? What it means is this. The primary producer-the farmer or the fisherman- who has a large income or who possibly has had in other years, and has to hire an accountant or someone with business experience to make out his return for him, is advised of that provision. He makes his application, and thereby can save a substantial amount of money over the years in payment of his income tax. But someone else who does not know of that provision, a smaller farmer or fisherman, who is not in the financial position to employ auditors, perhaps does not know about that. In this way he is debarred. And even those who do know about it sometimes suffer inadvertently.
I can think of one primary producer who employed an auditor to make out his income tax return. This auditor had done so for years. He had an application for averaging. But apparently, on the night of April 30, he forgot to mail it, and did not mail it until the first of May. As a result of that, this farmer suffered an increased tax of over $1,800. That was the result because of this default on the part of a person, one who possibly is responsible in damages in a civil action, if it were instituted. Nevertheless it was not the fault of the producer.
I am suggesting that the act should be amended so that those primary producers should have, as of right, the opportunity to average without having to go through the technical process of making application therefor.
And in that connection I wish to make one reference to the practice in connection with these income tax returns of primary producers on a net worth statement. The farmer will file an income tax return honestly and properly, but the department may raise some objection, or may feel that the returns

have not been properly prepared. They investigate that man's affairs, they prepare a statement of net worth, and the farmer is assessed on the amount they state. He faces a situation-and this could apply to a fisherman- where he must either pay on the statement of net worth, or lodge an appeal. Usually the amounts involved are such, and the distances from courts are such, that the persons affected just cannot appeal.
I must say that although I believe most of the officials in the department are fair and reasonable, I doubt if they all are. And in some cases I think they have been most unreasonable. Let us consider for a moment the situation of a farmer in my own constituency, where their apple trees were removed and where, because of the loss of the British market, the returns from the orchards have tremendously depreciated. Yet, in a net worth statement those orchards are carried at exactly the same value as they were in 1944 or 1945, the original year when they started the net worth provision.
They refuse to reduce those values. And if a farmer has received money in respect of trees pulled out, those capital sums are included in income, so that the poor farmer loses in both ways. His farm is maintained at the same artificial value, although he has no trees, because the trees were removed. And then the money he got for the trees is included in income. There is a situation such as that in connection with this net worth statement. I suggest the department should make careful investigation, and that certainly some change should be made.
Now, departing from that phase of the matter, and returning to the budget, as such: The parliamentary assistant the other day, closing his remarks, referred with not unbecoming modesty to the wonderful position in which this country finds itself, and he asked if there was anyone anywhere who could boast of living under happier circumstances than the people of this country.
Well, I wonder if that applies to the farmers of Canada today. I wonder if those who, shall I say, are growing beef in this country, with their market in the United States lost to them, are facing the situation with that high degree of equanimity and satisfaction to which the parliamentary assistant refers. I wonder if those who are in the poultry business are in that happy frame of mind.
Only the other day I talked to a farmer who, to a rather considerable extent, has been engaged in poultry raising. In other words, he was operating a one-man poultry farm. He told me he formerly employed help to the extent of two or three people, and
The Budget-Mr. Nowlan informed me further that, by discharging his help and doing all the work himself, at the present price of eggs he could pay himself about $2 a day wages. But he told me that if the price of eggs dropped another cent he would not be able to pay himself even that much. I do not think he would join in this paean of praise in which the parliamentary assistant indulged the other day.
And would those who are engaged in the dairy industry? Do they feel about it that way? Certainly the apple producers in the east and in the west who are facing loss of market, and a chaotic situation generally, are not too happy about it. They are not too pleased with the situation in Canada today.
I am sure there are many others employed in various lines of industry who would not share his views. For instance, let us consider the textile industry. I do not think they would say Amen to all that was said the other day by the parliamentary assistant. The same would be true in eastern Canada in respect of almost every category of employment.
It is all right to talk about figures. There is no doubt that the figures supplied by the dominion bureau of statistics show increases in bank deposits, in savings and in wages. That is all very fine. The figures are there, and no one questions that on an average they represent a satisfactory situation in many places. But neither could there be any question that, in respect of the citizen in the white-collar class, or the man on a pension, or the teacher, or the clerk-indeed, the great army of people who have no unions representing them, and who perhaps have no spokesmen speaking on their behalf-it would be true to say that they are being crushed today by the burden of taxation, a burden which for them has become almost unbearable.
They do not find the situation as happy as one might think. And speaking of the dairy farmer, may I refer again to a matter which may be only of local interest, although I think it has wider implications. All hon. members know what happened last year in the United States when the American congress added a rider to an appropriation bill placing an embargo on the importation of cheese.
We do know that our government has moved very softly in the matter-and I think properly so-in the hope that an adjustment will be made. And possibly it will be made. Certainly in so far as the executive branch of government in that country is concerned, there can be no question but that there is a wish to rectify the situation. But sooner or later, Mr. Speaker, our government may

The Budget-Mr. Nowlan made available, and quite properly so. Assistance can be obtained tor the western wheat grower. Their plight only has to be raised on the floor of the house and our friends from the western provinces close ranks. Then inside of a week or two weeks the necessary moneys are voted and it is all over.
We hear these terrible sobs and cries from western members about the plight of the western farmer. We appreciate their plight and sympathize with it, but I think those of us from the east on all sides of the house sometimes feel that our own primary producers have suffered disasters and have not received the treatment which wouldi have been accorded them if they had happened to live in another part of Canada. Last year the fishermen off the Atlantic coast did not suffer a disaster because of a storm but they just did not catch any fish. There were none, and they did not come appealing to the house for help. Now, however, there is a situation which requires attention.
When the minister was in Nova Scotia the other day he made a suggestion which I think is a constructive one and may have some merit. He suggested the working out of some form of insurance with respect to these things. But let us get some action on these matters, and I suggest that we want to avoid internecine feuds and wrangles and get a clear-cut policy between the federal and provincial governments so that in the matter of storm relief as well as other matters there may be more direct action in the future. These jurisdictional wrangles are of interest with respect to another matter which I have mentioned before. I will not say I feel deeply about it because it is a matter of viewpoint or perhaps a matter of the imagination. However, I want to refer to it because the solution of the problems of those of us from the east-and we have our problems- is centred to a certain extent upon the development of power.
With the Canso bridge going in and the satisfactory development of the steel industry, I believe we can have primary industries and that secondary industries will follow. This will go a long way toward solving the economic problems of the maritimes. However, we need power, and I have enough vision, perhaps enough Irish in me and enough speculative imagination to think that the development of atomic energy may be the solution of our power problems in the maritimes. Obviously that form of power will not be desired by the central provinces within the next few years because they are going to invest so much money in the development of hydroelectric energy. Therefore they will have to safeguard their investment and will not want to see the development of

power from atomic energy take place too rapidly in central Canada. Therefore we will have the opportunity of developing the use of atomic power in the east along the Atlantic coast. I was speaking the other day to a gentleman who is very close to this matter. He is one whose name you all know and he did not only say this to me but to many others. He said publicly that the development of atomic energy in Canada was such that one could visualize it in the same way as if the Kitty Hawk plane of Orville Wright's days were transformed within three years into a big United States bomber of the last war. He said if you could envisage such a transformation you could get a picture of the development of atomic energy in the industrial field that they can foresee today. All that has been done within these past few years. If we have no internecine feuds between the provinces and the federal government, if we can get the use of atomic power developed in the maritimes, then I suggest these provinces will again take the position in the economy of the country which they had before confederation when they really carried the country. Possibly our friends from the central Canadian provinces, who today are enjoying such tremendous wealth, may find that they will be only cousins although perhaps not poor cousins. They will find that our standard of prosperity will be equivalent to that maintained in the rest of Canada.


Mr. W. D. Wylie (Medicine Hat):: Mr. Speaker, in rising to take part in this debate I do so with considerable knowledge of how many residents of my constituency feel about the budget presented by the Minister of Finance (Mr. Abbott). I can assure you that I am not going to try to describe it in the house. In the first place I would not want to, and in the second place, Mr. Speaker, I am sure you would not allow me to do so.


Donald Methuen Fleming: Give it a trial.


William Duncan McKay Wylie: However, they were very disappointed. They say it is a very disappointing budget. The people who pay personal income taxes were sadly disappointed. After listening to the minister say that we were going to get a 6 per cent reduction in income tax it certainly upset them to find there was an increase. I believe the figures that have appeared in most of our daily papers are correct. There is no need for me to go over them again. The minister and his parliamentary assistant know them quite well.
I listened to a speech tonight with which I must take issue, that of the hon. member for St. Mary (Mr. Dupuis). He spoke about western farmers getting so much from the provinces of Quebec and Ontario. He did not

mention the $65 million but he hinted at it and we knew very well what he meant. May I suggest to the hon. member that he look at the record and find out the losses that the grain growers of the west, wheat growers in particular, have suffered during the last few years. He may have often wondered why you can buy bread so cheaply. I would not be a bit surprised at that. The reason for that is that the farmers, who comprise one-third of the population of this country, subsidized the rest of the country by supplying cheap wheat. I think that is a statement that cannot very well be contradicted. The wheat farmers of the west are in a very precarious position today. As a matter of fact they do not know just what to do. The year 1951 was a good growing but a bad harvesting year. In the province of Alberta today approximately 56 million bushels of wheat and 71 million bushels of coarse grains still remain unthreshed. When a province suffers in that way it is a national disaster. It is true that in parts of Alberta they are doing some threshing and some of the wheat is turning out not too badly, but it must be remembered also that in the southern part of the province, from a line drawn south from Red Deer, we have had more rain than for many years. All the lakes are full; the sloughs are full, and the fields are under water. Much of that crop is ruined.
I am not blaming the federal government for that, of course, but I am suggesting there is something wrong when a member from one of the eastern provinces gets up in this house and says we are giving the western farmers so much money. I would ask the house, if it had not been for western Canada where would the Cocksfautt Plow Company be, where would the Massey-Harris Company be, where would the International Harvester Company be, and many others? In my travels around Ottawa I still have to see as much machinery as is used out west. In the smaller villages in this vicinity I have not seen machinery piled in the yards as it is out in Saskatchewan and Alberta. It must be remembered that all this machinery is produced in Ontario and Quebec, yet the best market for it is in the western provinces. What about cars? When we buy a car at home we pay $226 freight from Oshawa to Medicine Hat on a Chevrolet, the cheapest car you can buy. Ontario people can go to Oshawa and pick up a car without paying any freight. The trouble is that we are hooked both ways. We pay the freight on our grain to the head of the lakes and we pay the freight on our cars and machinery from the point of distribution to the point of delivery.


John Horne Blackmore: And all the freight goes to Ontario and Quebec.
The Budget-Mr. Wylie


William Duncan McKay Wylie: That is something the eastern members must realize. It is something many of them do not appreciate. When the dominion government, or should I say the wheat board, was prepared to pay the western farmers $65 million of their own money, why should the west be criticized for accepting it? Don't try to tell me that money came out of taxes. If that was the case I would like the parliamentary assistant to the Minister of Finance to tell me so. I believe that came out of the wheat board.


John Horne Blackmore: It came directly out of the farmers.


William Duncan McKay Wylie: Certainly it came out of the farmers; it was their own money. Every time we hear that sort of thing in the house I really boil over, because it is not fair; it is not playing the game, and it is not helping bring about the unity we should have in this country. We know very well we cannot get along without the east. Surely the east must know they cannot get along without us.
Then just a word about coarse grains. What about the freight on coarse grains that has been paid by the government? We do not hear very much about that, though I remember that one night the right hon. Minister of Agriculture (Mr. Gardiner) spoke to the hon. member for Leeds (Mr. Fulford) about it and put him in his place. When the minister speaks he usually knows what he is talking about. He certainly did that night, because he showed exactly what the farmers in Ontario and Quebec had received by way of freight assistance on feed grains.


An hon. Member:: $110 million.


William Duncan McKay Wylie: It was twice that. We do not object to that. If the government wants to do it that is its affair, but that money comes out of the taxes we pay. When the farmers out west received $65 million from the wheat board that was their own money, and they were entitled to a lot more than that. They should have received many more times that amount.
Today the wheat farmers are paying too much for what they buy and getting too little for what they sell. We hear about the cost of living coming down. Sure it has come down, but on what? On what the farmer produces. It is true that if you buy a new car today the price has dropped somewhat. All the government did was to take off 10 per cent in excise tax. But today many people cannot afford to buy new cars. Many farmers cannot afford them this year; they
1634	HOUSE OF
The Budget-Mr. Wylie did not get their grain threshed last year and may not get it threshed this year. I would suggest to the government that it is about time the wheat board gave the farmers a little more for their wheat; and it is just about time one-third of the population, making up our basic industry of agriculture, stopped subsidizing the rest of the people so they can have cheap bread.
We have heard a lot about family allowances, old age security and almost everything else in this debate. Sometimes it does not hurt to repeat what has been said; but in view of the fact that it is going to take me considerable time and I cannot possibly finish by eleven o'clock, I move the adjournment of the debate.
Motion agreed to and debate adjourned.



BUSINESS OF THE HOUSE

Alphonse Fournier: the adjournment of the house.
He said: On Monday the Prime Minister will move the notice of motion which appears in the Votes and Proceedings of this date, taking Mondays away from private members. However, it was understood that on that day we would proceed with the business of private members for three hours and thirty-five minutes from the moment we got to the orders of the day, since that was exactly the time that was taken up on the motion to set up the committee on redistribution. As soon as we are through with private members' matters we will continue the debate on the budget.
Motion agreed1 to and the house adjourned at 10.50 p.m.

Monday, April 28, 1952