1953-02-24

[Stage Direction]
On the orders of the day:
Hon. Douglas Abbott (Minister of Finance):: Mr. Speaker, yesterday I promised to give an answer to the hon. member for Lake Centre (Mr. Diefenbaker) regarding outstanding excise stamps which were purchased in connection with the stamp tax on cheques. My colleague, the Minister of National Revenue, informs me that on the day following the budget his department issued instructions to banks and business concerns with an undertaking to redeem unused stamps and embossed cheques. I understand that the banks in turn are co-operating by redeeming unused stamps held by the general public. It would appear, therefore, that this matter is being handled to the satisfaction of all concerned.



BLOOD TESTS BEFORE DELIVERY TO THE UNITED STATES

[Stage Direction]
On the orders of the day:
Right Hon. J. G. Gardiner (Minister of Agriculture):: Yesterday on the orders of the day the hon. member for Middlesex East asked if instructions had been issued to the government veterinarians not to take blood tests until March 2 of purebred cattle sold for delivery in the United States during the first week in March, and suggested that such instructions would cause delay in delivery and financial loss to the livestock industry. I indicated that I was not aware of any such instructions being issued.
1 have made inquiries and find that under date of February 20 instructions were issued to all district veterinarians that it was expected the embargo against the importation of cattle and livestock products into the United States from Canada would be removed on March 1 next and it would therefore be in order for them to advise all concerned that they would be prepared to inspect and prepare cattle for export to the United States on request, in accordance with the bureau of animal industry regulations in effect prior to February 25, 1952, when the United States department of agriculture prohibited the importation of Canadian livestock and livestock products into that country.
In other words, the instructions were just the opposite to that suggested by the hon. member, and the department had already taken action to see that there would be the minimum of delay in such movement so that there would be no financial loss to the livestock industry.



DAIRY PRODUCTS


[Stage Direction]
On the orders of the day:
Mr. A. Earl Catherwood (Haldimand):: I
should like to direct a question to the Acting Secretary of State for External Affairs. Has the government received a reply to the note sent to Washington on February 11 protesting restrictions placed on the importation of Canadian dairy products? If so, would the minister inform the house as to the nature of the reply?


Right Hon. L. S. St. Laurent (Prime Minister):: The hon. member sent notice to
the Department of External Affairs of his intention to ask this question. In the absence of the minister and in the absence this afternoon of the acting minister, I have been asked to give him the following answer. The answer is no. It will be recalled that the note does not explicitly call for a reply but urges the United States government to remove the dairy products import restrictions as soon as possible.



INQUIRY FOR RETURNS


[Stage Direction]
On the orders of the day:
Mr. E. D. Fulton (Kamloops):: Mr. Speaker, may I inquire of the Minister of Defence Production the situation with regard to certain questions of mine which were passed by the house as orders for returns at various times. I have spoken of two of them before, the two dealing with the CF-100 and the Orenda engine. May I suggest that they be taken as answered by the minister's statement of Monday, the sixteenth of February, except for parts 7 and 8 respectively. If that suggestion is acceptable, then I would appreciate early returns.
There were two other questions dealing with wing panels and tail assemblies for the F-86, passed as orders for returns on February 4. I would like to include them in my query as to when answers may be expected.

The Budget-Mr. J. M. Macdonnell


Mr. J. H. Dickey (Parliamentary Assistant to the Minister of Defence Production):: With
respect to the first part of the hon. member's question, his suggestion is acceptable and the answers will be brought down very promptly.
On the other question, those answers are also under preparation and will be tabled as soon as possible.



THE BUDGET


[Stage Direction]
The house resumed, from Thursday, February 19, 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.
Mr. J. M. Macdonnell (Greenwood):: Mr. Speaker, with your permission and the permission of the house, before I address myself to my task I would like to say a word on behalf of those of us who sit on this side of the house about the late deputy minister of finance. I myself had the good fortune to be associated with him in personal ways because we were members of the same university. In that connection he was full of wisdom and full of the spirit of helpfulness. Since I have been here as a member of parliament I have realized not merely the validity of the praise which the Minister of Finance (Mr. Abbott) generously gave him the other night, but also that as regards every member of this house, regardless of where he sat, the late deputy minister of finance was only too anxious to assist so far as he could in the discharge of the duties of any and every one of us.
Now, Mr. Speaker, on Thursday evening last I expressed indignation at the practice apparently growing and becoming accepted whereby tax reductions are mysteriously synchronized with election years. I believe that is all wrong because I think it is a clear indication that tax reductions are timed and gauged not in the interests of the taxpayers and not in the interests of the country but in the interests of the government of the day.
I complained further that tax reductions were not the result of economy but merely rebates of still further exactions which the minister was making from the taxpayer. I complained that it was a kind of cat-and-mouse game where the government every few years is kind to the mouse in the hope of treating him still more scurvily later on.
I complained of extravagance and I gave illustrations of it. I complained that there was precious little in this budget for the small man. I complained particularly about


the extravagance in the Department of National Defence and finally I said, having regard to all the considerations I had brought forward or referred to, that I thought a reasonable person could conclude that if there was a really urgent and insistent attack on the problem of economy and efficiency huge sums might be saved.
Well, Mr. Speaker, as one surveys or reflects upon the budget since Thursday last, when it was presented, one realizes more than ever that we are witnessing a very interesting spectacle. The spectacle is that the government is offering, in return for votes, to give back to the voters a little of the huge amounts it has taken from them. No, Mr. Speaker, I am wrong. The government is not offering to give this rebate to the taxpayers as a whole because, as I say, the great majority get little or no benefit of any kind.
The offer is to give this rebate to a small and select proportion of the taxpayers, and the general body of taxpayers apparently is expected to be so pleased at this relief given to others that they will be full of gratitude to the government. It is a simple and interesting idea, Mr. Speaker, and I shall be very interested indeed to see whether it works out. My belief is that it won't.


An hon. Member:: We have heard that before.


James MacKerras Macdonnell: Now, Mr. Speaker, as I listened last Thursday to the apparent glee of government supporters, as evidenced by their rapping of desks, I remembered that last year there had been joy on the evening of the budget but on that occasion it was a matter of hours' duration and when we waked in the morning, "behold, it was a dream." The joy had turned to sorrow quickly. Indeed, it was no time before public opinion, as evidenced by the press, began to reproach the minister for what he had done. I will quote briefly from two newspapers, one east and one west. The Hamilton Spectator said:
If Mr. Abbott ever again has to perform the income tax sleight-of-hand he achieved on Tuesday's budget, we suggest that he let us know in advance so we can get in the mood for it.
The Calgary Herald said:
It can be said without fear of contradiction that Mr. Abbott makes most vaudeville magicians look clumsy. His hand is indubitably faster than the eye . . .
May I remind the house that the reason for those sour observations was that after the first joy was over it appeared that the income tax relief then, as now, missed most of the people in the lowest income brackets. After effect was given to the social security rate,

in the first half of 1952, on a taxable income of $1,000, far from there being relief a man had to pay $10 more. A man with a taxable income of $2,000 had to pay $16 more; and it was only when you got higher up the situation was different. A man with an income of $7,000 paid $20 less. This year it looks like a repeat performance, but let us see what it means in terms of actual dollars and cents.
In 1952 there will be no change-we will be making our returns very shortly. The taxpayer this year, as distinct from 1949, must wait for his social dividend until July 1. That was not the case in 1949 when Santa Claus went back to January 1. It does raise the question, perhaps, whether the minister is holding back on us and keeping some sweetening for a later date.
When it comes to 1953 we find, as we did a year ago, that the loaves are for the people with larger incomes and that those with smaller incomes seem to have only crumbs. For instance, if you take into account the social security tax, and we must take it into account, a married man with two dependents and an income of $5,000 is $18 better off. A married man with $3,000 is $4 better off and a man with $2,400 will receive the magnificent relief of $1. An unmarried single taxpayer is in the same class as the $2,400 man-he gets $1.
That raises the interesting question of how many of the taxpayers, how many of the earners, how many of the people who contribute to this result, are in the tax reduction picture. I can give you some figures. In 1951, the last year for which I have figures available, there were 4,950,000 earners. Of those, 2,172,000 paid no income tax, and 1,694,500 of those who paid taxes had incomes of $3,000 or less. The result was that roughly 75 per cent of the earners got practically no benefit from tax relief at all.
So much for the $100 million that was attributed to the personal income tax. We come now to the corporation tax which was reduced $97 million. We have believed, and we have said, that the minister has been mulcting corporations too much. We believe that the result of what he has done has been to drive down corporation earnings in 1952, and the evidence of 1953 is still more discouraging. We are glad that the minister has realized, even after a year, the mistake which he made a year ago. We are all interested in corporations. We are interested in two ways. First of all we are interested that corporations should produce goods at the lowest possible price, and secondly that they may be able to employ 68108-149
The Budget-Mr. J. M. Macdonnell
labour at the best rates. Therefore, if the situation is allowed to continue long enough where corporation earnings are going down, it will be injurious for us all. We can all, therefore, express gratitude that the minister has repented of the evil he has done. The only thing for which we do not forgive him is doing it at all.
As I shall show later, perhaps more than once, Mr. Speaker, we complain that those actions which have been taken, and which we deprecate, are all due to the fact that there is not yet in this government any effective attack on waste and extravagance. So far as the relief to small corporations is concerned, we on this side of the house take credit for that ourselves. We have hammered on that for years, and we will congratulate ourselves, though we will hardly expect the minister to admit that he has at least learned from us.
Now, the remaining $40 million of tax relief comes in odds and ends in certain special excise and sales taxes and in concessions to investment income. Not many of the 75 per cent who get little or no help from the income tax relief, Mr. Speaker, will get very much help from the 20 per cent increase in the amount of deductible dividends. I imagine most of them will find plenty of use for their money in buying food and clothing for the children. I do not think we need assume for one moment that any of them is trudging down to open safety deposit boxes to see his preferred shares or to calculate how much relief he is going to get on his 20 per cent deduction.
There are people however to whom the 20 per cent deduction is quite interesting indeed. Take the case of a married man with two children having no earned income, but having $8,000 of income from share dividends. This is how the matter works out for him. His exemption is $2,300, so he pays a tax on $5,700. His normal tax is y	.anc* his special investment tax is
$224. His total tax, therefore is $1,373.50. But he does not pay it, Mr. Speaker, because
able t0 set off 20 Per cent of the $8,000 or $1,600. His tax is $1,373.50 and his permissible deduction is $1,600, so as a result he pays no income tax at all. That is very nice for him, but I doubt if the government will get very many votes from the fellows below, let us say, $3,000 by reason of their assistance to that man.
Of course, if you smoke enough you may make money out of the budget. If a man smokes a package a day, every day of the year-I understand that is a very moderate amount of smoking-I have calculated that he will make about $15 a year. I hope my

The Budget-Mr. J. M. Macdonnell arithmetic is good. Of course, he would have to spend $125 to get that. I imagine that most of the fellows earning $2,400 a year, with two children, will be rolling their own or perhaps some of them will be smuggling them. At any rate, I would not think that the amount of money that would be made out of that would be very great.
A moment ago I referred to the loud acclaim, the plaudits of last Thursday, the smiles on every face; but I begin to wonder whether the smiles will turn into smiles _ of irony or disillusionment when the realization gets abroad, as it is getting abroad very rapidly, as to how many taxpayers are left out. I might mention in particular the farmers and fishermen who have been left out. Any benefits to them are picayune. Their only hope of getting any benefit is to be high-income tax payers. Then, of course, the farmers have a special grievance because there has been imposed on them a 15 per cent excise tax on replacement tires and tubes used on trailers, etc. This is all the worse because the farmer is hit at a bad time when many farmers are suffering from a loss of markets. It is just as if the farmer not only got nothing done for him but had to take a slap on the face for his pains.
The other night the minister told us, in summing up the achievements of his budget, that he regarded the relief given as a social dividend. I was surprised at that, and the more I think about it the more surprised I am. I have always thought of a social dividend as a dividend which would apply across the board. When I find benefits which seem to enure largely to a small class, called social dividends, I find that the words are used in a sense that is quite surprising. I cannot overlook the fact or refrain from pointing out that the minister, if the savings had been available, and I shall come to that later, could have done something through the sales tax for those who are left out of this budget. The minister has never been very sympathetic to us in our representations with regard to the sales tax. It seems to me he takes the attitude that the sales tax is not burdensome and he points to the undoubted fact that there are important exemptions from it. He seems to make every effort to make himself believe that it does not bear very hard on the ordinary household. I believe he is quite wrong, because a large number of the ordinary things which every person has to buy are still covered by sales tax.
Now, to sum up, Mr. Speaker, there is no need to elaborate the point further. It is obvious that the great bulk of the relief given by this budget is confined to the few,

let us say to 25 per cent of the population. For the 75 per cent of the population there is little or no relief. They are not in the sunshine, they are in the cold shade. The truth, as I say, is beginning to seep in. I noticed, to my surprise, that on Friday and Saturday there were comments in the press that there was something for everybody. I suppose if you define "something" as microscopic enough that may have been literally true. But it seems to me that it was an entire misreading of the budget, and I think that the truth is coming home very rapidly. For instance, here is an article from the Edmonton Journal of February 20:
For several million Individual Canadian taxpayers, finance minister Abbott's tax concession exposed last night . . . will seem little more than crumbs from a rich man's table.
The Post-Record of Sydney for February 21 said:
Only those too easily dazzled-
May I say with respect that I thought there were a lot of people in this chamber on Thursday night who were too easily dazzled.
-are saying that finance minister Abbott brought down a sunshine budget in the Commons on Thursday night.
There is one short quotation I should like to read from Le Devoir of February 20:
Some $300 million (of the surplus) are gone, but we still have a balanced budget. The prestidigitator has had a perfectly successful pre-electoral performance. It would appear extraordinary if it were new, but we are used to Mr. Abbott's hocus-pocus.
I do not know what that is in French. I shall have to learn later.
People also may have vague memories of 1949. If they go back to 1949, they may discover one or two interesting things with regard to taxation. I put them on the record, and I am sure the gentlemen, particularly those on my right, will be interested. In March, 1949, the government repealed the tax on all soft drinks sold in bottles, but the next year placed on soft drinks a 30 per cent tax, the heaviest in history. In 1949 the minister repealed the 30 per cent tax on candy and confectionery. A year later he raised it again to 30 per cent. In 1949 the minister repealed the 50 cents per pound tax on carbonic acid gas but in 1950 he restored it. In 1949 the government repealed the 30 per cent tax on chewing gum but the next year it was restored at 30 per cent.
What do we on this side of the house say about those reductions? Do we complain about them? On the contrary, Mr. Speaker. When the minister speaks about incentive and the need for encouraging production, the words sound familiar to us. We seem to

remember using words of that kind ourselves. When the minister confessed the injury done to corporations and the need for correcting it, that too is a familiar theme to us. We seem to remember raising this point ourselves. As I said a moment ago, the welfare of so many of us-wage earners and consumers-depends on reasonably profitable operations of corporations. These arguments have been used before, and any sensible man would use them.
Our complaint is that it should have been possible to do these things and other things as well, and that if there was due economy we would not have had to stop there with the 25 per cent but that we could have thought about the 75 per cent. As I say, our complaint is that it was not done before and that it is too little and too late. The minister really admitted a good deal of these things when he said a year ago that the additional corporation tax was unsound. What he should have done, Mr. Speaker, was not to increase that corporation tax which he himself told us was a wrong thing to do but to look around and get the economy which would have enabled him to avoid this tax.
Then there is the removal of the radio licence fee. We have shouted long and loud for that and we approve of it. But we certainly do not approve of the scheme-and an extremely strange scheme it is, it seems to me-whereby the 15 per cent excise tax on television machines is to be earmarked apparently for television services. Those things seem to me to have no relation whatsoever. Why on earth the number of television sets bought should fix the income of the C.B.C. on its television side is something that I cannot understand. It seems to me to be perfect nonsense. Nobody will argue that these things are related and it does not need much courage to predict that that scheme will not last very long.
I have said that our complaint is that these benefits are too narrow, and that they could have been extended if the government would really grapple with the question of the elimination of waste and extravagance. No one is more conscious than I am that those are not new words to use in this house, but I shall try to establish later that we perhaps have a new situation which may make them more effective than they have been in the past. The Minister of Finance no doubt is the prisoner of other departments. At any rate, the assumption of his whole statement the other night-and the assumption made by the government-is that the present spending level is virtually irreducible and that therefore no further tax relief is possible.
The Budget-Mr. J. M. Macdonnell
Mr. Speaker, we repudiate that assumption utterly; and we believe that an increasing number of people share our views. This is a good thing because it is perfectly clear that we are just wasting air in expecting economy until the hand of the government is forced. The Winnipeg Free Press, which I am always glad to quote-


Douglas Charles Abbott: That is good old stuff.


James MacKerras Macdonnell: Mr. Speaker, sometimes old stuff becomes new. As I say, the Winnipeg Free Press, which I am always glad to quote, on January 30 has an editorial with a brisk little heading. It is entitled "Quick, the Axe". What it wants the axe used for is because of the C.B.C. broadcast to South America of which the Free Press says "No more wanton extravagance could be imagined."
What is needed, of course, is to bring this sort of thing to the consciousness of the ordinary voter and still more to make him believe that something can be done about it. I wish to refer to a little illustration given by a writer recently. He breaks down the federal expenditure of roughly $4J billion. He says that is $375 million a month. He says that, on the magic calculation of averages, that is $25 a month, on the average, for every man, woman and child or $100 for a family of four. He says with force that if you could make the ordinary family believe that they are paying $100 a month in taxation, of which $50 is for defence, they would really sit up and take notice. I think that is true.
In general terms what we say, Mr. Speaker-and I go back now to the words used by the Free Press-is that what we need is a sharp economy axe instead of just a blunt penknife which I think is all that has been used up to date. If that had happened, then there could have been relief not merely for those now benefiting but for those who are ignored.
Let us look at another side of this picture. The other night I said that one of the things so unsatisfactory about this form of relief is this. It is not that the minister is going to walk off with any less of our money. He is able to throw us a little tip and still keep more of our money than he had before. He is going to take $4,473 million as compared with $4,375 million during the current year; and that is leaving out old age security payments which will be $344 million. Incidentally, Mr. Speaker, I cannot understand this practice which the minister has-and perhaps the government has it too-of segregating in his mind old age security as if somehow it was a different kind of money, obtained by a different
2338	HOUSE OF
The Budget-Mr. J. M. Macdonnell government and used for some different sort of purposes. Why on earth it should be separated I do not know. Whether they think it will lessen the pain to keep it in two parts, I do not know. To me it is merely confusing. I suggest that the practice might be abandoned. Again I say that, when the public is aware of these facts, I think it is going to take more than a little tax reduction given to someone else to keep them from complaining.
I said a moment ago that we have kept repeating that the only way to deal with this matter was to grapple with the appalling expenditures. It has often been said before but you also always hope, Mr. Speaker, that there is a last straw. There is a last straw.
I am not at all sure that this budget may not be the last straw because I think there are new circumstances. First of all, there is the Currie report which has kindled into a vigorous flame what up to the present has been merely smoldering. People are tax-angry and I do not think that anything that has happened in the last week is going to soften them up.
I do not wish to leave the impression-not for a moment-that I think it is only in the Department of National Defence that there is room for saving. I should like to recall that last year, when complaining about the overlapping of departments, I pointed out the number of economists there were, and how many departments each had their own staff of economists. I feel about that matter as I do about a great many other things, namely, that the test applied by this government has not been "What can we do without?" but, "Would it not be a nice thing to have this, that or the other thing?" I have no doubt that it is nice for every minister to have a battery of economists but I question whether it is not running us into great extravagance. I question whether, with some centralization, it could not be greatly lessened.
On looking at the estimates I find this year that there is a great array of architects. For instance, the army, navy and air force have fifteen. The Department of Agriculture apparently has five. The Department of Citizenship and Immigration has three. The Department of External Affairs has only one; I do not know what has happened to them. The Department of Justice has five; that surprises me a bit. The Department of Labour has one; the Department of Health and Welfare has one; the Department of Public Works has thirty-two; there is more reason for them there. The Department of Resources and Development has four. The Department of Transport has four and the Department of Veterans Affairs


has four. In addition to these architects, of course they have their satellites and there are several hundred draftsmen, and in addition large sums for outside professional architectural services. I think there is a lot of nonsense about this duplication. I believe it is just keeping up with the Joneses to have architects in every department.
I am glad to be able to quote the Senate finance committee on this. They appear to agree with me in this respect. While the government never seems to speak up loud and clear they did in their report of last June. They said:
The growing practice for other departments of government to by-pass Public Works Department and build up little public works branches of their own should cease.
I imagine we have one member of the government who would agree with that.


An hon. Member:: See him smiling now.


James MacKerras Macdonnell: Yes, Mr. Speaker, it is all very well for him to smile; he is good at that; but what we want to know is: What is he going to do about all these architects? The Senate had another crack to take at another practice. They were speaking of the increasing volume of publications from government departments and they said:
Your committee feels that much of this is unnecessary and useless and should be completely overhauled.
They could tell the world, Mr. Speaker, that much of this is unnecessary and useless and should be completely overhauled.
I repeat the astounding evidence that I mentioned about television the other night. I want to get this on the record again:
The C.B.C. Toronto and Montreal stations and studios cost $3 million each. But a new and powerful United States television station is now going up at Bellingham, just across the United States border from Vancouver and Victoria, at a cost of some $80,000.
That is an astounding statement. I checked it as far as I could with responsible people, and one of the responsible people gave me the interesting comment that I mentioned in the house last Thursday. He said:	"It all
depends upon the attitude you take toward money."


Mr. McCann:: That is not a transmitter station at all.


James MacKerras Macdonnell: That is the story of the C.B.C., I know. You look into it, and you will find that the answer is not as easy as that. I thought there might be some answer like that and I made inquiries and I need a lot of evidence to satisfy me that the statement which the minister has made is right.


James Joseph McCann: It is a relay station.


James MacKerras Macdonnell: That is not what I am informed.


James Joseph McCann: A different type entirely.


James MacKerras Macdonnell: The minister is the Minister of National Revenue, but he is not the engineer in charge of this development on the Pacific Coast, and I am not going to take his statement on that at all.


James Joseph McCann: You are an engineer!


James MacKerras Macdonnell: I want to say a little about other non-defence figures because we should not imagine they are small or that the increases are small. I hold in my hand a statement which shows several of the departments. The figures are for 1939-40; 1949-50 and 1953-54, in other words, four years ago and fourteen years ago. They are as follows: Civilian allowances for 193940 amounted to $1,181,090; in 1949-50 they went to $5,010,205; and in 1953-54 they are estimated at $8,780,000. Travelling and transportation: in 1939, $4,742,206; in 1949-50, $23,052,346; in 1953-54, $53,558,588. Let me head off the easy answer by saying I know that involves a good deal of transportation between Germany and Korea, but that does not begin to explain that huge rise.
Then we come to publications, films, broadcasting and advertising. In 1939 they amounted to $624,420; in 1949-50, $6,828,957; in 1953-54, $7,368,412. The next is freight, express and cartage. In 1939-40 the figure was $639,825; in 1949-50,	$8,800,686; in
1953-54, $18,790,004. For telephones, telegrams and postage we get these figures:	in
1939-40, $960,248; in 1949-50, $8,972,069 and in 1953-54, $13,002,208. There is also an additional amount of $3,899,952 for postage in 1953-54. For printing and stationery we get the figure of $2,582,901 in 1939-40, practically $14 million in 1949-50 and in 1953-54, $19,535,978. You see how these figures have shot up and the end is not yet, unless somebody comes in to take effective action.
Nobody supposes that economies are easy. These economies that we demand will not come without pressure. Where is the pressure going to come from? I submit it will not come from the Prime Minister (Mr. St. Laurent). The Prime Minister spoke about economy when the house assembled in November last. It seemed to me that what he was really telling us was that you could not do much about it; that it was unfortunate, but you could not do much about it. There was no sense of urgency. I understand the walls of Jericho fell down when the trumpets blew, but they must have blown hard. With deference, I feel that the Prime
The Budget-Mr. J. M. Macdonnell Minister's tone was weak and quavering. He seemed to be telling us merely why it could not be done, not how it could be done.
I said that there would be nothing done except under pressure. Savings will be made when there is a real desire to make them, but this government does not will to make savings. If savings came around and jumped up in their faces, of course they would make them, but that is not the way they are made. This government does not will to make them. They are accustomed to spending, and spending is pleasant. They have had large surpluses, and in those last years they have never had a real inescapable spur to economy.
The minister takes refuge behind the total figures of interest and of national defence figures, as if these were irreducible, as if they were unchangeable, like the laws of the Medes and Persians.
Well, I am afraid we must confess that perhaps in the early months of the new defence program we may have been a little negligent in allowing that attitude to prevail, but it is gone now. That cannot go on any longer. People are beginning to reach the attitude of mind where they are utterly unwilling to accept that attitude any more.
Last autumn the truth about national defence began to emerge. Newspapers were filled with serving forks, neckties, boots and shoes, women's raincoats. We were asked at the magic word "stockpile" to abandon all criticism and approve everything. The conclusion reached by the public was that the stockpiling argument was unsatisfactory and unacceptable. And then came the Currie report. I think it was like a breath of reality breathed into the whole situation, and it hit the public conscience with a bang.
We all remember that first day in the house when it looked for a few hours as if the government might be going to take it seriously. We all remember the hurrying to and fro which we could all see. We all saw the spectacle: the distress signals were clearly flying; but after the failure of an attempt made by the backbenchers on the government side to tell us that we were attacking the army and not the government, not the defence department, after the failure of that attempt the government ranks were re-formed and on the second evening a champion entered the lists. We might have expected that it would be the Prime Minister, having regard to what we had thought had been his attitude toward the Currie report; but no, the unpleasant job was foisted, in the absence of the Minister of National Defence, on the associate minister designate. I must say that I am sure he did his best.
2340	HOUSE OF
The Budget-Mr. J. M. Macdonnell His line was to pooh-pooh the report. It was an ungracious task suddenly foisted upon him. Later on, in Toronto-and I do not know whether it was the influence of Toronto that was responsible-speaking of the Petawawa difficulties he referred to the irregularities as merely "normal thieving". It seems to me that what is meant by "normal thieving" depends upon what your experience is with people engaged in that form of activity. I can imagine, for instance, that a real burglar might have said that the stealing that went on at Petawawa was subnormal.


Douglas Charles Abbott: What was it in your battery, Jim?


James MacKerras Macdonnell: I come back to say that I think the Canadian people will not accept the attitude which was taken, perhaps too easily, by those abroad on actual service. I doubt if that will be accepted, and I think the people of Canada will be interested to know what was the attitude taken by the Associate Minister of National Defence with regard to what had been revealed.
Now, the Minister of Trade and Commerce (Mr. Howe) got into this at Kingston. He dealt with it in an offhand and forthright way, as is his custom. He referred to it as "lurid language". I have looked up the word "lurid", and I find that one definition of it is-


Douglas Charles Abbott: "Lurid rehash" was the phrase, I think.


James MacKerras Macdonnell: I thought the words were "lurid language". However, if the minister wishes to correct me I am prepared to listen to him. However, I do want to read this definition of "lurid", because I am not sure that it may not be of interest in this context. The meaning I find is, "shining with a red glow or glare amid darkness." I rather think that that is exactly what the Currie report will do, that it will shine with a red glow or glare, amid darkness.
However that may be, I think the minister also said that it had been blown up beyond any reason. But what I would like to remind the minister of is that not one single word that Mr. Currie said in that report has been questioned or altered, and that on every question he has expressed himself his words are shattering words.
Now, we have the Minister of National Defence, hot-foot back from Paris. And of course there was only one thing he could do. He had told us already over the years of the excellence of his department. He had-


Douglas Charles Abbott: I do not like to interrupt my hon. friend on a point of order, but I feel that I must do so. I think there is a ruling


that one should not refer to a previous debate in the house in the same session. I have no objection to a discussion of the Currie report. But the fact is that there was a long discussion of it in the house; and if there is a ruling of that kind I suppose it is intended to prevent a second discussion. I am not sure about my point of order, but I do raise it to bring it to Your Honour's attention.


Some hon. Members:: Oh, oh.


Douglas Charles Abbott: Oh, if he wants to discuss that instead of the budget, it is fine with me.


Mr. Graydon:: You do not mind; you think the budget is worse than the report?


Douglas Charles Abbott: It would seem that my hon. friend cannot do much with the budget, so he goes back to the Currie report.


James MacKerras Macdonnell: I appreciate the point of order that has been taken. But if there is a ruling against my referring to what took place in the house, surely there is no ruling against my referring to the Currie report, which is a document in the hands of all of us?


Mr. Speaker:: The hon. member cannot refer to a previous debate on another subject during the present session, either directly or in quoting newspaper reports or speaking generally. It is improper for a member to refer to a previous debate, whether or not he uses the exact words which have been said.
It is my opinion that the debate on the Currie report should not be revived at this time. That report, for consideration, was referred to a special committee of the house. Now, I do not intend to prevent a reference to the Currie report; but another debate on it at this time I am sure would not be in order.


Edmund Davie Fulton: In connection with Your
Honour's ruling, may I just direct Your Honour's attention to the' fact that the Currie report was not referred to the special committee. If hon. members will just take a look at the motion moved by the government, through the Minister of National Defence (Mr. Claxton), as reported at page 943 of Hansard, they will find that the motion was as follows:
That the motion be amended by inserting after the words "'March 31, 1950", in the fourth line thereof, the following:	"and initially to give
priority in their examination to the expenditures and commitments of the Canadian army works services as dealt with in the report of G.S. Currie, esquire, chartered accountant, tabled in the House of Commons on December 15, 1952."
So the report itself was not referred to the committee. Rather it was the question of the activities of the army works services branch that was referred, and that is all.


Douglas Charles Abbott: As I said when I rose to the point of order, if my hon. friend prefers to discuss the Currie report, and if it is in order for him to do so, instead of discussing the budget, then I have not the slightest objection.


James MacKerras Macdonnell: May I say a
word. The minister suggests that a reference to the report is irrelevant. One of the points I wish to make strongly is that of economy: and in order to establish that, I wish to lay the foundation by indicating the strong feeling that there is a great deal to be done, and that also the strongest witness to that effect is Mr. Currie himself.
The point made by the hon. member for Kamloops is surely well made. I do not propose to detain the house long on this subject, but I certainly suggest that my reference to the Currie report is relevant. I am not quoting from a previous debate, if Your Honour rules that I should not refer to a previous debate. But that is surely an entirely different matter from referring to the Currie report.


Mr. Speaker:: As I said, it is not my intention to prevent the hon. member from referring to the Currie report. But I do not think it would be in order at this time to have a debate on the Currie report, generally. As the hon. member for Kamloops (Mr. Fulton) has pointed out, a certain portion of that report in any event has been referred to the committee.


Edmund Davie Fulton: I pointed out just the opposite.


Mr. Speaker:: That is not my interpretation of the motion passed in the house. I am not stopping the hon. member for Greenwood at this time, but I would ask hon. members during this debate not to revive discussion generally on the Currie report.


James MacKerras Macdonnell: Thank you, Mr. Speaker; I bow to your ruling, of course.
I was just making a brief reference to the Minister of National Defence, and was about to say that, in reference to Mr. Currie, he was in a rather difficult position because, like all of us, he had expressed the greatest regard for Mr. Currie. And he was at pains to suggest to the house that many of the Currie recommendations had already been carried out, and that the situation, in his opinion, was well in hand.
As far as I recall, the Minister of Finance said nothing about the Currie report until this moment; he is following the government line which is to brazen it through.
I come now to make reference to the report itself. I repeat, Mr. Speaker, that I do this believing it to be completely relevant because it is one of the strongest arguments
The Budget-Mr. J. M. Macdonnell on the point that I am trying to emphasize this afternoon, namely, that we need an entirely new approach to the question of economy. What is perhaps more important than my voice raised here is that I think the people of Canada are coming to believe that too. We all recall Mr. Currie's reference to a "general breakdown in the system of administration, supervision and accounting". He refers to accounting records being in "a chaotic condition". Speaking of an inquiry into cement he said:
It is Impractical and perhaps impossible ... to try to determine by this means-
He is referring to accounting means.
-the amount and value of the deficiency.
After referring to an attempt to clear up the situation regarding cement, he says:
It was impossible to ascertain exactly what had happened.
This was after discovering that apparently a loan of 3,400 bags of cement had not been returned, and he concludes as follows:
My test cement investigation convinced me that to attempt a similar study of all the 5,000 items . . . would be endless and probably fruitless.
There are two other short quotations from Mr. Currie I wish to make which put the whole situation in clear perspective. He
says:
My view would be . . . that the generally lax administrative situation would give rise to waste and inefficiency far more costly in loss than that covered by actual dishonesty.
Could anything more be needed to put us on inquiry as to the situation throughout the whole defence department expenditures? Mr. Currie's investigation covered, in terms of money, perhaps one-tenth of one per cent of the expenditures of the Department of National Defence-$1 in $1,000. He discovered waste and inefficiency in the tiny area in which he worked. He leaves us no reason to doubt that we should expect to find waste and inefficiency in the vast area which he did not cover. And finally Mr. Currie says:
What is needed now is the creation of a system designed to fit the economic and efficient administration of a large and long sustained preparedness program . . . This involves the abandonment by all administrators of the program of the war psychology, with its emphasis on speed, with resultant wastefulness and extravagance, and the substitution of an alert, economic and efficient operation.
This last statement has not received nearly the attention from the Canadian people that it deserves. Note first of all the use of the words "creation of a system". This means that no system exists now or, at any rate, no system worthy of the name. Second comes the phrase "the abandonment of the war psychology". Why is it to be abandoned?
2342	HOUSE OF
The Budget-Mr. J. M. Macdonnell Because of, and again I quote Mr. Currie, "its emphasis on speed, with resultant wastefulness and extravagance".
In other words, what this statement says in effect-and remember it comes from an eminent businessman, widely experienced in business and in the department itself, whose words have not been challenged-is that our huge expenditures are being made at the moment without system and with wastefulness and extravagance. In the light of this, Mr. Speaker, I find it hard to credit the situation which exists at the moment. With a devastating report on conditions which Mr. Currie has found in what he has examined and with clear warning that there is no reason to doubt that these conditions are widespread, the government refuses to allow an independent inquiry to be extended. What would happen if the board of directors of a company were told by the executive officers of the company that they were not to be allowed to extend an inquiry that had been made? If one department had been found wrong and they were told they were not to extend it-


Mr. Speaker:: Order. Was there not a vote in the house with respect to whether there should be a further inquiry by Mr. Currie?
I think the house decided not to do that.


Douglas Charles Abbott: Mr. Speaker, I have not interrupted again because I do not like to interrupt the speech of the financial critic of the opposition. But if we are going to have a completely new debate on the Currie report and whether or not Mr. Currie should be asked to extend his inquiry, I do not know where we are going to end this session. I do not know what the rules are for. I am quite prepared to have my hon. friend direct his attention to alleged waste and extravagance in the Department of National Defence or any other department of government but I wish he would try to observe the rules of the house.


James MacKerras Macdonnell: The minister will be glad to hear that I am practically through with that, although my understanding is that in the budget debate one is allowed the very widest measure of discussion. However, Mr. Speaker, I think perhaps the minister may not have to question me any more because I am going on now to what I hope are less controversial matters. I want to remind the house-and I hope here I am not in any difficulty-of what the Auditor General said. I will go ahead, Mr. Speaker, until you stop me.


Douglas Charles Abbott: Delighted.


James MacKerras Macdonnell: The minister has given his approval of that, so I am all


right. The Auditor General had something to say about the system. I was particularly interested because when I told what he had said to an experienced businessman who is a friend of mine this man was completely flummoxed by it. He said: "Well, if you have got eight systems of bookkeeping"-which is what the Auditor General said-"I just cannot imagine anything that could more easily give rise to waste, confusion and extravagance".
I do not need to rely solely on general principles in urging that the government take an entirely new approach to this question because there is evidence. We have the evidence of Penhold. We have the evidence in the Gazette yesterday, which many may have read, of extravagant and fantastic expenditures.


Douglas Charles Abbott: Page Arthur Blakely.


Mr. Lesage:: Some evidence.


James MacKerras Macdonnell: 
Douglas Charles Abbott: He always uses good grammar, or tries to.


James MacKerras Macdonnell: I wondered about the grammar but I think it was for

other reasons that the minister avoided it. My mind conjured up the 75 per cent of taxpayers who get no benefit or relief because expenditures do not come down. I realize, as I said before, that the government has a boom mentality. There is no use arguing with them. They think they can keep things going permanently just as they believed they could keep the 3 per cent bonds from going below par. They have always been right, they tell us. They were right when they kept the dollar at a fixed rate and they were right when they set it free. They were right when they spent millions to support the bond market and they were right when they let it go free. They were right when they supported the interest rate and they were right when they ceased supporting it.


Douglas Charles Abbott: Well put.


James MacKerras Macdonnell: There is nothing like blind confidence. But of course this can be said, and I think it is wise for taxpayers to remember, that after all the boom has just been a piece of cake for the government. What does it enable them to do? It enables them to follow the old adage: Tax and tax, spend and spend, elect and elect.
The minister was very kind in his praises of the people of this country the other night for their production. He may well praise them because, after all, they have saved his bacon, and if they keep working hard enough and produce enough the minister can keep prices up and he will perhaps have another surplus-a ninth to add to his eight. Of course, we all know the political harvest, and the government knows the political harvest- none better-of a judicious planting of hundreds of millions of dollars. They know how to attract to their standard, emblazoned with the dollar sign, thousands of adherents loyal to the golden appeal of government contracts. I say this because it is becoming a serious aspect of life in this country.
Someone will say: Aren't you taking this too seriously? Suppose the government is on a spree. It is a nice spree. Does it really hurt anyone? That leads me to make some observations on the cost of government and those who are not doing well out of this spree. Listening to the minister made me realize how hard it is for a minister with a series of surpluses behind him to be much worried about the cost of government. Presumably, as he produces surpluses out of the conjuror's hat he feels that even if he costs the country a lot, he is worth it. Has he not solved the problem of taxation, which is "to pluck the goose so as to obtain the largest amount of feathers with the least amount of squawking".
The Budget-Mr. J. M. Macdonnell


Douglas Charles Abbott: Where have I heard that?


James MacKerras Macdonnell: I believe there is going to be some squawking and I propose to help it as far as I can. Of course, part of the trouble with the government is its very remoteness, the fact that they have clothed themselves with arbitrary power and are far removed from grievances. After government has been in office for a very long period control passes from the people and into the permanent staff, and those few of the elected representatives of the people who are able to control the rest of the members. In the old days there was chronic fear of militarism but now the fear is the tyranny of government departments clothed with power based on fiscal and social security measures, power unnoticed for a long time but now struggling desperately to maintain itself.
Consider the power which is given by an expenditure of $4 billion a year. The sinister aspect is that it enables the government to use public money for its own benefit. Every department is the sounding board for publicity of that department and publicity in cataracts flows from innumerable sources, published under the authority of the minister. No wonder the Senate commented on this and said it was a bad thing.
It is wonderful how great a man can suddenly appear if he has hundreds of millions of dollars to spend. Even the most modest of individuals assumes heroic proportions when he has this kind of power. It is hard to see how governments would ever fall if the verdict was exclusively with those in the charmed circle of government beneficiaries. As governments poke their noses more and more into our business they strengthen themselves more and more by dispensing more and more of our money. It is very simple. The government takes your money and uses it, incidentally, to create good will for themselves. Why should they be interested in economy if the goose hangs high and the squawking is not too great? This will go on until people are aroused. There will be more taxes this year than ever before. We all know the effect of these taxes on prices, and I will just quote a sentence from Mr. J. R. Petrie, well-known tax expert, who was speaking on March 30, 1952, emphasizing this:
Our average man has lost nearly half of his increased income because of depreciated dollars and the present tax bite takes another 40 per cent of it.
He goes on to ask:
How high can taxes go before they in themselves become inflationary and disrupt the economy?

inflation. Many farmers are for the moment taking the rap and carrying the load, because of the cutting off of agricultural markets.
We must not, however, assume that the government has taken the pledge against further debauching of the currency. A good deal will depend on what happens in the United States. There a determined effort is being made by the new government to protect the savings. But we must be on our guard. If the government persists in the attitude that nothing can be done to curtail spending, the lull will be only temporary; for as Mr. Muir, president of the Royal Bank, said recently, the "root cause" of inflation is government spending. Buoyant tax revenues "so dear to governments" are "symptoms of inflation" says Mr. Muir. "What we must do is cut both sides of the budget, both expenditures and taxes. It is the only way to get at the root cause of inflation."
If there were time I would have liked to say a few words on the question of surpluses but I shall deal with it in only a word. We are familiar with the minister's gift for producing them out of hats. We remember Abbott's "rabbit". I myself never did fully understand the $722 million we talked about early in 1952. At that time, when we criticized it, the minister said it would be useful for non-budgetary purposes. I thought actually it had been spent but later on it turned out that, when we got the budget, the whole surplus was only $248 million. This year the minister is estimating a surplus of only $48 million, which on past experience would not warrant tax reduction. I have come to the conclusion that the surplus is largely in the minister's hands.
With such large expenditures it is possible, within limits, to arrange to have payments either before or after the end of the tax year. Further, the minister, by law, has the right during the days of April to attribute expenditures so that they go back into the previous year or into the current year. It is a good deal like the old days of equity, when it was said that the law administered by the chancellor was more or less corresponding to the length of the chancellor's foot. I think the minister's convenience and current policy have sometimes a good deal to do with the actual surplus which he tells us about.
Now, Mr. Speaker, I want to turn to another matter. 1 do apologize to the house for the time I am taking, but it is only once a year.


Douglas Charles Abbott: You have unlimited time.


James MacKerras Macdonnell: I know, and that is what is so hard for the other people.

I want to say something about tariffs. I am amazed at the things which responsible people, pursuing their conception of the party line, allow themselves to say about tariffs. We are in a controversial business. Political life is one of strife, of course, but it does seem to me that there are certain things which should not be done, even in political life. Sometimes I wonder if that is not forgotten.
I am sorry that I shall have to read this because it has a lot of detail in it. I want to say something about the tariff policy of this country, in the hope that some of the outrageously inaccurate and misleading things, even if I do not use stronger words, may perhaps no longer be said. I think it is about time somebody raised his voice to expose the campaign of misrepresentation and sham with regard to tariff policy that is carried on by a portion of the Liberal press in Canada.
Now, just where can the line in principle be drawn between the two historic parties with respect to tariff? It is a matter of history that a Conservative government made the first general increase in the Canadian tariff structure since confederation. Prior to the election of 1878 Sir John Macdonald, leading the opposition, formulated this policy on a motion to go into committee of supply. This was his amendment, and I think that, regardless of party, people will find this amendment interesting. It reads as follows:
This house is of the opinion that the welfare of Canada required the adoption of a national policy, which, by a judicious readjustment of the tariff, will benefit and foster the agricultural, the mining, the manufacturing, and other interests of the dominion; that such a policy will retain in Canada thousands of our fellow countrymen who are now obliged to expatriate themselves in search of the employment denied them at home; will restore prosperity to our struggling industries, now so sadly depressed; will prevent Canada from being made a sacrifice market; will encourage and develop an active interprovincial trade; and moving (as it ought to do) in the direction of a reciprocity of tariffs with our neighbours, so far as the varied interests of Canada may demand, will greatly tend to procure for this country, eventually, a reciprocity of trade.
I should like to repeat those last words:
-will greatly tend to procure for this country, eventually, a reciprocity of trade.
Now recall the circumstances in which this policy was set forth. The British preferences which were helpful to Canadian agriculture for generations had been repealed. The reciprocity agreement with the United States had been repealed, and the United States displayed a steadfast refusal to renew it with Liberal or Conservative governments. We come now to the 1896 election, with the Liberal party tied hand and foot by a free 68108-150i
The Budget-Mr. J. M. Macdonnell trade plank which it had adopted in convention in 1893, a few years earlier. What did they do about tariffs? They adopted the Conservative national policy, hook, line and sinker, in the first budget. That is a matter of history. Next they sought to ease the conscience of newspapers like the Winnipeg Free Press by providing for a British preference which was carefully framed not to injure Canadian industry.
I come now to the reciprocity campaign of 1911. Do the members of this house realize that on that occasion the Liberal government then in power refused to offer to the United States the intermediate tariff, except on a few inconsequential items? The defeat of reciprocity was followed by the Underwood tariff, 1913, which gave Canada free entry into the markets of the United States on products of the farm as well as other raw products.
Here is another fact that some hon. members may have forgotten. We had a Conservative administration in power for ten years under Sir Robert Borden and Arthur Meighen. What did they do with this Laurier tariff which was hailed by the Liberals in 1896 as a free trade tariff? Except for some war revenue duties, which were promptly repealed after the war was over, they left it entirely unchanged. It was good enough from the point of view of giving protection to Canadian industry for Sir Robert Borden and Arthur Meighen.
Then we come to a different era. The Underwood tariff was repealed in 1922. It was succeeded by the Fordney-McCumber tariff in the same year which served to exclude Canadian farm products from the United States. In the face of this a Liberal administration sat with its hands folded for nearly ten years. Then came the Hawley-Smoot tariff in June 1930, when the Liberals were still in power, and demolished such trade in farm products as was permitted under the previous tariff measures. The United States did not stop there. On top of the Hawley-Smoot they passed the emergency tariff act in 1932 which placed special duties against our copper and lumber.
It is in these circumstances, and in this atmosphere, that R. B. Bennett made his proposal to the British and all other governments of the empire. These resulted in providing Canada at the time with a sheltered market, especially in Britain. But Mr. Bennett did not stop there. He made a definite proposal for a trade agreement with the United States, and in his proposal he included what Mr. Fielding would not include in 1911, an offer of the intermediate tariff. Up to this time, no Canadian leader or other statesman had dreamt of offering the intermediate tariff
2346	HOUSE OF
The Budget-Mr. J. M. Macdonnell to the United States. This resulted in a trade agreement made between Canada and the United States in November, 1935, thirteen days after the King government was returned to power. What they really did was to sign on the dotted line the agreement that had been on the point of being signed while Bennett was still in office.
It is true that in 1930 the Bennett government had made substantial increases in the Canadian tariff right across the board. Rightly or wrongly, he did what practically all countries in the world were doing, including Britain, for the first time in nearly three-quarters of a century, that is, taking measures to protect the national economy against the devastating fall in world prices and shrinkage in world trade.
It should be pointed out that Mr. Dunning, a Liberal minister of finance, earlier in the year 1930 had already put in tariff increases. The facts are on the record for anyone to read about this 1935 agreement, but let me give you what some may regard as appropriate confirmation of the statement I have just made. Mr. Bruce Hutchison, in his interesting biography "The Incredible Canadian", had this to say at page 216:
Three weeks after the election, he (Mr. King) redeemed his first campaign promise by closing a trade agreement with the United States to reduce Canadian and American tariffs. The agreement was far more important for its long-range intent than for its immediate results, and represented a drastic change in the high policies of both countries.
Then again, Mr. Hutchison says:
The retreat from Ottawa, (i.e. from the Ottawa agreements), continued to the eve of the 1935 election when Bennett had negotiated and was almost ready to sign a tariff-reducing agreement with Roosevelt-on taking office King found that agreement ready to his hand. He promptly signed it with a few amendments. It was Bennett's work, a work denying his original principles, but no less valuable for that.
The much maligned national policy of tariff of Sir John Macdonald became a cornerstone of Liberal policy and after that unilateral tariff reduction as far as this country was concerned was at an end.
Then we come to the next most important step. We come frankly to what has been described as bargaining tariffs. Mr. Bennett, owing to his bargaining position which he secured through the empire agreements, was able to secure market opportunities in the United States. Mr. King pursued this policy, and in 1938 made trilateral agreements, by which the concessions we had in the United Kingdom were traded off for comparable concessions in the United States. That then is the policy of this government, a policy of increasing trade by mutual or by multilateral agreements. So, just as the Laurier
[Mr. Macdonnell (Greenwood) .1

government had stolen the clothes of the government of Sir John Macdonald, this government proudly wears the bargaining tariff clothes of the Bennett government.
All members of this house accept this policy. We have virtually all stood by the Geneva agreement and the Torquay and Annecy agreements; and there is at the present time no great difference in principle between the parties in this house with respect to tariffs. When, however, we take stock of the actual facts, we find that the present government are using customs and excise and various forms of imposition to raise prices unconscionably. To illustrate, I am referring to figures from the Winnipeg Free Press which deal with an automobile imported from the United States at $2,000.
First we must take the customs duty of 174 per cent. This amounts to $350. The succeeding levies are then pyramided. First the importer pays a special excise tax-as is also paid on the Canadian make-of 15 per cent. Here we have another $352.50 which brings the laid-down price up to $2,702.50. Do we stop there? Not a bit of it. There is a general sales tax of 10 per cent on the marked-up price as it then stands or on the sum of $2,702.50. This comes to an additional $270.25. Where is the buyer at now? His $2,000 imported car has reached the grand total of $2,972.75, of which $972.75 goes into the pocket of the government.
I must acknowledge to the house that, to my amazement, the Free Press in its evangelistic eagerness has made a technical mistake. I have made inquiries and I find that the sales tax is not pyramided on the special excise tax, so that the calculation, instead of as the Winnipeg Free Press works it out, would work out in this way. On the $2,000 imported car you first pay 174 per cent customs duty, and that brings the mark-up to $2,350. You next pay on that mark-up the 15 per cent special- excise and the 10 per cent sales tax which is 25 per cent, so that exactions amount to $587.50. So the mark-up price is not as the Free Press figures it out to be, $972.75, but is $937.50.
Now let us see the rate on the family car in Bennett's day. Today the $2,000 car is the ordinary businessman's car. In the 1920's and 1930's the ordinary family car and the ordinary businessman's car never exceeded $1,200 in value. As a matter of fact, on the import level $1,200 would represent a fairly good car. Now what do we find? When Mr. Bennett came into power in 1930, an imported car at not more than $1,200 retail carried the following rates of duty: British preference, 124 per cent; intermediate, 174 per cent;

general, 20 per cent. So at that time the general tariff against automobiles applied to the United States was 20 per cent.
Mr. Bennett, in his tariff changes in the special session of 1930, did not touch those rates. He did, however, increase the rates on those cars selling in excess of $1,200; that is in excess of what we all know was then the value of the ordinary family car. But what were the rates in the terrible Bennett days on the $1,200 car which corresponds to the $2,000 car of today? There were 20 per cent customs tax, 5 per cent excise and never more than 6 per cent general sales tax. That is a total of 31 per cent.
What are the rates now on the ordinary family car? They are as follows: customs, 17J per cent; special excise, 15 per cent; general sales tax, 10 per cent. They are 42J per cent, or 11J per cent more than the highest rates ever levied by any Conservative government in this country.
Mr. Speaker, you will be glad to know that I am nearly through, but I want to read to this house a statement from the Winnipeg Free Press. Then having regard to what I have read, I want the members to consider this and to consider whether it is the kind of thing that a responsible journal should write. It seems to me that it is a monstrous misrepresentation of the facts which are on record and which everybody-particularly a newspaper that seeks to lead public opinion- should know. I read from the Free Press of January 16, 1953:
The present Canadian tariff, although but a shadow of the old Conservative tariff, is still much too high . . . The Conservative party stands for protection. As shown the present over-all Liberal protection on automobiles is about 22 per cent. Contrast this with Conservative policy. In the last Conservative parliament, 1930-35, the tariff on all automobiles priced at $2,100 or less was 30 per cent, and on all higher-priced cars 40 per cent. And then, as now, there was an excise tax and sales tax which pyramided the actual tariff rate. There is absolutely no hope of tariff reform from the Conservative party. It is steeped and indurated m protection. High tariffs are the only policy to which, down the years, the party has been faithful.
In the light of the facts that I have brought forward this afternoon, I ask if there is a scintilla of justification for that statement and whether it is not, in any man's language, a gross misrepresentation of fact. I bring that forward because this kind of talk that I have read is common. It is used by people sometimes, I believe, in sincere ignorance and sometimes in insincere malice. I think it is desirable that this should be on the record. I only wish I could shout it into the ears of every Canadian.
Before I take my seat I want to say just a word about dominion-provincial relations.
The Budget-Mr. J. M. Macdonnell The minister dealt with this topic in traditional fashion; and when I say "traditional fashion", I mean the tradition now established by the government. He seemed to show considerable self-satisfaction with regard to what had happened. It seemed to me, however, that he left out of consideration entirely one important factor. I do not think the word "municipality" was even mentioned in his speech, but I think municipalities cannot be ignored much longer. The dominion at the present time takes 71-7 per cent-that is for the fiscal year ended March, 1952-the municipalities 10-9 per cent and the provinces 17-4 per cent of the total take. An extremely interesting speech was made in this house by the hon. member for Ontario (Mr. Starr) some little time ago in which, with all the experience of municipal life which he has had, he pointed out the plight of Pickering municipality which is near Toronto. Pickering is an old community and I would have thought that it was one of the best, most stable and solid communities that one could know. Yet the hon. member for Ontario pointed out that Pickering was not able to have a water supply and that during the recent drought water had to be delivered in tanks.
It could be answered, "Why should not Pickering pay for a water supply if it wants one?" That brings me to the question which I think the minister has ignored but which I do not think can be ignored for much longer. There was a time, not so long ago, when the municipalities' share of the total tax dollar was 39-4 per cent. It is now 10-9 per cent. That tells a story, Mr. Speaker, and it is a story that I think we are going to have to listen to before long.
Just a word now about the broader question. This question, of course, takes us back to dominion-provincial conferences; it takes us back to what happened in these buildings in 1946; and takes me back particularly to what the premier of Nova Scotia said at that time. I was interested to find that just the other day he had really reiterated his views and put us on notice as to what is the real inwardness or the real implication of this problem which we have not yet solved. Speaking to the students at Dalhousie university law school in October last, he asked:
Do we wish to continue as a federal state?
And continued:
I express no choice at this time, as between a unitary state and a federal state. I do say that certain things done over the last 30 or so years show a trend toward the unitary state. Thus about 1900 the federal government went into the labour field, in 1917 the income tax field; 1918, health; 1926, old age pensions; 1941, unemployment insurance; 1944, family allowances.
2348	HOUSE OF
The Budget-Mr. J. M. Macdonnell
Today one sees the central government extending its influence and its money into such matters as the building of hospitals, the support of education, the construction of highways. Most of these have been traditionally, and in many cases constitutionally, matters of purely provincial concern.
Under its unrestricted power to tax . . . the central government is, of course, in a very strong financial position. That position is further strengthened by the tax rental agreements, so-called, entered into by the central government and most of the provinces.
One does not need to be an expert in the arts of divination to realize that Mr. Macdonald is troubled and perplexed about the situation, and how can anyone avoid being troubled about a matter which is handled so that the province of Quebec is an absentee from the council table? How can we be content to go on? The government is fond of reminding us of their great representation from the province of Quebec, but it seems to me that their representation is not doing them very much good at the present time. What is happening is that we have horsetrading agreements

the minister used a different word the other night-sometimes shotgun agreements, where one province is played off against another and there is in certain cases what can best be described as an uneasy truce.
Dans la province de Quebec, le probleme de la centralisation des pouvoirs fiscaux a Ottawa a produit une resistance bien deter-minee. Pour les citoyens de la province de Quebec, la question ne se pose pas sous forme de gain ou de perte en argent; il s'agit de maintenir intacts les droits provin-ciaux qu'ils ont toujours conserves jalouse-ment et qu'ils envisagent bien au-dessus de toutes considerations materielles. Sans doute, 1'exemple du Quebec nous porte tous a reflechir et a nous rendre compte que la question des relations federates provinciates se rattache, comme l'a dit M. Angus Macdonald, a celle de l'Etat unitaire, dans toute son ampleur. Par consequent, c'est une question qui touche a la racine meme de la vie et de la citoyennete canadienne, comme les a congues la Confederation.
What I have been trying to say in my indifferent French, Mr. Speaker-I have not had, like you, the advantage of being at Laval university-is that in the province of Quebec the problem of centralization of taxing power at Ottawa has produced a very definite resistance. To the citizens of Quebec the matter is not merely one of more or less money but of the maintenance intact of the provincial rights which they have always jealously preserved and which they regard as far above mere material considerations.


Indeed, the example of Quebec may well have an influence on the rest of us in making us realize that the question of dominion-provincial relations really does bring in, as Mr. Angus Macdonald said, the whole question of the unitary state and therefore goes to the very root of Canadian life and citizenship as set up by confederation.
I shall not trespass on your patience longer, Mr. Speaker. I end where I began. This is a bad budget. The minister speaks of the "social dividend", but what he should have called it is an "anti-social dividend" inasmuch as it has done virtually nothing for 75 per cent of the earners of this country- those whose need is greatest. The minister has thought of everyone except the people. We say that if it had not been for profuse waste and extravagance he could have done something for the people too. But the government refuses to take the first step to end wholesale waste and profusion, which is to extend the Currie inquiry. Could anything better illustrate the pass to which we have come? We in this house in the opposition have exhausted our efforts. It now remains for public opinion to step in. We saw a year ago in connection with a public works bill, which was radically changed after being introduced in this house, that public opinion can bring this government to its knees in no time. Let us see to it that before this budget debate is over the public is fully informed. If they are, we need have no doubt of the result. They will demand action.
I move, seconded by the hon. member for Souris (Mr. Ross);
That all the words after "that" to the end of the question be deleted and the following substituted therefor:
"this house regrets that under the present budget the government proposes to take more money from the taxpayers of Canada than ever before for non-defence and defence expenditures without any effective steps being taken to:
(a)	deal with waste, extravagance and administrative inefficiency;
(b)	give tax relief to those who need it most;
(c)	offer any encouragement to Canadian farmers in meeting the serious consequences of lost markets and lower prices resulting from the government's agricultural and marketing policies;
(d)	permit an independent inquiry into the organization accounting and administration of the Department of National Defence."


Mr. M. J. Coldwell (Rosetown-Biggar):: Mr. Speaker, I am very happy to be able once again to participate in the debates in this house. In doing so on this occasion I want to congratulate the minister on the budget statement. I did not hear it, but I had the opportunity of reading it, and as an outline of the position of the country it does a great deal of credit to him. I am very happy to say that.

I want to join the hon. member for Greenwood in expressing sympathy to the family of Dr. Clark. In the death of the deputy minister of finance Canada lost another great public servant. I am sure all hon. members realize the extent to which he gave of his very best to the welfare of his country.
I propose to stick pretty close to the budget this afternoon. There are some matters I should like to discuss. I should like to say something about the Currie report. I am not refraining from saying something about the Currie report because I think it would be out of order to do so. This is an omnibus debate, and one could deal with almost anything in it provided he did not refer specifically to something that had been said in a previous debate in the house.
With regard to the budget I have noticed that the press has described it as an election budget. I suppose it was intended to be an election budget, but I cannot see that there is anything in the budget for the great mass of the Canadian people. In fact, the feature of the budget is that it actually discriminates against the low-income group in our country. In making the tax concessions that have been made the minister has failed completely to apportion those concessions in such a way as to benefit the vast majority of our Canadian citizens.
He informs us that he had about $250 million in this coming fiscal year to devote to tax relief and he credits this sum, and I think quite properly, to increased production, efficiency and plain hard work on the part of a united Canadian people. Those are his own words, and I certainly agree with that statement. He then tells us that the relief he proposes is a real social dividend, well and truly earned by our people. But when it comes to apportioning the social dividend and rewarding Canadians for the virtues he has mentioned, he forgets the great bulk of the Canadian people who actually toil to make this dividend possible. Most of his tax concessions go, instead, to the well to do in this country, and particularly to those whose incomes are derived from corporation and stock dividends. And I shall have something more to say about that in a moment.
This may be a social dividend budget; but I am afraid it can be shown-and I shall try to show it-that it is for the rich, rather than for the average Canadian. We have no choice but to come to the conclusion that it is a rich man's budget, when we compare the total concessions made to the average Canadian with the total concessions made to the well to do.
The Budget-Mr. Caldwell
Let us take a look. If we concede-and may I say it is making a generous concession to the minister and the government when you do concede it-that only Canadians in the lower income brackets will benefit from the changes made in the medical expense allowance, in the reduction of the tax on cigarettes, in the abolition of the radio licence fee, and, we will say, half of the benefits resulting from a reduction in the personal income tax-if, as I say, we make that concession, then the total for this coming year in benefits to the lower income groups in Canada, with incomes of, let us say, $5,000 or less, would be $75,500,000.
Now, doing the same sort of thing-and not entirely accurately of course, but I think quite fairly-on the other hand we may say that the well to do are given the following relief: First of all, a reduction in the corporation tax; increased credit for dividends; and, as I took the other half just now, we will credit to this group also half of the reduction in the personal income tax; abolition of the tax on cheques which, of course, are used chiefly by those people in the country who are better off, and the abolition of the tax on security transfers. If we add all these together we get a grand total of $167,500,000.
In other words, those whom I have classified as the better off and wealthier people in our society will receive 70 per cent of the tax reductions, while Canadians in the lower income brackets will obtain 30 per cent only of those reductions. But even this ratio of 70:30 is giving the minister the benefit of the doubt; for most of the well-to-do people will benefit also from the tax concessions given to the small-income Canadians. On the other hand few small-income Canadians will benefit from the tax concessions made to those whom I have classified as the well to do or rich.
We in the C.C.F. party have always held to the principle that the imposition of taxes should be in accordance with ability to pay. It seems to me the minister has applied this principle in reverse. Instead of making such generous concessions to those who do not need them, he could have granted relief to Canadians of limited means in quite a number of ways.
For example, he could have raised the income tax exemption levels; he could have amended the social security tax by removing the $60 ceiling and graduating it according to ability to pay. He could have abolished the 4 per cent floor on medical expenses. He could have reduced the general sales and special excise taxes.
But he did none of these things. He preferred to grant the more substantial relief
2350	HOUSE OF
The Budget-Mr. Coldwell to corporations, corporation shareholders, and to the shareholders of Canadian companies. Then, without offering any apologies, the minister gave preferential treatment to corporations, over individuals, by making the tax reduction for corporations retroactive to January 1, 1953. But when he came to the tax reductions for individuals he did not make them effective until July 1-six months later.
And when we examine these so-called tax reductions for lower-income Canadians we begin to wonder just what reductions the minister is talking about. For example let us take, as did the hon. member for Greenwood (Mr. Macdonnell), the Canadian family of average size. Let us consider the average taxpayer with two children who earns $2,400 a year and who, in 1950 paid $19, including his social security tax.


Douglas Charles Abbott: There was no social security tax in 1950.


Major James William Coldwell: I should have said 1952. In 1953 the same taxpayer will pay $18, or a mere saving of one dollar to be spread over a twelve-month period. Or take the case of the married taxpayer with two children earning $3,000. In 1952 he paid $130, including social security tax, whereas in 1953 he will pay $126, or will make a saving of $4. This is a reduction of only 3 per cent, on an average, or 33 cents a month. That is his gain. That is the contribution this budget makes to his family budget.
On the other hand we find a different story when we examine the savings for those in the upper income brackets. The taxpayer in the same family category receiving an income of $20,000 will benefit in 1953 to the extent of a saving of $360. In other words those in the upper income brackets will benefit most, in actual dollars, from the minister's personal income tax reduction.
More striking still is the fact that while the minister refuses to raise the exemption levels on personal income tax, the benefits to those receiving dividends from Canadian companies, by increasing their credit against personal income tax from 10 per cent to 20 per cent, are very substantial, as I shall attempt to show in a moment.
Of all the tax concessions the minister has made for the well to do in this and in previous budgets, without doubt this is the most incredible. And I think very few hon. members realize just how incredible it is. It means, for example, that a married man with no dependents who receives all his income from dividends-that is, he does nothing to increase the wealth of the country


by his labour, by his ability or his ingenuity -who receives all his income merely by receiving cheques from Canadian corporations and companies, is exempted from paying personal income tax until he is receiving $9,760 before exemptions have been made. But if this $9,760, before exemptions, were earned other than from dividends the taxpayer would be liable to income tax payment of $1,952; but because he is a shareholder in Canadian companies and receives all his income from that source, he does not pay a single cent of personal income tax.
That is an almost incredible statement; but I wish to show that it is so. I have in my hand a personal individual income tax form. I have worked it out going back from the exemption. Here is a married person with no dependents. All his income is from investments in Canadian companies or corporations.


Douglas Charles Abbott: Investments in stock in Canadian corporations, not bonds.


Major James William Coldwell: In stock, yes.


Douglas Charles Abbott: Dividend paying stock; that is an important qualification.


Major James William Coldwell: Quite right. From his investments in such dividend paying stocks he receives $9,760 so that his net income is $9,760. He has of course the usual deduction on personal exemption of $2,000. Deducting the $2,000 that would mean taxable income of $7,760 if it were earned. He would pay income tax on an earned income in this way. On the first $6,000 he would pay $1,140. On the remaining $1,760, where the tax is on the basis of 26 per cent, he would pay $457.60, making a total of $1,597.60. Then he would have to pay the social security tax of $60 or a total of $1,657.60 if it were earned.
This man of course would have a surtax on investment income over $2,400. He has an exemption of $2,400, and if we deduct that from $9,760 he has to pay the surtax on $7,360 at the rate of 4 per cent, which would mean that he would pay $294.40. Therefore the total tax would be $1,952 if he were paying it on the basis of earned income. But since he gets this money unearned, from other sources, from stock dividends, he is entitled to deduct 20 per cent of $9,760 or $1,952 from the tax he would otherwise have to pay. That is the exact amount that he would have paid as personal income tax if he had earned it. In other words, this gentleman who does nothing by his labour to assist the welfare of the country, who toils not and neither does he spin, pays no personal income tax.


Mr. Argue:: What a budget!


Douglas Charles Abbott: It is paid at the rate of 50 per cent as the result of his interest in the companies.


Major James William Coldwell: Just a minute. Is the hon. gentleman going to argue that he has paid something? He has paid nothing, and so far as the companies in which he is interested are concerned they pass on any tax assessed against them to the general public. The general public pays that tax which this gentleman escapes in his personal income tax. I think that is a fairly complete answer to the minister's suggestion. We have asked from time to time that the personal income tax exemption level should be raised from $1,000 to $1,500 for a single person and from $2,000 to $3,000 for married persons. We have been refused this concession again and again and have been told that it would involve a loss of revenue.
But what has the government done in effect? It has doubled what I might call the exemptions, though that word perhaps does not exactly fit the situation, for an already privileged group, those who do not have to work but receive all their income from dividends in certain types of Canadian investments. This particular group is given special exemption levels and, as I have already shown by actual reference to the income tax form, they are allowed to receive up to $9,760 from investments in Canadian stocks before they pay any personal income tax. I say that indicates very clearly that this budget, apart from everything else, is not a poor man's budget. It is a rich man's budget. When I began to work this out I must confess to the minister that it seemed almost incredible to me, but I am quite sure that the example I have given is correct because I have had it checked not by one or two people but by several economists and accountants.


Douglas Charles Abbott: I think the figures are about right. The principle was introduced four or five years ago.


Major James William Coldwell: Quite right.


Hazen Robert Argue: Who introduced the principle?


Douglas Charles Abbott: I did, and I announced then that I hoped to increase it later. The public have been under no misapprehension.


Major James William Coldwell: That does not make it any better or any more just. In fact it indicates the thinking of the minister and the government.


Douglas Charles Abbott: I am just wondering why my hon. friend did not raise this point when it was first introduced.
The Budget-Mr. Coldwell


Major James William Coldwell: I will tell the minister why I did not raise it. I have no staff behind me, like the minister has, to do a lot of research work for me.


Douglas Charles Abbott: Simple arithmetic does it.


Major James William Coldwell: I confess quite freely that I did not tumble to it at the time, and when I did tumble to it, it was so incredible that I hardly believed it until I had it very carefully checked by some friends.
Nor did the minister hesitate to benefit the corporations by increasing their income bracket to which the lowest tax rate applies. Instead of the lowest tax rate applying only to the first $10,000 taxable income with the top rate applying to the remainder, the minister has increased the corporation income tax bracket to which the lowest rate applies to $20,000. As an additional concession to the corporations, he has reduced the lowest rate from 20 per cent to 18 per cent and the top rate from 50 per cent to 47 per cent. These concessions are indeed most generous and contrast strangely with what the hon. member for Greenwood (Mr. Macdonnell) and I have shown to be the very niggardly concessions the minister has made to the great majority of the Canadian people.
How valuable these concessions are can be illustrated, I think, by reference to a few corporations, to see how they will benefit.
I might say that the figures are the latest we could obtain and are taken from the Financial Post survey of industrials. If we look at International Nickel, for example, on the basis of the old 1952 rates they would have paid $55,509,145 in 1951. Under the new basis they would pay $52,185,016, or a saving of $3,324,129. On the same basis, Consolidated Mining and Smelting will make a saving of $2,408,362, and the Aluminum Company of Canada will make a saving of $1,620,533.


Douglas Charles Abbott: These figures are all down 3 per cent. It is an obvious calculation. It is a 3 per cent reduction.


Hazen Robert Argue: They are still good figures for the record.


Major James William Coldwell: Yes, they are good figures.


Douglas Charles Abbott: I have not checked my hon. friend's figures.


Major James William Coldwell: My hon. friend likes to talk, in percentages. An 11 per cent reduction looks all right to the man in the street so far as his own income tax is concerned, but when you figure it out it amounts to about $1, $2, or $4 a year, which does not look so good. When you take the small percentage reduction in the case of corporations it does not look bad, but when you turn that
2352	HOUSE OF
The Budget-Mr. Caldwell into dollars you can see that it really means a great deal of money. I could give a long list but I am not going to take the time to do so.
Many of us find it difficult to understand the government's and the minister's reasoning. The minister has often told us of his concern about the high level of taxation on corporate profits which he felt was a deterrent to further incentive and investment.


Mr. Studer:: That is what the hon. member for Moose Jaw (Mr. Thatcher) thinks.


Major James William Coldwell: Never mind the hon. member for Moose Jaw. Deal with the hon. member for Rosetown-Biggar's criticism of the budget.


Hazen Robert Argue: That is who will be dealing with you.


Irvin William Studer: What contribution has he made to the national welfare?


Major James William Coldwell: I am dealing with this other matter at the moment, and I will be very glad to deal with the hon. gentleman from Maple Creek when the time comes.


Irvin William Studer: Begin right now.


Mr. Speaker:: Order.


Major James William Coldwell: On Thursday the minister told us exactly the same sort of thing. In the same speech he informed us that investment in capital goods, equipment and resource development was higher last year than in 1951. Of course the figures show that to be the case, according to his budget. He has estimated that the gross national product for 1952 increased in terms of volume about 6 per cent over 1951 which, incidentally, is well above the annual increase over the past few years. He pointed out that for the three-year period, 1950 to 1952 inclusive, the gain in real product has been more than double that of the preceding three-year period. These are impressive gains that we are all happy about, as I am sure the minister will be the first to admit.
Consequently it is all the more difficult to understand what the minister means when he says that present taxation rates on corporations are impairing their incentive to invest and expand. Indeed, expansion over the past few years has been phenomenal in this country, particularly since the outbreak of the Korean war.
What we are saying is that the minister could have eased the tax burden on the small-income Canadian in many ways. For example, he could have done so if he had abolished the 4 per cent floor on medical expenses, making all medical costs deductible from income for taxation purposes. Indeed, he 

does make a gesture-but it is only a gesture -in this direction by reducing the 4 per cent to 3 per cent. I say that provides only negligible assistance to many Canadians who have little or no real insurance against the high costs of hospitalization and health services generally.
May I just say, lest I be misunderstood, that I am not blaming hospitals and I am not blaming the medical profession. I am not blaming nurses and others who render those health services. They are highly trained, highly efficient people working with very expensive equipment, and the rates are of necessity high. However, since the health of the population is something in which the whole community is interested, in the interests of all the community we think the costs should be spread over the entire community or, in any event, that the individual might be relieved of the costs by eliminating and not reducing to 3 per cent the 4 per cent floor for medical expenses.
We were told that the abolition of the floor would have cost about $40 million, which is less than half what the minister is going to lose as a result of reductions in corporation tax in a full year; yet the benefits that would have been received by Canadians generally would have been of real significance to most people.
Then there has been no reduction in the general sales and special excise taxes which my hon. friend from Greenwood (Mr. Macdonnell) mentioned. They do bear oppressively on the lower income groups, particularly. These indirect and hidden taxes seriously reduce the standard of living, often of those who can least afford to have that standard reduced farther-old age pensioners and people with large families and small incomes. Many articles -used in the home are subject to both a sales and a special excise tax, in which case the two taxes apply separately to the same value.
As I have said, these taxes apply to a wide range of household and other articles sold in this country. Because it is applied at the manufacturer's level it is a pyramiding tax. The 10 per cent rate then is misleading. When the wholesaler computes his mark-up on goods he does so on the basis of the manufacturer's price taken together with the sales tax. The retailer in turn computes his markup on the wholesale price which includes the sales tax. When the consumer buys an article he pays not only a mark-up on the cost of the goods but possibly two or three mark-ups on the sales tax as well.
We believe that the minister could have assisted the consumer, raising the consumer's

purchasing power measurably, if he had reduced substantially the general sales and other excise taxes. This would have done more to alleviate the tax burden on a majority of Canadians than anything the minister has done in his budget.
I want to express regret that the minister has not seen fit to reduce some of these petty taxes such as those on chocolate bars and soft drinks. He has done something for the smokers in reducing the tax on cigarettes, although he has not done anything for the poor man who rolls his own.


Douglas Charles Abbott: I did that a couple of years ago.


Major James William Coldwell: Yes, but I do wish the minister had done something for the children and non-smokers.


An hon. Member:: Children don't vote.


Major James William Coldwell: Removal of the tax-


Hazen Robert Argue: The kids are not voting this year.


Major James William Coldwell: -would have been a minor concession.


Mr. Sinclair:: Bad for their teeth.


Major James William Coldwell: It would have involved only a relatively small loss of revenue and would have made so many people, particularly children, a good deal happier at a time when inflation and taxes impair the purchasing power of parents, demanding extra prudence in planning the family budget. The small luxuries have by necessity to be overlooked in many Canadian families.
It is with considerable regret that we find the minister still refuses to make the social security tax for old age pensions a graduated tax. We have from the start condemned the imposition of a flat rate of 2 per cent, with a maximum for all groups of $60 per year. We say this violates the principle that taxation should be imposed according to ability to pay. The inequitable nature of the present tax is fairly illustrated by the fact that a person who has a taxable income of $3,000 pays the same social security tax as a person with a taxable income of $10,000, $20,000, $100,000 or more.
Now, it is all too clear that the minister's budget gives little comfort and cheer to the small-income Canadian. His income tax reductions are so negligible that they can hardly be considered as reductions at all, yet outside of these the average Canadian receives no concessions worth mentioning. The minister had little left for the great majority of Canadians after his major concessions to corporations and the shareholders of stock companies and so on.
The Budget-Mr. Coldwell
We believe, too, that most Canadians would have gladly forgone these few minor concessions that have been given-I mean the whole bulk of them-for something else, for a national health insurance program. The tax reductions given to corporations and shareholders, and indeed other reductions as well, could have been used to promote this program, thereby assisting, in a major effort, Canadians from one end of the country to the other. The amount of $250 million-and perhaps also the amount that has been built up in the Department of National Defence which could be used, over and above what we estimate-would have gone a long way toward giving the Canadian people a proper national health plan.
Nothing could be more ironical than that the budget should benefit to such a large degree those who are already well off, when there has been no provision to protect our people against the high cost of sickness. When I speak of the high cost of sickness, I am not only thinking of the high cost of sickness to the individual but I am thinking of the high cost of sickness to our country through unnecessary absence from work, cutting down the production of industry and so on. The economic loss to the country is very great. Surely the minister speaks with his tongue in his cheek when he calls this a social dividend budget, unless of course he is thinking only of the corporations and the shareholders.
I am not going to intrude upon the time allotted for private bills, Mr. Speaker, but I do want to say this. Were it not for the fact that another international conference on tariffs and trade is to be convened shortly, I would have devoted some attention to our vulnerable trade position. I am very glad indeed that the hon. member for Greenwood (Mr. Macdonnell) raised the question of tariffs this afternoon. I was glad to hear him say what he did about it. In the old days I often used to say, whether correctly or incorrectly I leave the house and the country to judge, that the only difference between the Conservative and Liberal parties in those days was that the Conservatives believed in high tariffs and when they were in power the Liberals always maintained tariffs that were high. That was about the only difference between the two political parties that I used to be able to see. Don't ask me what the differences are that I see between them today, because that might be rather embarrassing.
Were it not for the fact that a new conference is being convened, I should have liked to say a great deal about the tariff situation. In my opinion, if prosperity is to be assured
2354	HOUSE OF
The Budget-Mr. Coldwell to this country, and indeed to the world, then the United States and Canada will have to sharply revise their tariff policies. As a matter of fact what we are doing in this country today is preventing our overseas customers from buying within our borders the goods they need, because they cannot sell here to get the dollars. We are preventing their recovery. North America has been giving aid to the European countries, the United Kingdom and other countries. They do not want that aid. What they want is trade in order that they may earn the dollars they require to buy the raw materials and food they need. Consequently, my own view is that the day is coming when consideration should be given to drastic reductions in tariffs or their elimination, so far as possible.
I am sure that sooner or later, Mr. Speaker, the high tariffs now in effect are going to boomerang against North America, and perhaps particularly against our own country.
I hope, therefore, that Canada will do everything possible in order to bring about a lowering of tariffs, preferably of course by international agreement. If it is not done through that means, then we shall have to do something in regard to this matter ourselves.
In summing up I want to say that I agree with those who have said it in the newspapers and elsewhere, that this is a rich man's budget. The minister had $250 million to dispose of and he disposed of it, but mostly to the wrong people. He might have used it to make a new start in health insurance. He even refused to abolish the 4 per cent floor for medical expenses. He might have raised personal income exemptions for the lower income groups, but he preferred to raise the exemptions of those who enjoy unearned dividends and of corporations. He might have reduced or abolished hidden taxes like the sales tax, which impose a burden on those least able to bear it. He refused to do so. In short, Mr. Speaker, from the point of view of the average Canadian this is a thoroughly bad budget.
I see nothing objectionable in the amendment proposed by my hon. friends to the right, but we think we want to be a little more specific in some particulars. I move, therefore, seconded by the hon. member for Vancouver East (Mr. Maclnnis):
That the amendment be amended by adding thereto the following words:
"This house further regrets that the present budget is a rich man's budget which:
(1)	makes tax cuts retroactive to January 1st for corporations but not for individual Canadians;
(2)	doubles the exemption levels for the full corporation tax rate while leaving exemption levels for individual Canadians unchanged; and


(3) doubles the credits allowed to shareholders for dividends, but gives no comparable credits to those who do the work that produces the dividends.	'


Mr. Speaker:: It being five o'clock, the
house will consider private and public bills.



PRIVATE BILLS


[Stage Direction]
Bill No. 144, an act to incorporate the Apostolic Trustees of the Friars Minor or Franciscans of Western Canada.-Mr. Dechene.
Bill No. 145, an act to incorporate the Evangelical Lutheran Synod of Western Canada.-Mr. Knight.
Bill No. 147, respecting the Apostolic Trustees of the Friars Minor or Franciscans. -Mr. Pinard.

Mr. D. F. Brown (Essex West) moved: the second reading of Bill No. 146, respecting the Detroit and Windsor Subway Company.


Mr. Murphy:: I wonder if we could have an explanation of this bill?


Donald Ferguson Brown: This bill, Mr. Speaker, has to do with the Detroit and Windsor Subway Company which operates a tunnel between the city of Detroit and the city of Windsor. There are three modes of communication between the two cities. There is the vehicular bridge, the Michigan Central Railroad tunnel, and there are ferries taking the railroad cars across the river. There is also the vehicular tube operated by the Detroit and Windsor Subway Company.
The purpose of this bill is to clarify the act of incorporation so as to permit the sale of this company, in whole or in part, to a public body. I think that is the. sum and substance of the whole bill.


Joseph Warner Murphy: I want to say a word or two on this bill, Mr. Speaker. In the first place, I see no objection to its being referred to a committee. I hope it will be. I am asking that it be referred to the committee on railways, canals and telegraph lines.
I am going to take this opportunity of saying this. This bill, in the first place, would never have been necessary at this time had the first bill, when it was before the respective bodies, been given proper thought and study. From this suggestion here it is quite apparent that when the incorporation was granted, sufficient study had not been given to the charter; because we now find that this company, which probably will be sold to a public authority, requires this legislation in order to rectify and clarify the original bill and charter. I think it is not fair to the people in this house that we should be taking

time in discussing this matter when we have other matters of more importance to consider.
This bill is necessary owing to the fact that at the time of the original incorporation it was not anticipated that a body such as this, which operates a vehicular tunnel, might at some time or other be transferred to a public authority. I think, too, that it is necessary for this bill to be passed in order to rectify an agreement which was entered into between the Detroit and Windsor Subway Company and the municipal corporation of the city of Windsor. My reference to the ambiguity of the former bill applies equally to the latter agreement. I hope the minister will have this bill submitted to the committee on railways, canals and telegraph lines.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on railways, canals and telegraph lines.

Mr. A. J. P. Cameron (High Park) moved: the second reading of Bill No. 149, to incorporate Canadian Reinsurance Company.


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


James MacKerras Macdonnell: May I be
informed, Mr. Speaker, whether it is the intention to refer this bill to the banking and commerce committee?


Mr. Speaker:: If the bill receives second reading, it will be referred to the standing committee on banking and commerce.


James MacKerras Macdonnell: I should like to have a statement, particularly for this reason. I should like to be informed whether, in fact, this title was considered to be unsuitable, on previous occasions, by the banking and commerce committee. Perhaps the sponsor of the bill could say something as to that matter, if he knows.


Alan John Patrick Cameron: Mr. Speaker, this bill reflects the desire of Swiss Reinsurance Company to share in the economic expansion of Canada. Swiss Reinsurance Company is a Swiss corporation organized in 1863 under the laws of the confederation of Switzerland. The authorized capital of the company consists of 60,000 shares of 1,000 Swiss francs par value, all of which are issued and outstanding and fully paid up. At the Zurich stock exchange recent quotations were in the neighbourhood of 7,200 Swiss francs per share.
The board of the company consists, at present, of nine members, all of whom are prominent Swiss business or professional men. Mr. E. Hurlimann, formerly general
Private Bills
manager of the company and an outstanding authority on international reinsurance, is chairman of the board. The management of the company is entrusted to two general managers, Messrs. E. Froelich and P. Gug-genbuhl who, at this time, are visiting the company's branch office and subsidiaries in the United States of America.
The Swiss Reinsurance Company is the largest professional reinsurer in the world. More than 90 per cent of its business is derived from sources outside Switzerland. More than one-third of the total premium income emanates from the United States, where the company ranks as one of the leading reinsurers.
The Swiss Reinsurance Company has had, for many years, a number of reinsurance connections with Canadian companies and British and foreign companies operating in Canada. In view of the recent economic development of Canada it had been contemplated for some time to enter Canada as a licensed reinsurer by establishing a branch office, or through the medium of a domestic reinsurance company. It is now felt that, as a long-term plan, the latter solution should be adopted, and it is their desire to become a more active part of the Canadian insurance industry by creating a domestic company under the name of Canadian Reinsurance Company with head office in Toronto. The issued and paid-up capital of the company will be $1 million, Canadian, and a surplus of a further $1 million, Canadian, will be contributed. With the exception of directors' qualifying shares, all the capital will be subscribed by the Swiss Reinsurance Company and one of its United States subsidiaries.
In spite of the fact that there are already a number of reinsurance companies located in Canada, they are of the opinion that a reinsurance company with the financial backing, and supported by the technical experience, of the Swiss Reinsurance Company is likely to become an important factor in the Canadian insurance market and thus of the Canadian economy.
In reply to the question of the hon. member for Greenwood (Mr. Macdonnell) with respect to the name, may I say that I understand an application was made a number of years ago in which the name Canadian Reinsurance Company was asked for. At that time I understand that some member of the house objected to the name, that during the proceedings of the banking and commerce committee four alternative names were suggested, and that the solicitor acting for the company adopted one of those names and dropped this name. But it was never disregarded or disallowed by the House of

Private Bills
Commons or by the banking and commerce committee, so I am informed.


Mr. Donald M. Fleming (Eglinton):: Mr. Speaker, I have just a word to say on the matter of the name. The incorporation may be desirable from every other point of view and I have no doubt that my hon. friend has made out a proper case for the second reading of the bill. But, in the light of the experience of several years ago in the banking and commerce committee, the matter of the name, it seems to me, is more serious than the sponsor of the bill has just indicated.
If my memory serves me correctly-and I may say that I have not yet had the opportunity to look up the record-at that time this identical name or something closely resembling it was sought by an applicant for incorporation, and objection was taken in the banking and commerce committee to giving to any corporation the name "Canadian Reinsurance Company". It was felt that by allowing the use of the word "Canadian" we would give a substantial advantage to any corporation in the insurance business.
On that occasion, in view of the opposition that developed in the committee-and I think it was not just one member of the committee who expressed opposition but that there was quite extensive opposition within the committee-to the granting of the name "Canadian Reinsurance. Company", the applicant was virtually compelled to select another name, this name not being regarded as a proper one to be given to an applicant for incorporation under the circumstances. That applicant has functioned in the meantime in this field of reinsurance under a quite different name.
Those being the circumstances several years ago under which an applicant was refused this name, it does not seem to me that there has been any change in the circumstances since then or that there has been given this afternoon by the sponsor of the bill any reason that would justify the granting of the name Canadian Reinsurance Company to this applicant. I should like it to be clearly understood, Mr. Speaker, that if this bill is given second reading this afternoon, no member of the house is forgoing his right to take objection to the name. We can regard the principle of the bill as one related to the incorporation of these applicants for the purpose of equipping themselves corporately to enter the business of reinsurance; but I would wish it clearly understood, Mr. Speaker, that any approval of this bill in principle on second reading does not extend to include the name which the applicants are seeking.


Mr. G. A. Cruickshank (Fraser Valley):: should like to say a word in that connection.

I am not a member of the committee, but I was a member of another group of the house along with the hon. member for Vancouver -Quadra (Mr. Green) and others. Possibly for other reasons we discussed an insurance bill, and we took exactly the same stand as the hon. member has just taken. We did not take it in committee but on the floor of the house. The objection which the hon. member is taking was not only taken in committee but right on the floor of this house. I entirely agree with him in his statement.


Edmund Davie Fulton: Might I ask the sponsor of the bill whether the applicants for incorporation gave any consideration to alternative names such as Dominion Reinsurance Company or possibly even Royal Reinsurance Company, which seems to me to be appropriate in the circumstances?


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on banking and commerce.

Mr. S. R. Balcom (Halifax) moved: the second reading of Bill No. 150, to incorporate the Callow Veterans' and Invalids' Welfare League.


Donald Ferguson Brown: Explain.


Samuel Rosborough Balcom: Mr. Speaker, I am very glad today that some hon. members have shown enough interest in this bill to ask for an explanation, for it is my special privilege to introduce this bill to incorporate the Callow Veterans' and Invalids' Welfare League; and I may say, sir, that such a privilege as this comes only once in a lifetime. This bill has already been passed by the other place.
The object of the league is, as stated, to promote the welfare of veterans and invalids, and the purpose of this bill is to permit the league to obtain a dominion charter and broaden the sphere of its good work. Heretofore the Callow coaches confined their activities largely to Nova Scotia, but when this act is passed I can see this wonderful idea of Walter Callow spreading throughout Canada and into the United States.
The Callow coaches are designed and built to enable shut-ins, wheel-chair patients and others unable to get about, to be taken on outings of one kind or another. The coaches are equipped, among other things, with a special ramp which permits the patients to be wheeled into the coach without discom * fort. The service is not confined to institu tions, although it was conceived first for th t benefit of veterans at Camp Hill hospital in Halifax. People living at home, who ar<4

physically incapable of getting out by ordinary means, are also helped in this way.
When one considers the number of wounded veterans in our hospitals, the many sufferers from arthritis and rheumatism of one kind or another, polio victims, palsied children and others afflicted with crippling diseases, it is not surprising that in Halifax, where the project was begun, it has been hard to keep pace with the demand for the coaches. Now that the idea has been taken up in other parts of Canada it has become necessary to seek this charter.
The project is unique in itself, but most remarkable of all is the man behind it, Walter Callow. He was not only the inventor of the coach but also the organizer for its development, the promoter for its acceptance and the guiding spirit after the project was taken up by others in order to raise money and extend the service as far as possible. All this is enough and more for a person with all his faculties; but Walter, as many of you know, is blind, immobile, without legs or the use of his arms, but of indefatigable mental energy. Walter is a veteran who was critically injured in a plane crash while training for the flying corps in world war I. Attacked by the dreaded arthritis, he became completely paralysed and blind. He is unable to move but he can talk, and talk brilliantly.
Walter Callow is a legend, an example of sacrifice, thoughtfulness for others, and courage. His name is, may I go so far as to say, hallowed by those who have benefited by his Callow organization, for he personifies not only their own suffering but also triumph over suffering. Walter is immobilized completely, helpless physically, blind; added to this he has recently had both legs amputated. Small wonder that he has many times been referred to as the human log.
When Walter Callow underwent the operation for the amputation of both his legs he did so hoping that as a result he might live and be stronger to carry on this work for others. He had prepared for every eventuality and had arranged that, should he not come through, the organization would carry on. The amazing thing is that, as he came out of the anaesthetic, instead of thinking of his own welfare his first thoughts and his first question to the doctor and nurses was "Have you heard how the campaign is coming along?"
Such altruism cannot be equalled. Callow has a board of directors to whom I should like to pay tribute but I wish, at this time, to mention specially the former and present ministers of veterans affairs, the staff of Camp Hill hospital and, in particular, the nursing
Callow Welfare League sisters and the orderlies who have been most patient and attentive at all times.
Walter Callow knows that his inspiration is not within himself, but comes from a higher power. He gives many persons credit, and in this he could teach us a lesson in humility. Although blind to the world, he is not living in darkness. Walter's pleasure comes from the tales and stories he hears of the happiness he is bringing to others. He relives the few years when he had his health; a simple pleasure of the past now takes on fond memories, for Walter worked hard in his youth and this youth he has lived over many times.
On the broad of his back his indomitable spirit cannot be shaken, as evidenced when he proposed a certain program to his directors and insisted on it being put into effect. When the directors heard this they did not altogether agree with his proposal. They went to him and said: "If you put this through we will all resign." After a pause of a moment he said-and this shows the man- he said "Well, I guess I am without a board of directors."
Walter has done more for mental patients than any other group in Canada outside of the medical profession. Mental patients ordinarily are confined to hospitals or institutions, but through Walter Callow's efforts a program has been put into effect so that four hours of freedom on many days is given to these patients to sit and mix with normal people at the ball games and other sporting events. It is said that these outside contacts have helped greatly in the rehabilitation of many. Special arrangements have been made with the ball park executives, for everyone co-operates with Walter Callow. Thirty seats are reserved. These are the only mental patients in Canada so treated; at least that is my understanding.
Walter's great ambition is to provide the continent's disabled and afflicted with some of the everyday pleasures and comforts of a healthy citizen. His hope for this has never dimmed. His good works moved someone to suggest that he receive the George Medal. So you can judge the magnitude of his work. While Walter Callow, or what is left of him, is helpless, he has what it takes to accomplish things. He has faith in God, his fellow man, himself, and the magnificent work being done by his organization.
There will be no profits or cash dividends from this corporation-and perhaps it is fitting to make reference to dividends at a time when the budget debate is in progress- but there will be that inner satisfaction which

Callow Welfare League comes only when you know you have done unto others as you would have them do unto you.
If there are any questions hon. members would like to ask, I shall be pleased to answer them.


Mr. J. S. Sinnoti (Springfield):: Mr. Speaker, we are most grateful to the junior member for Halifax (Mr. Balcom) for bringing this bill to the attention of the house, and for pointing out what this man has done for others. I am sure all of us would wish Mr. Callow the best of success. Before taking my seat I would ask the hon. member how many passengers the Callow coaches carried in 1952.


Mr. Deputy Speaker:: Perhaps it would be better if the hon. member for Halifax would answer questions when he closes the debate.


Mr. P. C. Black (Cumberland):: Mr. Speaker,
I am happy indeed to associate myself with this bill, and to support what its sponsor has said today. I have known Mr. Callow for many years. He came from my constituency, having lived in Parrsboro and later at Advocate, 29 miles away in the extreme point of Cumberland. I knew him before he enlisted in the first great war in the air service, and knew him after he received his injury. I used to discuss his condition with the late Dr. Fillmore, who served the community for many miles around.
At one time I was in a position to call on Walter Callow more often than I can now.
I recall his having come to Halifax on one occasion for medical treatment. I must give praise to Camp Hill hospital in Halifax for what it has done for him, as well as many hundreds of others. On the occasion to which I refer he was at the hospital for treatment, before he was totally incapacitated as he is today. I was able to help arrange for a hydroplane to take him from Halifax to his home in something less than 60 minutes, and place him down within a hundred yards of his home at Advocate.
As has been said by the junior member for Halifax, this bill is proposed by Walter Callow himself. He is its inspiration; and the object of it is to promote the welfare and happiness of invalids. We note that the last section of the bill states that-
The league shall be operated without profit or gain to any of its members and all moneys received by it shall be devoted to further its objects and purposes.
Walter Callow has been interested in aiding veterans ever since he became incapacitated. He was the means of sending millions of cigarettes to the men in the services. As


has been explained by the hon. member sponsoring the bill, he is now primarily interested in these Callow coaches.
Canada has had many heroes in the armed services. There were many in the first great war, many in the second, and a lesser number in the present engagement. But I do not believe there has ever been a greater hero, so far as service given is concerned, than was Walter Callow from the time he enlisted until the present time. He is now completely incapacitated, as the junior member for Halifax has explained. Only recently he had to have both his legs amputated. He is completely blind and immobile. His application for this charter was signed only with the greatest of difficulty, because before that time he had not written a single word or line for over 23 years.
I remember that last autumn Mr. Callow had had these coaches in service for some time, and on that occasion he made them available for those who were incapacitated but who wished to attend the maritime winter fair, an event at which thousands of people gather each year. I had occasion to ride with a number in the coach who were incapacitated and in wheel-chairs. In attendance was a stewardess in uniform, and I can say that those who were being conveyed were as happy as any others attending the fair. They had not expected ever to be able to go again but, by virtue of Mr. Callow's efforts, and the efforts of those associated with him, hundreds upon hundreds of people in Nova Scotia and New Brunswick have been able to attend ball games, exhibitions and other events.
I am happy to join with the sponsor of the bill in the House of Commons, as well as its sponsor in the other place; and I am sure every member in the house will join in making possible the passing of this charter. This is a most deserving application, and we would hope that its benefits would not be confined to Nova Scotia and New Brunswick, but that it might spread throughout Canada and perhaps into the United States as well.


Hon. Robert H. Winters (Minister of Resources and Development):: Mr. Speaker, as one who knows Walter Callow, I should like to say a word at this time to express my admiration of the good work he is doing. I notice that he is described in the bill simply as an inventor. But, Mr. Speaker, Walter Callow is much more than that. If one had the command of language that would be appropriate at a time such as this he would go far beyond the use of such words as humanitarian and philanthropist,

and would use other words which might more properly describe the qualities possessed by this man.
May I express the regrets of my colleague the Minister of Labour (Mr. Gregg) upon being absent from the house because of other business engagements. We know, however, that both as a private citizen and as the former minister of veterans affairs, the Minister of Labour has been interested in the work of Walter Callow and wished to pay a tribute to him.
It is most fitting that the junior member for Halifax (Mr. Balcom) should have had the privilege of sponsoring the bill in the house. Because of his field of activities, through the board of trade and otherwise in Halifax, he has been in close association with Mr. Callow. This would be true not only of the junior member for Halifax but also of the hon. member for Cumberland (Mr. Black), both of whom have spoken so graciously and have conveyed to the house some indication of the hardships this man has overcome and the difficulties he has surmounted to do so much for humanity, first in Nova Scotia and now, in a broader sense, in Canada. And as the hon. member for Cumberland has suggested, perhaps his work will extend even to a broader field.
It is remarkable how sometimes the finer human qualities prevail over physical disabilities. In my home town of Lunenburg we have another example, in Earl Bailly, of a man who, without the use of his arms, legs or very much of the rest of his body, paints with a brush in his mouth and turns out marvellous masterpieces. He too is one of those who have risen above difficulties which I am sure would defeat many of us. He has always been able to regard the brighter side of life and to look at things in a way that contributes something to the happiness of other people.
I simply say, Mr. Speaker, that these are living demonstrations that there are satisfactions in this life over and above material rewards, and I know that all hon. members will join in passing this bill to perpetuate the work of Walter Callow through the Callow Veterans' and Invalids' Welfare League.


Mr. A. J. Brooks (Royal):: Mr. Speaker, I rise also to express my support of the bill and to pay a tribute to Walter Callow. Although I have never met him personally, I feel that I know him very well because on many occasions I have had correspondence with him with respect to veterans' matters and I have also spoken to him on the telephone a number of times. I saw the coach that he invented in the province of New Brunswick last year and I realized, as did many others, the great benefit that it is to
Callow Welfare League returned men and crippled veterans. I want to pay tribute, as has been done so eloquently by the two hon. members who have just spoken, to his great courage, his will power and his outstanding achievements for the benefit of the veterans of the province of Nova Scotia, which benefits he now intends to extend to veterans throughout Canada.
We have often heard it said that those who suffer most best understand the needs and suffering of others. In no person has this been better exemplified than in Walter Callow. In thinking of him I think of that great woman of the United States, Helen Keller, who is known as one of the twelve greatest women of her country. In spite of the handicap of blindness and deafness she helped many thousands of blind people in her own country and many thousands throughout the world. I wish to pay this tribute to Walter Callow. I think that he stands second only to Helen Keller, and the veterans of Canada certainly owe a great debt to this very great man.


Mr. H. P. Cavers (Lincoln):: Mr. Speaker, it is a privilege for me to speak in support of the bill introduced by the junior member for Halifax (Mr. Balcom). I am not conversant with the projects sponsored by Mr. Callow but the sponsor has explained how worthy they are, and I am sure the passage of the bill will have a great deal to do with the alleviation of the pain and suffering of persons who have been invalided.
In Ontario a great deal of work along this line is being done by Rotary clubs, the Canadian Legion and other service organizations. They convey invalids to places of entertainment, athletic events and other amusement centres. I am sure that a conveyance of this kind will mean much to them in the transportation of persons who are unable to take care of themselves.
I might ask a question of the junior member for Halifax. I should like to know whether Mr. Callow has any objective with respect to the number of coaches he hopes to provide. I should not like to see them limited only to one part of the country but rather made available to every province in Canada.


Mr. G. C. Nowlan (Annapolis-Kings):: Mr. Speaker, I want to associate myself very briefly with what has been said by others in connection with this matter. I think it is fitting that those of us from the east, who have had a longer association with Walter Callow and know of the work he has done, should speak on this occasion.

Callow Welfare League
In the first place, because of the suffering he has undergone, the sacrifice he has made and the burden of physical disability he has endured, a burden which would have crushed an ordinary man, this individual has shown all Canadians that a spirit -of fortitude and courage can triumph over almost any physical disability. For that reason we have respected and honoured him for many years.
In the second place we pay tribute to him because of the mechanical devices to which he has given support, the coach and the chairs which he has developed. I have seen the coach in operation in the valley during the apple blossom festival and on other occasions. The coach has come down to the valley with crippled veterans who otherwise could not have been moved from a bed. One realizes too the widened scope and wider horizons which, by his own courage and imagination, he has created for others who perhaps are hardly less fortunate than himself.
Through the introduction of this bill he is attempting now, and properly so, to give a degree of permanence to his achievements and wider scope to his operations. I am sure I speak for all Canada, as have those who have spoken before, in paying tribute to a man who could not be crushed, whose spirit is indomitable and who, by his example and by the leadership he has shown, is making a real contribution to veterans and others who have suffered and whom this house should support.


John Horace Dickey: Mr. Speaker,
I should like to join briefly in the debate. First of all I wish to congratulate my colleague from Halifax on the manner in which he presented this important piece of private legislation to the house. He covered the work of Walter Callow very well indeed. Other speakers, including the Minister of Resources and Development (Mr. Winters), have filled in some of the details with which he was not able to deal.
The story of Walter Callow is one of the most amazing bits of personal history of which this country can boast. His condition of almost complete paralysis plus blindness renders him by all ordinary standards an almost hopeless invalid. Yet the record of achievement of Walter Callow over the past fifteen or twenty years is one of which the most active person in this country, a person most fully endowed with all his senses and faculties, might well be proud.
Besides Walter Callow's activities in connection with the wheel-chair coach, he was very active during the war in arranging for comforts and advantages for our troops overseas. He thought up devices and ran the


Walter Callow cigarette bank which provided hundreds of thousands of smokes for the troops overseas. He has the kind of imagination that enabled him to invent a combined knife, fork and spoon for the use of incapacitated people which has been adopted as the best available instrument of that kind in a number of institutions which care for people who have lost one or both of their arms or are otherwise incapacitated.
He thought up not only the whole idea of a wheel-chair coach, but he thought out and described to people who could put them down on paper the specifications and all the details of the construction of this coach. He thought out a very ingenious method for a hydraulic ramp at the back which would also be the main door of the coach. When it was submitted to mechanics and engineers it was said by them to be impractical and that it would not work. Walter Callow insisted that it would work and was able, by the force of his personality, to get a prototype built; and to the surprise of everybody but Walter Callow the ramp worked, and worked magnificently. It has been the basic feature that makes these coaches unique, so unique that the dominion patent office, after a proper application, granted a patent to Walter Callow for this device which he had created, not from experiment, not from experience but simply from the power of intellect and thought.
Now, Mr. Speaker, it is not always possible in this world and this life for credit to be given where credit is due, but this is one occasion in this house when all speakers who have joined in this debate have had the happy privilege, in which I am so glad to join, of giving the greatest and warmest possible tribute to a human being, Walter Callow, for what he has achieved. This house will be doing itself honour and will be doing a service to the people of this country, particularly those in other parts of Canada who will benefit from the extension of operations of the Callow Veterans' and Invalids' Welfare League into other parts of Canada, by approving this legislation.


Mr. Clarence Gillis (Cape Breton South):: Briefly I just want to associate myself with the previous speakers. I have known Walter Callow personally for 30 years. I think he is a living demonstration of the power of mind over matter. I also think the fact that he is still alive and able to do what he is doing reflects with considerable credit on the Camp Hill hospital. He must have received and did receive excellent care during the long period he has been in that institution.
I think it was George Bernard Shaw who said that the hereafter is composed of the

things you leave behind you, the monuments that you have erected demonstrating the fact that you have lived and contributed something to society during the time that you did live. I am very happy to be here and to lend my voice to the praises of Walter Callow that have already been put on the record by previous speakers. There is no need to repeat them. I think the coach he has developed under the difficulties he has had to contend with will live as a monument to the memory of Walter Callow long after he has departed this world.


Mr. Howard C. Green (Vancouver-Quadra):: Mr. Speaker, most of the members in the house today are not privileged to come from the maritimes. However, I am sure we all approve of the justifiable pride which the members from the maritimes, who have spoken in this debate, have shown in the accomplishments of this distinguished Nova Scotian.
I rise to add a few words, in the first place because I believe that Walter Callow really belongs to the whole of Canada, and in the second place because I have never known anyone with greater selflessness, greater determination or greater courage.
A good many years ago he started to write to me about the problems of veterans. Then five or six years ago I had the privilege of visiting him in Camp Hill hospital in Halifax and learning of his plans for this wheel-chair coach for veterans and invalids. Throughout all this time his whole attitude has been one of serving other people and not worrying about his own disabilities which are perhaps as great as those of anyone in Canada today.
Now he is asking for the incorporation of a dominion company so he can spread his good works right across this nation. For example, he has telephoned me twice this month concerning plans for a coach in British Columbia. I have no doubt that he has similar plans for each one of the provinces. I am very glad to be able to support the junior member for Halifax (Mr. Balcom) today and to congratulate him for sponsoring this bill.
Finally, I believe that Walter Callow is setting a standard of service which cannot be excelled, and that he is one of the great Canadians of our time.
(Translation):


Mr. Pierre Gauthier (Portneuf):: Mr. Speaker, I wish to associate myself with those who have preceded me, in support of the motion put forward by the hon. member for Halifax (Mr. Balcom). As the hon. member for Vancouver-Quadra (Mr. Green) said a moment ago, I believe that Walter Callow is one of those people who belong not only to their province but to the whole of Canada.
Callow Welfare League That is why I wish to associate the voice of the province of Quebec with that of the other provinces and ask the house to support, without any restriction, not only the words of the hon. member for Halifax, but above all his initiative in this connection.
Walter Callow is helping handicapped veterans and he is devoting himself, body and soul, to the task of building up the morale of those who are in the same position as he is in. We, therefore, of the House of Commons, and especially the people's representatives, must consider it our duty to do everything that is possible to give Walter Callow the moral support which he himself brings to those who are as handicapped as he is. (Text):


Gordon Graydon: Mr. Speaker, through the years, and particularly while for a short time I occupied the position of leader of the opposition, I have had close contact through correspondence and. otherwise with Walter Callow and his work. It seems to me that here we have one of the most remarkable Canadians of all time. It seems to me too that, somehow, when men are laid aside physically some other compensating advantage comes from that. One thinks of Milton and, in more recent times, of President Roosevelt and many others, and one realizes that, after all, out of a great unselfishness, great perseverance, great courage and great will, come some of the great works that have contributed so much to humanity as a whole.
I only want to join with those who have made their contribution to this debate, telling in glowing terms what Walter Callow has meant to Canada. Here we are in the parliament of Canada, dealing with an item of legislation brought forward through herculean efforts and over obstacles of a major character that had to be hurdled, all of which has been accomplished by a man who is lying in Camp Hill hospital almost immobile because of his physical infirmities. Still his influence is so great, and his unselfish devotion to the things he has regarded as high, and which we regard as high, so strong, that he has brought about this type of debate which has been participated in by members on all sides of the house. I believe this will always live as a great monument to his name, as well as the many other things that Walter Callow has done for Canada as a whole.
I do not want to go further because I know the junior member for Halifax (Mr. Balcom) wants to answer some questions. I do hope the legislation will go through before the time expires.

Private Bills


Mr. Deputy Speaker:: If the member for Halifax speaks now, he will close the debate.


Samuel Rosborough Balcom: I want to answer the questions which were asked. The hon. member for Springfield (Mr. Sinnott) asked how many patients from military hospitals or polio clinics had been carried by these buses. The number was 8,600. The hon. member for Lincoln (Mr. Cavers) asked what the objective of this organization was as to the number of coaches they hoped to have in the next few years. It is hoped to have 80 coaches in Canada, and by 1955 it is hoped that number might be doubled in the United States.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on miscellaneous private bills.


[Stage Direction]
Bill No. 151, for the relief of Rolph Julian La France.-Mr. Winkler.
Bill No. 152, for the relief of Jack Gold. -Mr. Winkler.
Bill No. 153, for the relief of Hazel Margaret MacRury Jordan.-Mr. Winkler.
Bill No. 154, for the relief of Anne Agnes Costigan Entwistle.-Mr. Winkler.
Bill No. 155, for the relief of Rachel Stur-man Spirer.-Mr. Winkler.
Bill	No.	156,	for	the relief	of	Agnes
Kathleen Small Finlayson.-Mr. Winkler.
Bill No. 157, for the relief of Pearl Irene Balogh Katona.-Mr. Winkler.
Bill No. 158, for the relief of Zoe Audrey Birch Butler.-Mr. Winkler.
Bill	No.	159,	for	the relief	of	Bessie
Mewhirter Mitchell Cameron.-Mr. Winkler.
Bill No. 160, for the relief of Elsie Smith Gray.-Mr. Winkler.
Bill No. 161, for the relief of Rita Lowsky Blatt.-Mr. Winkler.
Bill No. 162, for the relief of Anna Shulem-son Heymann.-Mr. Winkler.
Bill No. 163, for the relief of Cecile Lea Sauve Rheaume.-Mr. Winkler.
Bill No. 164, for the relief of George Frederick Shaw.-Mr. Winkler.
Bill No. 165, for the relief of John Arthur Dorsay.-Mr. Winkler.
Bill No. 166, for the relief of Dorothy Green Wainer.-Mr. Winkler.
Bill No. 167, for the relief of Mildred Isabel Lunan Aspell.-Mr. Winkler.
Bill No. 168, for the relief of Minnie Martz Kurtzman.-Mr. Winkler.
Bill No. 169, for the relief of Elizabeth Smaga Melnitzky.-Mr. Winkler.
Bill No. 170, for the relief of Alexander Hillcoat.-Mr. Winkler.
Bill No. 171, for the relief of Georgina Gibbons Bastien.-Mr. Winkler.

Bill No. 172, for the relief of Alice Martha Sharkey Maclnnes.-Mr. Winkler.
Bill No. 173, for the relief of Gittel Gershonowitch Hammer.-Mr. Winkler.
Bill	No.	174,	for	the relief of Frances
Louise Devenish.-Mr. Winkler.
Bill No. 175, for the relief of Marguerite Evelyn Lucy Watts Paterson.-Mr. Winkler.
Bill	No.	176,	for	the	relief	of	Joseph
Edouard Charles Pichette.-Mr. Winkler.
Bill No. 177, for the relief of Cecilia Rachel Baird.-Mr. Winkler.
Bill	No.	178,	for	the	relief	of	Verna
Kirstine Dam Credico.-Mr. Winkler.
Bill No. 179, for the relief of Diane Parent Leblanc.-Mr. Winkler.
Bill	No.	180,	for	the	relief	of	Blima
Blossom Wendy Weitzman Thompson.-Mr. Winkler.
Bill No. 181, for the relief of Joseph Edgar Roger Roland Bisaillon.-Mr. Winkler.
Bill No. 182, for the relief of Catherine Lois MacLeod McPhee.-Mr. Winkler.
Bill No. 183, for the relief of Dessie Fowler Taylor.-Mr. Winkler.
Bill No. 184, for the relief of Florence Trudy Nugent Barnett.-Mr. Winkler.
Bill No. 185, for the relief of Gordon Dampierre Ross.-Mr. Winkler.
Mr. Deputy Speaker:: The time allotted to private and public bills has expired, so at eight o'clock the house will resume the business which was interrupted at five o'clock.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.


[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 of Mr. Macdonnell (Greenwood), and the amendment to the amendment of Mr. Coldwell.
Mr. Solon E. Low (Peace River):: Mr. Speaker, at the outset of my remarks tonight I should like to associate myself with what the Minister of Finance (Mr. Abbott) said in his budget address on last Thursday evening in connection with Dr. Clark, the late deputy minister of finance. I should like to join with the minister in expressing keen and deep regret at the sudden passing of a great public servant.

Last Thursday night, Mr. Speaker, there was great jubilation amongst the Liberals. Judging from the way they applauded they probably thought that the jaunty, good-natured Minister of Finance had dragged the party corpse out of the fishing pond at Peta-wawa and had breathed the breath of life back into it. The minister himself thought so, I think, before he romped to the climax of his peroration and made his final flourish before he sat down. I venture to say that when the self-induced hypnosis had passed- for that is just what it was-say, by Sunday, the corpse was still a corpse. The buoyancy that was generated by frantic Liberal party hopes that the peace offerings in the budget would be gratefully received by the Canadian electors and that all the past would be forgotten, was only momentary and fleeting. Since Saturday there have been unmistakable signs throughout the country and in the press that when the taxpayers sat down with their pencils sharpened and some paper in front of them, in the calm hours after the uproar that took place in the house, three pointed conclusions stabbed their consciousness and left them cold. These are the three, in my judgment.
The first is that the minister's budget was overrated as far as individual material benefit is concerned. In this respect I agree with the hon. member for Greenwood (Mr. Macdonnell) who stated this afternoon that this was the rich man's budget and that there was little in it for the little man, the ordinary fellow. That is the conclusion most of the people throughout the country have reached. But let me say this. The minister never before in his whole life did such a fine job of making a thing look good. I pay him that tribute; he made it look good.
The second conclusion that people have reached, with pencil in hand, is that this is a great appeasement budget. As skilful as the minister is, he was not able to conceal the fact that he was making a supreme effort to buy less hostility toward a guilty government. He touched, however lightly in some cases, nearly every pocketbook in the Dominion of Canada. A government that is a real friend of the people, that through the years between elections has dispensed justice and equity, and that has shown a high measure of integrity and concern over the welfare of the people, need never resort to such transparent measures of appeasement just before an election. The taxpayers are wise enough to know that their friends are those who stand by them through all the years with the best that there is to offer. For example-and I commend this example to hon. members-the Social Credit government of
The Budget-Mr. Low
Alberta has not once in nearly eighteen years resorted to an appeasement budget in order to try to gloss over blunders or maladministration.


George Alexander Cruickshank: Oh, oh.


Solon Earl Low: They have not had to.


An hon. Member:: That is too much.


Solon Earl Low: They have not had to because the people know who their real friends are.


George Alexander Cruickshank: They found oil.


Solon Earl Low: Mr. Speaker, I throw that challenge out deliberately, because I should like to have some of these people whom I hear laughing bring me some examples to show otherwise. They have the whole debate before them and I should just love to have some of them stand up here and prove or try to prove to this house that I am wrong. I say that in not one single instance in four consecutive times before the people have they resorted to an appeasement budget of this kind in an attempt to buy the public with tax reductions and that sort of thing.


Mr. Ferrie:: What about paying interest on their bonds?


An hon. Member:: You would not understand, anyway.


Solon Earl Low: The third conclusion which the people have reached since last Thursday, Mr. Speaker, is this. If, with the comparatively 'modest surplus of this year the Minister of Finance can cut taxes by over $250 million, what was there to prevent him from doing it last year, the year before and the year before that, when he piled up whopping big surpluses.


George Alexander Cruickshank: He paid off debts, too.


Solon Earl Low: We needed the relief then even more than we do now, in order to help us meet the cost of living that was on its way to the highest mark in history. There is a strong conviction everywhere that the minister withheld tax reductions until just before an election, in the hope that those reductions could be used to bribe the voters into again supporting the Liberals.


George Alexander Cruickshank: Oh, hooey.


Solon Earl Low: "Hooey" is right.


Douglas Charles Abbott: The hon. member for Peace River agrees with you.


Solon Earl Low: The good-natured minister blew hot and cold in the matter of possible tax decreases all last year. The day after the upset of the Liberal government in New Brunswick, he told a meeting of Montreal

The Budget-Mr. Low
automobile dealers-and these were the words that were quoted in the press; I hope they are correct-as follows:
Present corporation and personal income taxes are too high to be continued for more than a relatively short period, and should be reduced as soon as conditions make it practicable.
Then on October 6 government candidates were successful in two Quebec toy-elections. Speaking in Prince Edward Island the day after-that was on October 7-the minister said he would be happy if federal revenues balance expenditures this year, with the surplus then at $336 million. He added that taxes could be reduced only if the international situation should improve, and he doubted that that would happen.


Douglas Charles Abbott: Or if production increased.


Solon Earl Low: I will just take that phrase as well, "or if production increased". I should like to have the minister, in his rebuttal, tell us how much increase in production there has been since then. This was last October.
Millions of Canadians are wise to this old political game with the people's taxes. The Liberals held out hope of reductions in taxes after a Liberal defeat last year. They discouraged the hope after Liberal successes, and now they make a few small reductions just before a general election to catch the unwary. They did it in 1949 in a shameless manner. The electors of Canada will be perfectly justified in condemning this government for playing a game definitely designed to fool the public. I make this statement with full knowledge of my responsibility as a member in this house. The tax burden could have been materially reduced in each of the past two years without in any way interfering with essential services or with the defence program. The entire sales tax could have been abolished two or three years ago, with a consequent substantial reduction in the cost of living.
I want to emphasize with all I have at my command that there has been absolutely no reason, no necessity for the continuing high taxes over the years. There could have been relief for the people two or three years ago, as the substantial year-end surpluses testify. Let me remind the members of the house that these surpluses were accumulated even in the face of a breakdown of control in the army works services; even in the face of refusal by government departments to curtail their competitive spending at a time when rigid economy was needed for the purpose of giving the defence effort top priority in materials, manpower and funds; and even in the face of waste and extravagance that has run throughout the whole defence department 
and several departments of government. It has seemed to me as though every conscious effort was being made in various departments to cause surpluses to disappear for the express purpose of maintaining the government in a position to launch this great appeasement just before the general election.
May I give as just one example of what looked to me like a patent attempt at getting rid of an embarrassing surplus of cash, the way this repointing job was done on this very building last fall. Some of you may have seen it. I watched it day after day as the work proceeded. Much of that work was done at a time and under conditions when it would be sheer waste. The mortar cement was still being put in between the stones when heavy frosts were occurring at night, and sometimes during the day, frosts that would crumble the green material and cause it to drop out long before its time. The total amount of that contract and the real value the people got for the money spent would be a most revealing bit of study for the members of this house.
Well, the Liberal government has tried all the tricks over the years. I do not know that there are any new ones, but short as the memories of the people are, after so many repetitions they are getting fed up and wised up, because they fully expect that if the Liberals were to be returned to power it would not be long before taxes were up again just as happened after 1949. The theme song of the Canadian taxpayer today is "If you loved me half as much as I love you", and I emphasize the last line: "You build me up only to let me down." People do learn though, by experience, especially repeated experience.
Just a word about the income tax reductions; I feel about them much as was expressed by the hon. member for Rosetown-Biggar (Mr. Coldwell). I had my pencil going for several days working out some schedules that were almost identical with those he presented here this afternoon. I do not intend to weary the house by a repetition, but do let me say this. What he gave this afternoon as an analysis of the income tax changes was exactly right. I doubt whether he would be more than one or two dollars out in his calculations, and the picture he showed is something for the Canadian people to think about. But the Liberal press across the country played it up as a real slash. Boy, what a cut! Actually individuals will pay a little less this year than they paid last year.
The minister took great care to make the reductions for individuals effective on July 1.

Of course, Mr. Speaker, this means not only that the individual taxpayer will enjoy only the 5J per cent reduction this year, but it will also mean that if the Liberals manoeuvre things just about right the first cheques with the lower income tax deductions will be in the hands of the taxpayers about the time they go to the polls.


Hazen Robert Argue: August 17.


Solon Earl Low: The government will argue, of course, that next year is the time the people will really get the benefit of the full 11 per cent reduction provided in the budget. In reply I should like to point out that this budget governs only this year. Next year will be governed by another budget entirely and the situation may be entirely different by then. Judging by past experience I should say the Canadian taxpayers had better do their calculating on what they have got this year and enjoy it while they can, because the whole business can be changed with a stroke of the minister's pen when he drafts another budget. The Liberal party has never impressed anyone yet as having stood for rock-bottom taxes; just the contrary is the case, as a matter of fact.
Now a word about corporation taxes. It is quite amazing how keen and penetrating the minister's perception can become in an election year. You know one can go along for years entirely oblivious to the ill effects of tax policies and then quite suddenly become as fully aware of the evils as though you had known them all the time. I would not suggest of course that imminence of a test at the polls would have anything to do with that keener perception on the part of my genial friend the Minister of Finance; not at all. But seriously, the minister showed commendable concern about what his high tax has been doing to Canadian corporations. We have been trying to tell him all along that his taxation policies were ruining business and he as much as admitted it in his splendid speech the other night. As a consequence he allocated half his tax largesse to them. They are to get $120 million of relief this year out of a total tax reduction of $250 million. That is a pretty fair slice.
Well, the minister's concern for the corporations is commendable, even if it does come a little late. We do need healthy corporations in Canada, and if we are going to continue on a private enterprise kind of economy these corporations must be able to make a reasonable profit, one that will enable them to stay in business and accumulate savings or undistributed profits sufficient to provide for the necessary expansion of plant and replacement of machinery to keep the economy robust and thriving. But I would
The Budget-Mr. Low
like to ask the minister how much profit they need to make. After paying their costs, and their taxes, and a fair and encouraging dividend to the shareholders, how much undistributed profits do they need?
That is quite a question. My calculations show me that Canadian corporations, in the ten-year period between 1940 and 1950 inclusive, accumulated undistributed profits of $4,952 million in round figures. That was after paying all their costs and in addition dividends of $4,276 million, and also after setting aside total depreciation allowances of $6,338 million. I have not the figures for 1951 and 1952, but I would judge from what I have read and observed that accumulations for those two years would be more than the average of the previous ten, so that accumulations to the present would doubtless be over $6 billion.
Would the minister say those undistributed profits and depreciation allowances were adequate? I wonder if he would think, with his colleague the Minister of Trade and Commerce (Mr. Howe), that the profits of the Canada and Dominion Sugar Company were too high. It was only a few days ago that we heard in the house that the profits of the Canada and Dominion Sugar Company were too high. Maybe the Minister of Trade and Commerce should take part in this debate and tell the house if he feels the same when he looks at the profits of, let us say, the Aluminum Company of Canada as he does when he scowls at those of the Canada and Dominion Sugar Company.


Mr. Harkness:: Or the C. D. Howe Company.


George Alexander Cruickshank: What has he to do with the C. D. Howe Company?


Solon Earl Low: Well, Mr. Speaker, when the boys are through-


Douglas Scott Harkness: What are you getting angry about, George?


George Alexander Cruickshank: You may have to take back some of that.


Mr. Speaker:: Order.


Solon Earl Low: 
do not know they are going to get is not a very bright prospect, or one that is very likely to lighten the burden of the farmers. Our farmers are entitled to much more consideration at a time when farm produce prices are falling. During 1952 the wholesale price index of farm produce fell 19 per cent, while the price of labour was rising by 7 per cent. In the 12 months from November 1951 to November 1952 the new consumer price index fell 1-8 points, but it was due very largely to the fall in farm prices which, in turn, brought food costs lower.
The farmers of Canada have borne practically the entire cost of the year's decline in living costs for the whole of our population. In my judgment that is not fair. That sort of thing has been done too often in the past. Meanwhile the cost of things the farmers will have to buy-machinery, repairs, building materials, fertilizers and all of those things- has shown very little, if any, reduction. It was only natural, therefore, that they should look for some consideration in the budget, and they deserved better treatment either in the budget or under a more realistic trade policy than they were given.
The western federation of agriculture has asked for an increase in trade with Britain; acceptance of sterling in payment for that part of our exports for which the United Kingdom and other members of the sterling bloc cannot pay dollars; a much better and more favourable long-term production credit arrangement; and much more two-way trade. I think all these things are reasonable and just, and certainly they are essential in the interests of a strong band of farmers and a strong Canada. I shall have something to say about trade shortly, perhaps before I have finished this evening.
Just at this point I should like to mention one or two specific things about the budget, particularly the taxes set out therein. What has happened in the field of cigarettes is an example of how this government almost killed the cow that was supplying a good many Canadian families with milk. We on this side of the house warned them of what was going to happen when they jacked up the cigarette tax a couple of years ago. But they would not listen to us; not at all. Now look what they have had to do.
Then the Minister of Finance had some pungent things to say about the nuisance taxes when he announced the removal of the stamp tax. It is interesting to note how easy it becomes for the minister to see clearly, in an election year, that a beloved tax is really a nuisance tax. And I say "beloved" because the minister admitted the other day that the

tnought of abolishing the stamp tax caused him to mourn. I am glad to see the stamp tax go, and I cannot bring myself to shed many tears over it. But I can bring myself to shed tears over the fact that he overlooked the kiddies in the country, and kept on a lot of nuisance taxes that might very well have been taken off: the tax on chocolate bars and on nickel candy, and that sort of thing. But I suppose the kiddies have to be sort of kept in line.
Then I think the minister should have abolished the 4 per cent floor on medical expenses, deductible from income tax. Of course 3 per cent is better than 4 per cent, but for whom? That is the question; for whom? Certainly it is not for the ordinary fellow, because he cannot take advantage of it under any circumstances. I will say the minister ought to have done something worth while for the little fellow by abolishing that 4 per cent floor entirely.
Because I like the minister and have a high personal regard for him I am now going to point out to him some sources of revenue that might be explored with profit both to the treasury and to the country as a whole. It is not often we give the minister ideas, but maybe this will help him. As he doubtless knows, there are quite a number of foreign magazines circulating in this country. Some of them put on a heavy sales pressure for advertising from Canadian business. My opinion is that they have taken a very large slice of advertising revenue away from some of our Canadian dailies and periodicals. Some newspapers in our country are hard hit as a consequence. The minister might consider putting a stiff tax on that kind of advertising in foreign periodicals in order that a healthy Canadian opinion can be maintained by a strictly Canadian press. I feel sure that such a result would be quite in larmony with the Massey report, and it cer-;ainly would be desirable. I pass that on ;o the minister for what it is worth.


Mr. Byrne:: Two bits.


Solon Earl Low: I am not going to charge him a hing for it. In his budget speech my con-;enial friend, the minister, made quite con-iderable capital out of the debt situation, le claims, and rightly so, that the government as brought about a reduction in the net 'Ublic debt of something like $2,283,900,000 ince the national debt reached its peak in be year 1946. The habit of using this net ebt figure is, I think, somewhat misleading 3 the average layman. He probably is led >
believe that the government has actually aid off that $2,283,900,000 and got it out of ie way. That just is not so, Mr. Speaker.
The Budget-Mr. Low Our gross debt will stand at an estimated $17,807,100,000 at March 31 next, and our bonded debt shows comparatively little, if any, reduction since the peak of the war years. What makes it look as if the whitehaired boys opposite have really performed a miracle is the fact that our net active assets in the form of cash accumulations out of heavier taxes than were necessary, loans to and investments in crown companies and socialistic enterprises of one kind and another, advances to communist Chinese steamship companies and certain railway companies, and loans to other governments have risen to the impressive total of $6,669,600,000. These so-called active assets are deducted from the gross debt and the resultant figure is used by the government to represent the actual debt, although they are now paying interest on $14,837,630,000, in round figures, of bonds and treasury bills. That is a picture that is not conveyed to the public as a general rule.
There is yet another side to the picture. While the minister revelled in what he called a spectacular federal debt reduction, he said nothing at all about the increase in the gross holdings by foreigners of Canadian assets. While his net national debt has declined by over $2,200 million, these foreign holdings of Canadian assets have increased by more than $2,300 million, more than the reduction in his debt. The total of foreign holdings of assets in Canada now is in excess of $9,400 million. That is the gross figure. The net amount of those assets, held mainly by Americans, is no less than $5,800 million. They constitute a foreign debt owed by the people of Canada collectively, and in every way they serve to drain out of our country very large quantities of goods to pay the interest and dividends.
If those assets earned a mere 5 per cent return it would mean $290 million each year exported from Canada for which there are no corresponding imports. When you add to this the fact that since 1949 this government's trade policies have pushed us into an adverse payments balance of between $300 million and $400 million a year, you begin to get quite a different picture of the whole economic and financial situation from what the minister gave us in his budget speech. It is true we had an over-all favourable balance this year as a consequence of trade supplied largely by Britain.	.
The weaknesses in our economy that would otherwise have been perfectly evident have been concealed temporarily by the influx of new capital, mainly from the United States. Some of this is quite desirable, but there is some of it that is distinctly undesirable. But the over-all effect has been to add to the
2368	HOUSE OF
The Budget-Mr. Low
people's interest burden by the necessity for increased payments of earnings, interest and dividends which, though they will be exported as cash, will not in the near future, at any rate, add to the volume of our export of goods.
Facing these facts, and also the fact that commodity prices have been falling now for fifteen or sixteen months or more, and that we possess only about $1,800 million of United States exchange and gold, what would happen if the United States investor were suddenly to become a bit panicky and start unloading his Canadian securities? Suppose he comes to the realization that he will have to take his earnings in goods, as he finally must. He will then find that our very large and chronic adverse balance of trade with the United States, as well as certain political factors and power blocs in the United States, make it impossible to take those goods into that country. How long will our puny reserves last under circumstances like that? That is the question. How long would it be before we were forced to go cap in hand to New York to try to float another big loan in United States funds?
There is another question that we have to face. That prospect in my judgment is very real as a consequence of the shortsightedness of this government in matters of trade and finance. We should have been promoting trade with the United Kingdom and other sterling countries with all our energy, on a barter basis if necessary, in order to avoid the dangers we now face as a consequence of running up these serious adverse trade balances with the United States.
I think the Minister of Finance has shown lack of vision and foresight in failing to make the wisest use of our gold production in Canada. In the first place, gold production has declined markedly in spite of the : government's efforts to subsidize it. Then the minister has let most of it slip through ' his fingers into the United States, the very country that needs it least, to settle adverse trade balances at a valuation that is far below its real value, and there has not been any real need of incurring these adverse trade balances since shortly after the war ended.
Today we have only between $800 million and $900 million worth of gold in our reserves. We should, I think, have accumulated much more than that in our reserves, and we would have been able to if we had been following the pattern of trade best suited to our own long-term needs as well as to the essential needs of the commonwealth of which we form a part. There a Would not have been so many large adverse


\
balances to draw away our reserves for settlement under those circumstances.
The country should not be misled by the buoyant optimism of the minister's budget statements. I think the people of this country have done a remarkably fine job in many respects and I am not complaining about the job they have done, but what I say is that we must not be misled by the minister's buoyant optimism in the budget. We are actually sitting on a keg of dynamite. If the terrible national debt situation in the United States, falling commodity prices and shrinking world trade should result eventually in reduced profits and consequently of course a shrunken tax base in the United States, is it not likely that our American friends might be forced into the position of having to revalue their dollar by raising the price of gold? I believe that is actually what they are heading toward. Would it not be wise, then, under those circumstances for Canada to get what United States currency we have in our foreign exchange fund converted into gold as fast as our production or acquisition can make it possible? If we are going to retain our freedom in the face of all the difficult economic and financial factors of the situation that confronts us, a situation very largely of the government's own making, the minister had better get rid of the rocks tied to his feet and get moving.
Evidently his colleague, the Minister of Trade and Commerce (Mr. Howe), has begun to worry a bit about the whole trade and economic picture, because he recently took a long jaunt through Latin America for the express purpose of drumming up trade in other than the United States. Perhaps his infatuation for that single basket of eggs is cooling off somewhat as the gravity of our whole position is borne in upon him. I will have something more to say about trade and finance at a later stage in this debate.
I have already said, Mr. Speaker, tha' people should not be misled by the beautifu picture painted by the Minister of Finance in his budget. They should also keep ir mind that the minister has been riding a wai horse since 1950. That horse has taken bin and the country with him to a false prosperity one that is based on unsound foundations. : would be interested in knowing how well the minister could ride a peacetime nag.
The minister dwelt quite heavily on thi gross national production figures for last year He quoted $23 billion of goods and service produced by the Canadian people in that time and he says that he expects $24 billion wortl next year. X think that was pretty optimist! in the light of the circumstances I hav cited, and particularly in the face of fallin,

agricultural prices. Mr. Speaker, if those prices continue to fall or even if they remain at present levels, then the farming community of this country will not be able to buy the products of the manufacturing industries. What happens then? The wheels of industry stop turning because surpluses pile up.
As a matter of fact there have been some rather embarrassing surpluses in Canada over the past year and, when surpluses pile up, then unemployment falls on the country like an avalanche. There must be some way devised for dealing with surpluses both of actual production and of productive capacity. The farmers of Ontario have had a terrible time in the last year with surpluses of cheese. They all seem to feel that the United States should take it off our hands. Why should they? They have more cheese down there now than they know what to do with.
The main trouble is that this government has not the slightest idea of a policy to scientifically distribute surpluses of production. I would like to ask the Minister of Finance (Mr. Abbott) what he would do if we should find soon an armistice possible in Korea. On February 19, in London, England, Lord Alexander said that it is quite possible to end the war in Korea with a military drive up to the narrow waist of that unfortunate country. Now, if there is a way of ending that war honourably, without a whole lot of subservient appeasement, and without paying a high price in loss of life, then we ought to be finding it.
The people in the government talk big, as if their efforts for peace are really all-out efforts. But one certain thing about the whole situation is that the minister has no policy or provision for peacetime in his financial repertoire. If he has, he has not shown it; and I challenge the minister to tell the country how he and his Liberal colleagues would handle the situation if peace were to oome soon. I will expect him to answer that question for the people before this debate is over. If the Liberals expect to be re-elected at the forthcoming election-


Some hon. Members:: And we will.


Solon Earl Low: -then they have to be able to tell the people of this country in detail just how they propose to stabilize our economy in peacetime, to distribute surpluses that inevitably will appear, and how they will be able to stave off serious unemployment.


Some hon. Members:: Time.


Solon Earl Low: They are the important things, not just these puny appeasing tax reductions on which the Liberals are apparently pinning their hopes.
The Budget-Mr. Dechene
Just what specific program would the minister follow to distribute the extra $2 billion worth of consumer goods that could surely be made available to the people in Canada if and when peace comes. That is the nub of the whole question that faces the Canadian people, and they are going to want to know the answer before they put down a single mark on a ballot.
Mr. Speaker, in conclusion, when my friend the Minister of Finance has devised a policy that will provide for the equitable distribution of Canada's gross national production on whatever level we may attain in peacetime, then he will know something about social dividends; and he will not make the kind of error he made the other night when, in his exuberance, he called his tax reduction program "a social dividend".


An hon. Member:: Maybe he meant "Social Credit".


Solon Earl Low: We Social Crediters are prepared to tell the people of this country in detail how it can be done. We have a program that is scientific and sound for the distribution of surpluses and for the maintenance of stability in our economy. We are prepared, Mr. Speaker, to put that program forward here in this house and out in the country; and I am going to make this prediction, that it will be the real issue in the forthcoming campaign, and not the provisions of this budget.


Mr. J. M. Dechene (Alhabaska):: Mr. Speaker, I am afraid that I will be unable to justify the generosity of members of this house in this, my first attempt to address you, sir, and through you the people of this country, in a considerable period of time. If I ask the privilege tonight of speaking more particularly of that great country in which I am more interested, it is because of the fact, sir, that I am afraid I am not able to take part in debate as often as I would wish; and I am of the opinion that my time would be better employed, rather than entering into an argument with the hon. gentleman who has just finished his address, to say what I believe ought to be done on behalf of the country where I have lived for over 60 years and on behalf of people I have represented for over 30 years.
Before I proceed further may I say that I will try to deal in these 40 minutes with many things that I have in mind; but I would be derelict in my duty if I did not remind the house of what I suggested regarding the Minister of Finance (Mr. Abbott) after he presented his first budget to this house many years ago. I had taken the opportunity of congratulating the Right Hon.
2370	HOUSE OF
The Budget-Mr. Dechene James L. Ilsley on the tremendous work he had done during the war and on what he had accomplished with incredible courage and ability on behalf of this country in its time of peril and danger. I said I was pleased to see that he was being succeeded by one of the most brilliant young men in the political life of Canada that day.
I listened to the minister the other night, and in spite of the things that have been said today and that will be said as the debate goes on I want to say to you, sir, that I belong to the school which believes that you do not abuse a man all his lifetime and then build him a monument after he dies. If you have anything nice to say about a man, tell him now. After listening to his speech the other night I was prouder than ever to be a Canadian and a Liberal.
I do not agree with the hon. member for Peace River (Mr. Low). As other Liberals realize, in spite of the fact that this Korean trouble arose which compels the minister to come before parliament and ask for sums so enormous as to stagger the imagination; in spite of that terrific burden imposed on the country in order to keep our pledges to our allies to keep this world free; in spite of those enormous sums of money required the minister has been able to come before parliament, because of the wisdom of the administration of this government, after reducing the public debt over the last few years by over $2J billion, and tell the people of Canada: Today I am able to reduce your taxes by an amount of over $360 million a year.
Mr. Speaker, there has been an attempt to tell the little man that he has not received anything.
Well, I am a little man. I am not a lawyer, and I am rather pleased about that lately. I am not a teacher. I have been a farmer and a homesteader. Of course you will understand, sir, why I am saying everything that is in my heart. I do not need any notes. Everything I believe, everything I have lived for in order to serve those who have entrusted me with their representation today, I am placing before you in order to deserve their confidence.
This afternoon I listened to the hon. member for Greenwood (Mr. Macdonnell). I heard him deplore the fact that the little man was not getting anything from this tough Minister of Finance. At that time I happened to be reading a document he had written and presented to the legislature of Alberta on March 17, 1933, when he was representing the mortgage associations of this country. I was a member of the legislature at that time. He came pleading with us not to interfere with the sacredness of their mortgages. This


happened at a time when the great majority of the farmers of our province, along with the farmers of other western provinces, were in desperate circumstances. The legislature of Alberta thought it necessary to pass some measure of adjustment in order that farmers would not be driven from their land. They could not dispose of their products at fair prices. Under the Tory regime wheat was selling at 25 cents a bushel and hogs were delivered to the market for $1.70.
This hon. member told us that he did not want to hurt the poor farmer. No; all he wanted to do was to keep him in bondage forever. He wanted to keep him on the land and would not bother him until things got better. Then he would keep the farmer in bondage until doomsday. The members of the legislature wanted to pass some measure to enable these men to stay on their land, and to do that they had to cut down the farmer's liability to the point where he could afford to stay there and have a chance of making a comeback. I take the hon. member's complaints today, therefore, this great representative of the poor people, with a grain of salt. This is the official record which I have here. I was a member at that time, so I do not need to rely on hearsay.
Then we had another great series of speeches made to us when social credit was preached to the people of Alberta. We heard that the man who was responsible for this great new orientation of democracy, as Mr. W. Wood liked to say, was a man by the name of Major Douglas. Apparently he never tried this doctrine, except on himself, because it paid him handsomely to talk about it. It was decided to invite this man to attend our legislature and explain social credit to us. He was on his way from New Zealand, where they had turned him down, and was travelling from Vancouver on his way home to England. He was only a few hours away from Edmonton, but do you know how much he wanted before he would attend this meeting? He wanted $2,000, and not in social credit but cold cash, before he would consent to appear before the legislature of Alberta to tell us about this scheme which we did not understand and which nobody understands today.
We do not need experts to explain these schemes to our men, no matter whether they are ordinary labourers with an ordinary education or farmers or anyone else. We do not need an expert to come from overseas to explain any scheme for the government of this country which may be of benefit to the people of this country. The ordinary man is smart enough to understand it, and if it is no good he will turn it down. In this case this gentleman tried it, and is still trying. That

should be sufficient on that score, because we have something more important to talk about.
I know you will allow me, Mr. Speaker, as will the hon. members, to speak about matters that may appear of a local nature to you. Hon. members from Nova Scotia, New Brunswick, Newfoundland or Quebec may say that my remarks apply to only a small part of the country, but that is not so. If they will permit me to speak for a few minutes I shall tell them, in a manner they can fully understand, that Athabaska stands in the middle of a new empire which is now in the making. We are at the headwaters of this great fluvial route to the north. There is the Athabasca, as well as many other large rivers-the Peace river, the Pembina, the Smoky, the Wapiti, the Clearwater and others'-with a tremendous flow towards the Arctic ocean for thousands of miles north of Edmonton. I hope, Mr. Speaker, that Hansard is able to follow my humble remarks tonight because I have no prepared copy of this speech. There are those who go around this country taking credit for the discovery of oil in Alberta. In 1932 I submitted a resolution to the Alberta legislature asking the government to help in the exploration for oil which I felt was underneath our soil.
At the time my hon. friend the Minister of Finance made his first budget speech I told him that within a few years he would be able to close out his books without a worry and the balance of trade would be in our favour, all because of the tremendous oil resources that would be discovered in Alberta. It may have been only a hunch. As someone once said, I am an optimist. In any event, the oil was discovered. In my constituency, at the junction of the Clearwater and Athabasca rivers, there is a field of oil so great and so valuable that there is nothing comparable to it in the world; and that is not just talk. Engineers from the United States bureau of mines, from Toronto and other places came to report upon it. Even at the lowest estimate there are over 500 billion barrels of oil in these sands, and that is only what we have seen s6 far.
There are also by-products, such as paving material and everything one can imagine. We import this paving material from Trinidad, and we pay tribute to the large oil companies for the material to pave our roads. At the same time, right in Athabaska, there is enough of this material to pave every street in this Canada of ours.
You may say this is a provincial matter. Well, it is not. The hon. member for Peace River (Mr. Low) was quite free with his challenge when he started his address tonight. There may be a challenge for him here to
The Budget-Mr. Dechene look into. During the war one of the finest businessmen ever to serve this country, to the detriment of his health and his business, was the Minister of Trade and Commerce (Mr. Howe), who was then minister of munitions and supply. He took advantage of the provisions of the War Measures Act to take over the property owned by the Abasand Oils company at Fort McMurray, and enter into the production of this oil.
I wonder if you remember how many times this was criticized in this house. Men have stood up in their places here, members from Alberta, and have criticized it. Instead of boosting it and trying to develop it, instead of taking advantage of the war situation to see that any possible means of separating the oil would be found, and doing everything that they could, they did everything possible to destroy the attempts of this government to develop that great natural wealth in the tar sands.
I remember that in February, 1945, I was astounded to find the propaganda that was going around there. It was heartbreaking propaganda, put out for purely political purposes, to retard the development of that vast resource right in our own country. That was done at a time when tankers were being sunk on the Atlantic coast, as you know, by the German submarines, and when we did not know but that the day might soon come when we would be without this fuel, without which we cannot carry on a war let alone carry on in time of peace. This devolopment was actually and effectively stopped by propaganda, and I found out the reason for it only later.
If anyone is interested, he can go to the city of Edmonton and ask the provincial secretary's department there to show him the deal that was entered into between a department of the provincial government of Alberta and a man who was a promoter all his life, who has made his living without having to work a day. He was given by the provincial government practically control of the entire area of the vast tar sands in that vicinity. I challenge anyone to deny this fact, because I myself saw this document, Mr. Speaker. I happen to have some friends in the city of Edmonton. I speak about a matter that appears to be provincial because we are not doing our duty by this country if we allow foreign companies to get entire control of our natural resources which are so valuable in oil and when we do not open up the incredible wealth of the tar sands in the Athabasca basin.
May I be allowed to have a thought for those who discovered that great Athabasca country. In the centre of the constituency
2372	HOUSE OF
The Budget-Mr. Dechene of Athabaska is a place called Lac la Biche which was discovered a long time ago, as time goes in this young country. It was discovered over a century or a century and a half ago. A mission was established there by those hardy pioneers. The missionaries were the ones, with Captain Shot, we called him, because he shot the rapids on the Athabasca. His name was Fosseneuve and his descendants are still in that great country which I represent. He was the first man to discover a route through Lac la Biche, the La Biche river, the Athabasca river and on down to the Arctic ocean, a route which was taken over by the pioneer company and all the great traders of the north country, which had been discovered by those hardy pioneers. That is why Athabaska so greatly appeals to me. That is why I am willing to devote the declining years of an active life to serving this pioneering population.
I have not much time left, Mr. Speaker, but in 1945-


An hon. Member:: You have plenty of time.


Joseph Miville Dechene: -I want to say that we acted along with the others in this country. We are talking about unity, and I know that most of us are united. May I say, in diverging for a moment, sir, that since coming to Ottawa I have been proud of the men and women I have met from other provinces: those strong, generous men from the provinces by the sea; I refer to Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland. I have been proud to meet those from central Canada, from my ancestral home, the old province of Quebec to which my ancestors first came in 1632.
I must admit that there is a great deal of narrowness yet, unfortunately, amongst some part of our people. This is the forum, is it not, in which to speak about the matter? Where else can I do so? I will say this on the platform anywhere; but so that the people of the country may hear, so that my message may carry beyond the walls of this building and may carry beyond the boundaries of my constituency, I believe I can quite properly and justifiably take advantage of the forum of this house in pleading this case with you, Mr. Speaker, and with the members of parliament.
In 1945 I was, as you will remember, the only Liberal member elected in Alberta from a rural area. There was one from a city. It just happens that because the people know me well and have confidence in me, the great majority of those of French extraction voted for me in that election, as they did in the past and as they will in the next. It was a close fight, a fight between gentlemen, citizens of Canada, with only one aim and TMr. Dechene.]

one ambition. Although we might differ as to methods by which it may be achieved, our one concern is for the welfare and the happiness of this great country.
May I say that I never heard of a race being insulted as were the French Canadians in that election by the defeated candidate. The language he used cannot be put on Hansard or anywhere else. If a man used it in the street he would be arrested right away. They insulted them, through the mud they tried to throw at this important part of our population. That conduct should deny them the right ever to appeal to that class in Athabaska or elsewhere in the future.
I am not trying to use this as a lever or as something in my favour. We are not by far the majority in that great constituency of Athabaska, but I want to protest against this kind of thing. That is why I mention it on the floor of this house. I am not the only one who heard it. There were many men and women there; and some of his own supporters called me outside and told me he should be ashamed for insulting such an important and pioneering part of our great population in Alberta and in Athabaska. I know the words he used. Don't worry; I shall never forget them. If any man ever utters that same kind of language again and ever appears on a platform, I do not care if I live to be 90 years of age, I shall be delighted to meet him and call him by his proper name.
Now I have something else to talk about and it has been the subject of many a debate in the past. I am sorry to say that so far I have been unable to get any support, for reasons that I ignore, from the present party in authority in the province of Alberta. I am speaking about this great new artery of transportation for which plans were made away back in 1927 and 1928. It is not a local issue. It concerns the four western provinces, and at least three of them vitally, namely northwestern Saskatchewan, the whole of northern Alberta and northern British Columbia. This was provided for by arrangement between the Canadian National Railways and the Canadian Pacific Railway, by which, in order to bring about this development in a country which had a future-which had lakes, forests, mines and everything, besides the best of land-the Canadian National Railways would continue this line from Battleford and St. Walburg to the constituency of Athabaska, and the C.P.R. would come in west of Prince Albert, would have running rights on that line for 55 miles until they reached Cold Lake where the grade was built, and from then the C.N.R. would go down to Edmonton and the C.P.R.
2373 S

would go north of the Beaver river to the Athabasca river and the Peace river, to join with the Northern Alberta Railways at Lac la Biche in Athabaska and join with the Northern Alberta Railways line serving Peace river in order to have an outlet for the western provinces to the Pacific coast.
This is not a new plan, Mr. Speaker. The time has arrived, I believe, when we should talk about this matter. I have spoken about it often. I have been a long time in public life and I have found out that you must keep going after these things. You must speak about them. You must agitate. You must seek the support of your fellow members. You must seek the support of the government. It will not be done in a day, I know. I do not expect it to be done tomorrow. But unless we push and press for it, it will not be done at all.
If the Korean war terminates, and if Uncle Joe behaves himself, then this country will be in a position to carry on with the Canadian Pacific and Canadian National Railways for the construction of this great outlet. The other day it was mentioned by the new premier of British Columbia, who by the way was a strong Conservative until a few weeks before the election and who used to live in Athabaska. All kinds of people live there. Mr. Bennett used to be a citizen of our country.


An hon. Member:: Why didn't you keep him?


Joseph Miville Dechene: We chased him out; we gave him to you. As I was saying, the premiers of Alberta and British Columbia met together and amongst other propositions they suggested a western outlet through one pass which is not the one that should be used anyway, but they suggested it. They entirely forgot, Mr. Speaker, that no government will ever build a railway which would cost $125 million to $150 million just for the purpose of developing that part of northern Alberta west of Lesser Slave lake. In order to ensure the success of such an undertaking there are only a few gaps to close between Battleford and Prince Albert in Saskatchewan to my country of Athabaska, and the city of Edmonton and this Peace river country. There are just a few short gaps to fill in to provide a line right through to the northern half of these great provinces with every possible resource, all the best of land, wheat and pasture land, cattle country, fish abounding, great lakes and timber resources of all kinds. These resources should all be linked together. In order for this project to succeed they would have to join with these others that I have been speaking about for so long and that I have been pleading
The Budget-Mr. Dechene for, so that whole empire a thousand miles wide will be served by this Peace river outlet.
I had a few notes here but I seem to have mislaid them. I do not want to refer to a previous debate, Mr. Speaker, following your ruling; but I must say that I was astounded at the attitude of the opposition.
It was not the budget that was being discussed at all. The attitude of the opposition was that there would be an election and they had nothing against this government; how could they? It is the same old tactics that were used in 1911 and again in 1917.


Mr. Rowe:: They gain nothing by repetition.


Joseph Miville Dechene: I can tell you something.


William Earl Rowe: Go ahead.


Joseph Miville Dechene: 
William Earl Rowe: He would spend a little more.


Joseph Miville Dechene: I have pleaded this for years. I will put it this way. A woman whom I have known since she was a little child, who is married and has a large family living, and who is raising them well through hard work, wrote to me. She believes in the nobility of work. She and her husband do not want anything for nothing. They want to earn the bread they eat. She wrote to me and said: "Mr. Dechene, how is it that they are drilling on my land? There is gas and oil under my land." A refinery was built and opened there in my home town, and I had the honour to be invited when it was opened. She said: "How is it that these men can walk on my land and just give me a little bit for the surface rights?
If I do not agree they go to arbitration, and they say, well, it is worth $100 an acre, or so; yet I have all that value under my feet. There are millions of dollars worth of gas and oil under my feet." They have devoted so much work to the land. She said: "I have seen my husband almost fainting from hard work taking the trees and stones out by the sweat of his brow, and there is a well under our feet and I have no title to it whatever, not one cent." They go before this democratic government, which says that this is an expendable resource. It actually is, of course. And they say they are going to use it in a revolving fund to finance the municipalities and the school districts.


This may not be of interest to you, but there is a point here and I have spoken on it very often. This is a plan under which they will keep the municipalities and the school districts in bondage to the government forever and ever, and they will have to pay interest on it; and they will never be out from under the direct control of these people. I protest again that this is the only forum before which I can bring the views of the people concerned.
Now, I said a moment ago that, in spite of the conditions created by the unfortunate Korean development, in spite of rearmament, in spite of doing our share in NATO, spending all those millions of dollars in a time of peace, we have succeeded in keeping the ship of state sailing on smooth waters, and in keeping the people of this country content and prosperous.
I remember, sir, saying at one time to some young members who were listening to me in this house-and I must say that I gave them some advice-to never hesitate to carry on with something in which they believed. I advised them never to let anything stand in their way, that they should not be discouraged if they did not succeed at first. Because, as I pointed out to them, things are not done that way. I said to them that if they thought they were right they should carry on, that they should have confidence in the cause they espoused. Carry on, and some day they would be surprised that what they have advocated had been accomplished.
That is all we can do in these times. And, just as I gave encouragement to those young men, I would give it to the present members of the House of Commons, speaking always in my humble capacity as a private member. Sir, there is no more beautiful land under the sun of God than Alberta in June. You know, our flower in Alberta is the wild rose. And I do not think finer will be found anywhere, even in the Rocky mountain area or anywhere else, not even excluding the Niagara peninsula. I was over in the St. Catharines area, a paradise in the spring; but I do not think I saw anything as beautiful as the prairies blooming in the sun in June, as we see it in northern Alberta. There is no night there; it is daylight almost all the time.
And the flowers, sir, the roses; tall as trees, and scattered throughout the land. Marvellous; simply marvellous. Beautiful. It creates a new heart in life, a gratitude to this merciful God who, after all the dictators, is still boss. In Alberta in June-and some day, when the Lord is ready, as we say in French, les desseins du Seigneur sont insondables- they are too deep for us.

And may I say to some of my good friends across the way just this: The other day one of them, the juvenile member for Kamloops, was objecting to the Prime Minister (Mr. St. Laurent) being out of the chamber- the Prime Minister who is carrying such a burden, who has to look after all these responsibilities of government in onerous times. But because he left the house on other business he was criticized. I was going to say to those young fellows something in French-and I hope there is a French shorthand writer in the house-something in all humility, which I recite myself, so that it may be realized that I am just a humble servant of the Almighty:
Acte d'humilite: Mon Dieu, je ne suis que cendre et poussiere reprimez les mouvements d'orgueil qui s'elevent dans mon ame, et apprenez-moi a me mepriser moi-meme, 6h Vous qui resistez aux su-perbes et donnez votre grace aux humbles.
Mr. Speaker, the autocrats of this day will disappear, just as the great autocrats and warriors of the past have disappeared. God will remain. It is in Him we trust. You may have noticed,. Mr. Speaker, that I make it a point to be in the chamber when prayers are recited each day, because they are such fine prayers, and you recite them so well. It is moving, indeed. And God will be in His heaven when the memory of those great warriors will have disappeared into the dust of the centuries. If at times it seems to take long for things we desire to happen we must remember this, that on God's eternal clock the centuries are but the minute hand. And just as the farmer when he sows his land in the spring, after spending a lot of money and backbreaking labour, has to wait upon God's will for the beneficent rain and sunshine, and lifts his anxious eyes to heaven, let us in this House of Commons do the same thing.
My last word is a very humble word of confidence in this country, its valiant people and, I will add, and without any hesitation, confidence in this government.
(Translation):


Mr. P. H. Spence (Roberval):: Mr. Speaker, with those of my class, that is the working class, I regret that the budget presented to this house last Thursday by the Minister of Finance (Mr. Abbott) does not provide for greater income tax reductions in so far as the small wage earner is concerned, and that no change has been made in the method of levying taxes on farmers who carry on family farming, which is the kind of farming done on most farms in the province of Quebec.
The Budget-Mr. Spence
In view of the high cost of living, the budget just laid before the house by the Minister of Finance would indeed have been better received, and it would above all have answered a need which the representatives of the working class have been voicing for a long time, if it had provided for reductions and rates more in keeping with the demands of labour. The new tax rates are a real disappointment to the working class.
Considering the disclosures made in this house and in the press in connection with the extravagances, the waste, and the thefts committed in the administration of the Department of National Defence, the workers were entitled to hope that, at long last, the government would see fit to act in order to effect economies and control expenditures in that department, so as to reduce the volume of such expenditures to the benefit of the working class, which is constantly being asked to make sacrifices that are considered, not without reason, in view of the recent disclosures of the Currie inquiry, somewhat exaggerated.
The workers are under the impression that they are being fooled for they now have been given the proof that a large portion of the income tax deducted from their pay envelope is being ill-spent, without sufficient control and even, in some cases, without the consent of the responsible authorities.
The workers have never refused to contribute to the administration or to the common effort of national defence; but they are not unaware of the fact that their contribution has, so far, been rather important, through various direct and indirect taxes. As a matter of fact, while the cost of living has been increasing for the past six or seven years, their contribution has grown in proportion to this increase.
The new scale of income tax provides only for an insignificant reduction with regard to small wage earners. I may add that it even penalizes people with dependents as, according to the table published by the hon. the Minister of Finance, a single person earning $2,500 a year will benefit to the extent of $15 for the current year and of $30 for a whole year, while for the head of a family with two dependent children, who earns the same amount, the reduction will only be $2 for the current year-against $15 for a single person-and $4 for a whole year-against $30 for a single person. The single person with an income of $5,000
2376	HOUSE OF
The Budget-Mr. Spence will get a reduction of $100 for a whole year, while the head of a family of two children will get a reduction of $39 less than the single person's. And the higher the income, the greater the difference. Independent newspapers have also acknowledged the fact. May I be permitted to quote from an item I read in Le Droit of today just before coming into the house. It is entitled:
"A social dividend unfairly distributed": Mr. Abbott has deemed it advisable to make concessions to every group that complained to him last year. Too bad for those who neglected to do so or who could not find good spokesmen to fight their1 case.
We must say however that the great but indistinct outcry of the people has not been heard as it should have been. Is it because the man in the street is usually ill-prepared to criticize such and such a point of our taxation system? Is it because the humble, the rank and file, do not clearly realize what is wrong about tax reductions? We cannot say. But it is the duty of independent newspapers who have no electoral axe to grind to speak on behalf of the forgotten classes and to enlighten the Minister of Finance on the most serious deficiencies of his last budget.
There is nobody in Canada who does not rejoice that the taxes will be reduced by $250 million for 1953-54. There is nobody also who is not happy that he no longer will have to pay certain nuisance taxes: excise stamps on cheques and money orders, radio licences, etc. But what is the exact amount represented by these two reductions for the average Canadian? Some $5 a year at the very most. The* taxpayers will pay $17 million less in taxes on cigarettes. But then again, the poorest, those who ''rolled? their own, will benefit very little. Those who will profit from it are the manufacturers and the Canadians who can spare 35 or 70 cents a day for 'smokes. As for the $15 million which the public treasury will lose in excise and sales taxes on books, food, etc., the ordinary man's share of this official ''gift" will also be rather small.
Now if under the heading of personal income tax, the individual taxpayers are to be left $87 million more, we must not forget that tax relief is carried out under a rigid mathematical formula, so that if we refer to the very tables submitted by the Minister of Finance, we see that the very simple result of all this is that those who have the greatest load to carry and the least money benefit from no special treatment whatever . . .
It may be stated, without injustice to anyone, that the world of business has been treated more generously- by the Minister of Finance than the average taxpayer. The gross exemptions, under the heading of income tax, will be $87 million for the private individual and $85 million for corporations, for the next fiscal year. Apart from the provision concerning medical expenses, which tends to favour those in the low income brackets, the other cuts will be felt mostly in the higher income groups. The $400 exemption per child attending university,1 though socially equitable, will only favour a minority, and not the poorest. The 20


per cent credit on taxable dividends directly affects businessmen. Business circles will benefit in the proportion of two to one from the abolition of taxes on cheques and negotiable instruments.
It is to be noted that serious reservations must be made with regard to the social effect of the income tax reductions announced last Thursday. It is clear that the advisers to the Minister of Finance have a theoretical conception of the taxpayer. It seems that they have lost all contact with reality, that is the toil and sweat of the humble people. Otherwise, Mr. Abbott's budget would have been different. It would not have shown that mathematical rigidity which is its distinguishing characteristic, nor this tendency to put on an equal footing the worries of the businessman and the misery of the humble people. It would have granted the famous "social dividend", of which the minister spoke, to a greater proportion of those who, socially, are more to be pitied.
The Minister of Finance has missed a wonderful opportunity of earning some rights to the gratefulness of our low income citizens when he failed to grant what our labour organizations and various other associations have so often asked for in the past few years, the raising of the income tax exemptions to $1,500 for single persons, and $3,000 for married people.
The labour group is the hardest hit by taxes. I would even add that it cannot possibly evade it in any way. Unfortunately, it is for this group that the present budget shows the least consideration.
In a speech I made in this house, I appealed to the Minister of National Revenue to rectify an anomaly which exists in our Income Tax Act with regard to family farming, as it is practised in the province of Quebec.
Here is what I said, as may be seen in the translation on page 487 of the English edition of Hansard for December 9, 1952:
I quote the text relating to the matter of family help, In our Income Tax Act, according to the "Farmers and Fishermen Guide'' 1951 edition, as reproduced in the Action Catholique of November 27.
Salaries earned by children are deductible only inasmuch as:
(a)	those salaries have been paid in cash during the year;
(b)	the services were rendered with a view to producing the income;
(c)	the services would otherwise have required the hiring of help; and
(d)	the amount is reasonable, taking into account the child's age and the wages which would otherwise be paid to an outside worker to perform the same task.
One cannot claim as expenses the value of the upkeep of dependent children.
The Action Catholique from which the quotation is drawn goes on to say:
Let us assume that a farmer has three sons and that the work they do on the land is not paid for, for this land will one day be theirs and they shall

profit by the improvements to it. Now if, in this case, the father does not pay his children any wages, all the income from the soil will be considered from the point of view of income tax, as having been earned by only one man, that is by the head of the family. This situation is unfair and contrary to common sense, but it nevertheless exists under our present Income Tax Act.
The present act considers only the case where the wages in question have been paid during the current year, so that wages earned during preceding years cannot be considered in such cases when for example death comes to the head of the family, and they can be deducted only if they have been used to pay for services designed to produce revenues and for which the farmer would otherwise have had to hire help.
Such a principle, when applied, means that farmers who pay wages to the members of their family cannot enter those wages in their expense accounts since in a great many cases the farmers would not have hired extra help to do the work.
The representatives of our farmers have kept up their plea for amendments to the Income Tax Act.
For instance, UAction Catholique, on February 19 last, published the following:
In the great majority of cases, agriculture in Quebec greatly differs from that of other parts of Canada, of western Canada for instance. In those districts agriculture is organized on a business basis, while ours is a family organization. The present Income Tax Act is well suited for commercialized agriculture but is badly fitted to our needs.
In our province, through a family spirit which honours us, farmers group together to make a success of their agricultural venture. Sometimes we see young children do work too strenuous for them, but this barely permits making a small financial success of the enterprise.
But the Department of National Revenue refuses to recognize the fact that although the income is all in the name of the father, a good part of it rightly comes to his children. The father could surely pay them a salary in the form of a loan and get the money back afterwards: this would enable the children to gradually become owners of the farm. But very few fathers are conversant with these provisions of the law and put them into practice in a fair and reasonable way.
Very often a farmer owns property valued at, say, $10,000 to $15,000, on which taxation officials are seeking to collect income tax, when in fact such property is the result of the courage and sacrifices of the whole family.
It is amazing, Mr. Speaker, that this government, though they received from Quebec, if I am not mistaken, quite a substantial measure of support at the last election, has not deemed it advisable to implement these requests put forward by our farmers and our salaried people.
I would like, Mr. Speaker, to draw the attention of the house to the fact that, despite these seemingly prosperous times, there are at present, in our district of Saguenay-Lake St. John, more than 6,500 wage earners drawing unemployment benefits. If we add to this number those who are not receiving this assistance, we easily reach a total exceeding
10,000	unemployed.
68108-152i
The Budget-Mr. Spence
Lumbering operations, which provide our farmers with an important source of revenue, especially when farm products sell badly, such as has been the case for more than a year, have been greatly reduced this year.
The lumber camps, which are generally active until March, ceased operating early in December, and have not employed half the number of people they have been employing over the past few years. Our farmers were the first to be affected by these layoffs.
On the other hand, in the past three years, two very important electric power stations have been erected on the Peribonca river, one at the Chute du Diable and the other at the Chute a la Savanne. Now these two stations gave work, while construction was going on, to close to 5,000 men. They have now been completed and those 5,000 men, a large majority of whom live in the towns and villages of my constituency and of the neighbouring constituency of Lake St. John, are now without employment.
I deem it my duty to draw the attention of the house to the critical situation which is the. lot of a great number of farmers and workers of my district on account of that unemployment and I venture to make a suggestion which, if implemented at once, would greatly help alleviate this crisis.
The cost of living being as high as it is now, and incomes being such that it is not possible to make both ends meet, when the head of a family becomes unemployed, the greatest misery follows.
Some 140 miles northwest of my county, there is a rich mining area, which we call the Chibougamau district.
According to the information I have, there are in that district, where the first prospecting operations were started more than 80 years ago, more than 225 companies owning land, and everything indicates that there is hope that these mining developments will be a success.
There can be no more doubt about the wealth and abundance of those deposits; the price of metals today is sufficiently high to permit profitable development. A market would be ensured for those metals. Hydroelectric power is relatively easy to obtain. A magnificent highway already makes it easier to get there by truck and automobile and to ensure the success of the development we only need a railroad.
Mining operations are already under way and according to the Progres du Saguenay of November 13, 1952, the Campbell Chibougamau Mines Limited have already obtained a contract from the U.S. government defence materials procurement agency for 63,200,000
2378	HOUSE OF
The Budget-Mr. Spence pounds of copper and for all the cobalt that can be produced, at 24| cents a pound. The delivery date has even been set and delivery must be made before December 31, 1956.
A modem city is being erected there, including a church, a school and public buildings. In the spring more than 500 technicians will be employed by some four or five companies that have started or will soon start operations on their deposits and in 1954 that number will be doubled.
No less than eight air transport companies are needed to take technicians in and out. In all assurance, I can say to the house that at least $40 to $50 million have been spent in our district, in the last fifty years, towards its development. However, transport difficulties have always made prospecting and drilling operations extremely costly and even from 1929 to 1948, the airplanes were the only means of transport. Before 1929, the Chibougamau district could only be reached by water or by dog sled. These difficulties have not deterred courageous and enterprising men from working perseveringly in order to show how rich this mining district is; in fact, in some cases, they put all their money in it.
The opening of a highway, three or four years ago, gave much stimulus to the development of the mining deposits. This road had made it possible to transport the necessary heavy machinery and will make it possible to take out the ore until the railway has been built.
Private enterprise has not been backward in spending money. The Quebec government has generously contributed close to $6 million for road construction. In my opinion then, and in the opinion of everybody who lives in that district, it would be high time for the federal government to play its part in this undertaking by enabling the Canadian National Railways to construct a line by which the ore could be hauled from the Chibougamau district as economically as possible.
We learn through the newspapers that a delegation from the council for economic guidance of the Saguenay-Lake St. John district will soon call upon the Minister of Transport (Mr. Chevrier). They will present a memorandum, carefully prepared by eminent economists, on the economic advantages which would accrue from the construction of such a railroad. It is therefore useless to acquaint the house with them.
Nevertheless, I thought I should talk about this matter, since the line which is requested will start from the constituency I represent


here and also because I am very interested in seeing that as early a start as possible be made towards the implementation of that project.
Since I was not invited to participate in the drafting of the memorandum which will be submitted to the Minister of Transport, and since I shall not be able to join the delegation on March 2 next, I would not like to have the people of my county think that, if I am not a member of the delegation, it is because I am not in favour of this railway project.
As a matter of fact, I believe that even if this railway were to have a deficit at the start, it should still be built. We have built railways which, after twenty years of operation, have not yet succeeded in balancing their budget.
As the Canadian National Railways is a state enterprise, even if our railway in Chibougamau shows a slight deficit at the start, the government will be largely compensated by the revenues which it will receive from other sources as a result of the new developments that this new railway will undoubtedly bring about.
In my opinion, when the state considers the soundness of a project it must not only consider the immediate benefits to be derived therefrom.
When we spend billions of dollars for national defence, we certainly do not expect to derive any financial benefits therefrom. These billions are the price we have to pay for our freedom and our way of life.
Therefore if the government votes a sum of $16 or $17 million for the construction of this new proposed railway, it will provide employment, increase the national wealth, ensure the economic stability of the area, the development of which will thus be made possible, and will, in return, derive very interesting direct and indirect revenues in the form of various taxes.
One might object perhaps that we do not have the necessary money to carry out such a project. My answer to that would be that the necessary funds might easily be obtained if a stricter control were exercised on the expenditure of money appropriated for national defence.
The few instances of waste that we have been able to find in this field give us reason to doubt the validity of an argument of that kind.

The question is of great importance to the economic stability of the Saguenay-Lake St. John district.
To bring this speech to its conclusion, I shall remind the government that in the past they have never bestowed their favours upon our district and especially upon my county, in such a way as to spoil us. It would therefore be a convenient opportunity for the present government to make amends for the complete oblivion, we might say, in which they have kept us.
The Budget-Mr. Spence
(Text):
On motion of Mr. Lesage the debate was adjourned.



BUSINESS OF THE HOUSE

Mr. Fournier (Hull) moved: the adjournment of the house.
He said: Tomorrow we shall continue this debate.
Motion agreed to and the house adjourned at 9.57 p.m.

Wednesday. February 25, 1953