1953-02-26

Mr. David A. Croll (Spadina):: On a
question of privilege, Mr. Speaker, I find that at page 2409 of Hansard for February 25, 1953, I am recorded as having said:
I have indicated that Frigidaire Products, Leaside, were certified on August 14, 1952. Here is a plant engaged mostly in defence production work. On March 31 it had 113 employees; on June 30 it had 589; on August 31 it had 1,170 and on November 30, 1,550 employees. Although that plant was certified at its own request on August 14, 1952, it has not submitted the name of one employee. It refuses to co-operate or to make any deductions.
Prior to making that statement, and as late as yesterday afternoon, I checked on the accuracy of my information. I am now in possession of a telegram which reads as follows:
Frigidaire Products of Canada Limited operates two plants. Plant No. 1 at Scarborough is a civilian plant. Plant No. 2 Leaside was designated a defence plant August 14, 1952. Plan for national housing assistance announced October 22, 1952 to all employees. Since then we have had 57 applications and to date 31 have been approved by central mortgage and housing. 26 applications still pending. Please clarify for both the house and the press.
I accept that statement and regret that the information was incorrect and reflected on them.



PRIVATE BILL


Mr. H. W. Winkler (Lisgar) moved:: That the petition for divorce of Hanus Braun, known as John Browne, presented on February 24, 1953, together with the report made thereon by the clerk of petitions on February 25, 1953, be referred to the standing committee on standing orders for such recommendation as may be deemed advisable.


[Stage Direction]
Motion agreed to.


Mr. Fulton:: In connection with a return tabled in the house on Monday, February 16, 1953, being sessional paper No. 153 A, dealing with the proposed site in Montreal for the national film board:
1.	How many storeys will the proposed building referred to in part 2 thereof contain? How many
rooms will this building have, and what will be the size and purpose of each room?
2.	What price has been offered by the government as compensation for the expropriated site?
3.	On the basis of what authority, statutory or otherwise, were the payments of $58,000 and $5,895 for architects and consultants' fees, and for appraisals and survey fees respectively, paid?


Mr. Fournier (Hull):: 1.	The proposed building will be two storeys high with basement, and will be subdivided into rooms as required by the national film board.
2.	No price has yet been offered.
3.	Answer already given in part (b) of question No. 3 of sessional paper No. 153 A.


COLOMBO PLAN, U.N. TECHNICAL ASSISTANCE PLAN, ETC.
Mr. Knowles:: 1.	Since the end of world war II how many persons from countries other than Canada have received training in Canada under the provisions of the Colombo plan, the United Nations technical assistance program, or any other plan designed to assist in the development of underdeveloped countries?
2.	From what countries have such persons come, how many in each case, and how many in each year since the end of world war II?
3.	What is the total amount spent to date for the training of those referred to in question (1), including transportation, maintenance or any other costs met by Canada?


Mr. Claxton:: 1.	243 students are receiving training or have received training in Canada since January 1, 1951, under arrangements made by the technical co-operation service of the Department of Trade and Commerce. Of these, 99 came under the Colombo plan, 123 under United Nations programs, 16 under UNESCO, 3 under FAO and 2 under ICAO.
2.	Antigua (1), Austria (1), Australia (1), Brazil (5), British Guiana (2), British West Indies (4), Burma (1), Cambodia (1), Ceylon (9), Chile (2), Colombia (3), Cuba (1), Denmark (2), Dominica (1), Ecuador (2), Egypt (4), Finland (10), Formosa (2), France (2), Gold Coast (2), Greece (2), Haiti (8), India (66), Indonesia (3), Iran (8), Iraq (2), Israel (4), Jordan (3), Korea (10), Malta (1), Mexico (1), Nicaragua (1), Nigeria (1), Norway (2), Pakistan (53), Philippines (3), South Africa (1), Sweden (1), Switzerland (2), Syria (4), Thailand (3), Trinidad (1), Uruguay (2),

Questions
Venezuela (1), Virgin islands (2), Yugoslavia (2); total 243, of whom 115 came in 1951 and 128 in 1952.
3.	$334,748.88 have been spent on the 99 Colombo plan trainees. Since the United Nations programs are administered by that body and its specialized agencies, it is not possible to indicate how much of their funds may have been spent in Canada. Canada contributed $1,600,000 to the United Nations expanded technical assistance program from July 1, 1950 to December 31, 1952.
Records are complete for trainees handled through the technical co-operation service since its inception. Prior to this, arrangements for training were made through other channels so that complete records of the numbers of trainees who came to Canada are not available. It is estimated that an additional 120 received training in Canada under these other arrangements. In addition 13 students from the commonwealth countries in South Asia have come to Canada during the past four years to take up post-doctorate fellowships tenable in national research council laboratories.


PACIFIC PORTS, MEXICO  CANADIAN
[Stage Direction]
COMMITMENTS Mr. Robichaud:
1.	Did the Minister of Trade and Commerce, on the occasion of his recent visit to Mexico City, commit the Canadian government, either directly or indirectly, to assist financially in the development of certain Mexican Pacific ports?
2.	If so, in what manner and to what extent?
Mr. Mcllrailh:: 1.	No.
2.	Answered by No. 1.


QUESTION PASSED AS ORDER FOR RETURN
[Stage Direction]
IMPORTS OF SPIRITUOUS LIQUORS Mr. Catherwood:
1.	What was the total amount in dollar value of spirituous liquors imported into Canada from (a) the United Kingdom; (b) the United States, in the year 1952?
2.	On these spirituous liquors, what was (a) sales tax; (b) customs duties; (c) excise tax?


[Stage Direction]
On the orders of the day:
Mr. M. J. Coldwell (Rosetown-Biggar):: Before the orders of the day are called, Mr. Speaker, may I address a question to the Minister of Trade and Commerce. Has the [Mr. Claxton.l
minister been requested by the Saskatchewan farmers' union with, I am informed, the approval of the labour unions concerned, to take over operation of the Pacific coast elevators pending settlement of the present dispute? What action, if any, does the minister propose to take?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, the answer is yes. In order to anticipate a supplementary question whether we are going to do it, may I say that the answer is no. As a matter of fact, the situation at Vancouver is extremely complex. No one would wish more than myself to operate the elevators quickly; but there are certain factors involved which would react on labour relations from coast to coast and which must be and are being taken into account.
It has been suggested that the country elevator situation is deteriorating. That is not true. The cars that would otherwise be moving grain to the Pacific coast are moving grain to the interior terminal elevators, something which we have not had an opportunity to do until this time. As I announced earlier, we expect to be able to open all elevator points on the prairies to a 15-bushel quota by the end of the month.



REFERENCE TO NEWS REPORT OF ILLEGAL EXPORT

[Stage Direction]
On the orders of the day:
Mr. J. W. Noseworthy (York South):: Mr. Speaker, I wish to direct a question to the Minister of Justice. Will the minister comment on the news report this morning that the Royal Canadian Mounted Police, in cooperation with other police, have uncovered an international baby export racket?


Hon. Stuart S. Garson (Minister of Justice):: Mr. Speaker, I thank my hon. friend for having given me notice of this question. The commissioner of the Royal Canadian Mounted Police informs me that that force is not involved in any way in investigating the reported baby export racket and that our information is to the effect that it is being investigated by the Toronto police.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. W. J. Browne (St. John's West):: Mr. Speaker, I should like to address a question to the Acting Secretary of State for External Affairs. I have sent him a clipping from the Daily News, a St. John's, Newfoundland,

paper, in which it is suggested that the United States northeast command wish to acquire land near St. John's to build a very substantial depot, and that the government at Ottawa has refused permission for the purchase or acquisition of the land.


Some hon. Members:: Order paper.


William Joseph Browne: Is the
minister able to make a statement upon this matter?


Hon. Brooke Claxton (Acting Secretary of State for External Affairs):: Mr. Speaker, there is and can be no question about the acquisition or purchase of land. There have been discussions between the United States and Canadian authorities as to the possibility of extending to additional accommodation the existing temporary arrangements at Torbay, and I believe that a satisfactory arrangement can be worked out.


CANADIAN BROADCASTING CORPORATION
[Stage Direction]
On the orders of the day:
Mr. G. R. Pearkes (Nanaimo):: Mr. Speaker, may I direct a question to the Minister of National Revenue. Has the
C.B.C. announced the policy that consideration will not be given to applications for licences for private television stations from Victoria because that city is considered to be a fringe area to Vancouver? If so, might that policy be reviewed on account of the topographical obstacles which prevent clear reception?


Hon. J. J. McCann (Minister of National Revenue):: I thank the hon. member for having given me notice of his question. The answer is no. My understanding is that in the light of the statement of government policy for the licensing of television stations as made by me in this house on December 8, the Department of Transport is not now accepting applications for Victoria, but this special situation will be further studied by the Department of Transport and the Canadian Broadcasting Corporation.


THE BUDGET
[Stage Direction]
The house resumed, from Wednesday, February 25, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. The Budget-Mr. Hees Macdonnell (Greenwood), and the amendment to the amendment of Mr. Coldwell.
Mr. George H. Hees (Broadview):: Mr. Speaker, last night before the adjournment, we were discussing the "mink coat" budget which this government brought in, which does so much for those with considerable means and does so very little for those who are trying to get by on a moderate income.
We were also trying to get to the bottom of the minister's phrase "social dividend" which he used in his budget address a few nights ago. Most of us were greatly puzzled when we heard this expression, because the only dividend that we knew we had received was a 10 per cent rebate for each dollar of overtaxation which we had paid out during the past six years. That would not seem to be a social dividend; it would seem to be a rather unsocial dividend. It seems to me, Mr. Speaker, that this social dividend to which the minister referred must be the special treatment which the government has accorded to the gentleman of leisure who does no work, and who pays no income tax on an income of nearly $10,000 a year, provided that income is derived from dividends from Canadian corporations.
We were also talking about the obsolete and reactionary housing policy of this government, which makes it impossible for the small man to buy a new house and for the Canadian construction industry to produce more than about half of the new houses which it is capable of producing in a year.
I should now like to refer to another matter on which the government is dragging its feet badly. I refer to the introduction of a rehabilitation program in this country. I want to show the minister how the introduction of such a rehabilitation program by this government could be one of the best revenue producers that this government would have in terms of dollars and cents, in addition to the tremendous benefit that would accrue to the health and welfare of the people.
I think we were all glad to hear the Minister of Labour (Mr. Gregg) a year ago tell us that an advisory committee on rehabilitation was being set up. However, the results which have been attained from that committee in the meantime have, I think, been disappointing indeed.
The purpose of any advisory committee is to make suggestions to the government. These suggestions are the product of the combined thinking of the best brains and experience available on that subject in the country. The government, of course, is the
2418	HOUSE OF
The Budget-Mr. Hees only body which can act on these recommendations, and if the government does not take legislative action, then the work of the committee is worthless.
So far, Mr. Speaker, there has been no indication of any inclination on the part of the government to take legislative action on any of the excellent recommendations on rehabilitation that have been brought forward to date. On November 27, Mr. Ian Campbell, the co-ordinator of the advisory committee on rehabilitation, gave a report to the advisory committee on manpower. This report was a very pleasant one, filled with aims, desires and aspirations, but it contained no information as to what the government proposed to do in the way of bringing in a legislative program. It was just the kind of report that members of the government make when they are trying to explain why they are not going ahead with something they know perfectly well they should be getting on with.
Since that report was made, another three months have passed, and there is still no indication of any action on the government's part. It makes it look as though the government intends to use this advisory committee in the same way as it used the advisory committee on manpower, and that is a very disturbing thing indeed.
The records of the meetings of the advisory committee on manpower show a parade of cabinet ministers and senior civil servants coming before the committee and outlining government policy on the various aspects of the problems with which the committee is dealing. But it is very hard indeed to find any record of a suggestion made by a member of the advisory committee, advising the government as to what course that member thinks the government should follow.
We have been presented with the farce of the government advising the advisory committee, instead of the advisory committee advising the government. I think it is just that kind of farce that caused Mr. Rhys Sale, president of the Ford Motor Company of Canada, to resign from that committee some time ago.
I believe that this kind of farce must not be carried into the advisory committee on rehabilitation, but I feel that it will be unless the government gives some clear indication of its intention to act on the many excellent recommendations that have been put forward to it.
On the question of rehabilitation, I hope that the government will demonstrate its intention of introducing legislation in the near future, because that is the only way it can 

show that it does not intend to use this committee merely as another shelf on which to lay away an issue.
I find it very hard to understand the reluctance of the government to act in this matter, when we take into consideration the experience in other countries where they have brought in a rehabilitation program. The United States is a good example of just what can be done, and I believe is indicative of what we can expect here in Canada.
In the United States, the federal government makes grants to the states for the operation of rehabilitation programs. According to the annual report of the United States office of vocational rehabilitation for the year 1951-and that is the last year for which figures are available

we see that rehabilitation services were provided for 93,000 disabled civilians. Of that number, 66,000 are now in suitable employment; 14,000 are employed and still under observation; 13,000 are ready for employment; and just under 5,000 have had their cases classed as being unfeasible.
The total income of this group before their rehabilitation was $16 million a year from all sources. After their rehabilitation, the total income of this group amounted to $116 million. The cost to the United States treasury was $457 for each case treated, which can be contrasted with $800 which it costs somebody, either relief, mothers' allowances, the municipality, or the family, to maintain a disabled person in idleness.
The United States office of rehabilitation estimates that those they have rehabilitated in 1951 will repay the costs of all their rehabilitation in income tax alone in the next four years. After that, this new-found revenue will be available to the government for other purposes. They also estimate that over the lifetime of the rehabilitated disabled person, $10 will be returned to the treasury in income taxes for each $1 that has been spent on rehabilitation services. I believe that these figures clearly demonstrate that rehabilitation is a social service which pays the federal government in dollars and cents, to say nothing of the improvement in the health standards of the people.
Now let us take a look at the situation in Canada today.


Mr. Ferguson:: Mr. Speaker, don't you think you should ask for a little order so that we can hear what the man is saying?


George Harris Hees: Rehabilitation services are today provided for disabled people only in so far as they come within certain categories. These categories are a disabled veteran, an

industrial accident casualty in certain provinces, a blind person and a paraplegic. The great majority of disabled Canadians cannot obtain the rehabilitation services which they need to enable them to compete with their fellows.
The establishment of a comprehensive rehabilitation program, for which all disabled Canadians would be eligible as a right of citizenship, would involve the financial participation of the federal and provincial governments, combined with the voluntary agencies. Money, properly administered for the purposes of rehabilitation, is the one thing that is needed to initiate a rehabilitation program.
What is needed is a Canadian disabled persons rehabilitation act which would provide money to the provincial governments and the voluntary agencies on a shareable grants in aid basis, for the purpose of establishing adequate rehabilitation programs in all provinces, subject only to the necessary administrative safeguards.
I believe that all members of the house will join with the government in passing such an act, because we are all agreed on the principle that the opportunity to lead a normal and useful life should be regarded as a fundamental right of citizenship. For that reason, I strongly urge the government to bring forward such a rehabilitation act at the earliest opportunity.
And now I want to deal briefly with a problem which is facing many municipalities today, and which I think is admirably expressed in a telegram which I received from the mayor of Toronto today which reads as follows:
For years Canadian municipalities, through Canadian federation of mayors and municipalities, have sought to have supplies and materials purchased solely for municipal purposes exempted from federal ten per cent sales tax in the same way as exemption now granted to provincial governments, their boards and commissions, as well as hospitals.
Government indicated that such exemption too involved, notwithstanding that other governmental bodies and hospitals were covered and now similar exemption given on books, newsprint, and other materials used in newspapers and magazines. Municipalities now bearing crippling financial burdens and exemption from federal sales tax would provide some measure of relief at comparatively little cost to federal treasury. Revenue loss could be readily absorbed within current budget. Toronto with other municipalities is keenly disappointed with lack of action on exemption of municipalities from sales tax as is accorded to other public agencies and now publishing concerns. Earnestly solicit your support of such provision being made in budget when before house for adoption.
I believe that this request is a very reasonable one indeed, and I would hope that within the next few days the minister will give it serious consideration.
The Budget-Mr. Howe


Clarence Decatur Howe: Mr. Speaker, I rise to take
part in this debate for the purpose of giving certain information about Canada's foreign trade, and more particularly about Canada's trade with Latin America.
The year just past has seen another remarkable record of achievement in our foreign trade. Our exports have continued to advance and reach a total value of $4,400 million in 1952, an increase of $400 million over 1951, the previous highest year. It is worth noting that the total volume of our exports in 1952 increased by even more than their value. At the same time many leading import commodities experienced a sharp fall in price during 1952.
In spite of this, the total value of Canadian imports remained at approximately the same level as in 1951, at just over $4 billion. Almost all of the $400 million increase in our exports in 1952 went to overseas countries. Thus, while our exports to the United States rose to $2,300 million last year, and continued to be our most important single factor in our foreign trade, the proportion of our trade going to that great market has declined steadily in recent years, and fell last year to 54 per cent of our total exports.
It is gratifying to note that our exports to the United Kingdom and commonwealth countries increased in value, in volume and in proportion, rising to over $1 billion. Similarly our exports to Europe and to Latin America, and to other countries, notably Japan, increased substantially last year, and totalled about $1 billion. Sound commercial and economic policies have enabled Canada not only to maintain high levels of foreign trade, but also to diversify that trade. Canada's policy is to build up a sound exchange of commodities with every country in the world. In this we are succeeding to a remarkable degree.
When the estimates of the Department of Trade and Commerce are being discussed I shall deal with international trade, in general; but at this time I wish to report on our trade with Latin America, and particularly on the results of the Canadian good will and trade mission which has recently returned from a visit to Latin America.
Our trade with the 20 Latin American countries continues to be one of the brightest spots in the world trade picture. This trade has experienced a rapid expansion in recent years. In 1938 our total trade with this area was valued at $33 million. Last year the total amounted to about $560 million. As a percentage of our trade with all countries, trade with Latin America has tripled since pre-war. Over 6 per cent of our exports go
2420	HOUSE OF
The Budget-Mr. Howe to these countries, and about 7 per cent of our imports come from them. The reasons for the growing importance of this area in Canada's trade pattern are obvious.
Latin America has a population of over 150 million, and vast natural resources complementary to our own. As in Canada, the whole area is in process of economic expansion, with higher production, rising living standards and increasing import requirements. We are natural trading partners each in need of what the other can supply.
Since the war our traditional exports to Latin America have been supplemented by a wide range of other products, and the area has become one of our best customers for manufactured goods, many of which are currently denied access to other markets. Many countries in Latin America including Cuba, Venezuela and Mexico are open dollar markets where trade is unrestricted by import and exchange controls, just as Canada is an open market for their products.
Our relations with Latin America have been strengthened substantially in recent years. Since the end of the war we have concluded new trade agreements with many of these countries, and we now maintain most-favoured-nation trade relations with all of Latin America, with the exception of Honduras.
In recent months we have further strengthened our diplomatic representation by establishing embassies in Venezuela, Colombia and Uruguay. It is against this encouraging background, and as a positive contribution to the expansion of Canada's trade, that the government decided to organize a good will and trade mission to visit many of the countries of Latin America early this year.
I was privileged to lead this mission on a five-week tour of nine countries, leaving Ottawa on January 5 and returning on February 10. We visited the following countries: Brazil, Argentina, Uruguay, Venezuela, Colombia, Dominican Republic, Haiti, Cuba and Mexico. The mission also made unofficial visits to Puerto Rico and Trinidad, where we were privileged to meet a number of businessmen. In Trinidad we were able to discuss matters of mutual interest with the governor, Sir Hubert Ranee, and with Hon. Mr. Gomes, minister of labour and industry, and other members of the government, and to see something of the development of that British colony.
The mission was composed of a small group of government officials and seven Canadian businessmen drawn from widely representative branches of the Canadian economy. Three of the latter group speak 

Spanish fluently, and spoke for the mission on a number of occasions. These businessmen called on those concerned with the interests they each represented and thus, by dividing the mission, we were able to cover a wide cross-section of interests in the countries we visited.
Special thanks are due to these businessmen who helped materially in making the trade mission a success. Their names and affiliations are as follows:
D. W. Ambridge, president, Abitibi Power and Paper Company Limited, Toronto, and representing the Canadian Chamber of Commerce.
J. M. Bonin, managing director, La Societe Cooperative Agricole du Canton de Granby, P. Q., and representing La Chahabre de Commerce de la Province de Quebec.
J.	S. Duncan, president, Massey-Harris Company Limited, Toronto, and representing Canadian Manufacturers Association.
Alex Gray, president, Gray-Bonney Tool Company Limited, Toronto, and representing Canadian Exporters Association.
F. L. Marshall, director of exports, Jos. E. Seagram and Sons, Limited, Montreal, and president, Canadian Inter-American Association.
K.	F. Wadsworth, president, Maple Leaf Milling Company Limited, Toronto, who represented the Canadian flour milling industry.
Clive B. Davidson, secretary, Canadian Wheat Board, Winnipeg.
The businessmen who accepted our invitation to join the group paid their own expenses, including the cost of their transportation in an R.C.A.F. aircraft. The government officials who were attached to the mission contributed much to its success, and were most helpful in our contacts with government and business. The crew of the aircraft, drawn from R.C.A.F. personnel, made a splendid impression, particularly when the mission was receiving military honours. The fact that the mission travelled in an R.C.A.F. North Star aircraft added considerably to its success.
The purpose of this mission was to gain new firsthand knowledge about some of the countries with which we have been doing such satisfactory business and to learn what more we can do to develop and strengthen our trade with them in both directions. We did not go with the object of signing or revising trade agreements or of entering into specific negotiations. This was a visit of friendship and good will, to strengthen the broad basis of trust and mutual interest on which alone a sound flow of trade can be developed. I may say with confidence that

the object of our mission has been achieved in the fullest measure. In all of the countries visited we were received by the head of the state to whom I transmitted letters of greetings from our Prime Minister. We also had the privilege of meeting high government officials, key industrialists and leading representatives of business, banking, agriculture and other organizations. The various business members of the mission had every opportunity to establish direct contact with their opposite numbers in each country. Many fruitful and valuable discussions were had and I am glad to report that while we were not, as a mission, concerned with making immediate business deals, many of the individual members of our group were able to conclude satisfactory arrangements for further business on the spot.
I intend to go into some detail regarding each one of the countries on our tour but, before doing so, there are several comments of a general nature which I would like to make.
The warmth and cordiality of the reception accorded to the Canadian good will and trade mission in each country visited was beyond anything we had expected. We know this was intended not for us as a mission but through us for all the people of Canada. The publicity we were accorded by press, radio and television was quite extraordinary. There is in all these countries a fund of good will and genuine friendship for Canada that augurs well for the future of our relations and for the long-term prospects of our trade. It was my privilege in each country to thank the government and the people for the magnificence of their reception and hospitality. I am sure I speak for this house and for the people of Canada as a whole when I take this opportunity of again thanking the countries we have just visited for all they did for us.
Wherever we went we found the keenest desire to increase trade with Canada and particularly to develop direct trade with Canada as against indirect trade through third countries. While this is something which depends largely on transportation facilities, I believe that much can be done along these lines right now.
I would urge Canadian exporters and importers to look into the possibility of further developing direct connections with their customers and suppliers in Latin America. The Department of Trade and Commerce here in Ottawa and all our offices in the field will do all they can to be of assistance.
Wherever we went we were asked about the possibility of further Canadian investment in these countries. As you know, there are
The Budget-Mr. Howe already many important Canadian interests established in various countries in Latin America. We were happy to meet numerous representatives of those organizations during our tour and I may say that they contributed greatly to the success of our mission. The Brazilian Traction, Light and Power Company of Brazil, the International Power Company (Montreal) in Venezuela, the Royal Bank of Canada, the Sun Life Company, the Confederation Life Company, the Aluminum Company of Canada, the Mexican Light and Power Company, the Massey-Harris Company and many other Canadian organizations have impressive records of business success in Latin America and are playing a significant part in the development and expansion of the countries in which they are established. We saw and heard about many new opportunities for profitable investment in these countries and I hope that Canadian companies interested in foreign investment will investigate fully the possibilities available to them in Latin America.
Our bonds with Latin America are more than purely commercial or economic. Increasingly, Latin American students are coming to our schools and universities for their education. We are interested in seeing an even greater interchange of ideas and of technical knowledge between Canada and the countries of Latin America.
One last general comment which must be made is a word of thanks on my behalf and that of our mission to the Canadian embassies and to our trade commissioners in the countries we visited. Their work and their co-operation were of fundamental importance in the organization and success of our tour. It was my privilege to see them at work and to see how fully they have gained the confidence and respect of the governments and the peoples of the countries where they are established.
Our first official stop was in Brazil. We spent three days in Rio de Janeiro, the capital, and another three days in Sao Paulo, the booming industrial centre to the south. We were received in Rio by President Getulio Vargas, and by several of his ministers with whom we discussed many aspects of our mutual trade. We also had important meetings with trade and business organizations and met a number of leading personalities.
Canada's trade with Brazil has become increasingly important. Our exports to Brazil in 1952 reached over $81 million while our imports from Brazil amounted to about $35 million. Brazil is one of our best markets for motor vehicles, and electrical apparatus,
2422	HOUSE OF
The Budget-Mr. Howe for many other types of equipment and materials. We have been recently supplying a large part of Brazil's wheat requirements and, shortly after our visit, Brazil announced her intention to import a further large quantity of Canadian wheat. Canada is an important market for Brazilian coffee, for cotton, iron ore, tropical fibres, waxes, quartz, and other products. We were glad to learn while in Brazil of plans being made for a solution of their current exchange difficulties. Brazil is giving priority to the liquidation of its commercial arrears. It has introduced a new exchange bill which it is hoped will enable them to move their cotton surplus and to sell abroad more of their cocoa and lumber. As part of her exchange-saving measures, Brazil continues to maintain strict import restrictions against many dollar goods. These restrictions are affecting a number of traditional Canadian exports to that market, particularly codfish, wheat flour, whisky and other consumer goods. I know, from my conversations with the minister of finance and other members of the Brazilian government, that they are as interested as we are in an early reopening of the Brazilian market for these goods.
Brazil is a country with tremendous possibilities for expansion. We had an opportunity to visit the Volta Redonda steel plant, the largest in Latin America, as well as a number of modern industries in the Sao Paulo area. I was personally most impressed with the efficiency and organization of all these plants.
The growth of the city of Sao Paulo is itself the best illustration of the progress of the country. This is said to be the world's fastest growing city, and now has over 2 million inhabitants. The 400th anniversary of the founding of the city of Sao Paulo will be celebrated in 1954 with a centennial exhibition. The Canadian government proposes to participate in this exhibition and it is hoped that many of our Canadian manufacturers will take advantage of this exhibition to show the products they have to sell in Brazil.
Keeping pace with the tremendous industrial and population growth of this area, as in Rio and in other parts of Brazil, the operating subsidiaries of the Brazilian Traction, Light and Power Company are giving a tangible and impressive demonstration of what Canadian capital and skill can accomplish in co-operation with the people whom they serve.
In the neighbourhood of Rio de Janeiro, we visited the Paraiba-Pirai diversion project. This large-scale power expansion project undertaken by Brazilian Traction will 

take several years to complete and will raise the capacity of one of the main power plants supplying the Brazilian capital from 190,000 kilowatts to nearly 900,000 kilowatts. Near Sao Paulo we visited the Cubatao power installations, also operated by Brazilian Traction subsidiaries, where important generating plants are being expanded to take care of the rapidly increasing demand. Canadians may well be proud of the engineering work being carried on by this Canadian company. The work is not only spectacular but involves features that are unknown outside Brazil. It was a privilege to meet the Canadians who are managing this vast enterprise and the Canadian engineers who are carrying out the development program. The company has a tremendous responsibility for making possible the rapid industrial expansion of Brazil, and those in charge are fully conscious of that responsibility. These men are a great credit to Canada and are all our ambassadors of good will in Brazil.
From Brazil we proceeded to Argentina for a three-day visit in Buenos Aires. President Juan Per on of Argentina received the Canadian mission. We also had meetings with the minister of external relations, the minister of foreign trade and with several other cabinet ministers. I was privileged to address a joint meeting of the British chamber of commerce and other business associations who joined together for the first time on this occasion. We were also received by the Buenos Aires [DOT] stock exchange. We visited the terminal grain elevator of the port of Buenos Aires, one of the largest in the world.
It was indeed a happy note to observe the great improvement in Argentina's wheat position. After the serious droughts of 1950 and 1951 Argentina's wheat crop had fallen to 75 million bushels, one-third of her ten year average. The current crop is estimated at 275 million bushels and this should contribute substantially to easing Argentina's trade and exchange difficulties. Canada's trade with Argentina in 1952 totalled about $12 million, with our exports valued at $8 million and our imports from Argentina amounting to about $4 million. Tractors and farm machinery are the main items in our exports at present. We also sell Argentina small quantities of aluminum, asbestos, newsprint and rubber tires. Our main imports are canned meat, quebracho extract, hides and skins and vegetable oils.
When we recall that Argentina became our largest market in Latin America in the immediate post-war years we should be encouraged to look for a very substantial increase in trade levels in the future.

Although possibilities of trade are limited by the fact that our principal products are largely the same, we are hopeful that our trade with Argentina can be substantially enlarged. A mutual desire to that end was evidenced during our visit.
The mission spent two days in Montevideo, Uruguay, where we had the pleasure of calling on Senor Martinez Trueba, president of Uruguay's national council, and other members of the national council. Members of the mission had a valuable round-table conference with Uruguayan government officials. Arrangements were made enabling us to meet many of the leading representatives of Uruguay's business communities.
Our trade with Uruguay is of moderate size. Last year our exports amounted to $5 million while we imported about $2 million from Uruguay. Uruguay is a traditional and important market for Canadian seed potatoes and a small but valuable outlet for newsprint, farm machinery, aluminum and other goods. Currently many items that we are anxious to supply are restricted entry because of Uruguay's exchange situation. I am glad to say that this situation is showing considerable improvement, and we hope the day will not be far distant when Uruguay can relax its import restrictions against Canadian goods. Our imports from Uruguay consist mainly of wool and wool tops, canned meats, and hides and skins. I hope that, with the exchange of embassies between Canada and Uruguay, and as a result of our visit, we may see a significant expansion of trade in both directions.
The mission spent six days in Venezuela. We stayed in Caracas, the capital, for five days, and spent one day in Maracaibo, the great oil centre. Venezuela is one of our most important dollar markets in Latin America, a valuable market for wheat flour, milk, motor vehicles, copper, aluminum, newsprint, electrical apparatus and many consumer goods. It is also our largest source of supply for crude oil imports. Our exports to Venezuela totalled $36 million in 1952 and our imports from Venezuela, traditionally much higher in value, amounted to about $136 million. We are interested in reaching a closer balance in our trade with Venezuela through an expansion in our sales to that country, and we are also anxious to seek new products that we can import from them. We had most interesting meetings with cabinet ministers of the government.
Venezuela has an ample supply of dollars derived largely from the export of petroleum. There are no restrictions on imports to that country. It is perhaps the largest import market in Latin America and imports from
The Budget-Mr. Howe Canada are far below the scale that we would desire. The market is highly competitive but still offers a fertile field for those Canadians who will visit that country in an effort to sell Canadian products. Members of our mission obtained important on-the-spot orders and all expressed the opinion that Canada is doing a very poor selling job in that country. Industrial expansion is in progress at an astonishing rate and almost any product of the type made in Canada is being imported in volume, including manufactured goods, metals, pulp and paper and food.
We also had an important meeting with officials of the Flota Grancolombiana, the joint shipping line of Venezuela, Colombia and Ecuador, which now extends its service to Canada on the east coast and will shortly do the same on the west coast. All ships owned by this company were built in Canada and are contributing greatly to the development of trade between Canada and the Latin American countries they serve. Plans are under way to expand the fleet of refrigerated ships which will help further to promote direct shipments from Canadian ports.
While in Caracas we had an opportunity to visit the Caracas La Guaira super highway now nearing completion which will connect the city of Caracas with its seaport. This is one of the major construction projects in Latin America. In Maracaibo the Shell Caribbean Company conducted us on a tour of part of the oil fields which have played such an important part in making Venezuela's currency one of the hardest in the world. There is no doubt in my mind that Venezuela will continue to be one of our most important trading partners. We shall continue to need crude oil imports in large volume for our east coast and maritime markets for many years to come, and we will thus be contributing substantially to Venezuela's strength and prosperity.
From Venezuela the mission proceeded to Colombia, where we spent four days in Bogota, the capital, and also visited Barran-quilla, the main Atlantic coast port. The mission was received by the acting president of the republic, Dr. Urdaneta Arbelaez, and also had interviews with several cabinet ministers. We had very interesting meetings with the directors of the Banco de la Republica, with the president and officials of the Flota Grancolombiana, with the Colombian coffee producers federation and with other business organizations.
Among the numerous matters discussed with government officials was that of Colombia's wheat import policy. In the past it has been difficult for Canada to supply as
2424	HOUSE OF
The Budget-Mr. Howe much of the wheat as we would have wished. Under the new arrangements being introduced, Colombian importers will have a greater opportunity to plan ahead, and will thus be in a position to buy more wheat from Canada in those periods when local production is insufficient. We were also informed by Dr. Cabal, minister of agriculture, that Colombia will be lifting its current embargo against Canadian meat and livestock when the United States does so.
We had an opportunity to visit the ancient salt mines of Zipaquira, near Bogota, and the new soda ash plant nearby which began operations last year. We also visited the modern pharmaceutical laboratories of Frosst and Company of Montreal, a new Canadian enterprise in Colombia. Colombia is a country with a highly diversified economy. It is in a strong financial position, and offers an important dollar market for many Canadian goods.
Our exports in 1952 totalled nearly $14 million, and our imports were about $18 million. Machinery, newsprint, asbestos, wheat and flour, malt and aluminum, are among our main exports to that market. In return, we buy coffee-Colombia is our second largest supplier of coffee-and smaller quantities of bananas and other items. Our first purchase of rice from Colombia was announced recently, and I hope that a more diversified import trade with Colombia may be developed. We shall soon have a Canadian embassy established in Bogota, and can look forward to an era of even closer relations between Canada and Colombia.
We had a brief but busy stay in Ciudad Trujillo, Dominican Republic, during which we were received by President Rafael Trujillo, and members of his cabinet and numerous other government and business representatives.
The Dominican Republic is one of the world's largest and most efficient sugar producers, and was an important supplier to the Canadian market during the difficult war years.^ We had an opportunity to visit the most important sugar property on the island, the Rio Haina estate. Its modern sugar mill is doubling its capacity. This project, initiated in 1949, has been financed entirely with local Dominican capital, with an investment totalling some $40 million.
Our trade with the Dominican Republic has grown substantially. In 1952 our exports to that country had a total value of nearly $5 million, mainly fish, wheat flour, rubber tires and newsprint. Our imports totalled about $6 million, consisting largely of raw sugar and coffee. This is an open dollar market, and I am sure that the recent 

establishment in Ciudad Trujillo of a Canadian trade commissioner post will be of great assistance to our trade.
Our visit to Haiti, though unfortunately all too short, was extremely useful and rewarding. Canada has traditionally close and cordial relations with the Republic of Haiti, not only in trade but also in the cultural field.
In Port-au-Prince, the mission was received by the president of the republic, Colonel Magloire, and by members of his cabinet. We had a detailed discussion of our trade interests with government officials and with the chamber of commerce of Haiti. Haiti has long been a market for our fish and flour, and is also buying numerous other goods in Canada. Our exports in 1952 totalled almost $3-5 million. Our imports of $2 million last year consisted largely of raw sugar, tropical fibres, coffee and bananas. Haiti is particularly interested in developing sales of rum in this market and I hope that some satisfactory arrangement may be reached on this subject. Our newly-appointed trade commissioner to Haiti will be paying particular attention to developing our trade with this country.
From Haiti we proceeded to Cuba for a two-day visit. Our official calls included meetings with the ministers of state, commerce and agriculture. The mission were received by the president of the republic, Major General Batista.
As you know, and as I have already explained in this house, I took the opportunity of our visit to Cuba to have full discussions on the subject of sugar production and marketing. I have already reported in detail on this matter. I may say that I received the fullest co-operation from the directors and members of the Cuban sugar stabilization institute and from other prominent representatives of the sugar industry. We had an opportunity also to visit the Hershey sugar mill, which is the largest single producer of refined sugar in Cuba with a daily productive capacity of 1,000 tons.
Our trade with Cuba has been rising rapidly since 1947 when Canada received substantial tariff concessions as a result of negotiations under the general agreement on tariffs and trade. In 1952 we exported to Cuba $24 million of goods, including large quantities of wheat, newsprint, wheat flour, copper, fish, malt, potatoes, milk, oats and machinery. From what I saw, there is still a wide field for a further expansion of Canadian sales in that market. Our imports from Cuba in 1952 totalled some $20 million, and consisted mainly of raw sugar, synthetic yarns, pineapples, fibres and tobacco. Cuban

raw sugar has been entering the Canadian market under the terms of a special arrangement entered into at Torquay in 1951. This arrangement comes to an end this year. Whether it should be renewed, and in what form, is a matter for further discussion in the light of conditions at that time.
While in Cuba, I expressed the Canadian government's hope that the current problems in world sugar marketing may be solved to the satisfaction of both producers and importers through the medium of an international sugar agreement which will be discussed later this year. Cuba's 1951-1952 crop of over 7 million metric tons of sugar is the largest in history and the Cuban government is this year restricting the current crop to well below that figure. It is certainly in Canada's interest that the Cuban economy, so dependent on sugar production and export, should continue at a high level of prosperity and stability.
Our four-day visit to Mexico City was the last stop of our tour before returning to Canada. The mission were received by the president of the republic, Dr. Ruiz Cortines, and also had meetings with the ministers of his government. The foreign minister of Mexico, Mr. Padilla Nervo, preceded Mr. Pearson as president of the United Nations general assembly and is a great friend of Canada.
We had particularly valuable conferences with the Banco National de Mexico, with the confederation of national chambers of commerce and with the importers-exporters association of Mexico. At these meetings the Mexican representatives formally proposed the creation of a joint Mexican-Canadian chamber of commerce or similar association of private trade interests, in both our countries. I understand that this proposal, which has much to commend it, is now being given the fullest consideration.
Mexico is Canada's second largest market in Latin America. Our exports in 1952 totalled almost $40 million and included a wide range of products with the main items being motor vehicles, newsprint, machinery, wood pulp, farm implements, electrical apparatus, aluminum and asbestos. It is also one of our most important suppliers of raw cotton and of many other products including peanuts, fresh vegetables and fibres. Canadian imports from Mexico in 1952 were valued at about $24 million. Canada has become one of Mexico's main customers. Mexico is keenly interested in the further development of her tourist trade with Canada, and I hope that an increasing number of Canadians will visit that beautiful country. We are hopeful that direct air services between Canada and
The Budget-Mr. Howe Mexico may soon be established and this will aid in promoting even closer relations between us.
Mr. Speaker, I have given a brief review of our official visits to nine Latin American countries. We have come back from our tour with increased knowledge and with increased confidence in the future of our relations. But I am sure I speak for all members of our mission, and particularly for the business representatives, who were with us and were able to prove this for themselves, when I say that what impressed us most was that our trade with these countries can be expanded to still much greater levels. Latin America is one of the world's major trading areas, selling over $3J billion yearly to the United States alone and buying almost $300 million monthly from the United States, our nearest competitor. I believe Canada's share of this trade could be greatly increased and our position in these markets further improved. The opportunities are there, and it is up to us to make sure they are grasped and developed. This is a job that must primarily be done by Canadian businessmen themselves. There is no substitute for personal, direct, on-the-spot contacts and relations. I would most strongly urge senior Canadian businessmen to go to the countries of Latin America and see for themselves what new fields are open to them. I would like to think that our own visit was but the first of many such visits in both directions by business groups and individuals. There is no better way of getting to know one's customers and suppliers and of finding new customers and new suppliers.
I took the opportunity of my stay in each country to extend to the governments and business groups of those countries an invitation to come and visit us in Canada. I know many of them are making plans to do so, and I have assured them that they will meet with the warmest and most cordial reception among us. I also invited the governments and business groups of each country visited to attend our international trade fair. Many of them have already done so, and more will come in future years.
Like Canada, the countries of Latin America are countries of the future. We have come closer together over the years. May I express my sincere hope that we shall continue to work together in our programs for the expansion of our economies.


Mr. Green:: May I ask the minister a question, Mr. Speaker? While he was away, there was a press dispatch to the effect-if I remember correctly-that the Canadian government
2426	HOUSE OF
The Budget-Mr. Fleming had plans to help develop certain Mexican ports on the Pacific. Was there anything in that report?


Clarence Decatur Howe: We were informed that the great drawback to trade between Mexico and Canada on the Pacific coast is this lack of a seaport with proper docking facilities. We were told that if Canadian businessmen could interest themselves in that project, the government of Mexico would be prepared to join with them and to extend concessions that would be very valuable indeed as a contribution to the success of the project.


Howard Charles Green: The Canadian government or the Mexican government?


Clarence Decatur Howe: The Mexican government made that proposal. Of course it is not a project that the Canadian government could undertake as a government, but we can draw it to the attention of Canadian businessmen interested in projects of that kind, and I hope we can find a Canadian group that will believe it worth while to undertake the project.


Mr. Donald M. Fleming (Eglinton):: Mr. Speaker, I am sure the house has listened with interest to the report which has just been read to it by the Minister of Trade and Commerce (Mr. Howe). It has been a report glowing with optimistic hope for the future.
I am sure that all Canadians will hope that that optimistic outlook will be justified by developments in the future. We are not unmindful of the fact that the minister is always optimistic, but we trust that, in the opportunities that have been outlined here today, there may lie the assurance of increasing trade between Canada and these countries of Latin America, to their mutual profit. A little later in my remarks, if there is time,
I -shall have something more to say on the subject of trade.
The speech of the minister was undoubtedly an interesting and pleasing diversion for the government from the hard realities of the budget which was introduced in the house a week ago by the Minister of Finance (Mr. Abbott). May I say that I am happy to have the opportunity today of addressing myself to the minister. A year ago, as he will remember, I had occasion to complain about his absence at the time of the debate. I now say to the minister that taking part in the budget debate with the Minister of Finance out of the country is something like the play without Hamlet, particularly when in the budget one has to discuss something rotten in the state of Denmark.	,
I suppose every budget, Mr. Speaker, has its distinguishing characteristics. There are some that lend themselves to particular designations. For instance, one remembers the


1949 budget which the Liberal propagandists did their very best to designate for history as "the sunshine budget". One recalls the budget of a year ago, introduced by the same minister, which was so aptly described by one leading journal of the province of Quebec. Referring to the reaction to it throughout the province of Quebec as one tinged with disappointment, he Soleil described that reaction in its issue of April 12, 1952, in these words: (Translation):
The general note is one of deception.
(Text):
Mr. Speaker, it was thus well described as a budget marked by deception; and, Mr. Speaker, I think the budget deserved the title given to it by some of us, the budget with the false face or the Hallowe'en budget, because while he was actually increasing our taxes the Minister of Finance argued that we ought to acclaim his reduction of them. It was a strange and curious contradiction. No doubt it was something like that which the parliamentary assistant to the minister had in mind yesterday when he adopted a reference to the Minister of Finance from another quarter, namely the "wizard of Ottawa". I do not think any of us on this side of the house have called the minister quite as hard a name as that before. But at any rate, he is the kind of wizard, apparently, who has succeeded less in pulling a rabbit out of the hat than in talking through his hat.
There was a curious and interesting effort made yesterday by the parliamentary assistant to the minister to borrow from the 1949 experience and to call the budget of 1953 a "sunshine budget". Mr. Speaker, it will take a great deal of effort to accomplish that. I compliment the parliamentary assistant on the strenuous, vigorous and at times eloquent effort he made yesterday to convince his doubting colleagues that this budget had some virtue in it. But it will take a great deal more than his able and sincere efforts, I am sure, to convince the people of this country that this pale and anaemic reflection of the budget of 1949 is deserving of the title "sunshine budget". I am going to suggest, Mr. Speaker, that a much more apt and appropriate title for this budget would be the "sunset budget" because I am satisfied that this government is fast going over the hill.


Some hon. Members:: Oh, oh.


Mr. Abbott:: Another new joke.


Donald Methuen Fleming: I hope to have an opportunity a little later on to draw comparisons between the so-called sunshine budget of 1949 and this dismal sunset budget of 1953.
There are, of course, some special problems in relation to the budget which one is tempted

to discuss, but time does not permit; there may be an opportunity at a later stage. The minister refers to the problem of accrual of bond interest with respect to the calculation of income and also to the position of reserves and prepayment for goods and services. These are problems which I trust will be discussed when we reach a later stage in the debate. There are some special problems which, had there been time, one would have liked to have an opportunity to discuss at this stage. But in the limited time at one's disposal, one must confine oneself to the general features of this budget.
Sir, the first and most striking feature of this budget is, of course, the fact that it was conceived in political expediency and begotten of political necessity. For that reason I think that the public and this house may well approach it with a high degree of distrust. It is undoubtedly an attempt to borrow something of the experience of 1949 when, after proclaiming year after year the virtues of cyclical budgeting, the virtues of big surpluses in good times, the minister threw everything overboard and brought in the sunshine budget of that year, marked by sweeping reductions in taxes. It is not at all unusual in the experience of parliament under the present government to see these reductions and other benefits that lie within the power of the government to bestow used deliberately on the eve of an election with no other purpose obviously than to win votes thereby. If the Minister of Finance went to his riding and offered the people of that riding small handouts, of course that would be an offence against the Canada Elections Act, but when it is practised on the grand scale by the government, then it is held up by the government opposite as a model of political -virtue.
I wish to say this in general. We have already had some experience with the kind of budget the minister introduced in 1949. And the people of this country will not have forgotten their post-1949 experience. They will not have forgotten, sir, that once the election was won, once the sunshine budget had served its political purpose, then of course the taxes imposed by this government resumed their dizzy climb.
In the second place, it will not have been forgotten that the government resumed the practice of taxing the people of Canada at extortionate rates so that big surpluses were created. Unnecessary taxation was heaped upon the Canadian people. We have seen these budget surpluses year after year. We have seen them not as budgeted surpluses but accidental surpluses arising as a result of miscalculation, surpluses arising out of blunders on the part of the Minister of
The Budget-Mr. Fleming Finance. Surpluses may be a very good thing when they are consciously budgeted for. Debt reduction is a very commendable thing and should be consciously budgeted for. But, sir, it is a very different matter from just wilfully soaking the taxpayer with quite inadequate regard to the necessities of government, and in that way building up these big unbudgeted surpluses which have represented such a heavy imposition upon the people during these times when taxes have otherwise already been quite high enough.
When the minister talks about a budget surplus this year we of course cannot attach any more reliability to an estimate of that kind than we can to his earlier calculations in the light of the errors that developed in them year by year; and we will not have forgotten either that when these surpluses began to roll up during the year ways were found, as the ingenuity of the minister was taxed to find ways, of reducing the apparent error in his budgeting. And so, as last year and the year before, we saw the great orgy of expenditure in the closing days of the fiscal year, which had the effect of relieving the government of some of the embarrassment Of the huge unbudgeted surplus. And then we also saw the government placing here and there, in different pockets in the consolidated revenue fund, very substantial sums of money, running into hundreds of millions of dollars, which had the effect, not of reducing the true surplus, but of reducing the apparent surplus.
When the minister made his budget speech on April 8, 1952, he estimated that the budget surplus by that time had been reduced to $356 million. Not satisfied with that, sir, you will remember in the next few months he addressed himself to finding a way of reducing the surplus still further by devising a new method of charging interest on the public debt, which enabled him to reduce the surplus by August 8 to $248 million. All but $20 million of that difference was attributable to the change in method of treating interest.


Douglas Charles Abbott: My hon. friend knows there was no change in the previous fiscal year in the way of charging interest on the public debt; that applies only to the current fiscal year.


Donald Methuen Fleming: I have the reference here, and I shall be very happy to come back to it because the statement has appeared in government print, and I am relying on that in making the statement that I have made. The sum of $20 million of it went elsewhere, but the rest of the difference, according to that statement, was attributable to a change in the method of treating interest on the public debt.
2428	HOUSE OF
The Budget-Mr. Fleming
These unbudgeted surpluses have been defended by the government and by the minister in bygone years. They were held up as having great virtues. You will not have forgotten, sir, that in his radio speech on February 19, 1952, at a time when the surplus in the minister's hands was running to something like three-quarters of a billion dollars, the minister said that "it has been an excellent thing, not just for the government but for each and every one of you." There was no repentance indeed for the grievous overtaxation of the people and the creation of this big surplus. But now, sir, where are the virtues of the big surplus? Why does the minister not now budget for one? Well, Mr. Speaker, you know perfectly well that surpluses lose their virtue on the eve of elections. The minister can proclaim the virtues of these accidental surpluses due to overtaxation for four years, but come an election year and there is no thought then of ascribing any virtue to the surpluses. Yes, it is not the season for surpluses, Mr. Speaker.
We of the official opposition do not ask that under conditions like these any more than in those recent years the minister .should budget for a surplus. Under the rates of taxation now existing it would be a highly oppressive and grievous policy. But, Mr. Speaker, we put this policy of 1953 alongside the policies proclaimed in these past four years and we invite the people to condemn those who have engaged in this double talk.
There are two factors that stand out perfectly clearly in all this. The first is that apart from the political needs of this government there was no less reason for reduction of taxation in any one of the past three years than there is this year. But, Mr. Speaker, considerations of that kind, in the view of this government, are quite irrelevant. In these past four years since the sunshine budget of 1949 the government has proceeded on its way with its lighthearted, but heavyhanded extortion. In the face of all this, many people are saying: Let us have an election every year. And there is much to be said for that; if we were going to be faced with the kind of government in the future that we have at the present time, then I think, Mr. Speaker, there is a great deal to be said for an annual election.
The general election of 1949 cost the public treasury of this country about $4,250,000. It is obvious that an election is cheap by comparison with the kind of impositions that the government inflicts upon the people by way of heavy and often quite unnecessary taxation between elections. So, let us have


more elections, more election years and more election budgets.
The second factor, sir, relates of course to our own experience with this government, because here we are not speaking upon surmise; we are speaking in the light of experience, because of what happened after the sunshine budget of 1949. Well, by 1950 the sunshine budget had faded; the shadows began to gather in as the Minister of Finance and the government got themselves into gear again to increase taxes. Everybody in this country by this time knows perfectly well that after the reduction of taxes this year, if this government should be in office next year, then we would have a repetition of what happened after 1949. The taxes would go up again, and the people of this country will no doubt be happy to welcome anything that leaves a breathing spell for even the space of one year. But nevertheless, the slogan of these governmental tax gatherers continues: "Business as usual, during alterations." The only hope of this country for the kind of tax reduction that will continue is through a change of government.
And indeed we have only to look back on what the Minister of Finance himself had to say to recall how completely the minister gave away his whole case in this respect, how he himself exposed the political motives of the government in what they undertook. You will remember after he delivered his budget speech on that memorable night of March 22, 1949, he, as it is recorded in the Windsor Star, proceeded to the Liberal lobby. And then, the story proceeds-
He came out in the Liberal lobby and he grinned, took off his big, brown, rimmed glasses, rocked from foot to foot on his heels, and then he looked across the faces at the retired prime minister and said, "As Mr. King says, boys, the timing of what you do can be just as important as the thing you're doing."
And that is the end of the quotation. Well indeed has the Minister of Finance learned the lesson of timing. But he carries it to the point where he justifies himself for imposing extortionate taxation upon the people of Canada three years in a row, in order that he may indulge in one of his timing exhibitions on the eve of an election in the fourth year.
Then, again, we recall that only a few days later the minister was again in a mood of great candour, because speaking on April 27, 1949, he said this in the house:
Let us not try to fool ourselves, even if we are trying to fool the people.
I am quite prepared to leave it at that. It is perfectly obvious the minister did his best to fool the people in 1949. It may be that the hon. members opposite feel that the

fact the government succeeded in getting itself re-elected justifies the offence they committed in the spring of 1949. Apparently they are going to do their very best to repeat the performance this year.
Well, let us look a little deeper into the comparison between 1949 and 1953. It will not have escaped hon. members, who sat here and heard the minister's budget speech a week ago, that members of the Liberal party in the house certainly looked to the Minister of Finance to deliver the goods. Political necessity was written large all over those gloomy faces on the Liberal side. They were expectant. Oh, what a picture they were! One's thoughts turned to those words of Burns-
O wad some power the giftle gie us
To see oursels as Ithers see us!
What a revelation it would have been to hon. members opposite if they could have seen their faces that night-that look of expectancy, the look of anxiety, the look of concern. They were all there. And then, when the minister, feeling that he had done his job of salesmanship, and winding up, like little Jack Horner, by saying, "What a good boy am I!"-then, of course, the cheering section did its best to cheer up the minister. His political peroration on that occasion was interesting, but it only served to emphasize the fact that we are proceeding rapidly to the eve of an election.
Now, let us look at 1949 and compare it with 1953. Let us ask ourselves whether there is very much sunshine left in this budget. In 1949 the minister proposed, in the first place, tax reductions amounting to $323 million-about $100 million in excess of those proposed for this year.
Looking at the percentages, though, we find that, as compared with the total revenue collected from the people of Canada during the year ended March 31, 1949, the total reductions proposed by the minister in his March 1949 budget amounted to a 12 per cent reduction in the total tax burden. What do we find in this anaemic counterpart in 1953? We find a 5 per cent reduction in the tax load that the people have carried in this fiscal year that will end on March 31, 1953.
Then let us look at the income tax. The Minister of Finance proposed a reduction in income tax that year that could be considered a respectable reduction, and that amounted to a 30 per cent reduction of the income tax load borne by the people of Canada in the previous fiscal year. Well, what do we find this year? In this anaemic counterpart we
The Budget-Mr. Fleming find a scant 5 per cent reduction in the income tax load carried by the people of Canada this year.
Then we will remember also that the Minister of Finance did that in 1949 while, at the same time, budgeting for a surplus of $87 million. This year, with his scant reduction- his inadequate reduction-he can budget for a surplus of only $11 million.
And then let us look at the indirect taxes. In 1949 the minister proposed a substantial reduction in excise taxes. As a matter of fact, if hon. members will look at page 1804 of Hansard for 1949, they will find that he proposed the abolition of eight or nine excise taxes, and reductions in nine or ten more of them. That amounted to a total reduction of 35 per cent, as compared with the total tax in the previous year.
But this year what does the minister propose? Well, what he proposes this year by way of total reduction in indirect taxes just amounts to nothing. If one looks at the figures closely one will find that the minister is proposing to take more money out of the people through these taxes next year than he has during the present year.
And so it is a very tawdry, a very anaemic, a very pale-yes, a very ghostly counterpart of the 1949 budget that we see in this sunset budget of 1953. But, sir, perhaps we should not be too hard on the minister. Perhaps we should say: "If you don't like the music, don't shoot the piano player, boys; he is only doing his best."


Douglas Charles Abbott: Certainly lots of originality in this speech.


Donald Methuen Fleming: But if the minister would come before the house and tell us frankly that it is a very poor budget, that the reductions he has proposed are ill-distributed, that they are belated, that they are inadequate, and that even at this late hour they are introduced entirely for reasons of partisan expediency, then perhaps one would have reason to say to the minister, "Well, you have done your best."
But the minister has not come before us in that light at all. The minister has come before us, again, with the pretence that he Is reducing taxation. Mr. Speaker, this budget does not reduce taxation. Let us have that crystal-clear. This budget proposes to increase taxation, to increase the tax load of the Canadian people. The load proposed by this budget is the heaviest load in Canadian history. The fact is that the minister is proposing a record load of taxation to be imposed upon the Canadian people.

The Budget-Mr. Fleming
Yes, the game of light-hearted and heavyhanded extortion is to go on; and the people are to be fooled, apparently, into thinking that they are obtaining tax reductions. Well, the fact of the matter is that the increase in the load proposed by the minister this year, as compared with the present fiscal year, amounts to $7 per capita, and a $35 increase for every family of five persons. Federal taxes during this coming year will average $340 per capita and $1,700 per family of five.
Now, the minister had a good deal to say about what he called the social dividend. That is worthy of examination. The fact of the matter is that dividends are normally declared only out of earnings. This one the minister has chosen to declare in anticipation. If the figures of earnings he put before us the other evening are not attained next year by the hard work of the Canadian people, then we shall find ourselves in the red at the end of the year; and no doubt the minister- if by any chance he should be the minister at that tune-will then apply the tax screws again to make up for what he has done this year.
In further examination of this budget and its shortcomings, a second outstanding feature is the delay in tax reductions. Why is it that the minister today brings in tax reductions which we in the opposition in many cases have been asking for for years? You know why he has not reduced the income tax previously. You know why he waits until now. You know why the government has for years resisted our efforts to have the licence fee on radio receiving sets abolished. You know why, in spite of warnings from the opposition about the unwisdom of raising the cigarette tax and encouraging smuggling, he went ahead and did it. So far as there is any wisdom in these reductions, then we say that we of the official opposition are now seeing the fruits of our own efforts. In 1953 we are at the same time seeing the minister condemning the policies that he so obstinately followed in those past three years.
The next observation I have to make about the budget is to point out the inadequacy of the reductions. I have mentioned that the total reductions represent only 5 per cent as compared with the tax load of last year. Owing to the policy of the present government, taxes in this country are still far too high. We can regard the reductions proposed by the minister as being little better than token reductions. The minister will have need of more to say than he said the other night in seeking to justify the inadequacy of these reductions. Let us recall that a very eminent newspaper in the province 
of Quebec, L'Action Catholique, a year or so ago had this to say, and I translate:
The federal government is bleeding the Canadian taxpayer white.
It will take more than a 5 per cent reduction in the bleeding of the Canadian taxpayer to bring health back into our Canadian taxing policy. The taxes imposed today by this government are ten times what they were fifteen years ago, while the gross national income is only four times as high. Last year taxation at all levels took one-third of the nation's income.
Next, we say that these reductions are particularly inadequate for those who need reductions most. As my colleague, the hon. member for Greenwood (Mr. Macdonnell), pointed out in his very comprehensive speech on Tuesday, this budget means, for a married man with two dependent children, earning $2,400 in income, a saving of the handsome sum of $1 for the present year. People on low incomes have been virtually ignored by the minister. In this budget he has shown himself to be utterly indifferent to the plight of people in this country with small incomes.
He has likewise shown himself to be indifferent to or unmindful of the plight of the farmer. I should like to quote from the daily bulletin of the dominion bureau of statistics of February 10 as follows:
Accrued net income of farm operators from farm production declined by $255 million in 1952, a drop of 12 per cent from the record level established in 1951. This decline is largely attributable to a severe drop in livestock prices of between 20 and 25 per cent, and a 10 per cent rise in farm operating expenses.
Is there anything for the farmer in this budget, faced as he is with reduced income and the prospect of still further reductions in his income? There is nothing in the statement read today by the Minister of Trade and Commerce (Mr. Howe) that holds out hope for the farmers of this country. It may be a statement of interest to industry, and of course to that extent we are glad to have it, but there is nothing in the statement that promises anything for the Canadian farmer. The great failure of this government's trading policy continues to be that. I know that the hon. member for Ottawa West (Mr. Mcllraith) wants to say that the minister is holding out hope of selling some wheat to Brazil but-


Mr. Mcllraith:: To Latin America.


Donald Methuen Fleming: -we want something more than hopes in the meantime. We want some results. We want back for the Canadian farmer that market that was his, the British market. That has been the traditional market throughout the lifetime of this country and

apart from wheat and flour it has been lost to us under this present government.
The government has done nothing to reduce the load of indirect taxes. We have been told by the minister that the indirect taxes apply on 30 per cent of the gross income of this country. This year his indirect taxes are to be increased $100 million over the indirect taxes that were taken out of the pockets of the people in the fiscal year ended March 31, 1952. Far from budgeting for a reduction in indirect taxes, the minister is proposing to increase this burden.
For example, the revenue which he hopes to obtain this year from the sales tax is being increased from $257 million to $280 million. That is quite apart from the 2 per cent imposition for old age security. In the meantime the sales tax is applied to purchases made by municipalities. This is something that should be stopped as quickly as possible. It is unconscionable, when we consider the burdens that are being carried by municipalities, that the federal government should go on applying the sales tax on purchases by those municipalities of goods that come within the terms of that tax.
This tax is still being applied on many drugs and medicines. I promise the minister that we are going to continue the fight that we put up in 1951 particularly, and in other years as well, against the continued imposition of this 10 per cent sales tax. It was only 6 per cent in 1935 when Mr. King stumped up and down this country and denounced that tax as being "iniquitous". It will not be forgotten that immediately following the election Mr. King's government increased that tax to 8 per cent, and it has remained for the succeeding government to increase it to 10 per cent.
This tax still applies on clothing, boots and shoes, furniture, some processed foods, all of which are basic necessities of life. Is it any wonder that today we are not very far away from the danger of recurring inflation? I do not believe even the minister will stand up in this house and say that the danger of inflation has passed. Then why does the minister insist on heaping up these indirect taxes which have such an inflationary effect? They boost the cost of living; they reduce the value of savings and insurance and make more difficult the lot of those who are trying to procure housing for themselves. This budget lost a great opportunity to do something for the people with small means or small incomes in neglecting to reduce the sales tax.
Waste and extravagance continue. This government simply has no will to reduce waste and extravagance which have been 68108-155
The Budget-Mr. Fleming exposed in its own operations. There is no will to eliminate all this unnecessary and wasteful expenditure. Think of all the neckties, boudoir lamps, rugs and carpets purchased for the army, and yet the Minister of Finance can say that there is no waste. We will want something better than what the minister said in an address to the Westward Rotary club on June 13, 1952, where he is reported as saying:
There is no widespread waste and extravagance in military expenditures. It is impossible to avoid waste in military expenditures of $2,500,000,000.
Impossible to avoid waste? That is the verdict of the Minister of Finance of this country, the man who ought to be the watchdog of the treasury. He says that you cannot avoid waste in the expenditure of these amounts. Is it any wonder then-I have almost finished, Mr. Speaker.


Mr. Speaker:: The hon. member still has time.


Donald Methuen Fleming: Thank you for the news. That is perhaps welcome to me, if not to other hon. members of the house.


Douglas Charles Abbott: Do not leave out anything.


Donald Methuen Fleming: Thank you.


Douglas Charles Abbott: So many nice adjectives, too.


Donald Methuen Fleming: I hope the minister will take them to heart because they have been put before him with a view to working in him that repentance which is long overdue.
There you have the man who should be the watchdog of the treasury saying that you cannot avoid waste in expenditures as large as those in which the government is indulging. Well, is it any wonder that the Associate Minister of National Defence (Mr. Campney) followed the minister's lead when, in a recent speech in Toronto, he summed up the scandalous exposures of extravagance and waste in the Department of National Defence of late by saying: Oh, all that has been exposed is "normal thieving". Normal thieving! So the government apparently resigns itself to the fact that this kind of waste, this kind of extravagance, this kind of thieving are normal, and they cannot do anything about it. If they cannot do anything about it, then let them make way for a government that will do something about it.


An hon. Member:: 


Donald Methuen Fleming: No, it will not be C.C.F. Whatever may be said for my hon. friend, the fact of the matter is that there is only one place for the people of the country to turn to in this situation if they want an end to this extravagance, this waste, an end to these scandalous irregularities, if they want

The Budget-Mr. Fleming an end to this extortionate burden of taxation, if they want an- end to these attempts to fool the people on the eve of elections. There is only one place for them to go and that is to go to the Progressive Conservative party, and go to that party they will at the next election.


An hon. Member:: What a hope.


Donald Methuen Fleming: There will then be an end to the kind of thing from which this parliament has been suffering at the hands of the government, deliberate attempts to thwart the efforts of the elected representatives of the people to pry open the lid to find out just what has been going on beneath the facade that the government throws over this expenditure of $44 billion in a year. The house has not been permitted to look very far. The people have not been afforded very much information about the way their money is being thrown around by the billions, but to the extent to which the government has not altogether succeeded in thwarting the efforts of the nation to obtain information, then what has been exposed is a scandalous reflection upon this government and its entire approach to its duties as a government.
Where is any sense of responsibility, where is any sense of husbandry with respect to the finances of the people? No, you do not find any sense of responsibility on the part of this government towards the heavily burdened taxpayers of this country. The government makes first claim upon everything and apparently it does not behoove the Minister of Finance to address himself to a responsibility that rests upon him, pre-eminently among all his colleagues, of doing away with unnecessary and extravagant expenditure. There is nothing in the ill-distributed favours of this budget or in the quite inadequate and belated reductions in taxation which it proposes that is attributable to the reduction of one copper of expenditure. Not one copper of expenditure is reduced by the government. The whole thing is to be taken on faith. The whole burden is thrown back upon the Canadian people. The minister says: If you work harder than you worked last year, if you produce more than you produced last year, then I will give you a dividend out of your own efforts. How generous on the part of the minister! What an act of generosity on the part of the minister that he should tell the people of Canada that if they work harder than they did in the past year, if they produce 5 per cent more than they produced before, he will let them have a 5 per cent reduction in their taxes. There is no sense of responsibility there.
I say to you, Mr. Speaker, that this budget fails lamentably by every standard to which


a budget should be subjected by a parliament composed of vigilant representatives of the people. This is another exemplification, on the part of a government that has been in office far too long for the good of the country, yes, for its own good-


Mr. Fraser:: That is the truth.


Donald Methuen Fleming: -of the fact that it has lost that fundamental sense of responsibility to the people which should be the hallmark of every democratic Canadian government.


Joseph William Noseworthy: Mr. Speaker, I rise to support the amendment to the amendment moved by the hon. member for Rosetown-Biggar (Mr. Coldwell) which appears at page 2354 of Hansard for February 24. It reads as follows:
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."
It was pointed out by Warren Baldwin, a feature writer in the Ottawa Citizen, in the evening edition of Monday, February 23, that this budget marks a radically changed philosophy, at least within the finance department, that has pushed welfare and social security into the background in favour of private enterprise and dividends. I think the budget indicates quite clearly that the voice which predominates in the Liberal cabinet today is the voice of St. James street. The point of view that predominates is the point of view of the St. James street corporation lawyer. Gone apparently are the days of the humanitarian philosophy of the old Liberal party. The Liberal party has at last succumbed to the warnings of the Progressive Conservative party and the Progressive Conservative press, and they have given us what has all the earmarks of a good Conservative budget.
As a matter of fact the hon. member for Eglinton (Mr. Fleming) reminded the Minister of Finance (Mr. Abbott) a few moments ago that only this year has he acceded to requests which the Conservatives have been making for the past three or four years. If, as the hon. member for Eglinton stated a few moments ago, the people of Canada have no one to turn to in place of the Liberals except the Progressive Conservatives, then the people of Canada are in a bad way. I can see very little hope for the people of Canada

if that must be their only choice. Listening to Progressive Conservative speakers and studying the budget, I could not help but wonder how the Conservatives themselves could improve upon the budget.
As a matter of fact, if you study Liberal fiscal policy I think you will find that throughout the years the interest of the Liberal party in welfare and social security has varied in inverse ratio to the size of the party's majority in the House of Commons. It was during the years when their majority in the house was not too great and their hold on office was none too secure that the Liberal party evinced the greatest interest in social security. Since 1949 the party appears to be losing interest in social security measures. They have been listening to the voice of the Conservative newspaper writers, listening to the voice of corporation lawyers, which voices have been advocating all along a reduction in corporation taxes.
I believe the budget indicates another change of attitude on the part of the Liberal government. This is generally regarded as an election budget. If one were to judge from the response given the Minister of Finance (Mr. Abbott) by the Liberal members in the house on budget night, one would say they were delighted with the budget, that they thought the budget was just what they wanted in an election year.
I feel that a study of the budget will indicate that, as an election budget, there is a shift of emphasis in relation to the esteem in which two different and distinct classes of citizens are held. In previous election budgets, when the party's hold on power was less certain than it appears to be today, the ordinary voter was held in much higher esteem and received much more consideration that he receives today. In this election budget it is not the ordinary voter who receives consideration. It is the class of citizen who can contribute most to campaign election funds who gets the consideration. This would lead one to believe that today the Liberals place a higher esteem on those who can contribute to election campaign funds than they do on those who actually deposit the votes in the ballot box.
Liberal thinking appears to be that, providing you can spend enough and providing you can raise sufficient money at election time, you do not have to worry about the votes of ordinary voters. If you can spend enough money on full-page advertising in national newspapers and magazines across the country, and consequently get plenty of publicity regarding the campaign in those same magazines and newspapers; if you can dot the countryside with billboards posters, etc., and 68108-155J
The Budget-Mr. Noseworthy if you can by devious ways get sufficient election workers, then the vote of the ordinary elector is assured. Apparently it is on that basis that this budget was constructed, with the emphasis on benefiting that group of citizens who contribute to election funds rather than on the ordinary voters of the country.
Of course something must be done for the ordinary voter. When the Minister of Finance came into the house on the evening of February 19, he reminded me very much of Santa Claus, who parades the streets of our cities at Christmastime. All he needed was the accompaniment of a few dancing girls, and the scene would have been complete. He waved his portfolio of papers to the gallery and to the house, as though saying "This is my bag of presents and the bag contains a present for everyone." Certainly no one must be permitted to leave the minister's party feeling that he has been forgotten or neglected, but the people who must be given the preference on this occasion axe the people who contribute the most to election campaign funds.
I would say that, judged by that criterion, the present budget is a masterpiece. It provides something for every voter, no matter how small that present may be. I believe that every pressure group receives some recognition except possibly one lobby, and that is the soft drink and candy makers. As has been pointed out already, the majority of their customers are not yet old enough to vote. This time the presents were certainly handed out exclusively to those who could assist in the election.
Yes, we get a 4-cent reduction on a small package of cigarettes. The ordinary voter who is fortunate enough to have a bank account will save 3 cents on every cheque he writes. The voter who has a radio set will save $2.50 per year on his radio licence. Of course he will pay a 15 per cent tax on his radio or television set, but then I think we can take it for granted that he will not notice that very much because it will be absorbed in the price of his set. It will be a hidden tax. The ordinary married man with a family of two children, getting by on $2,400 or $2,500 per year, will get a one dollar tax reduction. At the end of April, 1954, he can send the income tax department a whole dollar less than he will have to send this year. One dollar means a lot to a man getting by on $2,400 a year and trying to raise a family of two children.
There are a lot of these people in the country. Approximately 75 per cent of- the heads of families in Canada come within the $3,000 or less income group. There would be a lot of people saving one dollar.

The Budget-Mr. Noseworthy I presume the minister hopes that, because of the saving of this dollar, a lot of these people will again vote Liberal.
The man with whom the minister is concerned is the man who is trying to get by on $50,000 or $100,000 a year. The man trying to get by on $50,000 gets more than one dollar of relief; he gets $1,200 of relief on his income tax. The man who is trying to get by on $100,000 receives relief of $3,000 a year, regardless of whether or not he has any children. I believe that is quite a significant difference. It substantiates my claim that the person with whom the minister and the cabinet is concerned in this election is not the person who can put a ballot in the ballot box but the person who can provide election funds to enable a blah, blah, blah, campaign to be carried on, and then they will not have to worry about the ordinary voters.
But that saving to the $50,000 or $100,000 taxpayer is not all the rich taxpayer gets in this budget, a fact which I think substantiates our claim that this is pretty well a rich man's budget. When we come to the corporation taxes we find that the rich man not only gets the biggest slice of the income tax pie but he gets the biggest slice-


Mr. Lesage:: No, no; that is not true.


Joseph William Noseworthy: It is not true? O.K.


An hon. Member:: Go on anyway.


Joseph William Noseworthy: The hon. member has his chance to get to his feet here and say what he likes about it, but the fact remains that the taxpayer who earns $2,400 a year, and who has a wife and two children, saves a dollar. That is true, is it not? He saves a dollar.


Jean Lesage: If the hon. member is asking a question, Mr. Speaker, I will answer it. Yes, it is true. But how can you take $20 out of the tax of a man who pays only $16? That is my question.


An hon. Member:: It is a good question.


Joseph William Noseworthy: Mr. Speaker, my statement remains true. The taxpayer with the $2,400 or $2,500 salary or wages, and with two children, saves a dollar in this budget. The $50,000 taxpayer saves $1,200. The $100,000 taxpayer saves over $3,000. You cannot explain away those facts.
Corporations in this country have escaped excess profits tax since the end of the war and we have had no capital gains tax in this country. Both those taxes have been in force in the United States for some years. According to United States authorities our corporation taxes, as they existed before this budget came into effect, were still lower than those in the United States. But the people the


minister is particularly concerned with, and for whom he has expressed concern throughout the years, are the corporation shareholders. Consequently what we find in this budget is this. Whereas formerly a corporation paid 20 per cent tax on the first $10,000 of profits, it will now pay an 18 per cent tax on the first $20,000 of profits. Whereas in former years it paid a 50 per cent tax on profits over $10,000, it will now pay a 47 per cent tax on those profits over $20,000.
The situation figures out something like this. A corporation which last year paid $22,000-that is, a corporation which had a profit of $50,000 and paid $22,000 in taxes- will this year pay about $17,700. It will save $4,300 in taxes. The corporation with the $50,000 profit fares just a little bit better than does the taxpayer who has a $50,000 income.
It was argued by the parliamentary assistant to the Minister of Finance that these reductions go to the small corporations and the small businessmen. However, according to the government's own statistics, 2-3 per cent of the corporations in Canada in 1950 earned 66 per cent of all the corporation profits that were earned in Canada. That 2-3 per cent of the corporations earned well over $1J billion in profits in 1950

2 per cent of the corporations with 66 per cent of the profits. So long as that is the situation it would appear to me that the corporations which are benefiting most by the minister's reduction in corporation taxes will be those corporations that come within that 2-3 per cent.
But that is not all the minister has to hand back to the corporation shareholders. As has already been pointed out, for some years now -I think since 1949-those in receipt of dividends from Canadian taxpaying corporations have been getting a credit against their personal income tax of 10 per cent of those dividends. If I understand the situation correctly, this is not just a deduction from taxable income but is a credit against taxes which would otherwise be paid.
In speaking on the budget in 1950 I pointed out that in that year a man who was earning $5,000 in wages or salary would pay $510 in income tax, but that the man who was in receipt of $5,000 in dividends from Canadian corporations, and whose $5,000 was all received in that form, would pay about $114 in that year. The situation for the dividend collector has been improved in the new budget. The dividend collector can now take a tax credit up to 20 per cent of his dividends. If his income is derived entirely from dividends from Canadian corporations, he can receive up to about $10,000 without paying

a cent of taxes. More than that, if he has a tax credit of $2,000, he not only pays no taxes on his $10,000 dividend income, but he can deduct $2,000 from taxes he would otherwise pay on income derived from other sources.
I think that is the picture. To me that seems very generous treatment to extend to the dividend collector. To me it would seem to indicate that the new point of view of the government or the treasury benches-the St. James street point of view which has now gained the ascendancy in the cabinet, apparently-is much more concerned with the dividend collector than with the ordinary citizen.
I know this device is supposed to take care of or avoid what is known as double taxation. The theory, of course, is that when a corporation pays the corporation tax it is paid out of profits, and that the shareholders of that corporation should not be required to pay a tax on the dividends they receive from that corporation. That is the opinion of the minister and is the opinion of the Conservatives, because on this point the Conservatives have had far more to say in the last few years than any of the Liberals. It is the Conservatives in this house who have been crying to high heaven against double taxation.
But to my mind all this talk about double taxation is just pure eyewash. As far as I am concerned, it is not the shareholders of that 2 per cent of the corporations which made $li billion in profits in 1950 who pay the corporation tax. That corporation tax was paid by the consumers of this country in the form of increased prices. I do not believe for one moment that the increased tax credit which the present budget gives the dividend collectors will be passed on to the consumer in the form of reduced prices.
In my opinion this increased tax credit will benefit for the most part the shareholders of that 2 per cent of our corporations that made 66 per cent of corporation profits in 1950 and between them collected a profit of over $1,500 million. It seems to me that these are the people the minister was particularly concerned about in this election year.
Had the minister been really considerate of the small man he could have done one of a number of things. It has already been pointed out that he might have reduced the sales tax. In his speech yesterday the parliamentary assistant to the minister pointed out that had there been a 2 per cent reduction in the sales tax a married taxpayer with two children on a $2,400 salary would save only $14.40 a year. I want to thank the assistant to the minister for working that out for us. It gives
The Budget-Mr. Noseworthy us a good argument. A 2 per cent reduction in the sales tax would, in the words of the minister's assistant, have given the taxpayer on a $2,400 salary fourteen times as much as he gets by way of reduction in his income tax from this budget. True, that would be only $14.40 a year, but $14.40 a year means a good deal to many of these taxpayers. There might have been a reduction in the sales tax; there was none.
The minister might have granted exemption from taxable income for hospital and doctors' bills. We have debated that at great length in this house, and the wiping out of that 4 per cent floor would have been a remarkable saving to many a harassed taxpayer. The best the minister could do was to reduce that item from 4 per cent to 3 per cent. We thank him for that, and we think we recognize in that action some small degree of success in the campaign which this group is waging with other groups in this house for the wiping out of that floor.
With the $100 million the minister was handing back by way of corporation tax reductions he might have made at least a beginning on. a national health insurance scheme. He might have helped the little man by raising the tax exemption level. He might have given the small income taxpayer the big reduction. He did not do any of these things. But there are one or two things the minister can still do that will benefit some of the needy people of this country.
I want to call the minister's attention for a moment to the predicament of the blind, who are still subject to the means test. Surely with the something more than $240 million the minister had at his disposal for the reduction in taxation, he could have included among those who were to be benefited the blind people who are still subject to a means test. The act provides for an allowance to all blind people from 21 to 69 years of age whose income, with the allowance, does not exceed $840 for a single person and $1,320 for a married person. The Canadian council of the blind at four consecutive national conventions passed resolutions requesting the elimination of this means test. The Canadian National Institute for the Blind has asked for the elimination of the means test and an increase in the allowance.
The retention of the means test in the case of the blind can serve no good purpose. And since year after year the minister has refused the removal of this means test I should like to again appeal to him. Now that he is in a position to reduce to some extent the tax burden on certain groups of citizens he should consider as a sort of afterthought to his
2436	HOUSE OF
The Budget-Mr. Noseworthy budget the elimination of this means test which can serve no good purpose whatever. On the contrary, it militates against the rehabilitation of all those who become blind after they become adults, and I am told that a great many of those who are blind have become blind in adult life.
Those interested in the rehabilitation of the blind And that in addition to the frustration which blindness brings to the adult, they have to contend with the fear of insecurity which is created by that means test. They tell me there is the inclination for the blind to rely on the allowance rather than endeavour to train themselves to improve their earning capacity. They adopt the point of view that there is just no point in improving their earning capacity when they will thereby lose all or part of their allowance. In my opinion that one difficulty which the means test presents to rehabilitation should be sufficient to warrant its elimination. Certainly it would be a far more enlightened policy to regard the allowance only as compensation for the handicap the blind suffer, and subject them to the operation of the income tax laws as they apply to other citizens. Why should not blind people be encouraged to improve their training, and thereby their earning capacity, without having to sacrifice all or part of their allowance?
Certainly the means test is not retained in this case because of the savings that accrue to the government by reason of its application. Why should blind persons be confronted with the choice of taking a full-time job at $70 a month, and thereby receiving no allowance, or working half time, thereby reducing the earnings to $30 a month, and making up the difference by means of the allowance? An editorial in the Vancouver Daily Province of April 14, 1952, referring to the means test, says-and quite properly-
There is no benefit to anyone from this procedure. There is no sense to it. It is useless and reactionary and cruel. It is entirely unworthy of the Canadian people.
And I will add it is unworthy of a government that calls itself Liberal. Apparently the Department of Finance assumes that a single person requires $1,000 and a married person $2,000 before being called upon to pay income tax. The trade union congress has gone on record as asking that the exemption be raised to $1,500 for a single person and $3,000 for a married person. What has led the minister to conclude that a single blind person can live on $840 and a married person on $1,350? I say that this country, with its increased demand for production, can well afford to give the blind an opportunity of


earning to the best of their ability, without applying any means test other than our income tax laws.
Then there is another group to whom I suggest the minister should give some last-minute consideration. I suggest there should be a removal of the means test from the war veterans allowance. There are still today veterans of world war I who are suffering in our military hospitals, or living on a mere pittance in the form of a small veterans allowance, but who are still subject to the means test. I can see no good argument at this moment for retaining that means test.
Then another group that is affected by veterans allowance benefits is the widowed mothers of veterans. Not very long ago a delegation from the Silver Cross Women of Canada waited upon the minister. This organization represents the mothers of veterans. In many instances these are widowed mothers of veterans. Many of them gave their only sons. In some cases these sons were their sole supporters.


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


Douglas Charles Abbott: Finish it up.


Mr. Riley:: The audience is enthusiastic.


Joseph William Noseworthy: The Silver Cross Women of Canada have recommended that section 33 of the Pension Act be amended in such a manner as to provide that the same consideration be given to needy widowed mothers, without surviving children, as is given to the widows of servicemen. I pass this resolution on to the minister suggesting that, while there may be no such provision in the budget, he make provision at this time for these needy cases.


Mr. Roch Pinard (Chambly-Rouville):: The Budget-Mr. Pinard
But there are other attributes of sovereignty which we should endeavour to obtain for ourselves in the years to come. We should have a distinctive Canadian flag and we should have our own national anthem. Canada has done many things of which we are all very proud. For instance, we have enacted our own citizenship legislation. Recently, with the approval of the United Kingdom, we appointed a Canadian as governor general. Many other measures of the same nature have been enacted of which we should be very proud.
But there is one thing missing in this field. We have done a lot, but in my opinion we have forgotten to do the most important thing. We should not overlook the fact that up to the present time Canada has been unable to play the role she should be playing. Canada does not possess her own constitution. The constitution we have today is not sufficient in the light of our status and growth as a free and independent nation.
The British North America Act was passed in 1867. That was a tremendous achievement, and I think we should pay a tribute to those who framed that constitution. We should be grateful for their determination, their good faith and their courage. But I believe that the British North America Act has served its purpose. It cannot keep in line any more with our progress as a nation. We need a new Canadian constitution which will become the new written law of the land.
Some countries have put in documentary form their constitutional liberties. Some of these constitutions may contain very emphatic declarations, but they remain very dear to the hearts of the people of those countries. Other countries have preferred to rely on usage and custom. They do not wish to put anything in writing which will restrict their constitutional liberties.
Here in Canada we fall into neither of those two categories. Today our constitution is insufficient to guarantee our constitutional liberties. I think every Canadian should hope that some day we will have a Canadian constitution which will be part of our statutes. We should endeavour now to repatriate our own Canadian constitution.
I come now to the attitude taken by this and preceding governments in that respect. Ever since our national life progressed sufficiently to justify such a trend of action, Canadian governments have worked constantly toward a gradual recognition of our constitutional prerogatives. This has been done in most cases with the support of United Kingdom governments. Numerous amendments to the British North America Act have been enacted.

Other measures, such as the Statute of Westminster, have been passed. This has been done generally at the request of the Canadian parliament. Steady progress has been made in the right direction. But differences still continue to exist between the provinces, and it would appear that no definite steps can now be made towards the complete repatriation of our constitution until such difficulties have been settled by mutual agreement between the provinces and the central government.
It is my duty to pay a special tribute to this government and its present leader for their increasing efforts toward a settlement of these constitutional problems. The Prime Minister of Canada (Mr. St. Laurent) has already made a great contribution toward the settlement of our constitutional difficulties, and let us hope that he will be spared for many years to come so that he may continue to give our country the benefit of his knowledge and experience as a constitutional authority. It is with great pride as a Canadian that I read his eloquent words to the premiers of the ten provinces whom he welcomed as Prime Minister of Canada at the last conference of the provincial governments held in this very House of Commons in January of 1950. He said:
As an essential step, therefore, this conference presents a very real challenge to the political capacity of the public men of Canada. Sooner or later this challenge will have to be met, because sooner or later the people of Canada are going to insist that somehow means shall be found by which complete jurisdiction over the constitution of Canada is established in Canada.
Progress has been made as a result of the discussions that took place at that conference between the central government and the provinces. It would appear now that the most important question which remains to be solved before we can hope to be in a position to repatriate our constitution is a more precise distribution between the central government and the provincial governments of the fiscal powers provided by the constitution. We feel that all Canadians are in agreement on the other fundamental rights that are contained in the British North America Act. We all feel that Canadians are all in agreement with respect to protecting minority rights, and especially those which are guaranteed to the province of Quebec by the very terms of the British North America Act.
Whether confederation is being considered as a pact between the two elements that constitute Canada or whether it is to be considered as simple legislation, I think a truth remains that cannot be challenged: This federation of provinces, which Canada
fMr. Pinard. 1

became in 1867, has been established and will only survive through complete recognition of all minority rights and those of the French-speaking element of our country. As the Prime Minister said on the same occasion to which I have referred:
That in nowise runs counter to the firm belief of so many of us that there is something stronger than any legal safeguard, and that is the good faith, the mutual tolerance and the common understanding which are the highest glory of most Canadians, regardless of whether English or French happens to be their mother tongue.
I may add in that respect that my confidence in the safeguarding of the historic rights of the province to which I am proud to belong rests with complete assurance in the true patriotism of my leader and the sincere devotion and integrity of the members of my party throughout Canada and of my colleagues from the province of Quebec, regardless of their racial origin. But, as I said before, we are now confronted with another very difficult if more practical problem, and that is the difficulty of trying to distribute the fiscal powers between the central government and the legislatures.
I wish to review very briefly the history of our relations in that respect and recall certain important dates which have marked our development in that field of fiscal legislation both by parliament and by the provinces.
Ever since the enactment of the British North America Act there have been discussions and negotiated agreements between the provinces and the central government, as is the case with all countries where there is a system of government based on a federation of independent states or provinces. Such is the case with other nations of the commonwealth; such was the situation with our friends of the United States. In order to attain agreement, discussions had to take place. In some cases there was even violence exercised before agreement could be reached. Our neighbours to the south had to fight it out in a costly and bloody civil war before they could reach final agreement and ensure a stable system of government.
This also happened in our own country, and it is in the blood of some of our fellow Canadians that is to be found the real cradle of our constitutional liberties. In Canada the troubled and historic days of 1837 preceded the federation of provinces, but they were nevertheless the fruit of serious constitutional grievances of the people against our system of government at that time. It was felt by those who brought about the rebellion that responsible government was more precious than life itself and should be the sole basis of any real democratic system.
The Budget-Mr. Pinard
After confederation peaceful negotiations were maintained for the purpose of the adjustment of local provincial disputes with the central government. Subsidies, as provided by the makers of confederation, were claimed by provinces either on the occasion of their entry into the federation or after their acceptance of initial terms of agreement. For many years after confederation there were no very serious difficulties and frictions in that respect. There were no real quarrels as to the exercise of fiscal powers although the British North America Act, in many fields of taxation, provided for overlapping powers and for the competence of both the central and the provincial legislatures in the same fields. The problem was relegated to future discussions, and this was due mostly to the great prosperity of Canada at that time.
But such a confusion had to produce one day or another a real clash between the provinces and the central authority. A state of uneasiness was constantly felt, but it was only with the depression of the thirties that serious protests from some provinces, which could not secure sufficient revenues from their sources of taxation, began to complicate the situation. The Minister of Finance (Mr. Abbott) in his budget speech reviewed very clearly government policy in that matter, and I hope my remarks will not be found to be a mere repetition of what he said in that respect.
The first move was made by the central government to try to remedy the situation and bring about an adjustment of these taxation powers. In August, 1937, the Rowell-Sirois commission was instituted by order in council. After nearly three years of continued investigation and study this commission, which had almost unlimited terms of reference, brought in special recommendations of a very drastic nature. The most important was to advocate exclusive federal jurisdiction over taxation in the fields of income, corporations and succession duties.
In 1941 it took only three days for the provinces to reject these recommendations, and the condemnation of the Rowell-Sirois report was the only possible solution and conclusion that could be reached at that special conference which was held in Ottawa at the request of the central authority. Byt what the provinces refused to do in time of peace they agreed to do later in time of war. They agreed to give to the central authority the right of taxation in these matters. Parliamentary authority was obtained to put

The Budget-Mr. Pinard the agreement into effect by special legislation which was enacted in May, 1942 as the Dominion-Provincial Taxation Agreement Act.
The only real criticism, although it might not be considered as very serious, that I could voice against that legislation would be as to the use of some of the words in the title. For instance, the word "vacation" was used in the phrase "vacation by the provinces of the income and corporation tax fields". The word "vacate" should have been avoided. Words are of great importance in legislation of that nature and their misuse may sometimes create undesirable precedents. This legislation was of great importance since it brought about for the first time the exclusive application of rights of taxation by the central government in the fields of income of individuals and corporation taxes. It implemented, in part at least, the most important recommendations of the Rowell-Sirois commission.
After the war a new dominion-provincial conference was held which lasted from August, 1945 to May, 1946. The central government was then asked to maintain the system applied during the war. A green book containing specific post-war proposals was prepared by the central government, which called for a continuation of the system applied during the war in order to allow the federal government to organize a better system of social security and maintain full employment. As was the case with the preceding legislation, these proposals also called for unanimous acceptance by the provinces. These proposals were turned down and the conference, after many sittings, met with complete failure.
In 1946 the federal government, through its then minister of finance, Right Hon. J. L. Ilsley, offered new proposals which were contained in his budget speech. The most significant part of the minister's statement was the decision of the federal government to depart from its original position of securing unanimous consent of the provinces before negotiating with them. For the first time there was a serious change. The principle of separate agreements was introduced. The provinces were offered a new deal which, in the language of the Minister of Finance, could be accepted by provinces which wished to accept it and left aside by those which did not desire it or felt they had no need of it. In those last words used by the minister is to be found, I submit, the real motive for the changed attitude of the federal government. The central government felt that some provinces might be in need


of federal assistance, while others might prefer to dispense with such intervention. In my opinion that is the crux of the whole problem, in all its implications.
If a province feels itself to be in need it can negotiate an agreement, but it is entirely free to take whatever attitude it feels the circumstances may justify. There is no compulsion. On the other hand, the justification for the federal government negotiating these separate tax agreements lies in the fact that it is the duty of the central authority to legislate for the benefit and welfare of Canada as a whole and, for that purpose, to offer temporary assistance to the needier provinces or to those provinces which, for other advantages, favour agreements of that kind. Such a policy on the part of the federal government gave rise to these tax rental agreements, which all the provinces except Quebec have finally agreed to accept.
Parliamentary authority was given to implement such agreements, and legislation was passed to sanction them as they were negotiated and signed. I must say that in the drafting of this new legislation the title used was much better. The word "rent" replaces the word "vacate". The abandonment of provincial powers could no longer be implied through a false interpretation of the title of the legislation.
As I said before, the province of Quebec now stands alone in its refusal to negotiate, and has consistently refused the federal offers. In 1947 the premier of Quebec had felt the need to come to an agreement with the central power, since special legislation was then enact'ed under his name to authorize Quebec to negotiate with the federal government. Apparently the premier changed his mind, even though he did not choose to have this legislation repealed. He preferred to maintain his usual policy of political expediency.
A few weeks ago special legislation was enacted at the request of the premier of Quebec to institute a royal commission to inquire into constitutional problems. We hope this commission will refuse to be influenced by any attempt which might be made to turn it into a political platform.
If I had chosen to support my government in its past attitude in this respect, and if I did agree entirely with the legislative enactments to which I have already referred, it was because I was fully convinced that such tax agreements were negotiated in order to attain a uniform standard of living for my fellow Canadians. But such agreements can be of only a temporary nature, and I do not believe that any province should permanently surrender all these fiscal powers to the

central authority. The constitutional issue we are facing today is more acute than it ever appeared to be in the past. A solution must be found which will permit our country to pursue its march toward greater independence and prosperity.
I listened with great interest to the constructive remarks made by the Minister of Finance on Thursday night last when he commented at length upon the great difficulties facing our country in trying to find a solution to our fiscal problems. As he said, such difficulties also exist in the United States and no general solution has been found there. In Canada the problem would not appear to be easier of solution than it is for our friends to the south. According to the minister, a new reallocation of tax sources could not offer any definite or final solution. A system of subsidies to vary with the needs of each province would not be feasible because it would have to receive unanimous approval, and it might not bring satisfactory results. The minister seemed to conclude that a system of continuing negotiations and separate agreements, a method of temporary accommodation, or in other words an adjustment as we go policy between the two levels of government, would be the only formula which could bring effective results.
I believe every Canadian will commend the minister for the sincerity and good faith he has demonstrated in his approach to this national problem. A few days ago the representatives of the chamber of commerce of the province of Quebec came to Ottawa and were received with sympathy by the members of the cabinet at a meeting presided over by the Prime Minister (Mr. St. Laurent). In their brief these representatives recognized that the attitude of the federal government could very well be the only one that should be considered under the circumstances. But, Mr. Speaker, I remain very optimistic. I still feel that a purely logical solution may be found to bring about a final adjustment of our dominion-provincial relations. I think that the policy of a new allocation of powers should be pursued, and that it will go a long way toward bringing about a satisfactory agreement.
In my humble opinion the solution lies in further negotiations between the provinces and the federal government, in order to devise ways and means to allow the complete repatriation of our constitution. The effect of past legislation concerning tax rental agreements can only be to alleviate our present difficulties. It will not, I submit, solve the problem. A complete revision of the British North America Act has become
The Budget-Mr. Fair
necessary and indispensable. This government has accepted that task and has commenced it with determination. The people of Canada gave their confidence to our government and its leader. The people will continue to give them that confidence because they know the fundamental differences between political expediency and real patriotism.
I welcome the day when, by making each province the master of its own destiny, by revising and redistributing equitably between the provinces and the central government legislative powers in all fields, by reaffirming the same determination to safeguard and protect minority and racial rights, a new and wholly Canadian constitution will be enacted by parliament. We will then have a written law setting forth our constitutional liberties. The new charter of Canada will then be born. For all Canadians, it will become the first and greatest law of our land.


Mr. Robert Fair (Battle River):: Mr. Speaker, during the months we have been compelled to spend in Ottawa attending to our duties as representatives of the people, we have enjoyed many different kinds of entertainment. But I believe the Minister of Finance (Mr. Abbott) put on as good a show as we have had for some time when he introduced his budget on Thursday night last. Hidden behind those dark-rimmed glasses and smelling sweetly of cure for his cold, he came in and pulled what we call a stage trick. In the Ottawa Journal of February 21 I found something which describes very well the performance put on by the minister that evening. This article is credited to the Montreal Gazette. Apparently the people of Montreal know the minister fairly well by this time. The article reads as follows:
It is always the old actor's ambition to "leave them laughing". But many a time some members of the audience must wonder, after the curtain has fallen, just what the great actor says to his colleagues behind the scenes, or just what he says to himself. What does he really think of the audience for being pleased over the tricks he has played upon them?
It is hard to believe that the Minister of Finance could play the role assigned to him without a good deal of private and party amusement.
There was a great actor of the English stage who used to say: "When my audience laughs, I laugh too. They think I'm laughing with them, but I'm laughing at them. If they don't see through me, that's no reason why I shouldn't see through them."
But this is a case where the audience has seen the same play with the same actor. They are beginning to know the tricks nearly as well as the chief performer. They can see what's coming even before it arrives.


An hon. Member:: What paper is that?
6810S-156i
2442	HOUSE OF
The Budget-Mr. Fair


Douglas Charles Abbott: It must be the Montreal
Gazette.


Robert Fair: From listening to the cheering
section of the Liberals-and that includes all who occupied Liberal seats that night-we might really have thought that they were enjoying it; but apparently most of them did not know the kind of trick that was to be played on them a little bit later on. All one had to do, when the time came for the minister to announce his tax cuts, was to watch the people in the galleries where I believe over 700 were sitting or standing that night, and again watch them on their way out the door. I took occasion to do that after the minister finished his speech, and many of the remarks I heard would be classed as unparliamentary by you, Mr. Speaker. Hence I am not going to try to put any of them on the record.
After the members of the government had a chance to sober up and analyse the different parts of the budget, they had an entirely different expression on their faces when we came in here on Friday afternoon. All one has to do is listen to conversations in restaurants or stores downtown, or even to conversations that people are carrying on along the streets, in order to find out that the minister was an extremely good actor that night and once more pulled the old trick.
The minister dealt with the expansion of production, and as reported at page 2117 of Hansard he had this to say:
We here in Canada over the past decade have experienced a period of growth and prosperity-unrivalled in our history. As a nation, we have become accustomed annually to breaking new records in production, foreign trade, investment, employment and income. Each year our people set their sights a little higher; we expect almost as a matter of course that we will do better than we did the year before.
Then a little bit further on he had this to say:
The increased output represents an impressive rise in the productivity of the Canadian economy. While the improvement resulting from the record wheat crop may be regarded as largely fortuitous, our people as a whole are beginning to reap the benefits of the enormous investments in new plant, equipment and development that have been made since the war. I might add that the record grain crop could scarcely have been harvested had it not been for the heavy postwar investment by our farming community in labour-saving machinery.
Before going further I believe I should now make it clear, as have some other hon. members, that much of our increased production is due to our preparation for and fighting of the present undeclared war, and perhaps also making preparation for another global war that may break out at any time. Dealing with that matter, perhaps I should remind the house of what happened, because


there are many members now here who were not here in the 1939 session.
At that session I remember that in June we passed legislation which limited profits of manufacturers of war implements to 5 per cent on their investment. In August of that year, about the third week, the governor in council by -order in council cast aside that 5 per cent limitation that was passed by the representatives of the people. Perhaps they had taken note of something that was in the newspapers some months before that time, when it was stated that during the latter part of August or the early part of September a crisis was going to develop. We all know what happened on September 1, 1939. This again may have something to do with the increased profits of our manufacturers in this country.
I believe we must give credit to communism and its friends for the prosperity we have at the present time, because that is the cause of a good deal of the unrest and the preparation and expansion of production at the present time. Some of our leaders are speaking out against communism while others again in this country I believe are supporting it. I was glad to see in the Ottawa Citizen of February 16 the following:
Supplementing Christianity with some kind of social or political theory was a popular pastime these days. Rev. A. Leonard Griffith told his morning congregation at Chalmers United Church.
"There are people, not all of them politicians, who heap upon democracy the praise and devotion due only to God, while others would deify the welfare state, making it the supreme object of love and loyalty", said Mr. Griffith.
Of all the false doctrines threatening Christianity today, Mr. Griffith said Marxist communism was the most dangerous because of its manifest plausibility in every strata of society.
Communism was the most perverted parody of Christianity since the first century. "Its one god is dialectical materialism: its trinity, Marx the lawgiver, Lenin the incarnate truth, Stalin the guide and comforter; its chosen people the proletariat, destined to inherit the earth; its devil private property; its church the communist party; its scriptures the writings of Marx-Leninism; its infallible witness the will and word of Stalin: its last judgment the violent overthrow of capitalists and the enthronement of the workers; its millennium the withering away of the state in a classless brotherhood," said Mr. Griffith.
I believe those words may well be pondered by members of this house having the responsibilities we have on the part of our people.
In my opinion we have no place in this country for communism or any of its supporters. That fact should be made clear on every occasion possible in the house and out of it. I note that in my province of Alberta we already have eight representatives of the Labour-Progressive party nominated to run in the next election. I expect that similar

nominations will be held in other parts of the country. In those cases, where we have in this country such people who are getting their living here, and are having the freedom the people of this country are enjoying, I am now suggesting that they be given a first-class, one-way ticket to Russia, without the right to return. If that were done I think we would have less talk of communism and less support for it.
Having said that, I would also add that we have no place in this country for people who support policies that drive people to communism. I say that because in this country we have the goods to give all of our people a very high standard of living. We can increase production at the present time to a considerable extent. The 4 per cent increase that we achieved last year is not the limit of our possibilities. We could go far beyond that provided we were given conditions that would make it possible for the people to carry on and enjoy some results from their labours.
In the past we have used much of the production of our country for war purposes. Is there any reason why we should not use it, just as soon as we can after peace is declared, for our own people in a peacetime economy? Some people may ask, how are we going to do that? My first reply is:	Cut out the waste that exists at
the present time. We have had an example of that in the camps across the country, and particularly at Petawawa. We also have an example of that in the fact that the committee has been prevented by an overwhelming Liberal majority-


Mr. Speaker:: No. I cannot allow that.


Robert Fair: Very well, Mr. Speaker. Then we move along. There is no committee sitting on the number of civil servants we have in Canada. In 1939 we had 46,106 civil servants. At the end of March, 1952, we had 131,646, according to the information I have received. If you look around the different parts of the country-I am not limiting it to Ottawa-you will find people drawing big fat salaries and not doing enough work to earn their board. Several instances of that are to be found.
In connection with the 1953-54 revenues, the minister states that he is budgeting for $4,473 million. In addition to that another $280 million is to provide old age security. This makes a total of $4,753 million, and if the practices of other years are followed in the coming fiscal year 1953-54, we shall find that an amount in excess of the minister's estimate will be extracted from the people of the country. That means in round figures
The Budget-Mr. Fair
that a population of 14 million people will pay a tax of $340 each. Every man, woman and child in this country will be taxed $340, and on the basis of five persons to a family it will mean $1,700 per family. For many families it will mean much more than that because there are thousands of families in this country who do not make that amount in a year. Without paying income tax, they will pay heavily through other taxes.
I believe that we should continue to increase production and make it available to our people. Someone may say, how are you going to do that? One way to do it is to reduce our tariffs. We have many tariffs and unnecessary burdens that could be removed. At the end of November or early in December the right hon. Prime Minister (Mr. St. Laurent) and the Minister of Finance attended the prime ministers' conference in London. At that time they were going to work wonders. I have the following quotation I should like to give with respect to that conference, which decided-
-that a more positive policy can now be adopted both by the commonwealth countries themselves and in concert with other friendly countries, to promote expansion of world production and trade.
My suggestion is that one of the best ways to promote that trade is to remove some of our tariff barriers. We also read in the Ottawa Citizen of January 17 that the Prime Minister attended a meeting of the Canadian Club on Friday, January 16. He had certain things to say there which I believe should be repeated here, and I quote from that news report:
The Prime Minister said in a speech given at the Canadian Club: "That is apt to require all the wisdom and experience, all the patience and perseverance the Canadian people can bring to bear upon their domestic and their world problems as well as the most responsible leadership they can provide in every field of their activities."
He was referring to the privileged position that Canada holds in the world today. He went on:
"This country must do its part at home and abroad to build and to maintain the peaceful and balanced and prosperous world which is essential to peace and growth and prosperity for ourselves and for those who will come after us in this dear land of Canada.
It can be done and I am one of those who feel confident it will be done".
Mr. St. Laurent was speaking to the Ottawa Canadian Club at its regular luncheon meeting in the Chateau Laurier on "Canada's position in the world".	'
He said he didn't think most Canadians realized how greatly the actual position of Canada in the world has changed since 1939. If Canada's real position in the world is changed, he said, he thought Canadians' attitude to it had changed even more.
This is a significant statement for the Prime Minister to make, and I should like to finish this, Mr. Speaker, before six o'clock.

The Budget-Mr. Fair
The heading is "Fundamentally the same".
He said that fundamentally there were no differences between the major political parties in Canada. Such differences as there are cut across party lines and are mainly differences of emphasis.
That is rather strange, because Liberals do not want to be called Conservatives and Conservatives do not want to be called Liberals. The Conservatives are supposed to be high tariff people, but under Liberal policies we have had higher tariffs and higher prices for manufactured goods in Canada than under the Conservatives. Again this ties, in with the statement made by the Prime Minister at Regina in 1949, when he said that the C.C.F.'ers were Liberals in a hurry. Therefore all those to my right and those across the carpet are sleeping in the same bed.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
Robert Fair: Mr. Speaker, when the house rose for dinner at six o'clock I had just placed the Liberals, the Progressive Conservatives and the C.C.F. all in one bed, and I have not heard a squawk out of any of them since that time. I presume they are getting along all right. So, for the time being, we shall leave them there and proceed to the other business at hand.
The prime ministers' conference held recently in London advocated freer trade. The Prime Minister (Mr. St. Laurent) advocated freer trade when speaking to the Canadian Club on January 16, and we find, too, that there are industrialists in Canada who want freer trade and lower taxes. In the Ottawa Journal of Friday, February 20, under the heading "What We Render Unto Caesar", we find this:
Mr. Rhys M. Sale, president of the Ford Company of Canada, in a speech in London, Ontario, this week, revealed some fantastic things about motor cars and taxes. For example:
"1. In 1952, the Canadian government taxed motor cars and trucks to the tune of $138 million. This was $61 million more than was earned by the 35,000 employees of the motor industry who made the cars and trucks.
2.	In 1939, the year before world war II, the combined sales and excise tax was $61 on an average price of $996 for the most popular cars in the lower-priced group. In 1953 the combined sales and excise tax is $362 on an average price of $1,836 for cars in the comparable lower-priced group- almost six times as much as in 1939.
3.	If there were no such thing as a tax of any kind entering into the retail price of a Canadian car (eliminating not only the excise and sales taxes,

but all hidden taxes). a car now selling for $2,000 could be bought for $1,200, and a car selling for $2,500 could be had for $1,500."
Mr. Sale could have explained also that after the purchaser of a $2,500 car had cut in the federal tax-gatherer for $1,000 as his share there would be a provincial tax-gatherer right outside the sales room waiting for his share, too. The provincial man would say "don't dare drive that car around the corner until you pay me for a licence", and later on, down at the gasoline pump, another provincial tax man would collect a toll for gas.
Those who are interested in encouraging freer trade and greater prosperity for Canada should take notice of the words spoken by Mr. Sale. We find that a day or two later a statement along the same line was made by Mr. Henry Ford, Jr.
While the Minister of Finance (Mr. Abbott) continues to put on his show, other things are happening. For instance, we find that on Friday, February 20, the hon. member for Fraser Valley (Mr. Cruickshank) asked this question:
Has the attention of the government been brought to a statement reported in the press, by Mr. Henry Ford, Jr., in regard to furthering free trade? If so, is any action being taken to follow up the proposal?
Apparently members of the government had some difficulty deciding who would answer the question. The hon. member for Fraser Valley then continued:
If this has not been brought to the attention of the government, I am bringing it to their attention now. If it has been brought to their attention, I should like to know what action is being taken.
Then the Minister of Finance (Mr. Abbott) made this reply:
I saw the press statement and I think Mr. Ford's sentiments are highly commendable.
I hope the minister will do something further about the matter.
Under the heading of "Commodity Taxes" the minister had this to say, as reported at page 2132 of Hansard:
I now turn to the field of commodity taxes. With some regret I have come to the conclusion that I cannot this year recommend any change in either the general sales tax rate or in the special excise tax rate.
The show is continued by the Minister of Finance. Other members supporting the government want to have more trade and better conditions; but the taxes stay on. A year ago last December I remember coming back here after Christmas. Many of us had to leave our homes Christmas afternoon in order to be here on December 27. We did succeed finally in passing resale price maintenance legislation.
I believe now, as I did at that time, that the people handling those commodities were

receiving much more than that to which they were entitled; because since that time, right up to the present, we see purchasers being allowed anything up to $150 on an old paring knife, or something of that nature, as a trade-in on the purchase of a refrigerator, a washing machine, a stove or some other commodity of that kind.
I wonder why it is that we in Canada have to pay these higher prices. When we go down across the boundary line, as many of us do on our way home, we find that electrical fixtures, tools and many other commodities can be bought for half or very little more than half the amount we have to pay in Canada. Today we have in the house some advocates of low tariffs. The hon. member for Charlotte (Mr. Stuart) has brought the matter up, as has also the hon. member for Fraser Valley (Mr. Cruickshank). One day last year the hon. member for Norquay (Mr. Wood) made a lengthy speech on freer trade and lower tariffs. Then I believe someone else spoke along the same lines in the last few days.
I wonder why those hon. members do not express their opinions in caucus, and have something done about it. I believe there is something radically wrong in connection with farm machinery prices but I am not sure that an investigation would bring about much improvement. During the last few years I have asked on several occasions for an investigation into the prices of farm implements. I remember that back in 1937 and 1938 the committee on agriculture and colonization was set up to deal with the matter. The result was that during the investigation the machine companies raised their prices on two occasions, and the government did nothing about it. We see low-tariff Liberals allowing prices to climb higher and higher. If we cannot get a committee to investigate this matter, then we should have a royal commission to do it because prices are too high. In referring to farm machinery I include cars and trucks, because today they are real necessities on the farm.
A combine of the best quality for the harvesting of grain costs around $6,000 today. With the diminishing price of grain and increased production costs I cannot see how our farmers are going to continue in business unless some changes are made. The tariff reductions as far as farm machines are concerned are practically nil. One of them has to do with plow bolts. Many people do not even use plows any more, so they do not require bolts. I believe something worth while should be done in connection with the prices of farm machinery, and I do not confine my submission to the farmers of the
The Budget-Mr. Fair
prairie provinces. I realize that farmers in other parts of the country also have to make a living.
No time should be lost by the government in realizing the importance of agriculture to this country. I point that out also to the labour organizations, because the farmers of Canada are the best potential customers that industry has. During the investigation into farm implements in 1937 and 1938 it was brought out that 69 per cent of the machinery manufactured in Canada was used in the prairie provinces. That is proof enough that industry and labour should combine to see that agriculture gets a square deal.
If it does not get a square deal there is only one thing it will have to do-cut down production in order that prices may be kept up. That would be a serious matter today when most of the world is hungry and in need of food. When the farmer is prosperous that prosperity is spread all over the country. I shall deal with agriculture a little later, but for the time being I should like to deal with the debt of this country.
The funded debt as at March 31 next is estimated to be $14,837,630,437, with the annual interest amounting to $409,456,495. There are other costs of financing in addition. This is almost equal to what it cost to run this country when I first came down here in 1936, and that situation continued until war broke out in 1939. It is estimated that the interest rate this year will be 2-76 per cent. Last year it was 2 [DOT] 67 per cent; the year before it was 2-60 per cent. We see a continually rising rate of interest. It may be amusing perhaps to some people to know that we have incurred most of this staggering debt for the purpose of fighting wars. I do not know of anything those wars settled, except to make profits for the men who manufacture the implements of war.
During the war financing, agents went out through the country selling bonds, and as far as I know they gave the assurance to their clients or victims that they would be able to sell those bonds at any time for 100 cents on the dollar. This has been denied in the past by ministers of finance, but I do know that agents did give that assurance to purchasers. We find now that the ninth victory loan bond is selling for $93.25 which represents a loss of $6.75 on each $100. At the same time people are accepting 3 per cent interest.
The minister told us recently that the government is going to float a loan of $100 million at 3-85 per cent, almost 4 per cent. That will have a detrimental effect upon provincial and municipal governments and those persons who are making loans to build homes and

The Budget-Mr. Fair
for many other reasons. The government should be more concerned with reducing interest than increasing it and thus creating a detrimental result for a large number of our people who are not able to go along on a cash basis. I do not know whether I should say much more, as there are a number of other items I want to deal with. I see my time is sliding along pretty fast.
I am satisfied that the income tax is the fairest tax you can have, provided it is properly administered. But where those who are least able to pay bear the heaviest burden, then I do not think it is a fair tax. In his present budget the minister has announced reductions of $100 million from personal income tax, $97 million from corporate income tax and $40 million from taxes on commodities.
The hon. member for Peace River (Mr. Low), my leader, placed on the record on Tuesday last figures indicating the profits made by corporations in the past. Then we had the denunciation by the Minister of Trade and Commerce (Mr. Howe) of a sugar company a little over a week ago. With that in mind I think the corporation tax might have been left as it was a little longer. We must remember that if people are kept poor they are much easier to handle. I have a parable here written by Count Leo Tolstoy concerning the private profit system, which portrays in realistic fashion a state of affairs that is all too true. He said:
I see mankind as a herd of cattle inside a fence enclosure. Outside the fence are green pastures and plenty for the cattle to eat, while inside the fence there is not quite enough grass for the cattle.
Consequently, the cattle are trampling underfoot what little grass there is and goring each other to death in their struggle for existence.
I saw the owner of the herd come to them and when he saw their pitiable condition, he was filled with compassion for them and thought of all he could do to improve their condition.
So he called his friends together and asked them to assist him in cutting grass from outside the fence and throwing it over the fence to the cattle.
And that they called Charity.
Then because the calves were dying off and not growing up into serviceable cattle, he arranged that they should each have a pint of milk every morning for breakfast.
Because they were dying off in the cold nights, he put up well-drained and beautiful sheds for the cattle.
Because they were goring each other in the struggle for existence, he put corks on the horns of the cattle, so that the wounds they gave each other might not be serious.
Then he reserved a park in the enclosure for the old bulls and the old cows over 70 years of age.
In fact he did everything he could think of to improve the condition of the cattle, and when I asked him why he did not do the obvious thing, break down the fence and let the cattle out, he answered:
"If I let the cattle out I should no longer be able to milk them".

Don't forget that today many of our people are being kept within enclosures with hardly enough to eat. They are not given proper treatment so they will be easy to handle, much easier than if they were a little more prosperous. We should think this matter over when dealing with communists and those who support communism.
The corporation tax last year was 50 per cent plus 2 per cent for old age security and the present budget proposals reduce that to 47 per cent plus the 2 per cent old age security tax. For those who had profits up to $10,000 the tax was 20 per cent plus 2 per cent for old age security. That has been decreased in the present proposals to 18 per cent plus 2 per cent, and corporations of this kind may have profits at this lower tax rate of up to $20,000 instead of the $10,000 already referred to.
So far as personal income tax is concerned, in my opinion there is very little relief. I have just dealt with a few examples. For the single man or woman with an income of $1,500 there is a saving of $3 this year. For the individual with an income of $2,000 there is a saving of $5 this year, and on an income of $2,500 the saving this year is $9. For those in the $3,000 bracket there is a saving of $12. That is a decrease of 5J per cent in income tax. The married man without any family and with an income of $2,500 will save $3 this year. The fellow with an income of $3,000 will save $5. Just before dinner I was reminded that $5 is only the price of a bottle of whisky. I do not drink the stuff; therefore I do not know, but I am sure that people in those income tax brackets will be very thankful to the Minister of Finance (Mr. Abbott) for the benefits they will receive.
The question of the cigarette tax has also been mentioned. So far as that is concerned, I think smoking is a messy habit anyway, and I cannot agree that there is very much advantage there. I am sure the ladies who have to clean out the ashes after the men smoke and throw their cigarette butts around would be pleased if some other use were found for tobacco.
Then we have done away with the stamps on cheques, notes and bills of exchange, something that has been in existence since 1915. I am sure many people will be glad not to have to put stamps on cheques. It was a nuisance tax from the beginning and should never have been imposed. The radio licence fee is also eliminated, and I am sure the people will be glad to get rid of that tax on the air we breathe and the air waves. I am not going to take any more time on that subject.

I intend to use the balance of my time to discuss agriculture, and if I cannot deal with it fully now I will finish on the estimates or on some other occasion. Agriculture is still our basic industry. In 1952 some 20-8 per cent of the Canadian population were on the land, and they got 12-6 per cent of the national income. Farm prices are always the first to drop and the last to rise, and farm costs are always the first to rise when there is any increase in prices and the last to go down. In 1952 wholesale prices of agricultural products dropped 19 per cent while costs increased by 7 per cent.
Agriculture is one industry people cannot get along without, because people must have food to live. While our farmers are prepared to grow enough for our own people and to feed millions of people in other countries as well, in my opinion we will have to adopt the method I suggested a short time ago, and which I do not think is a good one, of curtailing production unless the government sees fit to do something worth while for agriculture.
Many people were wondering whether there would be a change in agricultural policy in the United States when the new government took office. In the Christian Science Monitor for February 24 there is a dispatch from Des Moines, Iowa, which reads as follows:
Midwestern farmers indicated that they are concerned about the drop in farm prices but did not seem to be unduly alarmed over the situation as they gathered in Des Moines for the annual sessions of the national farm institute. Highlight of the program was the address by secretary of agriculture Ezra T. Benson who introduced a note of reassurance. He reiterated his belief in price supports on farm commodities and urged farmers to take advantage of present price supporting loans. At the same time, he warned against plac-
The Budget-Mr. Fair
ing sole reliance on price supports in formulating future programs.
To me that was very sound advice and I only wish those in authority in this country would take note of it. I believe that we must retain the Canadian wheat board. I also believe that we must have an international wheat agreement, but we must not sacrifice price in order to have such an agreement. The present agreement expires at the end of July, 1953, and the wheat board legislation expires at the same time.
I hope action will be taken by the government to see that the wheat board legislation is renewed and retained as permanent policy.
The present international wheat agreement is costing us plenty of money, as is the internal policy with respect to supplying wheat to Canadian millers for consumption within Canada. During the past two years that has cost us anywhere from 1 cent to 52 cents per bushel. It is a case of the wheat growers of the prairie provinces subsidizing all the people of Canada and at the same time also subsidizing the people of the 44 countries that are buying wheat from us. To show what has been the effect of policies that were not wisely thought out, I should like to place on Hansard a set of figures dealing with the British wheat agreement. These calculations are my own and are based on figures that have been taken from the Canadian wheat board annual reports and from returns that were brought down for me in the house. With the consent of the house, I should like to have this table placed on Hansard.


Mr. Speaker:: Has the hon. member leave?


Some hon. Members:: Agreed.


Robert Fair: The table is as follows:


LOSSES SUFFERED BY FARMERS UNDER THE BRITISH WHEAT AGREEMENT CROP YEARS 1946-49
[Stage Direction]
Year	Bushels
	Sold
194R-47 		169,000,000
1 Q47-4.R 		170,600,000
194K-49 		146,342,802
1949-50		140,000,000
Price	Price Class II	Loss Per Bushel	Net loss$ cts.	$ cts.	$ cts.	$1.55	2.43	.88	148,720,0001.55	2.88	1.33	226,898,0002.00	2.23	.23	33,658,8442.00	2.16	.16	22,400,000
Total losses suffered by farmers on wheat sold to Britain during the four years of British
Wheat Agreement	
Token payment by Dominion Government	
[Stage Direction]
431,676,844
65,000,000
366,676,844
2448	HOUSE OF COMMONS
The Budget-Mr. Fair

[Stage Direction]
Year	Bushels Sold	Price	Price Class II	Loss Per Bushel	Net loss$ eta.	$ cts.	$ cts.	$1946-47	29,041,927	1.25	2.43	1.18	34,269,4741946-47	24,573,939	1.55	2.43	.88	21,625,0661947-48	49,342,532	1.55	2.88	1.33	65,625,5671948-49	39,281,098	2.00	2.23	.23	9,034,6521949-50	39,788,512	2.00	2.16	.16	6,366,162Total	$ 136,920 921Losses on British contract..	366,676,844$ 503,597,765
I believe the coarse grains policy is working out very well, and I hope it will be continued. So far as hogs, eggs and butter are concerned, I believe that support prices should be made available at the producer level rather than give the packers all the benefits, because that is not good enough. The fellow who does most of the work is not getting full protection. I am glad to see that the embargo on the export of our cattle to the United States is being lifted, and I hope that fair prices will be paid for cattle during the months to come.
I had intended to deal, so far as income tax is concerned, with the charging of the cost of brushing and breaking to farm expenses. In June, 1947, the Minister of National Revenue (Mr. McCann) promised that such expenses on small acreages would be allowed as current expenses but so far that has not been done. Then I believe that farmers should be given the right to claim full depreciation on their cars because today cars are a necessity in the business of farming. Wages of housekeepers for bachelors and others should also be allowed, and allowance should be made for the work done by the wife and children of a farmer in the family garden.
There are several other things with which I wanted to deal but I see that my time is almost up. Therefore I shall hasten to conclude without saying much more until the estimates or some other opportunity arises. The world is still in need of more food production. The farmers of Canada can produce in abundance, but are discouraged because of the loss of guaranteed markets and the imposition of the present crippling taxation. Increased production in many

cases forces prices down. The measures adopted to date have not produced the necessary result.
In my opinion we need a financial policy that will operate in the interests of the masses of the people, and which will make it possible for every family to have their own home and enjoy the comforts of life in a peaceful world. Under the present system these good things are denied us by our unwanted rulers. Adoption of Social Credit principles will produce the means by which we can all enjoy the fruits of our labour in the best country in the world.
Mr. J. A. MacLean (Queens):: The hon. member for Battle River (Mr. Fair), in his closing remarks pointed out the unsatisfactory position which the agricultural industry of this country occupies in our economy. It is chiefly for the same purpose that I rise to take part in this debate. I am deeply concerned about the unsatisfactory economic conditions which now prevail in the agricultural section of our economy right across this country, and in the economic condition of our rural people generally.
It may be said that that is not a fair statement, that that is not the case. If we refer to the census of 1951, we find that about 20 per cent of the Canadian people earn their livelihood from agriculture. This group of 20 per cent received in 1951 only 13 per cent of the national income. It may be said, of course, that perhaps the situation has improved since then. One would be tempted to draw that conclusion from the remarks of the Minister of Finance (Mr. Abbott) when presenting his

budget, as found at page 2118 of Hansard for February 19, 1953:
The total of salaries and wages earned by Canadian workers during 1952 rose by 12 per cent, an increase which is considerably larger than the rise in gross national output. For example, the average weekly earnings of labour in nine leading industries were $54.13 in 1952, an increase of $4.52 over 1951.
In. contrast to that, Mr. Speaker, I would draw your attention to what has taken place in agriculture over that same period. The best estimates that are yet available with regard to agricultural income indicate that in 1951 agriculture had a net income of $2-2 billion. In 1952 that income dropped to $1-9 billion. In other words there was a decrease of $300 million which had come out of the pockets of the people who depend upon agriculture for their livelihood. Percentagewise the fall has been more than 14 per cent of net earnings in one year.
On the same page of Hansard, the minister points out:
While production, employment and wages rose in 1952 to the highest levels in our history, it is gratifying to note that prices have not followed a similar rising course.
I contend that is not due to the fact that inflation has been curbed in a general way, but is due chiefly to the fact that the prices which agriculture receives for its products have dropped radically in the last year. If we refer to the consumer price index as it stood in January, 1952, and then compare it with January, 1953, we find that the index as a whole dropped 2-5 points. We find also that this drop in the general consumer price index was due almost entirely to a drop in the price of food, and due entirely to the combination of a drop in the price of food and a drop in the price of clothing.
It is interesting to note that the drop in the price of clothing took place chiefly in the clothing which is produced from farm products. There was a considerable drop in the prices of wool, leather and linen, the three agricultural products which go into clothing. Therefore, Mr. Speaker, it can be seen that agriculture is not sharing fairly in the progress which our economy has been making over the last number of years.
In connection with the fall in the price of food, it may be argued that much of this reduction in cost may be due to the reduced cost of merchandising and processing. I should like to refer to the annual report of the Department of Labour for 1952. On page 36 of this report there is a table which shows the increases in wage rates in Canada by industries from 1941 to 1950. During that period it will be seen that the wage rates
The Budget-Mr. J. A. Machean in the industries which process food have increased sharply. As a matter of fact in 1942 this scale stood at 115, and by 1952 it had risen to 217. In the edible animal products industry there was an increase of more than 100 points, from 122-5 to 235-4.
It will be seen from this that most of the reduction in the cost of food is being borne by the primary producer. I believe that, as a result, agriculture is not sharing as it should in the progress of our country.
This fact can be readily seen if you travel through any rural area in this country. You will see that the population of the rural area is declining. It will be seen that there are many farms which are not operated at all or are operated in a small way by elderly people. You will find that the average age of rural people has increased rapidly in the last number of years, due to the fact that farmers' sons have gone to the cities to earn their livelihood. In this way they hope to get a fairer share of the national production.
On page 2124 of Hansard for February 19, 1953, the Minister of Finance said:
For the coming year I propose to follow this same policy of budgeting for a balance. This means, from the figures I gave a few moments ago, that something close to $250 million can now be devoted to tax relief. That this can be done in spite of the estimated increase in the coming year of about 3 per cent in total expenditures is, I think, a great tribute to the Canadian people.
In a very real sense this surplus for tax reduction is the direct result of increased production, efficiency and plain hard work on the part of a united Canadian people.
I feel, Mr. Speaker, that no segment of the Canadian people is more entitled to those remarks than the people engaged in agriculture. They certainly work hard; they certainly are industrious and, generally speaking, they are efficient. From the remarks of the minister one would infer that, therefore, they are going to share in the benefits of whatever tax reductions the minister has to offer.
I think we should look, then, to see what benefits they are receiving from the tax reductions, small though they be, which the minister has recommended. We find that there is little benefit accruing to the average farmer from this budget. We find that there is no reduction in the sales tax. We find that, on the other hand, on replacement tires for agricultural equipment there is a tax which did not exist in the past. We find that the farmer benefits but slightly from any reduction in income tax. We find that he is working long and difficult hours on the land to try to make a living.
In that connection I should like to quote again from the 1952 annual report of the Department of Labour with regard to the

The Budget-Mr. J. A. MacLean average working hours in industry and in other branches of endeavour in this country. At page 39 of this annual report there is this to be found:
The average normal work week for plant workers in Canadian manufacturing was 43-6 in October, 1951. This is a decrease of about 2 hours since 1947. More than one-third of the plant workers in 1951 were on a 40-hour week as compared with a proportion of less than one-fifth in 1947. To a large extent, the shortening has been effected by the elimination of Saturday work, about 70 per cent of the plant employees in manufacturing being on a 5-day week by October, 1951 as compared with about 50 per cent in 1947.
A similar, although more gradual, trend is seen in the figures for office employees whose work schedule is generally less than that for those in the plant. In 1951, the average for these workers in manufacturing was 38-6. In recent years, the proportion of office workers on a 371-hour week has increased sharply. About half the office workers in manufacturing were on a work schedule of 371 hours or less in 1951. More than three-quarters of the office employees were on a five-day week.
Mr. Speaker, there is no such thing as a five-day week in agriculture. On most farms the farmer works not five or six days but seven days a week. From that point of view I think it is most unfair to take the attitude that those engaged in agriculture should not share in any benefits which are going because they do not work long enough hours. Having read this quotation from the annual report of the Department of Labour I could say that, generally speaking, the agricultural worker works more than 37 hours a week. If I said that, I think it would be perhaps the greatest understatement of the year, because I personally know that most farmers work that many hours in three days.
In any case, the resulting situation in which the agricultural industry finds itself is that the economy of rural Canada is deteriorating. There is hardly a rural area in this country that is not finding it difficult to maintain itself. People will explain this away by saying, "Well, the economic agricultural unit is now larger; therefore each family must operate a much larger farm in order to make it economically feasible", the same as is done in Russia, only on a slightly different basis.
That factor alone does not explain the situation, because the efficiency of agriculture has increased rapidly in the last number of years. Agricultural costs have also increased, but the prices received by agriculture are now declining. Our industry finds itself ground between the upper and the nether millstones. It finds itself caught between rising costs on the one hand and lowering prices for what it has to sell on the other.
The result is that more and more farms in this country, especially in the maritimes, 

are becoming vacant; and in spite of the patent benefits there are to be derived from living in the country, more and more people are forced to give up farming and to earn their livelihood in some other way. Every family unit which becomes vacant in the country makes it that much more difficult for those who remain to make a reasonable livelihood, and that much more difficult for the community to support schools, churches, roads, power lines, telephone lines and all the other benefits which it is only right that rural people should have as well as those who live in urban centres.
It may be argued that the agricultural industry has been looked after, as far as this budget is concerned, by the reduction in the individual income tax. I think that argument is worthy of a second look. If you consider the average farmer as being married and having two children, it would be necessary for him to have an annual income of more than $2,300 a year to benefit from the reductions in personal income tax which have been made in this budget. If his income is $2,400 in 1953, he will benefit for the whole year to the extent of $1, which is less than a third of a cent a day for 1953. You may say that he benefits from the reduction of four cents a package in the tax on cigarettes. Mr. Speaker, most farmers that I know either smoke a pipe or roll their own. They cannot afford to smoke ready-made cigarettes.
I was interested to find some specific cases of how this budget might apply to a typical rural area, and I took the rural part of the riding which I represent as perhaps being typical of a rural area in the maritime provinces. I found that in a rural population of' about 25,000 people in 1950, there were at that time only 340 people earning enough income to be taxable. Although I have no figures to prove it, I suspect that the number who will earn a taxable income in 1953 will be even smaller. It therefore follows that of the 25,000 rural people in Queens county,, only about 340 will benefit in any way from the tax reductions which the minister has made in his budget.
I was greatly interested in a statement which the minister made in his budget speech, apparently with considerable satisfaction, after he gave a table which indicated our net debt, our per capita net debt and our net debt as a percentage of gross national product. The minister said, as reported at page 2122 of Hansard:
I commend this table to the attention of hon. members who will see that while our total net debt has declined by 17 per cent since 1946, the per-capita debt has fallen from $1,092 to $752 or 31 per cent. In 1939 our net debt was equal to 60 per-

cent of our gross national product for that year, in 1946 it was 113 per cent of our gross national product, and it now stands at only 48 per cent. To put it in more realistic terms, our 1939 debt represented 31 weeks of the nation's output, in 1946 it was about 60 weeks, but today's debt could be covered by the product of 25 weeks' work. The real burden of our debt has been considerably more than halved over the past 7 years.
I do not quite understand that statement, because I believe the minister is either fooling himself or trying to fool everyone else when he makes it. He knows as well as the average person that this is a world in which a person gets nothing for nothing, and this is also a country in which at the present time you get very little for a dollar. This is a world where in the main you cannot get something for nothing. If our national debt has in effect been halved by this sort of thing, someone has paid it.
I do not argue that it has not been reduced, but I do maintain that the people who have reduced it are the people who in good faith bought victory bonds from their savings during the war years when much of this debt was accumulated. They invested their hard-earned savings in bonds measured in dollars of that day, and they will be repaid in dollars of the present time which have less than half the purchasing power of the dollars they gave for the bonds. In effect, that is how our national debt has been reduced. We have a situation where the people who contributed their hard-earned savings during the war contributed dollars which had real purchasing power, and they will be paid back with about half that amount of purchasing power. That I believe is one of the reasons there is a tendency for interest rates to rise.
People realize that they have two choices. If this inflation keeps on, they are much better advised to invest their savings in real property than in bonds or anything of that sort. In order to be induced to invest in bonds they must be rewarded by a relatively high interest rate, because they have seen what has happened to investments they made during the war. They are not even cashable at face value at the present time; and even if they were, their purchasing power, or what they would receive for them, would be only about half the purchasing power that they paid in for those bonds.
It may be said "Well, what is the matter with that? That is quite all right". I should like to recall, Mr. Speaker, that after the first world war Germany paid off its national debt entirely by the process of inflation. But instead of pulling just one rabbit out of the hat and creating a 50 per cent inflation, the Germans after the first world war pulled both rabbits out of the hat and inflated their
The Budget-Mr. J. A. MacLean money to such an extent that it was worthless, so that their national debt had no meaning. If the Minister of Finance has any notion of pulling another rabbit out of the hat in the way of inflation to reduce the national debt further I would recommend to him that before doing so he think very carefully of the effects of inflation and of the habits of rabbits.
There is another aspect of this budget in which the people of Canada find cold comfort, namely the position of people on fixed incomes. Their position is a corollary of that about which I have been speaking. It is due to the fact that inflation has taken place in this country. People on fixed incomes find that their present income has only approximately half the purchasing power of their income of seven or eight years ago, and they are in a most difficult position. This applies to people who are living on proceeds of insurance policies, to people who are in receipt of pensions and all types of fixed incomes.
In connection with the reduction of income tax on corporations, there is one aspect with which I am anything but pleased. I refer to the fact that no special consideration has been given to corporations whose business it is to provide public utilities to the public generally. That is a very real problem in the province from which I come, because in that province both telephone service and electric power are distributed by private corporations who are forced to pay income tax from their profits. As a result of that, the consumers of the electric power and of the services that these public utilities provide are subject to an indirect taxation which does not fall on people living in other provinces where these facilities are provided by provincial crown corporations and co-operatives. This is something that I should like again to bring to the attention of the Minister of Finance because it is creating a real hardship in my province, especially as far as rural electrification is concerned.
In addition to what I have already said, when I see that there has been no reduction in sales tax-and that is the only way a fair and equitable benefit could be given to people in the lower income brackets, and to farmers and labourers and people whose income is not taxable-I have a further observation to make. I note that municipalities and cities across this country are forced to pay sales tax on equipment of a type which is exempt from sales tax when purchased by a provincial government. To me that seems to be a very unfair state of affairs. I hold in my

The Budget-Mr. Major hand a letter from the council of a city in this country, which reads in part:
Our city, in common probably with all other cities in Canada, feels strongly that, being a local government responsible for a limited area and obliged to expend the citizens' money for purchases similar to those made by provincial governments, it should have the same favourable exemption as that accorded to provincial governments. Indisputably, it spends public money for public good and the discrimination is beyond understanding.
I must say that as far as I am concerned this discrimination is beyond understanding. I recognize that there would be difficulties in administration, but I am sure that if it was given careful study some means could be found to circumvent any very great difficulties as far as administration was concerned.
It would be unfair if I were to suggest that there is nothing right with this budget. After all, I imagine there was never a budget in which there was not something good. In that connection I should like to make a brief reference to the fact that the radio licence fee has been abolished. I believe that is an unadulterated good. I am delighted, too, that the nuisance tax on cheques has been eliminated. These are two nuisance taxes, the costs of collection of which were very high. Their nuisance value was much beyond their real value, and I am delighted to see both of them go.
The budget speech was extremely well delivered, and in it I have noted another paragraph with which I can agree most heartily. The minister says:
Tax laws should avoid placing too great a penalty on successful effort. Every reasonable incentive should be given to people to work hard, move to better-paid jobs, take risks and expand their businesses without keeping one eye continually on the tax-gatherer. This is particularly important in a growing and expanding country such as ours where there is so much to be accomplished.
I think that statement expresses in a very fine way the principles for which the party to which I belong stands, and I am delighted to see those sentiments expressed by the minister.
Looking at these three last observations in the budget, one might be tempted to conclude that the government has recognized the benefits which would accrue to the country if we had a Conservative government. One might see in these portions of the budget an attempt-a feeble attempt, X admit-nevertheless an attempt to give the country a Conservative government by process of evolution, rather than by process of election.


Mr. W. J. Major (Glengarry):: Mr. Speaker, may I take this opportunity to bring to your


attention some of the problems that are of much concern to the farm producers and the consumers of my district.
I would first like to commend the Minister of Finance (Mr. Abbott) for the careful consideration he has used in applying the various tax reductions, while at the same time appraising his revenue with a view to budgeting for a safe balance. Personally I have always believed in the principle of a budget that provided for a surplus to take care of the public debt. Along with careful expenditure it was always my conviction that the decrease of interest payments, through the reduction of public obligations, was one of the sane ways to reduce taxation.
Of course I would not think of a surplus acquired by overtaxation; but when a greater national expansion permits a surplus without increasing tax rates, then I would surely welcome it, and apply it toward the reduction of our national debt. I know most of us would prefer not to have to pay taxes, but it is impossible to have services and social security without them. Those of us who went through the thirties remember our difficulty in paying limited taxes at that time, and I am sure we would not trade our buoyancy and taxes of today for the debts incurred and the depression of that day.
May I now say that most of the people of my county are dependent upon agriculture for their income. Our towns are also largely dependent upon the farm income for their business. The prosperity of our farmers depends solely upon the prices realized for their products, and by the same token the people of our towns depend largely upon the purchasing power of the farmer. You can therefore see why the progress of the one is largely responsible for the progress of the other.
Perhaps I should again bring to your attention the fact that, unlike industrial production, which is timed and controlled by the will of man, farm production is largely controlled by the will of nature. Conscious of the food requirements of his country, the farm producer must always plan for more than the immediate requirements, to make sure that his fellow citizen and consumer has enough at all times. If in hisi endeavour to supply his fellow citizen he must produce more than the immediate requirement, then surely he should not be asked further to tighten his belt and bear alone the full burden of a food cheaper in price than what it actually takes to produce it. I would think this responsibility should be borne jointly by both the producer and his fellow citizen.
We know that industrial controlled production reckons wages and costs in setting

up the sale and resale price of the manufactured article. Would it be advantageous to the consumer if the farmer were to recommend the discontinuance of the present price support and subsidy principle, and were to adopt the industrial system of controlled production, together with prices that would include the consideration of services and other costs in setting the price of the farm product?
In protecting the interest of both the consumer and producer I would like to commend the government for the support it has given our farm products under the Agricultural Prices Support Act when the necessity arose. These support prices, though not always at a level that the producer would like to see, nevertheless have the effect of preventing the producer from losing more than he otherwise would, if no support were given. At the same time the consumer is saved from eventually paying the considerably higher price which would result if production was allowed to decline to where it would go, should no support be given.
The present policy of applying support prices has the effect of avoiding extremes in production, and at the same time protecting the price both to the consumer and the farmer. I also believe that the government's aim should be toward the application of a policy that would encourage more stability both as to production and price, a policy that would diminish the causes leading to periods of extremely high or low production followed by wide variations in price. Towards this end, perhaps our Canadian federation of agriculture, working with the bureau of statistics, could be of assistance in directing a balanced production, which would allow for a more stabilized price at all times.
The over-all picture of farm income may show that the national income of Canadian farms in 1952 is just as high as or higher than the previous year. However, it must be remembered that in western Canada a bumper crop was harvested along with half of the 1951 crop harvested in the spring. This being so, and with the total farm income equal to the previous year, it is equally apparent that the income of the farms of eastern Canada was decreased by a proportionate amount.
While the prices of livestock, cheese, poultry and eggs declined by an average of from 15 to 30 per cent in 1952, figures released by the bureau of statistics inform us that wages throughout Canada were increased by approximately 12 per cent. From these figures we can reasonably assume a corresponding increase in the price of goods and supplies that the farmers must
The Budget-Mr. Major purchase. At the same time I think it should be reasonable and fair to expect a corresponding and related increase in the prices of the products he must sell.
Should it be desirable to keep the price to the consumer at a level lower than the actual cost to the producer without applying support, then the only alternative would be to apply a subsidy at the consumer level to take care of the rising production cost, and at the same time not pass it on to the consumer. As the extent of the drop in production has a close relation to the amount of support given when prices axe depressed, the support program as applied to cattle, hogs, eggs, cheese and butter should be sufficient to arrest the production hesitancy caused by the depressed price.
In eastern Canada we depend a great deal on the sale of our surplus dairy cattle to the United States. As a result of the embargo following the foot-and-mouth outbreak these dairy cattle, for the most part, had to be retained on the farms. At the same time Great Britain did not renew her cheese contract, and on top of this New Zealand cheese was being imported by the trade. These cheese milk producers found themselves without an outlet and the cheese factory owner was also greatly disturbed as he could see his life earnings disappear with his cheese factory.
I wish to thank the Minister of Agriculture (Mr. Gardiner) for his endeavour to clear the situation that existed at that time. I am sure the farmers of eastern Canada are highly appreciative of the fact that the federal government lost no time in entering into an agreement with the government of New Zealand to have imports of New Zealand cheese discontinued. May I also tender my appreciation both to the federal and Ontario governments; to the federal government for its assistance and co-operation in setting up the cheese producers, through the Ontario marketing board under the federal co-operative marketing act, with a guaranteed price of 80 per cent of the average of the last three years, and to the provincial government for their further guarantee to bring it up to the full 100 per cent of the average of the last three years.
To avoid the recurrence of conditions such as we experienced last year, I would suggest that more consideration be given to a system of government permits when the importation of dairy products becomes necessary to keep a proper balance between dairy production and supply.
There is another matter that I would like to deal with; that is the contention that the

The Budget-Mr. Major answer to the problems of dairying and farming generally lies not in higher prices for the product but in efficient production and lower costs proportioned to the needs of the consumer and outside markets. The looseness with which this expression is used often creates the impression that the dairy producer is inefficient, doing his work haphazardly and without method or calculation. If the farmer of frontier days could get along without very careful planning or the keeping of books let me assure you, Mr. Speaker, that the income tax department has made the farmer of today very alert to the keeping of records of his sales and costs as well as all other data that are of assistance to him in the planning of his production.
When we speak of efficient production we should not lose sight of the fact that the farm producer is continually striving, to increase his efficiency, and in addition to his own efforts he is strongly aided by the experimental farms, who are continually searching for ways leading to better yields and more efficient methods of produotion. The operation of a dairy or mixed farm requires the use of constant and applied labour; and when prices obtained for farm products are not sufficient to realize a net equal to that which can be obtained by other employment, then farms are vacated.
With the disappearance of low-wage labour and the depletion of our farm population, those remaining on the farms have to resort to more mechanization and hydro installations if they wish the production quota to be continued; but this does not necessarily mean a cheaper production. On the contrary the initial cost, together with repair and maintenance of the increased equipment, tends to offset the advantage that we otherwise gain. Of course unless increased efficiency, newer methods or increased mechanization reduce production costs they are of no benefit to the producer or consumer in so far as price is concerned.
While efficiency may play a small part in the over-all cost of production it must be noted that the main cost is made up of feed, equipment and services that go into the farm product. It must also be remembered that the producer has no control over the latter, and they are the main part that must be reckoned with when the farmer strives to reduce his production cost.
We should also keep in mind that the farmer's week is one of 70 hours or more and that he receives the gratuitous labour of his wife and family, which the wife gives by taking extra hours to do her housework. It is therefore quite impossible for him, for the most part, to reduce his production cost from


the standpoint of labour. Unless the cost price of the essentials which he has to buy such as feed, machinery, equipment and services be reduced, how can you expect him to reduce his over-all production cost?
There is also another matter which causes great concern to my constituents, and that is the inroad of synthetic foods which are a serious threat to the dairy industry. The preparation and manufacture of these synthetic foods give employment to very few people. On the other hand the dairy industry employs a larger number of our population. If these synthetic inroads are allowed to continue and increase they will seriously jeopardize the dairy industry. The dairy farm population is one of our good and steady markets for Canadian manufactured products.
As long as our dairy farmer is assured of a market for his dairy products at fair and reasonable prices he will be in a position to buy Canadian manufactured products. This in turn will assure work to Canadian labour in our factories. Unless something is done and done quickly to arrest the inroads of these synthetic products, the sales of our dairy products and the purchasing power of our dairy farmers will be greatly reduced. This in turn will force the dairy farmer to limit his purchases of equipment and essential needs, with the result that Canadian employment will be greatly affected through overfilled warehouses and lay-offs.
I know very little of these synthetic foods but I have in my possession a Shur-Gain bulletin, dated Montreal, January 15, 1951, which deals with synthetics as compared to animal proteins in the preparation of feeds for our baby chicks, and I quote:
A.P.F., animal protein factor, vitamin B 12, these things have received a great deal of publicity during the past few months.
Extravagant claims for some of these synthetics have been made. After a few months background of testing, the smoke has cleared somewhat and the true picture has emerged. A.P.F. supplement is no substitute for natural animal protein such as meat meal, fish meal, milk powder.
It goes on with further details.
Now, if these animal protein factor supplements or synthetics are no substitute for animal protein to be used in the preparation of feed for our baby chicks, surely they should not substitute for animal protein as contained in milk, ice cream or other products for our Canadian babies, children or adults.
If we are to protect our dairy farmers from synthetic inroads we know that the first responsibility lies with the provincial governments, in whom the supreme court has vested the responsibility. Following the decision by the supreme court, the provinces of

Quebec and Prince Edward Island immediately enacted legislation to deal with the problem within their respective borders. The province of Ontario passed an act respecting edible oil products which was assented to on April 10, 1952, and I understand that the enforcement of the act depends upon the designation of the regulations by the lieutenant governor in council of that province.
Should there be any way in which the federal government could assist the provinces in their legislation to protect the dairy industry from these synthetic inroads, I would ask the government that it lose no opportunity of doing so.
(Translation):


Mr. Henri Courtemanche (Labelle):: Mr. Speaker, according to a Canadian Press dispatch from New York published in La Presse of Montreal on February 21, a newspaper of the American metropolis, the Daily Mirror, in its comments1 on the budget just submitted to us, commended Canada and her Minister of Finance (Mr. Abbott), who should be called "the great wizard of Ottawa".


Some hon. Members:: Oh, oh.


Henri Courtemanche: I am pleased to hear my hon. friends laugh, and I hope they will follow me to the end.
The Daily Mirror is right-


Mr. Langlois (Gaspe):: The New York Times said the same thing.


Henri Courtemanche: This title, the great wizard of Ottawa, indeed becomes the hon. Minister of Finance. Rarely have we seen so much juggling, deceit, sleight-of-hand and so forth on the part of a politician.
When I read this report, it immediately came to my mind that a Blackstone, for example, had nothing on the Minister of Finance.
By sleight-of-hand, the latter causes elephants to disappear while our great hon. treasurer annihilates-or very nearly does so -surpluses amounting to hundreds of millions. Blackstone has us believe that he has just sawn a woman in two, even though the woman is still alive, while the Minister of Finance, pretending to lop off most of our taxes, hardly scratches them at all. From a single cone of paper, Blackstone draws a lot of multicoloured handkerchiefs-


Mr. Dupuis:: Red, white and blue.


Henri Courtemanche: Very nice colours. From very little taxation relief, the Minister of
The Budget-Mr. Courtemanche Finance wishes to give the illusion that he is granting everybody drastic tax reductions.
Harry Blackstone is certainly an ace at sleight-of-hand but however great he may be as a magician, he must sometimes recognize that he is powerless when faced with the simplest things.
Last January, he was in a New York city hotel with his wife, when she told him that her favourite hamster Poncho had disappeared from the suite she occupied and that searches on the whole floor had been fruitless.
In spite of Mr. Blackstone's magic words "hocus pocus", his mysterious gestures and the weirdest invocations, Poncho could not be found. He had to admit to newspapermen that he, Harry Blackstone, who could make elephants vanish and come back several years later, was absolutely powerless to locate the little rather harmless rodent which was as dear to his wife as a precious piece of jewelry.
Our great wizard at Ottawa, to use a phrase coined by the Daily Mirror, has just had an adventure somewhat similar to his distinguished colleague Blackstone.
Our Minister of Finance has cut taxes here and there by the million-at least, he has tried to give that impression-but he has been unable to alleviate, in any noticeable measure, the tax burden of the head of the family, the worker, the farmer, in a word, of the taxpayer of average or below average means.
From the gallery, the federal wizard may have seemed to do tremendous, colossal, fantastic wonders, but for the needy, for those who most deserved real and authentic tax reductions, the wizard has done nothing worth-while. One would look in vain throughout that budget for something that might bring comfort to the father or mother of a family. The family has been completely ignored and overlooked. Who will benefit from those tax reductions? Those with considerable earnings, and nobody else. Consequently, don't be surprised to hear what I heard during the last few days in my riding, that it is a rich man's budget.
In any event these are more or less the terms used by the leader of the Canadian Congress of Labour, an association with 370,000 members, I am told. According to a Canadian Press despatch, published in the newspaper La Presse, of Montreal, on February 21, 1953, the Congress had this to say about the budget:
Canadian workers will be quite disappointed in this budget which Mr. Abbott has incorrectly called a social dividend budget, whereas, in fact, it is a
2456	HOUSE OF
The Budget-Mr. Courtemanche financial dividend budget. The latest figures published by the dominion bureau of statistics show that 75 per cent of heads of families have a revenue of less than $3,000. The new income tax scale means a savings of $5 a year for the married workers whose revenue is $2,500. If he has two children, the new budget means a savings of $2 for the year 1953.	"
In his review of the economic position of Canada, Mr. Abbott gives the Canadian worker credit for the increase in Canadian production. His budget is a strange kind of reward for them.
Mr. Abbott had about $260,000,000 to distribute and he distributed this amount almost entirely to those who were not the most deserving.
He has reduced by $97,000,000 the corporation income tax and this reduction is retroactive to January 1. He has reduced by about $100,000,000 the personal income tax, but this reduction will be put into effect only on July 1. Moreover, as far as personal income tax is concerned, it is wealthy taxpayers who are granted the most substantial reductions.
Contrary to what happens in the case of the small wage earners, the taxpayer who earns $50,000 a year is granted a reduction of $1,200, whether he has children or not. If his income is $100,000, he will benefit from a reduction of more than $3,000.
The government's main excuse for not undertaking a health insurance program was that it could not afford it. But it can afford giving away $97,000,000 to corporations and granting substantial income tax reductions to wealthy taxpayers. Mr. Abbott said again and again that he could not do any more for the underdeveloped countries because he would have had to increase taxes.
Now he makes tax concessions, particularly to the rich, to the tune of more than $250 million. He could have left untouched the corporation tax and he could have given about $100 million to the backward countries and still have more than $150 million to lighten the tax burden of those in the lower income brackets.
I want to consider tor a moment the main items of the budget we are now discussing and find out what relief it gives to the little fellow, to the average taxpayer.
The Canadian Congress of Labour has shown that the income tax reductions were insignificant for the great majority of taxpayers. Nobody will question that.
The 11 per cent reduction is far from sufficient and the Minister of Finance did not even want us to benefit by the whole percentage this year. The reduction will come into effect on July 1 only, which means that in 1953 the relief will be less than 6 per cent.
Let us consider the case of a married man with two children, whose annual salary is $3,000; his wife will have to pinch and scrape every cent in order to feed and dress the family. I put the accent on the wife, for in most homes it is she who bears the brunt of a scandalous fiscal burden. What do we see 

then, in the case we are considering? The father of two children, who in the best of circumstances will scarcely be able to make both ends meet, and who, should a rainy day come, will run hopelessly into debt, will be granted a measly reduction of $7 for the whole year! It is obvious that the government is not bleeding itself white for that particular taxpayer. Moreover, the government does not bleed itself white in order to help the taxpayers earning less than. $75 or $80 per week.
The decrease in the income tax rate is, actually, only a deceit of the great wizard of Ottawa, as the Daily Mirror calls him.
It is a known fact that the personal income tax is disheartening to the workers; they cannot save anything and they have to put up with unnecessary and intolerable hardship.
I am the first to recognize that organizations like our chambers of commerce are right in asking for a somewhat fairer taxation.
Nevertheless, I feel that the income tax is a greater menace to the family than the corporation income tax is to private enterprise. And it seems to me, it would have been only logical to do something for the small wage earners, for the worker with an average income-and I mean something worth while-before granting any reductions to business.
When we blame our friends to the right for their attitude toward the family, they usually reply that there are the family allowances. Yes, family allowances do exist, but the same goes for taxes, taxes of all kinds which were unheard of when family allowances were unknown. It is becoming rather irritating for the family to always be reminded that it is receiving allowances when it dares ask for justice.
Family allowances, considering especially the rates at which they are maintained, serve only to pay taxes-income tax, federal sales tax, etc. What prevents the government from increasing these allowances to take care of the rise in the cost of living which has taken place over the last ten years?


Jean Lesage: Then, it would be necessary to increase taxes!


Henri Courtemanche: No, there are certain ways of practising economy of which my hon. friend is certainly aware.


Jean Lesage: Not so sure!


Henri Courtemanche: The federal income tax is wrongly distributed; the poorest of our Canadian citizens are called upon to pay far too much in relation to their income and their family obligations.
Just consider: a gift of $7 for 1953, for the head of a family, with two dependent children, whose earnings are less than $60 a week. Is it not rather a huge joke?
Take another item, the 4 cent reduction on 20 cigarettes. It would seem that the opposition was right in saying "the higher the tax on cigarettes the lower the revenue from that source". Figures now show that everything has its day. There comes a time indeed when taxation is so high that the taxpayer seeks to elude it. He stops smoking or smokes less, or yielding to temptation, he smokes cigarettes smuggled from the United States. This 4 cent reduction on a pack of 20 cigarettes will not end smuggling. Those who have got into the habit of smoking American cigarettes will not stop because of this four cent reduction. I am not saying they are right in doing so. However, they have grown into a habit which they will lose only when the Canadian government makes it cheaper to smoke Canadian cigarettes than American cigarettes.
That situation arose because one day the government decided to overtax the people. Today, the consequences of this overtaxation are serious from the financial point of view, but even more so when we consider that people have taken to the habit of violating the law.
To sum up, the average taxpayer does not stand to benefit greatly from the lowering of the tax on cigarettes.
Corporation taxes will be reduced by approximately $120 million per year. We cannot blame the working man when, through the Canadian Congress of Labour for instance, he voices his surprise at the news that this exemption comes into effect on January 1 of the current year, while the personal income tax will be reduced only on July 1 next.
I admit that corporations, like individuals, need some relief from their taxation burden. I repeat, however, that it would have been better to think of the latter before thinking of the former. There are surely more
The Budget-Mr. Courtemanche tragic cases among individuals than among corporations.
Now what about the yearly $2.50 radio licence fee that has been abolished? This tax has always been considered a joke and an unfair tax. It was a joke because most people succeeded in avoiding it. It was unfair, because it was iniquitous to levy such a tax on the owner of a small radio. God knows, besides, how much it cost to collect that nuisance tax. Many other means will surely be found to provide the C.B.C. with all the money it needs, including money it could do without. And we shall go on paying for the C.B.C., for radio, television, shortwave service and so on and so forth. In fact, that item does not benefit the taxpayer, even the one who had to pay the $2.50 licence fee.


Hector Dupuis: It is still a good thing. You would have liked it to stay?


Henri Courtemanche: It was a good thing to do away with it because, as I just said, it was a nuisance tax.


Hector Dupuis: Very well, I thank you.


Henri Courtemanche: They made a great fuss about the fact that stamps used on cheques and other documents were being abolished. That was another nuisance tax. Who will benefit the most from its removal? Surely not the head of a family earning $3,000 a year, who would have liked to be able to write cheques by the dozen every week. A worker within that bracket very seldom writes more than one or two cheques a month.


Jean Lesage: Will the hon. member allow a question? Does he object to this proposal, contained in the budget, as to the abolition of stamps on cheques?


Henri Courtemanche: On the contrary, it is a worthy gesture on the part of the government, and I just said that I approved of it-


Jean Lesage: That was because you said-


Henri Courtemanche: That it was a good thing because it was going to benefit those who had a lot of money.


Hector Dupuis: That is pretty good too.


Mr. Balcer:: Not for the small taxpayer.


Henri Courtemanche: This, therefore, is a saving of about 50 cents a year. This saving will only be appreciated by those who use cheques a great deal, by large

The Budget-Mr. Courtemanche concerns, in other words, not by the great majority of people.
By bringing down the floor on deductible medical expenses from 4 to 3 per cent the hon. Minister of Finance was not generous enough.


Hector Dupuis: And that is also a good thing!


Henri Courtemanche: Well, it is a good thing but it is not generous enough yet. There have been a great many speeches delivered in this house to demonstrate how immoral it was to tax sickness, to tax doctors' or surgeons' bills. This meagre 1 per cent does not bring about a worth-while improvement. Would it not have been better to grant a deduction for all medical expenses, including medicine and drugs? That would really have been a relief for the taxpayer.


Jean Lesage: Your father-in-law would not be in favour of that.


Henri Courtemanche: I do not have to bother with what my father-in-law would say. Right now we are talking about a tax collected by the federal government. When we get around to provincial matters, we will talk about them. And that is not what happens at all with the reduction in medical expenses deductible for 3 per cent of income.
The budget includes other items, but they are surely of no interest to the average taxpayer. For instance, take the 10 per cent sales tax on books; it represents, for most people, even for those who do quite a lot of reading, but a slight saving.


Hector Dupuis: It's still a good thing.


Henri Courtemanche: It is not a good thing for those who derive no benefit from it. Like everything else, it's a sham. It is possible that the people may have the opportunity of changing that in the very near future-I hope so.
To put it briefly, this budget brings no satisfaction whatever to the head of a family, the worker, the farmer, or the small wage earner.


Léon Balcer: That is bad.


Henri Courtemanche: The Minister of Finance, who has sought to get around the taxpayers of all provinces, has sought also the sympathy of the province of Quebec and of the corporations in that province, by allowing the latter to deduct from their income tax the 7 per cent tax they have to pay.

Up to now the government allowed a deduction of only 5 per cent.
The federal government wants to take all possible credit for such concessions. Thus we have, among others, this statement of the Minister of Finance which can be found at page 2130 of Hansard for February 19, 1953:
Of course the extent of federal taxes does make substantial tax increases by provincial governments more difficult. No royal commission is needed to discover this truth. X have good reason to know the sort of problems which provincial ministers of finance have to face, and I think they know that they have my sympathy.
But no group of men at Ottawa is responsible for this problem. It finds its origin in the will of the majority of the people of the ten provinces which, of course, is Canada. No one in Ottawa has any liking for centralization as a principle or objective.
No one wishes to deprive provincial governments of their rights or to take over their responsibilities.


Douglas Charles Abbott: Hear, hear!


Henri Courtemanche: So far, so good.


An hon. Member:: It is still very good.


Henri Courtemanche: I regret to have to inform the Minister of Finance that this federal measure will not settle the great and ticklish problem of federal-provincial relations.


Léon Balcer: Quite true.


Henri Courtemanche: I must regretfully tell the minister that in the province of Quebec people are not taken in so easily and that concessions such as these-which, all things considered, do nothing more than right grievous wrongs-will not lead the province of Quebec to reverse its attitude, or to surrender without fears and worries to the solicitude of the federal government.
Quite understandably the Minister of Finance is not too keen on the idea of a royal commission inquiring into the relations between Ottawa and the province of Quebec. But the matter is going to be investigated anyway. The members of the commission have already been named and they will assume their functions as from March 1. Everybody agrees that they are men of great ability and perfect integrity.
The Minister of Finance should not think that such an investigation was lightly decided upon. It was following a request from a non-political organization, that is, the chamber of commerce of the province of Quebec, that the hon. the premier of Quebec agreed to set up such a commission.


Mr. Gauthier (Portneuf):: Who is president of the Quebec chamber of commerce?


Hector Dupuis: I think it is Mr. Bernard Couvrette, who was Conservative candidate in the provincial election.


An hon. Member:: I believe it is Mr. Paradis.


Henri Courtemanche: That does not concern me. I am not here to prepare the slate of candidates for the next provincial election.
In the Quebec legislature, the leader of the opposition, Mr. Marler-


Jean Lesage: That is the only one whom you had not mentioned yet.


Henri Courtemanche: -used language which is close enough to that of the Minister of Finance. The reply to the leader of the Liberal opposition was given by an English newspaper, the Montreal Gazette, in its leading editorial of January 23, 1953; this reply is also intended, in the present circumstances, for the Minister of Finance. May I be permitted to quote a few lines of this editorial, taken from a translation published on the editorial page of the newspaper Montreal-Matin, on January 26 last.


Hector Dupuis: The Gospel!


Henri Courtemanche: So it is with the
Liberals and their Canada.
In November, a delegation of about 500 members of the chamber of commerce and of the Quebec union of municipalities went to the provincial legislature to see Mr. Duplessis. This delegation proclaimed Mr. Duplessis the great champion of provincial rights.


Jean Lesage: Say it without laughing.


Henri Courtemanche: This delegation held that the rights of the province had never been in such grave danger.


Jean Lesage: You cannot say it without laughing.


Henri Courtemanche: I do not want to make my opponents, or rather my friends opposite, too unhappy, and so I try to gild the pill, before the end of the quotation.
Then stating their opinions they pointed out how close these were to his own.
The delegates asked for a royal commission to be set up in order to ensure a fairer distribution of powers as between the federal and provincial governments. And it is the establishment of this very commission which Mr. Duplessis advocated this week in the provincial legislature.
It is true that Mr. Marler did not oppose the establishment of the commission itself. But, judging from his remarks he would no doubt take objection to most of the arguments which the chamber of commerce brought forward in presenting its request to Mr. Duplessis. He would object more strongly to the tribute which the chamber of commerce paid to Mr. Duplessis by declaring him the champion of the rights of the province against centralization.
After all, in the minds of the Liberals, the chamber of commerce was only giving praise to Mr. Duplessis for a costly and erroneous policy. Therefore, the chamber of commerce itself favours that which is costly and erroneous.
But why should French-Canadian businessmen, irrespective of party allegiance, through their
The Budget-Mr. Courtemanche representatives, consider Mr. Duplessis as their champion when he follows a political policy which, according to Mr. Marler, "puts the province in a position of economic inferiority"? Such is the mystery which the opposition has not yet explained in the provincial legislature.


Hector Dupuis: They cannot speak.


Henri Courtemanche: As long as it is so, Premier Duplessis will be justified to assert that in enjoying the support of the Quebec chamber of commerce, he has something like the echo of the people's voice behind him.


Hector Dupuis: They are forbidden to speak over there; they cannot say what they want.


Henri Courtemanche: I find that a certain member for St. Mary speaks quite often. In spite of what the Minister of Finance may think-


Pierre Gauthier: He speaks well.


Henri Courtemanche: all true patriots in Quebec support that investigation and expect excellent results. Excellent for those who want to see the constitution respected, but perhaps not so good for those who would easily disregard the rights of others.
The Minister of Finance knows perfectly well that the problem of dominion-provincial relations is not solely a matter of a tax on the transfer of securities or of a 7 per cent tax credit for corporations with head offices in Quebec. It is not these thousands or millions of dollars which will change the minds of our people. The principles at stake are worth a lot more. And those who might have thought that this so-called generosity would be enough to change the opinion of Quebec, of its government and its people, were greatly mistaken.


Mr. Maltais:: What are the principles at stake?


Henri Courtemanche: We will have an opportunity to discuss them in the near future.


Mr. Maliais:: Now is the time to discuss them.


Henri Courtemanche: The matter has greater, and, especially, more serious implications. There are a great deal more than two injustices involved. It involves a way of thinking, a state of mind, that of the centralizers.


Hector Dupuis: As the Leader of the Opposition (Mr. Drew) was and still is.


Henri Courtemanche: I will not resort to petty politics with respect to a matter of such gravity.


Hector Dupuis: Oh, no, no petty politics!


Henri Courtemanche: And what is involved here is more than millions of dollars, but the very survival of a province, and of a

The Budget-Mr. Courtemanche race with its language, its institutions and its beliefs.
The Hon. Maurice Duplessis, premier of the province, has explained all this on several occasions. The province of Quebec is not for sale, not for millions of dollars, because nobody wants to sacrifice even one of its essential and vital rights for a sum of money.
Mr. Speaker, allow me to express the surprise I felt when I heard the Minister of Finance say that there was nobody in Ottawa specially interested in the principle of centralization, nobody who saw in that a goal to seek.


Mr. Fournier (Hull):: Hear, hear.


Jean Lesage: That is true.


Henri Courtemanche: And yet, Mr. Speaker, that is not what the federal-provincial conferences have demonstrated. It is not what all these laws have shown which have constituted serious impingements upon provincial rights.
And was it not the Minister of Finance himself who, in July last, stated that the agreements which had then been concluded with seven provinces constituted a compromise, as compared with our original objectives which he defined as follows:
The proposed financial arrangements, added to the other measures recommended, would be such as to strengthen the federal system under which the ten governments represented at the conference now function.
And have we forgotten already the temporary income tax of the first world war, the impingements on the rights of the provinces in the field of radio in 1927, the centralizing charter brought about by the Rowell-Sirois report, the further inroad into the provincial field as a result of the second world war, the offer of subsidies after the termination of hostilities, the royal commission on the development of the arts, letters and sciences in Canada, etc., etc.?
The advocates of provincial autonomy have often requested a dominion-provincial conference to define the taxation powers of the central government and of the provincial governments, but Ottawa has always refused to call one.


Jean Lesage: That is not true and you should know it.


Henri Courtemanche: The Minister of Finance may believe himself endowed with the talents of a juggler, and I will be the first to recognize that he has some skill and great dexterity. But he should not try to

make us believe that centralization is but a bugaboo invented by the opponents of the government. He will quickly lose the reputation of a wizard granted to him by the Daily Mirror and that of a distinguished and sincere statesman granted by all true Canadians.
The Minister of Finance knows very well that one of his former cabinet colleagues, Mr. Angus Macdonald, who is now premier of Nova Scotia, often saw the danger of centralization and gave unequivocal warnings.
The newspapers have even told us that, on October 25 last, speaking at Dalhousie university, he gave to the provinces the serious warning that they had to choose between retaining their autonomy and submitting themselves to centralization. Mr. Macdonald, as reported in the press, underlined in the following terms the steady progress of centralization:
Today, the central government is more and more dealing with (and financially contributing to) building of hospitals, subsidies to education, road construction, fields which either by tradition, or under the constitution, were all exclusively under provincial jurisdiction.
On this occasion, the premier of Nova Scotia did not say where he stood, but he had indicated it on a previous occasion.
I would like also to submit the testimony of the Ottawa Journal which on September 10,	1952, published an editorial entitled
"Quebec does not stand alone", from which I quote the following:
Those who keep on pretending and repeating that Quebec keeps constantly apart, implying therefore that all the wisdom and all the patriotism are on the dominion's side and all the indocility and isolationism on Quebec side, certainly do nothing to help confederation. And the dominion government so far has offered only stopgap agreements,, agreements which, according to Premier Frost of Ontario, leave the fiscal structure of this country in a state of weakness, if not of chaos.
And now the Minister of Finance claims that there is no centralization in Ottawa, no centralizers here. That is going a little too far!
But, after all, this is quite in agreement with the Liberal party's little scheme with. regard to this budget. The taxpayer must be made to believe that he has found a breathing spell, the province of Quebec must be convinced that it no longer has anything to fear from Ottawa.
Unfortunately for the Liberals, in spite of all the government's propaganda, the public has seen through their scheme. They will not be fooled.

The great wizard of Ottawa has done his best to put on a big show. He made millions disappear and appear again. But when we asked him to put in our pockets a few dollars of which we had great need in order to meet family expenses, to pay for the education of our children, and above all, to leave them there, not to come back and get them with the same craftiness with which he had put them there, the great wizard refused, saying he was powerless.
And the public has understood and judged, before passing a judgment more final, more decisive.
The Budget-Mr. Courtemanche (Text):
On motion of Mr. Decore the debate was adjourned.



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow we will continue this debate. I understand that the Minister of Finance will be absent tomorrow, but the Acting Minister of Finance will be here.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Friday, February 27, 1953