1953-03-13

Mr. G. R. Pearkes (Nanaimo):: Mr. Speaker, on a question of privilege, on pages 2860 and 2861 of yesterday's Hansard, appear questions in my name and the answers thereto. My question was in six parts but answers are given to only the first two parts. I would request that the original question remain on the order paper so that I may have a complete answer.


Mr. Speaker:: The question was declared answered when it was called in the house. Do I understand from the hon. member for Nanaimo that it was not answered?


George Randolph Pearkes: Only the first two parts of the question were answered; the remaining four parts were not answered.


Mr. Speaker:: I shall look into the matter
and get in touch with the hon. member.



RAILWAYS, CANALS AND TELEGRAPH LINES

[Stage Direction]
Fifth report of standing committee on railways, canals and telegraph lines.-Mr. McCulloch.


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: should like to direct a question to the Prime Minister in connection with the 7 per cent increase in freight rates ordered by the board of transport commissioners. Would the Prime Minister say how many provincial governments have asked him or the governor in council to suspend the increase and whether the governor in council intends on his own motion to vary or rescind the decision of the transport board or in any event to grant a reprieve until such time as the equalization of rates takes place?


Right Hon. L. S. St. Laurent (Prime Minister):: I have received telegrams from eight provincial premiers in respect to this order for the increase and I think each one
of them suggested that the governor in council should suspend the operation of the order. I shall be glad to have copies of the telegrams tabled if the hon. member desires, but that is my general recollection of their tenor. As to the other question, the government has given no consideration to the suggestion that it should on its own motion vary, rescind or suspend the order made by the board of transport commissioners. I think that answers the questions the hon. gentleman has asked.
(Translation):


Mr. A. M. Robichaud (Gloucester):: Mr. Speaker, may I be allowed to put a question to the Right Hon. Prime Minister? Have the lumber merchants and other industrialists in the maritimes made representations to the government requesting that the implementation of the new increase in freight rates be postponed so that interested groups may have sufficient time to present briefs?


Louis Stephen St-Laurent: Mr. Speaker, I have heard of no such representations.
(Text):



CIVIL AVIATION


[Stage Direction]
On the orders of the day:
Mr. H. O. White (Middlesex East):: I
should like to direct a question to the Minister of Transport, and this does not concern freight rates. Have orders been issued limiting the height of buildings and other structures adjacent to Crumlin airport, London, Ontario? If so, are these orders by authority of the amendments passed last session to the Aeronautics Act?


Hon. Lionel Chevrier (Minister of Transport):: Mr. Speaker, as the house knows, an act was passed to amend the Aeronautics Act to provide for the zoning of certain airports. Thus far surveys and investigations have been made with reference to Malton and Dorval airports. While the traffic at London is important, and while the regulations will apply to that airport as soon as we get

The Budget-Mr. Quelch around to it, I must tell my hon. triend that the position so far is that we have only been able to deal with the two airports to which I have referred.


Harry Oliver White: Then under whose authority are restrictions being enforced now?


Lionel Chevrier: At the moment restrictions are not being enforced by the Department of Transport. It may be there is some municipal bylaw that affects the airport at London.



THE BUDGET


[Stage Direction]
The house resumed, from Thursday, March 12, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Greenwood), and the amendment to the amendment of Mr. Caldwell.
Mr. Victor Quelch (Acadia):: Mr. Speaker, at the time that I adjourned the debate yesterday I was criticizing the federal government policy that apparently has influenced the Minister of Agriculture (Mr. Gardiner) to advise farmers to reduce their production of livestock. I had called such a policy an anti-social one and had suggested that it might have an adverse effect upon the agricultural program in western Canada. I call it an anti-social program because I consider it to be a retrograde step back to the policies of the 1930's. It is apparently an attempt to bolster prices by creating a scarcity for fear that we might have an artificial surplus. I use the word "artificial" because no one can argue that there is an actual surplus of livestock products in the world today. In many parts of the world meat is still being rationed. Furthermore, I think it makes a mockery of the declaration of principles of the United Nations Organization to which we have subscribed and to which we have pledged ourselves to do everything possible to eliminate want in the world. I also recall that the Minister of Agriculture, when speaking to the food and agriculture organization conference some years ago, expressed himself to the effect that never again would the people of the world tolerate a situation where food was destroyed while there were hungry people. Of course when you reduce production you are destroying a potential supply.
On the second point, that it might interfere with the agricultural program in western Canada, I recall that for many years hon.

members from eastern Canada were most critical in the house of the farmers of western Canada for depending upon one crop. The cry we used to hear in the year 1935 and onward was that the farmers of the west should diversify, that they should raise more livestock. In recent years the farmers of the west have diversified. They have gone into livestock extensively. They have gone into crop rotation, and it was very wise that they did because by growing more grasses and keeping more pasture land they have helped to restore fibre in the soil and thereby prevent soil drifting. But the farmers of the west are now being advised to cut down their livestock. Once again the pasture land may be plowed up and once again there will be the danger of soil drifting.
The Minister of Agriculture argued in his speech in the house that the best market was the home market. I think we all agree with him that the best market is undoubtedly the home market. That is why we in this group have time and again urged the government to maintain the purchasing power of the people at all times at a level that will make it possible for them to buy the production of the country and the imports that can be brought into the country in exchange for our exports. But on the other hand, of course, there are many commodities that we can produce in excess of home needs, and so we export this surplus to bring imports into the country.
With a few exceptions, a very large percentage of our farm products is consumed within the domestic market. Unfortunately the small percentage exported abroad dominates to a great extent the prices received for the goods sold in the home market. I would point out that has not been the case with regard to the secondary industries. In so far as they are concerned, they have made a practice of selling in the domestic market at the best price they can get, at a price which returns to them a fair profit, and then they have exported their surplus and sold it at whatever price it would bring on the world market. In other words, the secondary industries have followed the practice of adopting a two-price system for their production.
From time to time we have urged the adoption of a similar policy so far as agriculture is concerned. Of recent years western farm organizations have urged the adoption of a two-price system for the sale of agricultural products, especially with respect to the sale of wheat. They have urged that wheat sold in the domestic market should be sold at a parity price, and then

wheat exported would be sold at the price under the international wheat agreement or as class II wheat.
There would of course be greater difficulty in applying a two-price system to the marketing of livestock products than would be the case with wheat because as far as wheat is concerned it is handled under the wheat board. However, we in this group believe that it would be to the advantage of agriculture and the whole Canadian economy if a national livestock marketing board were set up which would have full control over the marketing and purchasing of farm products. First of all we think that a plebiscite should be held to find out whether or not the farmers would support such a program, in the same way that a plebiscite was taken in Manitoba as to the sale of oats and barley through the wheat board. If the farmers voted in favour of it, then of course it would require enabling legislation by the provinces. In that way there would be no difficulty in having a two-price system. Farm products consumed in Canada would be sold at parity prices and farm products exported would be sold at the best price that could be obtained in the international market. An initial payment would be made when the products were purchased, and the final payment would be made at the end of the year, balancing the price obtained from goods sold in the domestic and external markets.
I am quite well aware of the fact that some people will brand such a policy as a form of protection, but as long as the farmers of Canada have to pay a protected price for practically everything they buy then I say they are entitled to protected prices for those things that they sell. When I say "protected", I do not merely mean protected by tariff because there are many forms of protection in this country. There is the tariff. There is the question of minimum wage laws and wage agreements which, of course, have an effect on prices. There is the question of railway tariffs which afford the railways protection against competition. There are the social security programs which are a protection affecting prices, and of course there are support prices. These various forms of protection all have an effect upon the prices at which commodities are sold. Therefore, I say that so long as farmers have to pay those protective prices they are entitled to protective prices for the things they sell.
As I pointed out yesterday, I am not surprised and I am not criticizing the Minister of Agriculture for having advised farmers in 68108-185
The Budget-Mr. Quelch conference in Victoria to reduce their production of livestock in order to get better prices. No doubt he thinks that is the wise thing to do in the light of the existing international situation. However, I think it is high time we adopted international trade policies that would fit the needs of the various nations rather than trying to mould the economies of those various nations to fit into the pattern of some international trade agreement such as the Bretton Woods agreement.
ft is quite obvious by this time that the Bretton Woods agreement, especially the international monetary fund, and the Geneva trade agreements have not been a success in achieving a balance of international payments and thereby paving the way for convertibility.
The Minister of Finance (Mr. Abbott) in delivering his budget had this to say at page 2117 of Hansard:
The major instruments for international economic co-operation which were drawn up immediately after the war, namely the Bretton Woods agreement and the general agreement on tariffs and trade, envisaged that convertibility of currencies and multilateral trade would have been restored over a larger part of the world by now.
A little further on he said:
It is clear that the time has come for new initiatives.
Well, Mr. Speaker, we hope that the new initiatives will be exercised in the right direction because they might even make the situation worse if pursued in the wrong direction. It is hoped that we now fully realize the fundamental weaknesses of the Bretton Woods agreement, especially in regard to the international monetary fund.
At the time the Bretton Woods agreement was debated in the house in 1945, we in this group stressed the need for recognition of the fact that balancing international trade was the joint responsibility of both the creditor and the debtor nations. We attacked the Bretton Woods agreement as having a very definite pro creditor bias. We pointed out that debtor nations were only able to balance their payments if the creditor nations were willing to accept goods in payment for their exports. The Bretton Woods agreement places great pressure on the debtor nations but applies little or no pressure on the creditor nations.
It is interesting to note in that regard that the United States are the main culprits. When the Bretton Woods agreement was before the banking and commerce committee in 1945 I had stressed that point and I pointed out that on the record of the past there was little reason to expect that the United States would act as a good creditor under the international monetary fund, and

The Budget-Mr. Quelch that unless they did change their policy there was little or no chance of success within that agreement.
Here is a reply made by Mr. Rasminsky on page 29 of the proceedings:
You say that the United States on her past record can be counted upon to act as a bad creditor. I would reply to that that on the basis of the experience before the war there is reason for misgiving regarding the willingness or the ability of the United States to carry out the type of economic policy appropriate to her creditor position.
Then he goes on to point out that certain trade proposals had been put forward by the United States which gave him reason to hope that the United States would change their policies in the future. Later on I stressed the responsibility of the creditor nations to accept payment in goods, and Mr. Rasminsky had this to say in reply, on page 59 of the proceedings:
Yes. The only answer that one can give to your question is that in the final analysis, that debt can only be discharged through the movement of goods, t am assuming now that the debtor country has not any independent monetary reserves of its own; and there is the question that Mr. Quelch has insisted on, of the responsibility of the creditor to facilitate the movement of goods that will enable the debtor to discharge his debt. I have indicated today, I think-and at some length last night-that I agree with Mr. Quelch that in the final analysis the creditor country must pursue policies that will enable the debtor to discharge its indebtedness.
In spite of that we went ahead with the Bretton Woods agreement trusting that the United States was going to change her policy in that regard and, as a creditor nation in the future, be willing to allow debtor nations to pay their debts in goods. What has been the situation? Was that hope of Mr. Rasminsky justified? It is now seven years since that agreement was signed. It is interesting to read what the governor of the Bank of Canada had to say in his report for 1952 as found on page 11 thereof:
More than seven years have now passed since the end of the war and it must be acknowledged that the world is still far from the goals of currency convertibility and non-discrimination; indeed, restrictions on trade and payments are in many cases more rather than less severe than they were some years ago.
On page 12 he says:
If it is the primary responsibility of the deficit countries so to conduct their affairs that there is available for export a sufficient quantity of goods at competitive prices, so is it the primary responsibility of the surplus countries to allow competition from abroad to take place, and not to prevent but rather to encourage an increased inflow of goods. There is no need to underline the importance in this connection of the policies pursued by the United States.
Further down:
The difficulties involved in the deficit countries achieving balance through an increase in "hard currency" exports rather than by continuing to
tMr. Quelch.]

rely heavily on import restrictions and discrimination may well appear to them insuperable if United States actions limit severely their chances of earning dollars by competing in the American market. Restrictions in the United States cannot fail to encourage restrictions elsewhere.
Now, seven years after the passing of the Bretton Woods agreement, when Mr. Rasminsky stated that there was every reason to believe that the United States were going to change their policy, we have the governor of the Bank of Canada regretting that the United States is not making it possible for debtor nations to pay for their goods by the acceptance of their exports. I would say that if a new initiative is to be used to seek solutions, we should place the responsibility equitably upon both debtor and creditor nations, and not just depend upon a change of attitude by the United States for the success of the agreement. By that I mean that if we realize that in order to achieve a balance of international payments it is essential that a creditor nation shall accept payment in goods, we must place that obligation in writing in the agreement rather than depend upon a change of policy on the part of creditor nations that have not been adopting that policy in the past. Because, mind you, while we just depended on hope that the United States would change their policy under the Bretton Woods agreement, we did not depend on hope as far as the debtor nations were concerned. We placed a definite responsibility upon the debtor nations to balance their payments. If they fail to do so they may be penalized by an increase in the interest rate. As I say, we have placed a penalty upon the debtor nations but not upon the creditor nations.
As Mr. Towers says, it is a joint responsibility. Therefore, in the future, if we are going to make any changes or institute any new international agreements, let us provide that the creditor nation will have to accept a share of responsibility along with the debtor nation. Under the Bretton Woods agreement a creditor nation has the right to demand payment in its own currency.
Now, what is the real purpose of international trade? The real purpose of international trade is the exchange of goods and services on the basis of mutual advantage. Therefore, if nations are sincere in subscribing to that type of policy, then all the creditor nation needs is to accept the currency of the importing nation rather than demanding its own currency, because with the currency of the importing nation it will be in a position to buy anything that nation produces. If it is sincere in saying it is going to balance its trade, the only type of

currency it needs is the currency of the importing nation, rather than demanding its own currency.
I should like to quote from a summary I made in 1945 dealing with the situation. I shall quote briefly from it, because I think it applies today just as much as it applied then. On page 131 of the proceedings of the banking and commerce committee for 1945 I stated:
What we want in the act mainly is a provision that a debtor nation in order to pay for its imports shall be recognized as paying for them when they establish a credit within their country in favour of a creditor nation and that that credit can be used to buy anything purchased within that country. Then if the creditor nation is not willing to accept goods from a nation with which it has a credit if it desires to trade on a multilateral basis it may trade the credit established on that basis for the credit of another country on a multilateral basis. So I say if the great industrialized nations are really sincere in this matter they should have shown it at this time and been willing to have an article to that effect put in the Bretton Woods agreement.
Had that been done, we would not today have a situation where the governor of the Bank of Canada is deploring the fact that the United States is still the main culprit in refusing to accept imports in payment for their exports as they did prior to the time the Bretton Woods agreement was passed. Under such a policy trade with the sterling area could be expanded and production within the sterling area could be expanded. It would, in that way, provide greater markets for Canada's agricultural products. There would be no need to reduce production of livestock as suggested by the Minister of Agriculture (Mr. Gardiner). Provided we adopted the two-price system we would be able to obtain a fair price, an average between the domestic price and parity with world market prices. I believe that today is an opportune time to press for changes in the Bretton Woods agreement, because at last there does seem to be greater realization on the part of the people of the United States of the responsibility they have to make it possible for other nations to balance their payments with them.


Mr. T. H. Goode (Burnaby-Richmond):: Mr. Speaker, during the week of February 28, Mr. H. R. Anderson, who I understand is vice-president and general manager of the Trans Mountain Oil Pipe Line Company, made a speech to the North Burnaby board of trade, and the keynote of that speech was that Burnaby and the lower mainland of British Columbia generally would benefit, in many ways, as the result of the building of the pipe line from the Alberta oil fields to British Columbia, and with that idea I 68108-1851	.
The Budget-Mr. Goode have no argument. He went on to say that it would take 2J million gallons of oil to keep the pipe line full and that this oil content would have a value of some $6| million. He gave a long story on the additional pumping station needed on the route and he talked about the cost of the large tanx farm being built for oil storage on Burnaby mountain.
Then the speaker, Mr. Anderson, as reported in the Burnaby Advertiser of February 26, blasted British Columbia members of parliament for being opposed to the Sumas cut-off, saying that before tankers could be used on Burrard inlet much work would have to be done on the entrance to Vancouver harbour.
I had no intention of making a speech on the Trans Mountain Oil Pipe Line Company or anything else at this time, but I consider that the people of the lower mainland of British Columbia are being hoodwinked by Mr. Anderson, and I wish to bring to the attention of the House of Commons what has happened in regard to the so-called all-Canada pipe line of the Trans Mountain Oil Pipe Line Company. First may I say that any objections Mr. Anderson may have to the condition of the entrance to the Vancouver harbour were taken care of in the speech from the throne at the present session when the government submitted its intention of spending large sums of money to deepen the entrance, and Mr. Anderson knew that when he made his speech in North Burnaby.
I want to refer back to the committee meetings of the railways, canals and telegraph lines committee of March 19, 1951, when the members of that committee gave full investigation to an application for the charter of Trans Mountain, and I wish to bring to your attention certain statements made by the officials of the Trans Mountain company to the committee. When 1 am finished I believe that this house and the people of Canada may have occasion to request that this charter be reinvestigated. On March 19, 1951, Mr. S. M. Blair, who was introduced to the committee as the parliamentary agent for the company, was questioned by the hon. member for Skeena (Mr. Applewhaite). On page 88 of the proceedings, the hon. member for Skeena submitted the following question:
Will this Trans Mountain company be in the business of buying and selling oil or just carrying oil for other people?
Mr. Blair answered:
Its primary purpose is to carry oil.

The Budget-Mr. Goode
Further down the page the hon. member for Simcoe East (Mr. Robinson) asked a series of questions as follows:
Q. I understand your present intention is that the line shall end at Vancouver.
A. That is correct.
Q. Are you at the present time considering any plans for an extension of the line from Vancouver to Portland or Seattle or other places.
A. No, it is our intention to go to a terminal at Vancouver.
Q. You have no plans and you have not considered taking the line further south in the states?
A. No, our present plans are entirely with respect to the bulk terminal at Vancouver, other arrangements being in the future.
Q. You will find the necessary refinery capacity at Vancouver?
A. That, you appreciate, will be the responsibility or the undertaking of the different refining companies. There will undoubtedly be refinery expansion concurrent with pipe line construction, but what the refinery companies' plans are I am not in a position to say.
This question, Mr. Speaker, is in connection with the amendment to be proposed by a C.C.F. member of the committee.
Mr. Robinson-
Q. Mr. Blair, are you familiar with the wording of the amendment which Mr. Herridge mentioned.
A. Yes, I am familiar with the wording as it was stated in the other hearing.
I will mention the amendment further on in my argument.
I continue quoting:
Q. And it is that wording you say you will welcome with open arms.
A. We welcome it for the reason that it in no way conflicts with our intention. Our intention is to build the line from Edmonton to Vancouver with the terminal there. The pipe line will be entirely in Canada and we will finish it in that manner.
Q. I would just like to get your idea of the effect of the amendment should your intention change in future. Should your intentions in the future come to be along the lines that you would like to extend your pipe line into the States, do you think or would you consider that you would be bound by that amendment and that you could not do so.
A. I would understand that amendment, sir, as meaning that we are confining our operations to Canada. We do not visualize any pipe line outside of our own country.
Q. Let me put it this way. Suppose you want to go into the United States, do you think that you would have to come back to parliament and ask to have other powers. I just want to get your idea on how far the amendment would bind you.
A. I do not know that I am in a position to answer that legal question. We are just not planning that sort of development.
Now I wish to put on the record, Mr. Speaker, paragraph (a) of section 6 of Bill No. 115, which concerns the charter of the Trans Mountain Oil Pipe Line Company, and which was not only passed by the committee but was approved by this house. Paragraph
(a)	as amended, reads as follows:
Within or outside Canada construct, purchase, lease or otherwise acquire and hold, develop,


operate, maintain, control, lease mortgage created liens upon, sell, convey or otherwise dispose of and turn to account any and all interprovincial and/or international pipe lines-
And this is the amendment:
-provided that the main pipe line or lines for the transmission or transportation of oil shall be located entirely within Canada.
Mr. Speaker, the paragraph goes on with technical terms to its completion, but the essence of the intention of the committee and of the house is contained in the part of the paragraph that I have placed on the record. I now wish to continue with evidence given at the committee hearings, and I quote again questions asked by the members and answers given thereto. The hon. member for Simcoe East (Mr. Robinson), as reported on page 92 of the committee record, at this time addressing Mr. R. L. Bridges, director of the Bechtel Corporation, asked:
Q. I have an additional question, Mr. Chairman. What do you contemplate doing with the excess, with the amount over the 30,000 barrels out of your prospective 70,000 barrels per day, which would be the capacity of your pipe line?
A. I think it would be exported.
On page 93 of the proceedings the hon. member for Simcoe East resumed his questioning:
Q. Mr. Bridges, I presume the excess would be exported; how would it be exported, by barge?
A. By tanker or barge.
Q. From what contemplated place?
A. You understand, it would be the oil companies doing this. We merely deliver the oil at the terminal, but we would assume that it would be going down into the States.
Q. And by tanker?
A. By tanker and barge.
Q. Not by an extension of your line?
A. Not in so far as the pipe line company is concerned.
On page 94 of the proceedings a question by the hon. member for Cariboo (Mr. Murray), still speaking to Mr. Bridges:
Q. Would this witness say whether he would serve the Canadian navy at Vancouver or the United States navy or the British navy?
A. We would furnish anyone who had need for crude oil there.
Meaning Vancouver.
Actually we would not own the oil, but we would do servicing within the capacity of the marine terminal.
Q. Well, if the Middle East were tied up as a source of oil they would naturally turn to your supplies at Vancouver?
A. That is correct.
I wish to bring to your attention, Mr. Speaker, the fact that Mr. Bridges definitely stated in the committee hearings that all the oil carried in the pipe line outside of that used for domestic consumption in British Columbia was to be shipped by tanker and barge to export markets, and I wish to tell the house at this moment, to be absolutely

fair, that a large tank farm is being established on Burnaby mountain in the constituency of Burnaby-Richmond in British Columbia, and that there is considerable construction either being proceeded with or contemplated on the waterfront to assist the refiners in some export business.
But at this time I also wish to bring to the attention of the house the fact that not only did the committee understand that all oil carried through this pipe line was to find its eventual destination on the Burnaby waterfront, but that this bill was passed by the house on March 20, 1951, as reported on page 1459 of Hansard of that year, with the amendment attached thereto. The amendment was read by the chairman of the committee in response to a question asked by the hon. member for Fraser Valley (Mr. Cruickshank), and there can be no doubt in any hon. member's mind that it was the intention of this house to pass a bill establishing an allCanadian pipe line, with all the oil going to the Burnaby tank farm and either being used for British Columbia consumption or to be exported via Burrard inlet to outside markets.
On February 6, 1953, the board of transport commissioners in Ottawa heard an application, under sections 11 and 12 and other sections of the Pipe Lines Act, for an order granting the Trans Mountain Oil Pipe Line Company leave to construct a pipe line- and listen to this-consisting of one or more lines of pipe for the transportation of oil from a point in section 28, township 19, east of the coast meridian in the province of British Columbia, thence in a southwesterly direction for approximately 5 [DOT] 5 miles to a point on the international border between Canada and the United States of America in section 6, township 19, east of the coast meridian. What these technical terms actually mean is that a cut-off located in Sumas in the Fraser valley is to be constructed south to the international border for the purpose of carrying oil to the United States. For the information of hon. members not familiar with that part of the country, this point is approximately fifty miles east of Burnaby.
During the hearing of the application the following gentlemen were present to support the application: Mr. H. E. B. Coyne, Q.C., for the applicant; Mr. J. J. Frawlev, Q.C., representing the attorney general of the province of Alberta; and an official of the Department of Trade and Commerce. Suffice it to say that the application was granted. And now the Trans Mountain Oil Pipe Line Company have permission, as far as the board of transport commissioners are concerned, to construct one or more lines of pipe carrying oil to the
The Budget-Mr. Goode United States before that oil arrives at the terminal in Burnaby. I submit to hon. members that this was not the intention of the House of Commons when it passed Bill No. 115, and that the people of British Columbia and Canada have been double-crossed by the action of the pipe line company.
I should like to refer for a moment to some of the statements made at the hearing. The same Mr. S. M. Blair, who still is the vicepresident of the Trans Mountain Oil Pipe Line Company, was questioned by Mr. Coyne, and as reported on page 3087 of the proceedings this question was asked:
Q. I suppose there is no proposal or thought, at this time anyway, of constructing another line from your western terminus down into the States too, is there?
A. No, this would be it. This line would feed any future refineries going in there.
Q. This, as far as you know, will be the only branch from the main line?
A. Yes.
And may I refer to a question asked by the assistant chief of the board of transport commissioners when he queried Mr. Blair on the size of this five-mile pipe line. The answer given was that it was a 24-inch line, the same size as the main line.
Mr. Blair also placed on the record that the local market in British Columbia is now in the order of a 50,000 barrel market per day and that a general shortage of oil on the whole Pacific seaboard has occurred and that imports of 140,000 barrels per day are required to supplement California production and satisfy the demands of United States west coast refineries. Mr. Blair also went on to say that the Trans Mountain Oil Pipe Line Company plans to instal a third pump station in connection with this new line which will increase the capacity of the line to the United States to 120,000 barrels per day, and he implied that this oil would go down to a refinery at present being constructed at Fern-dale, in the state of Washington. It is expected that the refinery will be completed in 1954.
At this juncture I would suggest to hon. members that they obtain a copy of the evidence given by this company on February 6, because it will be an education to them, not only in regard to the construction of pipe lines, but a lesson in the way that companies can circumvent the intention of the House of Commons. There is no doubt in my mind that the Trans Mountain Oil Pipe Line Company had no intention of telling the committee on railways, canals and telegraph lines their final intention. They agreed to the amendment wholeheartedly, and knew that some time in the future they would not only

291$
The Budget-Mr. Goode double-cross the people of British Columbia, but laugh at a verdict arrived at by the members of this house.
I do not wish to comment on the matter further. X have placed the essential facts before the house for any action that they may deem necessary, but there is one matter that I would like to mention at this time, a matter so serious to the people of my riding that it is necessary for me to speak of it now. As reported on page 3084 of the evidence, an affidavit was read signed by Mr. Sherwood Lett of 626 West Pender street, in the city of Vancouver, which reads as follows:
1.	I have searched the editions of the Vancouver Daily Province and the Vancouver Sun, published on the 13th, 14th, 15th and 16th days of January, 1953, and find that on each of the said dates a notice was published, true copies of which are attached hereto.
These notices gave the intention of the Trans Mountain Oil Pipe Line Company to apply to the board of transport commissioners.
2.	That the said notice was published in four consecutive issues of each of the papers aforesaid.
These notices were published at the direction of the board, stating the oil company's intention to apply for the judgment given to them on February 6, 1953.
Another letter from Mr. Sherwood Lett was put in as evidence which read as follows- the letter is addressed to a Mr. Wahn who, I understand, is secretary of the pipe line company:
Dear Mr. Wahn:
Confirming our long distance telephone conversation today, as requested I spoke to the Hon. R. W. Bonner, Q.C., Attorney General of the province of British Columbia, and referred him to the notice which had been served upon him in connection with the above matter and the hearing before the Board of Transport Commissioners on February 6. Mr. Bonner informed me that the province of British Columbia is not going to appear at the hearing, and accordingly it followed that he was not going to object to the application. Mr. Bonner stated that he had received Mr. Bridges' letter and had referred it to Mr. McLean of his department If a reply has not been sent he will see that the letter is replied to.
And this is the reply from Mr. Bonner to Mr. Bridges:
Dear Mr. Bridges:
Your letter of January 14 is hereby acknowledged. Following receipt of your letter, we have studied the matter of the application which your company proposes to make in connection with your branch line extension from the vicinity of Sumas to the international boundary. Under the circumstances, we feel that the province need not be represented at the hearing.
On page 3079 of the evidence the assistant chief of the board of transport commissioners, evidently concerned over the non-appearance of the government of British Columbia, asked

the question: "Anyone here appearing on behalf of the province of British Columbia?" And there was no answer.
I have quoted, Mr. Speaker, the evidence given before the committee on railways, canals and telegraph lines, and I have offered to you the subsequent actions of the Trans Mountain Oil Pipe Line Company, proving, I think, that they had no intention of carrying out the orders of this House of Commons. I have also placed on the record the refusal of the attorney general of the province of British Columbia to appear at the hearing, even though the province of Alberta considered it necessary to be represented there. During my investigation of this matter I have come to the conclusion that if all the oil contained in the pipe line were to go direct from the Alberta oil fields to the tank farm in the constituency which I have the honour to represent, the excess to be exported would command the employment of over 500 men, day in and day out, 365 days a year. The estimated payroll would be in the vicinity of $5,000 a day, $150,000 a month, almost $2 million a year, and this all in extra wages to the people of British Columbia, with all that means to our economy; and yet the attorney general of British Columbia does not think it is important to defend his province at the hearing on this application. If this is Social Credit, thank God I am a Liberal.


Mr. Blackmore:: May I ask the hon. member for Burnaby-Richmond a question?


Tom Goode: I will be pleased to answer it if I can.


John Horne Blackmore: I wonder whether the
decision of British Columbia not to be represented at this hearing was any indication that British Columbia was not interested in the outcome, or was it a decision on their part that the decision should be made by parties who were directly financially interested in the matter.


Mr. Sluder:: The teacher asking the pupil a question?


John Horne Blackmore: I had permission to ask the question, and that is all I did.


Tom Goode: The question is a fair one. I have put on the record the amount of wages that this means to my constituents; I have also put on the record the letter from the attorney general of British Columbia to the board of transport commissioners; I have also said that the board of transport commissioners expressed amazement that the attorney general of British Columbia did not see it possible, and did not think it was important enough to appear at that hearing on behalf of the neople of British Columbia. I

have also said that the province of Alberta thought it was important enough, even though they were only interested in a minor way, to be represented at the hearing. I think that answers my hon. friend.


John Horne Blackmore: If I may ask the hon. member another question-


Mr. Speaker:: If the hon. member permits the question to be asked it is perfectly in order to do so, since the time of the hon. member for Burnaby-Richmond has not expired.


Tom Goode: I am sincere in this matter; I am quite sure the hon. member is sincere and I shall try to answer his question.


John Horne Blackmore: I appreciate the hon. member's attitude, and it is exactly what I would expect from him. He always shows that sort of attitude in the house, a willingness to discuss things fairly.


Irvin William Studer: What is the question, teacher?


John Horne Blackmore: What I am wondering is whether or not the province of British Columbia did not believe that the decision would be made as a result of considerations other than any that the British Columbia government itself might present before the hearing?


Tom Goode: If that was true, Mr. Speaker, why did the attorney general of British Columbia not say that in his letter? He definitely refused to appear at the hearing of the board of transport commissioners. I represent
105,000	people, and I have taken this opportunity to make my complaint. I think the attorney general should have been represented there at least. The case is on the record, and if my hon. friend wishes the transcript from the board of transport commissioners, I shall be only too pleased to provide him with it.


Mr.  W. Chester S. McLure@Queens: Mr. Speaker, now that the private debate is over I wish to make a few remarks. Following the example of the last speaker, I wish to refer to a matter that has been brought to my attention today, before I go on with the other matter that has been engaging the attention of the house for some time.
The matter to which 1 wish to refer has been mentioned by previous speakers. They have been receiving letters from the municipalities in their constituencies with reference to discrimination in taxation between the provinces and the municipalities. I also have received communications along these lines, and I wish to state my case as others have done before, before making my budget remarks.
The Budget-Mr. McLure
The city of Charlottetown is the capital of our province; it is also the seat of the provincial government itself. It also contains the heads of all the departments of the federal government. Conditions have arisen between the municipality, or the capital city there, and the provincial government similar to that of other provinces. I refer to the purchasing of supplies and goods that are used by the governments either of the city or of the provinces. The class of goods that are bought and on which the sales tax is rebated in so far as the province is concerned is similar to those goods which are bought by the municipal government. The city of Charlottetown municipality should have the same privileges extended to them as are extended to the provincial government with respect to the remission or rebate of sales tax on goods purchased by the provincial government.
I hope this matter will be taken up by the government, and that they will cease the injustices and discriminations with regard to the municipalities, and particularly the city of Charlottetown in whose behalf I am speaking. I am sure it would be much better for the government to give consideration to this request than to be pushed into making the proper adjustments later on.
We come now to that part of the budget which has occupied the attention of this house for quite a number of days. This debate allows great latitude and hon. members can speak on almost any subject. If time permits I intend to refer to a few things of vital importance to the constituency which I have the honour to represent.
The budget was presented to the house on Thursday, February 19, by the Minister of Finance (Mr. Abbott). If I was trying to find something to describe that occasion, I think I would take the minister's initials, "D.C.A.", and say "Douglas Can Act". The minister did an excellent piece of acting from the script which had been placed before him. The minister made one statement at the opening of his speech which I think put all hon. members at ease, and I quote from page 2115 of Hansard of February 19 as follows:
With the common consent of all groups in this house the work of this session has been planned so as to begin and conclude our deliberations six or eight weeks ahead of the usual times-
What a hope!
-so that adjournment can take place well in advance of the date appointed by Her Majesty for her coronation.
That was a most important statement because it indicated that we would not be having an April election, at least this year. I have listened to at least a score of budget addresses and I do not believe that in all
2918	HOUSE OF
The Budget-Mr. McLure that time I have seen a larger attendance. The galleries were filled to overflowing. As one looked into the faces of those who had come to hear the minister deliver his budget speech, one could see they were radiant with hope and expectation; but at its conclusion, when you again looked into the faces of those people, you saw nothing but disappointment and despair. There was nothing for them to take home; there was no hope or relief.
One heard many remarks about the budget. One remark I overheard in the elevator was this: It is time for the opposition to take over the national financial mess in this country and see what they can do for us. There were many other remarks, but that was an outstanding one.
It is interesting to note that many of the great civilized nations of the world have made changes in their governments. Great Britain has now a Conservative government led by that greatest of world statesmen, Winston Churchill. The great republic to the south has a new government in office. No doubt those two countries are looking to see a change of government in the third great nation as soon as the next election comes around. We hope that that change will come at a time when these other two great nations have proper governments in office.
Time does not permit me to refer in detail to all the speeches that have been made during this debate, but I shall refer to a few. There have been 75 or more speeches during the present debate. Because of his years of experience the Minister of Finance was able to give an uplift, or, as some would say, a face-lifting to the budget which he presented. However, he was followed by the financial critic of the Conservative party, the hon. member for Greenwood (Mr. Mac-donnell); and after he had finished, the budget looked more like a wreck than ever because the hon. member had torpedoed it from all sides. I should like to record again the amendment moved by the hon. member for Greenwood. It has been recorded already by several hon. members, but I think it is important enough to record again. As reported on page 2348 of Hansard of February 24, 1953, the hon. member moved:
That all the words after "that" to the end of the question he deleted and the following substituted therefor:
"this house regrets that under the present budget the government proposes to take more money from the taxpayers of Canada than ever before for non-defence and defence expenditures without any effective steps being taken to:
(a) deal with waste, extravagance and administrative inefficiency; (b) give tax relief to those who need it most; (c) offer any encouragement to Canadian farmers in meeting the serious consequences of lost markets and lower prices resulting


from the government's agricultural and marketing policies; (d) permit an independent inquiry into the organization accounting and administration of the Department of National Defence."
Following the hon. member for Greenwood, the leader of the C.C.F. group, the hon. member for Rosetown-Biggar (Mr. Cold well), made his presentation. After denouncing the budget he said he could see nothing objectionable in the amendment moved by the financial critic. He accepted that amendment but he moved an amendment to the amendment to be found on page 2354 of Hansard. I think it is all to the good that I should include it in my remarks. The hon. member for Rosetown-Biggar (Mr. Coldwell) moved:
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."
There is another leader of a group who has condemned the budget in his own language and has moved an amendment to the amendment which seems to be very satisfactory when taken with the amendment. The next speaker was from the Social Credit group. He spoke at considerable length and like the other two speakers he denounced the new budget as one which benefited those who needed tax relief the least and left the major burden still on the lower and middle income people who have to pay the taxes. All these speakers denounced the tax changes as an attempt to woo the voters before a general election. The leader of the Social Credit party stated that it was a shameless repetition of the tax cuts made prior to 1949.
After that criticism, there came to the rescue of the dilapidated budget the parliamentary assistant to the Minister of Finance. This new assistant was one of the few men in Ottawa who had the privilege of assisting in preparing the budget from its very beginning, and he was in a position to be well informed about the budget. However, when his speech was finished, the appearance of the budget in the eyes of the public had not improved so far as its beauty was concerned, and it was still in the down-and-out class.
A moment ago I stated that I have listened to more than 20 different budget speeches in the house. In making that statement, I am reminded of the Minister of Agriculture (Mr. MARCH 13, 1953
Gardiner) because he expressed himself similarly. He said that he had listened to many budgets, and that the present budget reminded him of another one which he named. His remarks are recorded on page 2665 of Hansard of March 5, and I wish to refer to them for a moment or two. The minister referred to a certain time in the government of this country that appealed to him as possibly giving rise to some good Grit propaganda. He told how he came into the house. He described his actions quite vividly, as can be seen from page 2665 of Hansard to which I referred. He told about crawling into the gallery and finally hiding behind a post there. I find it hard to understand how the Minister of Agriculture, as we know him today, could be so shy, so frightened, so depressed that he had to crawl into the gallery and hide when he got in there. I think he must have been either overrating or underrating himself at that time. However, he got in. I heard that same budget speech, but I must say that I did not have to crawl in and I did not have to hide when I did get in. I was elected by the good people of Queens county and I sat in seat No. 21 while the Minister of Agriculture was hiding behind a post.
However, that is not the point I want to make with regard to his speech. He went into great details about what he saw that day in the house. He described the dress of the then prime minister and the other members of the cabinet. A few moments ago a person sitting in the gallery looking down upon the cabinet members then in the house would have seen one member of the cabinet asleep, another dozing with his feet up where his elbows should be and the right hon. gentleman ready to go out. That is a contrast to what he has described as the wonderful dress of the cabinet of 1930.


Irvin William Studer: That is what the cabinet sees across the way every day.


Mr. McLure:: Wait a moment. You can have your say when I am through. I am not in any humour to be interrupted right now. There is one point the Minister of Agriculture made with respect to Mr. Bennett's speech with which I agree. He said that it was a good speech. It was a good speech, made by the great statesman of the time, the Right Hon. R. B. Bennett, who was also minister of finance. The Minister of Agriculture could have gone further and said that it was a most remarkable speech made at a time when the country needed a great statesman like Mr. Bennett to make such a speech to bring confidence back to at least some of the people of Canada during the 68108-186
The Budget-Mr. McLure depression that had been laid at the doorstep of the Conservative party by the Liberals when they went out of power.


Mr. Ferrie:: Why did you kick him out then?


Winfield Chester Scott McLure: What was the reason for the Minister of Agriculture making the very nice remark that he made? It was just his subtle way of bringing before the house and possibly before the country the years from 1930 to 1935. He did bring them up in that same old ragtime Grit way, singing that old song: "From 1930 to 1935".


Gladstone Mansfield Ferrie: The Bennett buggy.


Winfield Chester Scott McLure: Another yapper.


Gladstone Mansfield Ferrie: Can't take it, eh?


Winfield Chester Scott McLure: Just keep quiet there now.
Then he proceeded to blast some Grit figures regarding low prices of 1930 to 1935. Where he discovered those statistics 1 do not know, but I do not think anybody in the house believed them, and I do not think the right hon. gentleman himself believed them.
I was going to deal with these figures in detail but that is not necessary. All I want to do is place on the record what an hon. member, a neighbour of his from the west, had to say. I refer there to the hon. member for Assiniboia (Mr. Argue), and I want the two sets of figures close enough to each other that the public can read them both at the one time. On page 2666 of Hansard the Minister of Agriculture made this statement:
The export price of wheat during that period-
That is the period he was referring to before, 1930 to 1935.
-averaged 68 cents a bushel . . . and cattle averaged $61.93 a head.
He emphasized the latter part by saying:
That was not a hundredweight or a pound, although they have been up to about half that per hundredweight recently. It was $61.93 a head.
Well, as I said a moment ago, I do not know where he discovered those figures but he used them anyhow.
The hon. minister was very anxious to have those figures strongly on the record, and he repeated them because he wanted to show what had been done under the Bennett government from 1930 to 1935. It must have been a great surprise to the Grit minister when the hon. member for Assiniboia put the skids right under his figures. The hon. member's figures will be found on page 2681 of Hansard, and I cannot read them all, since that would take too much time, but I will read a few of them. Here is what he said:
The thing that amazed me in the statistics he gave about prices was that during the Conservative

The Budget-Mr. McLure regime prices were so much better than prices during part of the time after the Liberal government took office.
A little further on he said:
At any rate, $69 was the price under the Bennett government. The present Minister of Agriculture and this government came to power in 1935.
I am still quoting from what the hon. member for Assiniboia said.
What happened to cattle prices in 1937? The members1 . . . know very well that under a Liberal government ... at Ottawa, with the present Minister of Agriculture, . . . the farmers in Saskatchewan were forced to sell many cattle for a cent a pound, $10 a head.
Further on he said:
The government here paid a cent a pound; that is what it paid. I know of one farmer who sold two head of cattle for $21-
I am quoting these figures because I want them recorded close to those given by the Minister of Agriculture.


Mr. Sinnott:: They are not very reliable figures.


Gladstone Mansfield Ferrie: Mr. Speaker, there is not an atom of truth in them.


Winfield Chester Scott McLure: Just wait; I will be through in half an hour.


Irvin William Studer: Where did he get those figures?


Winfield Chester Scott McLure: The hon. member for
Assiniboia told the house that the minister said that the price of wheat under the Bennett government was 69 cents.


Gladstone Mansfield Ferrie: Nineteen cents a bushel.


Winfield Chester Scott McLure: The minister said it averaged 68 cents a bushel. Under the benevolent Liberal government, says the hon. member for Assiniboia, the price of wheat to the farmer went down, and had fallen to 50 cents [DOT]a bushel in 1937.


John Sylvester Aloysius Sinnott: Absolutely incorrect.


Winfield Chester Scott McLure: I do not know anything about these figures but I will leave these statistics of the two gentlemen on the record. They are both from western Canada and we will say that the prices, statistics and figures which they have both given must both be correct or they must both be wrong.


Gladstone Mansfield Ferrie: You are wrong.


Winfield Chester Scott McLure: Just keep quiet; and I told you before to keep quiet.


Mr. Deputy Speaker:: Order.


Winfield Chester Scott McLure: To the support of the budget that has been so ruthlessly kicked around came the Minister of Trade and Commerce (Mr. Howe). We thought that he would support the budget in the best manner he knew but he did not wish to speak on the budget,
[Mr. McLure.1

supporting it or otherwise, as far as I can understand. He did want to give us a report on that luxurious trade conference upon which they had been frolicking down among the Latin American countries. I must say now that, if the members of the conference party all looked as well when they returned as did the Minister of Trade and Commerce, they must have had a whale of a good time. He went on to tell what a wonderful conference it was. He did not say that the taxpayers of the country were paying for the fun they had, but he tried to leave the impression that they had done a great deal of good. He said that in this conference they had made a lot of new friends. Why wouldn't they? They were going where they were not known.
Had I known that they were going down there I could have told them where they could get some business. It is all very well to get these flowery reports about what they do when they get out making contacts, but Mr. Speaker, I would like to have placed on the record here by the Minister of Trade and Commerce one item of business which they transacted; one sale of any one commodity that Canada has to sell.
Had I known they were going I could have given them one of the best opportunities-


An hon. Member:: Everybody else knew they were going.


Winfield Chester Scott McLure: Easy now, boy.
The best opportunity they had was to unload some 20,000 silver fox skins which the government has been trying to market for the past three or four years. We always had a fairly good trade in South America for this article. This government, and the Liberal government preceding it, ruined that market by their unjust form of taxation on furs. If this delegation had desired to do so, they could have sold these furs for their own government because they had the right to sell them at any price they wished. If they could not sell them, why did they not do as the natives did years ago and barter them for some articles for which Canada had some use?
This delegation might have stopped at Washington on the way home, where they could have taken up the matter of duty on furs going into the United States. Silver fox furs from the United States enter Canada free of duty. When we ship silver fox furs into the United States we are met at the border with a 37J per cent ad valorem duty, which is practically prohibitive. If they had even done that little bit of good while they were away gallivanting, we would have had a little blessing for them instead of perhaps cursing them. However, we are not going to deal too harshly with them.

I could not help but be amused at one remark made by the Minister of Trade and Commerce when he told us of a place in which the government could spend some money. As I understand it, it was to help build seaports in Mexico so that we could develop trade. If this government wants to find a place in which to invest their money instead of sinking it in something of that kind, I shall tell them where they can invest their money and it will bring wonderful returns. I refer them to the Andrew Rae Duncan commission, a commission appointed by the Liberals in 1926. One of the recommendations in that report refers to seaports and to the harbour of Charlottetown. The commission suggested that the port of Charlottetown be put in such shape that it could take care of all ships that are coming in there from time to time, and not have them anchoring outside the harbour because of unsatisfactory accommodation in the harbour, as they have to do on some occasions.
I want to mention another place in which they could invest their money by following out the instructions of their own commission. This suggestion is made on behalf of labour in the city of Charlottetown as well as on behalf of trade. Why would the government not build, as we have urged and coaxed them to do from time to time, a railway marine slip so that we could take care of our own ships? Today, we can do the top work on any ship but we have not accommodations to take care of work under the water line. For instance, we have six large ships of our own and we have quite a few smaller ones. All these vessels have to be sent to Quebec, Halifax or Saint John to have work done. One of them, valued at some $4 million or $5 million, was lost while making the trip for repairs. If we had had our own railway marine slip, as we should have, that vessel might not have been lost. If we had this slip, we could employ over 200 men the year round, instead of our labour having to leave for other places. We have machine shops; we have mechanics and we have labour, all of which can do any of the work required in repairing any ship that floats. I think that this hon. gentleman will yet have to give us some consideration. I believe he should have mentioned this himself, because it had been previously brought to his attention by the provincial government before he left on this trip.
Now, Mr. Speaker, I might say a few words with reference to our own conditions and the things that we really require in the constituency of Queens. The budget has not given us any relief whatever in that province. The riches of the province are not pyramided, as 68108-1864
The Budget-Mr. Bryce they are in some of the other provinces in which there are men of great wealth. There are none of these rich men to benefit from this budget. We pay our share of taxes, and the people in my constituency who pay the taxes receive practically no relief from this budget. I want to say that one class who came up here with a petition and who should have received consideration was the blind people. We all have sympathy for them and they should have received further consideration from the government.
I want to say a few words about another class of people we have, and that is the incapacitated.


The Acting Speaker (Mr. Robinson):: Order. I am sorry to interrupt the hon. member, but I am obliged to inform him that his time has expired.


Winfield Chester Scott McLure: May I be allowed two or three minutes to finish this one item? As I said, we have a number of incapacitated people. A resolution concerning the incapacitated was presented to this house, and I was sorry that it did not come to a final vote. This is a problem with which the government will yet have to deal, along with the problem of pensioners in the lower brackets. Before I came to Ottawa I received a telephone call from a pensioner. He was a railway man who had retired on the old pension scheme. He was a thrifty character, and he had saved a few dollars. His pension was $80 per month, which has only the purchasing power of about $37, so he had to dip into his savings to such an extent that today those savings are exhausted. He does not know what to do. He said to me, "Well, the only thing I can look forward to now is the poorhouse."
There are other matters with which I should have liked to deal, but I suppose there will be an opportunity when the estimates come before us. I thank you for the little extension of time, but I thought perhaps you would have given me half an hour longer.


Mr. William Bryce (Selkirk):: Mr. Speaker, after having listened to over 60 members speaking in the budget debate, it is rather difficult to get to one's feet and speak on the budget without repeating what someone else has already said.
I agree with the leader of this group when
he said that this budget provides greater benefits to those in the upper income brackets than to those in the lower brackets. Many speakers on the opposition side of the house have referred to the budget as a rich man's budget. Let us consider for a few moments the average taxpayer with two children who earns $2,400 a year and who in 1952 paid $19, including social security tax. In 1953 the same

The Budget-Mr. Bryce taxpayer will pay $18 or will have a saving of a mere $1 for the year. Let us take the case of the married taxpayer with two children, earning $3,000. In 1952 he paid $130, including social security tax. In 1953 he will pay $126, $4 less than a year ago.
On the other hand we find a different story when we examine the savings of those in the upper income brackets. The taxpayer receiving an income of $20,000 will benefit in 1953 to the extent of $360. But of all the concessions made by the minister, perhaps the most astonishing one is the example that a married man with no dependents, who receives all his income from dividends from Canadian corporations and companies, is exempt from paying a personal income tax until he is receiving $9,760. If this $9,760 were earned by a married farmer, businessman or merchant, with no children, he would be liable to an income thx payment of $1,657.60. But because the other fellow is a shareholder in Canadian companies and receives all his income from that source, he does not have to pay a single cent of personal income tax. If he has a further $10,000 of unearned income, he would have a further 20 per cent credit or a $2,000 deduction from any tax on that additional $10,000.
The argument of the Minister of Finance (Mr. Abbott), of course, is that this money has already been taxed. It has been taxed on a corporation basis but not on an individual basis; and of course it would lead to double taxation. Let us take, for example, a married man with no dependents, who has investment income from dividend paying stocks of $9,760. He has, of course, the usual personal exemption of $2,000. After deducting the $2,000, that would mean a taxable income of $7,760, if it were earned. He would pay income tax on an earned income in this way: On the first $6,000 he would pay $1,140; on the remaining $1,760, where the tax is on a basis of 26 per cent, he would pay $457.60, making a total of $1,597.60. Then he would have to pay the social security tax of $60, or a total of $1,657.60 if it were earned.
This man, of course, would have a surtax on investment income over $2,400. He has an exemption of $2,400. If we deduct that from $9,760, he has to pay surtax on $7,360 at the rate of 4 per cent, which would mean that he would pay $294.40. Therefore the total tax would be $1,952 if he were paying it on the basis of earned income. But since he gets this money unearned, from other sources, from stock dividends, he is entitled to deduct 20 per cent of $9,760 or $1,952 from the tax he would otherwise have to pay; and that is the exact amount that he would have paid as personal income tax if he had earned it.


I know that it is quite easy to be critical when speaking on a budget. But when the minister could afford to do without the extra taxation which I think he said amounted to about $250 million, it would have been nice for him to have done something for the people who are receiving pensions for the blind. The removal of the means test with respect to blind persons would have been a boon to those people who are obliged to live in darkness through no fault of their own. It is to be hoped that in the near future some government will remove the means test from the pension for the blind.
Then there is the means test in connection with the war veterans allowance recipients. These are the men who are old before their time. These are the men who marched away in world war I. We can remember what we said at that time, namely that nothing would be good enough for them when they came back. We now find among them some cases of great hardship which the Minister of Finance could have helped at this time with the assistance of the Minister of Veterans Affairs (Mr. Lapointe).
Then there is that class of people who, through no fault of their own, are unable to earn their own livelihood; they are dependent upon their parents to keep and to clothe them. We have the case of the paralytic, the person who is permanently crippled. There are those who are crippled from arthritis and there are many cases of chronic illness.
On various occasions we have had representations from people in wheel chairs who spoke on behalf of persons such as these. Of course, in giving these people relief, the provincial government would have to be considered. But it certainly would have been nice if the dominion government had done something to lead the way.
At this time I should like to draw the attention of the Minister of Finance and the Minister of National Health and Welfare (Mr. Martin) to the Manitoba Association for Retarded Children, in order to see whether he could provide a grant as an aid to education or whether the money could be granted in any other way. I bring this matter to the minister's attention inasmuch as it is one of the things that would have to be done on a federal-provincial basis. I have the brief here but it is too long to read at this time. There are more than 800 of these children in Manitoba; they are children with an I.Q. between 40 and 60, now living at home with their parents, and not urgently requiring to be in an institution. They are really a forgotten group. The department of education makes it an offence punishable by a fine for the

parents to send them to the regular classes in school. Children who are blind and children who are deaf are educated or trained at provincial expense. Children whose affliction is mental have equal right to education and some kind of training that will help them to fit into the community. May I, Mr. Speaker, just quote a couple of paragraphs from their brief? This is the brief they presented to the department of education in Manitoba:
That we petition the department of education and the department of health to provide day school and special training classes for mentally retarded children who are living at home by:
Extending the Public School Act to provide that in any school district where there are at least fifteen children of school age who are mentally retarded, but who are deemed by the provincial psychiatrist to be capable of benefiting from special instruction, it shall be compulsory for that district to provide the special instruction required.
Exploring terms of the health education and mental health grants now provided by the department of national health at Ottawa through the provincial department of health to see if some of these moneys can be spent to provide the supplementary grants required for such classes and to provide intelligence testing services so that there is proper screening of children for these classes and to pay scholarships to Manitoba teachers to take special training for this work.
I might say that I have a niece in Scotland who has been specially trained in the work of taking up these classes, and they have done a wonderful job for some children who have a low I.Q. I hope that the Minister of National Health and Welfare and the Minister of Finance will give it the consideration that it deserves.
Today I received a letter from the tariff board with the result of appeal No. 284. This was an appeal by the Dow Chemical Company against the Department of National Revenue. Evidently, from the evidence I have read, different chemicals are used to make antifreeze, and they were being admitted duty-free under tariff item 208h. The Dow Chemical Company appealed, asking that a 20 per cent duty be applied to these imports used in the manufacture of antifreeze. I have always understood that it was the policy of the Liberal government to decrease tariffs, not increase them. This is something to which the government should give further study, because Canadians are paying about $2 a gallon more for antifreeze than are our neighbours to the south. Residents of the west in general, and in my own constituency in particular, are going to be most annoyed about this decision. Antifreeze of different blends is used in all cars, trucks and tractors in the west, and the western farmer and other users have always complained about the high price compared with the United States price.
The Budget*-Mr. Bryce
Judging by the statements taken from Moody's Industrials, the Dow Chemical Company is in a good sound financial position. I have here the income of the company for a number of years before the federal taxes are taken off. In 1946 the company had $9 million-


An hon. Member:: Before taxes?


William Scottie Bryce: I have already said that. This is the profit but the federal taxes must still come off it. In 1946 it was $9 million; in 1947, $21 million; in 1948, $33 million; in 1949, $41 million; in 1950, $53 million; in 1951, $109 million. From 1946 to 1951 the increase in the net earnings, before federal taxes are deducted, amounted to 1,100 per cent. From 1950 to 1951-that is only one year-the increase is over 100 per cent, or to be exact 106 per cent. For the life of me I cannot see why this company needs protection when it is in such a sound financial position and when the users of antifreeze in this country are paying $2 more than they pay south of the border.
Coming back to the corporation tax, may I say that the hon. member for Moose Mountain (Mr. Smith) put some figures on the record showing that the Massey-Harris Company shareholders averaged only $276.10, and therefore could not be called millionaires, that they were only ordinary people. Well, I admit that the people who receive only $276.10 are ordinary people. Since the hon. member for Moose Mountain spoke in the house I had the privilege of having a chat with him and discussing this matter. The hon. gentleman also quoted the Bell Telephone Company and said that the shareholders were only ordinary people.
Using his argument that they should not be taxed twice, I should like to draw to the attention of the house the fact that the American Telephone and Telegraph Company is the parent company of the Bell Telephone Company. Dr. Theodore J. Krebis, economic adviser to the United States temporary national economic committee, told that group at its hearings on April 16, 1940, that less than 5 per cent of the stockholders own more than half of the shares of the American Telephone and Telegraph Company. As is the case in most large corporations, the officers control the voting stock so completely that they need not consider stockholder approval of their decisions and policies. In meetings held by 17 of the major oil companies in 1938 the officers voted an average of 99-3 per cent of the common stocks voted. This statement was made by Roy C. Cook, an expert of the

The Budget-Mr. Bryce antitrust division of the United States department of justice in a report prepared for the United States temporary national economic committee in 1941.
In an extensive study prepared for the New York stock exchange by the Brookings Institution of Washington it was determined that on March 1, 1952 there were 6,490,000 individuals holding shares in publicly-owned corporations. Only 4-2 per cent of the population held even one share. The survey also showed the ownership concentrated in the upper income brackets, with 55 per cent of the families in the $10,000 and over bracket having one or more shareholder in it. Unfortunately in Canada there has been no known similar survey, and there is no evidence to indicate that the great mass of Canadian people are different from their American cousins, 95 per cent of whom own no shares.
When talking about unearned income the argument is always put up about the widow who has her money invested and would be deprived of her livelihood. I feel sure that this government, or any future government, irrespective of what political stripe it may be, would certainly look after the widows of the Dominion of Canada. To argue that by taxing corporations you are taking away the living from the widows will not hold water. As I have said already, any government with any humanity in it would see that they were protected.
Coming back to the Massey-Harris Company, a shareholder of Massey-Harris common stock who bought one share in 1943 at $5.50 now holds five shares worth a total of $49.37 and has collected during the past 10 years $16.12 in dividends, almost three times his original investment. He has annually received an interest rate of 29 per cent. The working capital of Massey-Harris has increased from $26,339,529 in 1943 to $101,598,515 today, and during the same time reserves have jumped from $4,180,972 to $23,449,791. Annual profits after taxes have been: 1943, $1,322,357; 1944, $1,413,396; 1945, $1,588,480; 1946, $2,125,570; 1947, $4,084,067; 1948, $8,376,910; 1949, $13,367,416; 1950, $15,015,803; 1951, $13,103,721; 1952, $10,868,600.
A shareholder of Cockshutt Farm Equipment Limited who bought a share of common stock in 1943 at $9.25 now holds two shares worth a total of $32 and has collected $8.55 in dividends since he bought the share, receiving an annual interest rate of 9-2 per cent. Working capital of Cockshutt has jumped from $4,894,610 in 1943 to $22,728,452 today, and reserves have increased from $1,000,000 to $2,500,000. Annual profits after taxes have been: 1943, $397,918; 1944,

$399,244; 1945, $266,159; 1946, $361,925; 1947, $731,438; 1948, $2,062,002; 1949, $2,070,013; 1950,	$2,032,786;	1951,	$2,247,175;	1952,

In 1946 when the implement companies were asking for a 12J per cent increase in their retail prices I objected to it on the grounds that they did not require it.


Irvin William Studer: Tell us about the subsidy on Saskatchewan insurance.


Mr. Gillis:: The hon. member is talking about the cost of production for the farmer.


William Scottie Bryce: Perhaps I can continue when these hon. gentlemen have finished their argument. I should like to quote from what I said on March 22, 1946, as reported at page 1777 of Hansard:
I come now to the implement companies. The parliamentary assistant to the Minister of Finance has defended them and has told the house that they needed this advance. Personally I cannot see that they do. I notice from the papers of April, 1938, that the shares of Cockshutt Plow were quoted at 7 while the shares of Massey-Harris were quoted at 5], I shall not give the quotations for the shares of other companies, as I think these two are sufficient for my purpose. By April 2 of this year the shares of Cockshutt Plow had advanced to 163 while those of Massey-Harris had come up to 17[. According to today's paper there was a further increase, Cockshutt shares being quoted at 173 and Massey-Harris at 181.
I admit that I know more about livestock than this sort of stock, but it seems to me that these companies must be in a sound financial position when there is this improvement in the value of their shares on the stock market. These increases show that there must be an expectancy of greater profits in the future.
I think what I said then has been amply proved by the continued rise in the earnings of these companies, which have gone on making more and more money. I should like to refer to an advertisement by Massey-Harris in Maclean's of March 1, 1953 in which they set out some dominion bureau of statistics figures. These deal with a number of items such as raw materials, average hourly rates, farm products, farm wage rates, but I should like to refer particularly to what is said about farm implements, and I quote:
Yet in this same period the index for Massey-Harris Canadian-made farm implements has risen only 66-5 per cent.
That may be quite true, but they are including farm implements the price of which has not risen very much. They went up some, but they have not gone up as much. Take the plow, the cultivator and the double disc, implements that we do not use nearly as much today as we did ten years ago. Their prices have not increased as much as the prices of combines, tractors and one-way discs. Therefore this advertisement, while it may be right in the mind of the man who wrote it, to my

way of thinking is not a fair comparison. I have said already that some tractors are more than double what they were. Combines are away up in price. A combine in 1944, such as we owned on our farm, cost $2,800. Today a similar combine is over $6,000. One-way discs are also away up in price.
One thing the advertisement does not say is how much the profits of the company have gone up since 1941. I have not the profits for 1941 but I have the profits, after taxes, in 1943. They were $1,322,357. In 1952 they made $10,868,600, and the year before they made more than that. I know that the company has to have a profit and that it is worldwide in its scope. I have seen Massey-Harris machinery in operation not only in Canada but in the British Isles, on the continent of Europe and in New Zealand and Australia. They are a tremendously big organization. But when I look at these returns I am convinced that the large implement companies are taking more than the traffic will bear or, in other words, they are charging too much for the implements.


Clarence Gillis: Gouging the public.


William Scottie Bryce: In 1936-37 a committee was set up to inquire into the cause of high prices of farm implements, and I wish to quote the following from page 1264 of the proceedings of the special committee on farm implements:
The committee Is of the opinion, as a result of the above finding, that there is competition in the matter of securing sales but little or no effective competition in the matter of prices as between companies. It is true that one company cannot increase its price unless other companies, particularly the larger ones, follow suit but, as illustrated in January, 1936, and throughout the period, increases in the prices, or maintenance of prices when a decrease should have been expected, occurs simultaneously in all the companies. The companies insist that no understanding existed between them in the matter of the January, 1936 increase and that the increases resulted from the same conditions arising in each company. It is extremely difficult for the committee to understand the remarkable coincidence of the increase occurring in the same month of the same year and, generally speaking on the same implements and to the same extent.
The companies state that it is the practice in the industry to exchange price lists and it may well be that this practice enables the companies to quickly gain uniformity in the matter of price levels. The lack of free price competition in this industry, as in many other industries, is one of the real problems of modern economic life. From the standpoint of the business executives, free price competition was not a satisfactory condition and escape from it was one of the salient reasons for the formation of large corporate units by amalgamation of smaller previously existing companies. From the consumer's standpoint, however, it is apparent that this has resulted in higher and less flexible prices for the commodities which he has to purchase.
Then in 1952 a special select committee on farm implements sat in Saskatchewan. The
The Budget-Mr. Bryce work of this committee was not too successful. In their efforts to obtain a true picture of the operations of the farm implement industry they failed to get the co-operation of the large companies to supply the information they needed. May I quote from the final report of the 1952 special select committee on farm implements of the province of Saskatchewan. It reads in part as follows:
Your committee regrets to report that it has been unable to complete its task as fully and adequately as it had hoped, due to its failure to obtain specific information deemed fundamental to the inquiry. Despite repeated assurances of their desire to co-operate, the four manufacturing companies have been most dilatory in returning answers to questions relating to factory costs submitted to them on January 26, 1952. These questions remain unanswered to date, and repeated requests have been met by pleas for more time: in one case by a direct refusal to comply.
The committee cannot but record its sense of frustration and impotence in confrontation with this attitude of these extra-provincial companies. It feels that a principle is involved-a principle which merits consideration and study by all provincial legislatures and by the parliament of Canada.
The situation apparently is that companies, with head offices located in another province, yet doing a great volume of their Canadian business in this province, can take advantage of the immunity their location confers to deny a committee of this legislature information material to an inquiry undertaken in the public interest, and essential to an adequate report on the matters under study and review. These companies too are shielded by another immunity. As Canadian incorporations engaged in interprovincial trade, they are immune from retaliatory action by the province which might be construed as in restraint of that trade.
I think the government should set up a special committee to investigate the farm implement industry so that information which certain implement companies refused to give to the committee that sat in Saskatchewan in 1952 could be obtained. Then we would know if the farmer is being charged a fair price for his implements or if the companies are charging too much.
If we could have such a committee or inquiry, the committee could also go into the standardization of farm implements. When it is a good thing to standardize our arms in wartime, surely it is high time to talk about the standardization of our farm implements. Not only would the parts be exchangeable but the companies could build better implements and cut down selling costs. If farm prices are to come down, something will have to be done about it, and one of the first things to do would be to set up a committee of the house to go into these matters affecting farm implements. I appeal to the government to set up a special committee to go into farm implement prices. Indications point to lower farm produce prices, and farmers will not be able to buy farm machinery at present prices.
2926	HOUSE OF
The Budget-Mr. J. O. Gour (Translation):


Mr. J. O. Gour (Russell):: Mr. Speaker, I am delighted to have the occasion of taking part in this debate. I wanted to speak earlier, but owing to the geographical position of Russell county, which I have the honour of representing, I have the pleasure of receiving large numbers of its nice citizens at my office in the house. That is why I have been unable to express my opinions sooner in the nouse. I always take pleasure in receiving my electors and strive to obtain what they want, wherever they may come from, whatever may be their racial origin, their religion or their political allegiance.
The county I have the honour of representing is typical of Canada as a whole, because its population is made up of people of various races, various creeds and various classes of society. A little more than half of them are city people; this includes several thousand most distinguished and competent civil servants, who serve the country well, for it has been proven that Canadian civil servants are the most efficient a country could have. Several hundred others are employed by the public works department, the queen's printer, the national research council, the Central Mortgage and Housing Corporation, etc. I know they rank among the best employees this country can wish for. There are a great many businessmen and industrialists, as well as some of the most highly-skilled workers to be found anywhere. Let us not forget the thousands of farmers who own beautiful up-to-date farms; most of them have electricity, automobiles, tractors and enjoy all the conveniences that electricity can bring into our modern homes. We. the Liberals, are administering this country in order to enable the people to live well and get those modern conveniences, if they do not have them already.
During the last ten years, the population of Russell has more than doubled, increasing at the rate of more than 3,000 citizens a year. I am pleased with it and I will give but one example, that of Manor Park, a smart suburb of more than 5,000, with modern homes and a very distinguished population. Six years ago, a few houses only could be found at that place. Eastview, barely ten years ago, had a population of 5,000. It now goes oeyond the 16,000 mark. There can be found most modern houses, spacious stores and theatres and hotels which are the envy of the large cities of this country, and even of other distant countries where I had the pleasure of travelling with my family last summer.
Then there is the headquarters of the Royal Canadian Mounted Police, a police force recognized to be without t>eer in the world


for competence and effectiveness. It occupies finer quarters than any other police force, anywhere. I would invite my colleagues to pay them a visit. They may be found in Overbrook, a short distance from here.
The Department of Transport, the Central Mortgage and Housing Corporation, the national research council and the Department of National Defence, either at Uplands or on the Montreal road, at Rockcliffe, at Greely, have brought various improvements to the two airpoi'ts; they have erected different buildings, married quarters for the armed forces, especially for the R.C.A.F., and modern schools. I would like the members of this house to visit these improvements. They are a source of pride to all Canadians. They allow our civil servants or military personnel to give better service. Moreover, the erection of these various buildings has given jobs to thousands of workers. Approximately $8 million yearly have been spent there since the outbreak of hostilities in Korea, in 1950.
Everyone here is familiar with the Rockcliffe airport, one of the most up-to-date in Canada from the point of view of defence, as well as with the Uplands airport which will be shortly one of the most modern from the point of view both of defence and transport.
I should like to congratulate the Minister of National Defence (Mr. Claxton) for the ability he has shown in the improvement of these airports as well as the Minister of Transport (Mr. Chevrier) for the active part he has taken in the improvement of Uplands airport and elsewhere.
I should like, however, to draw the attention of the Minister of National Defence, whom I was congratulating a moment ago for his participation in the construction of buildings and schools of the most modern type-as I did orally and by correspondence- on the necessity of arriving at some kind of agreement with the Ontario government, whereby the latter could amend the law if necessary, so that the children of our fliers may have the educational opportunities to which they are entitled. In order to do so, both a public school and a separate school are necessary. If the parents who wish to send their children to public schools are entirely free to do so, it ought to be the same for the parents who want to send theirs to separate schools. There is no reason for the present situation, which does not give justice to anyone. In my opinion, it would be easy to solve the problem; let us divide the present school in two; part of it would be the public school and the other part, the

separate school. If there be a lack of space, more must be added. But would it not be better to build new accommodation? In my county all villages and towns have beautiful churches, and most modern schools. East-view will have a hospital which will be the pride of the capital and of the whole of Canada. This 400 bed hospital will have a most competent staff. I invite in advance my colleagues from Hull, Ottawa, Prescott, Carle-ton and Russell counties to patronize this hospital. The project will cost more than three million. The Daughters of Wisdom have accepted the task of directing the hospital, because they are eager to do even more for the sick, not being satisfied with the immense work they have accomplished in that respect in Canada and elsewhere. I want to say in this house how deep is our esteem for them and how much we are grateful for what they do. I ask divine Providence to protect their order which accomplishes so much good on this earth through their excellent work, their teaching of the young, and their endeavours to come to the aid of the unfortunate; their work is great and deserving from a religious point of view, but so often unknown to the population. The love which those sisters bestow upon the unfortunate is often unrecognized and their good deeds are very seldom rewarded on this earth.
People will say that such a hospital is in receipt of provincial and federal grants. It is true and it is an excellent thing. However, building costs being what they are, I ask the Minister of National Health and Welfare (Mr. Martin) to find the means of doubling the grants paid to hospitals. I would also ask the provinces to do the same.
Now, let us come back to our schools-


Mr. Deputy Speaker:: Order. It being five o'clock, the hon. member will have to postpone the remainder of his speech until eight o'clock.
(Text):
The house will devote the next hour to private and public bills.



PRIVATE BILLS


[Stage Direction]
The house resumed, from Tuesday, March 10, consideration of the motion of Mr. Larson for the second reading of Bill No. 189. to incorporate Mid-Continent Pipelines Limited.
Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, in the course of this debate there have been several suggestions from opposition members that the
13. 1953	2927
Mid-Continent Pipelines Limited government define its policy relative to the export of petroleum and natural gas. It is my purpose at this time to attempt to do so.
I think to do so will be helpful not only to members of the house but to all those interested in the production and transportation of these products.
Pernaps I had better first outline the relative responsibilities of the province of Alberta and of the federal government. Both petroleum and natural gas are, of course, the prop-produced. In the case of Alberta, that erty of the province in which they are province controls the production of gas and oil, as well as its transportation within the province and, under special legislation, controls the export of natural gas across its provincial borders. In the case of petroleum, the province	can decide whether the
petroleum shall be moved westward or eastward. In the case of natural gas, the province may determine the amount of gas to be exported, when it will be exported, and the point of exit either eastward or westward.
So far as the federal government is concerned, once the petroleum moves outside the province in which it is produced it then becomes the responsibility of the federal government to determine the destination, if it is oil moved in a pipe line, or the destination of the natural gas wherever it may go. Under the Pipe Lines Act, the board of transport commissioners has the responsibility for determining the route of pipe lines and such other responsibilities as are recited in that act. Those are responsibilities of the federal government administered by the board of transport commissioners.
Then we have another act which covers the export of petroleum and natural gas, provided it is exported by pipe line. This act is the Electricity and Fluid Exportation Act, which was enacted in 1907. Perhaps it would be worth while at this stage to read a few pertinent sections of that act, because its contents are sometimes misquoted. Section 1 of the act simply recites the short title, the Electricity and Fluid Exportation Act. Section 2 of the act is the interpretation section and reads as follows:
In this act. unless the context otherwise requires.
(a)	"export" and "exportation" mean.
(i)	when used with reference to electrical power or energy, respectively export and exportation from Canada by lines of wire or other conductor,
(ii)	when used with reference to petroleum, natural gas, water or other fluid, whether liquid or gaseous, capable of being exported, respectively export and exportation from Canada through pipe lines or other like contrivances:
(b)	"fluid" means petroleum, natural gas. water or other fluid, whether liquid or gaseous, capable of being exported by means of pipe lines or other like contrivances, and produced in Canada:
(c)	"power" means electrical power or energy produced in Canada.
2928	HOUSE OF
Mid-Continent Pipelines Limited
Then section 3 reads as follows:
The governor in council may make regulations not inconsistent with this act for giving effect to the object and intention thereof, and by such regulations may impose fees to be paid thereunder by applicants for licences or others.
Such regulations shall be laid before parliament within fifteen days after the making thereof, or, if parliament is not then in session, within fifteen days after the opening of the next session thereof.
Section 4 mentions the payment of duties and the duration of the licence. Section 5 reads:
No person shall export any power or fluid without a licence, or any power or fluid in excess of the quantity permitted by his licence, or otherwise -than as permitted by such licence.
2. No person shall, without a licence, construct or place in position any line of wire or other conductor for the exportation of power, or any pipe line or other like contrivance for the exportation of fluid.
The next section deals with the licence to export. Section 6 reads:
Subject to any regulations of the governor in *council in that behalf, the governor in council may grant licences, upon such conditions as he thinks proper, for the exportation of power or fluid where a right to export exists by lawful authority.
2. Such licence shall be revocable upon such notice to the licensee as the governor in council deems reasonable in each case.
Section 7 reads:
Any such licence may provide that the quantity of power or fluid to be exported shall be limited to the surplus, after the licensee has supplied for distribution to customers for use in Canada power or fluid to the extent defined by such licence, at prices and in accordance with conditions, rules and regulations prescribed by the governor in council.
2. Every such licence shall be revocable at will by the governor in council if the licensee refuses or neglects to comply with any of the conditions imposed with regard to the supply and distribution of power or fluid in Canada.
The remaining sections of the act relate to penalties for violations of the act.
A distinction must be made between exports of petroleum and exports of natural gas. Petroleum is a commodity which moves freely across all international boundaries, as does iron ore, wheat and certain other basic commodities. The refiner buys his petroleum wherever he can buy it cheapest. He may buy today from Alberta, tomorrow from Venezuela, the next day from the Middle East and the next day from the United States, depending upon where he can make the best arrangement. No problem of continuous supply is involved. If one source becomes no longer available, the refiner may buy from another source. Petroleum can be moved in tanker ships, tank cars or tank wagons, and in such event its export from Canada is not under government control. In other words, as I have pointed out, petroleum moving


in the manner I have just stated does not come under the provisions of the Electricity and Fluid Exportation Act.
Movement by pipe line is under government export control, but this does not alter the fact that there is no obligation imposed upon the government of Canada to maintain a continuous supply. Canada's national policy should therefore be, first, to move petroleum from the source of production to refineries within economic distance in the cheapest possible way; second, to arrange for markets for that portion of the Canadian output that cannot be economically used in Canadian refineries in the market that offers the highest return to the producer. This is the policy this government has followed and intends to follow.
Pursuant to that policy, the Interprovincial pipe line has been built from Edmonton to Superior, Wisconsin, serving refineries at Moose Jaw, Regina and Winnipeg. The present route involves movement of the petroleum from Superior, Wisconsin, to Sarnia, Ontario, by lake tankers. The entire movement from Edmonton to Sarnia is in bond, except for permits that have been granted to export small quantities of petroleum to the United States.
Interprovincial Pipe Line is presently engaged in extending this pipe line through the United States to Sarnia with the purpose of arranging for a continuous supply at Sarnia and further lowering the cost of transportation. The "in-bond" privilege presently granted to Interprovincial will apply to the new pipe line. This is consistent with government policy of approving the lowest possible cost of transportation from the source of supply to refining centres within economic distance of the source.
The Leader of the Opposition (Mr. Drew) and his supporters have been arguing that the Interprovincial Pipe Line Company should have been compelled to take the pipe line to Port Arthur instead of to Superior, and then build the pipe line extension to Sarnia around the north and east sides of the great lakes. It is worth noting that the distance from Gretna, Manitoba, to Sarnia by the present route is 939 miles, while the distance by the route advocated by the Leader of the Opposition is 1,341 miles. The cost increase involved in building the pipe line following the latter route would result in an additional expenditure estimated at $67 million. Such a line would touch no important refining centre and thus would be of no important value to the area it would traverse. Remembering that the cost of the line must eventually be paid either by the producers or by the users of gasoline and other petroleum

products, or by both, the government is not disposed to exercise its authority to saddle these consumers with an additional and unnecessary $67 million of expenditure, nor would the national interest be served by so doing.
Another petroleum pipe line is being built from Edmonton to Vancouver to serve oil refineries in that important distributing centre. Application has been made by the pipe-line company for a branch line to the northwestern Pacific states. Here again such a branch line does not violate government policy, provided the refineries at Vancouver will first obtain an adequate supply of petroleum from Alberta.
We now come to a discussion of government policy related to the distribution and sale of natural gas. Here we are dealing with energy similar in many ways to electrical energy, in that export under conditions that call for investment in another country obligates Canada to maintain a continuous supply of that energy. Therefore the policy that has governed the export of electrical energy since 1907 must apply, within reason, to the export of natural gas. Canada has consistently refused to authorize firm contracts for the export of electrical energy, and this in spite of great pressure at times from producers of electrical energy. That consistent policy has paid large dividends to the Canadian economy, in that our sources of electrical energy have been preserved to our own economy.
Therefore the policy of the government of Canada is to refuse permits for moving natural gas by pipe line across an international boundary until such time as we are convinced that there can be no economic use, present or future, for that natural gas within Canada.
As I have said, the proposal is to follow this policy, within reason. To date one exception has been made. It was made in response to a request from the director of defence mobilization of the United States that Canada supply a defence production requirement for gas in order to maintain the production of copper at Anaconda's smelter in Montana. The requirement was small and of a temporary character. The government of Alberta agreed with the federal government that this defence requirement warranted a temporary deviation from the policy that both governments favour, and consequently a permit was issued, both by Alberta and by the federal government, for the export of not more than 40 million cubic feet per day or 10 billion cubic feet in any year for this purpose during a period of five years from April 7, 1951. At the end
13, 1953	2929
Mid-Continent Pipelines Limited of this period the permits from the province and the federal government come to an end.
This government has now been confronted by a second situation which requires special attention at this time, as hearings are now in progress before the federal power commission of the United States. There has for some years been an urgent requirement for natural gas for the industrial area of British Columbia. Large reserves of natural gas have been established in northern British Columbia and in adjacent territory in northern Alberta. The natural outlet for this gas is the Pacific coast. Without that outlet it is difficult to find any economical use for gas from this northern area. The province of Alberta therefore has issued an export licence to Westcoast Transmission Company Limited, who propose to build a pipe line from that territory to Vancouver and to other consuming centres in British Columbia. Unfortunately the present and foreseeable demand within British Columbia is not in itself sufficient to justify the building of the required pipe line.
There is, however, a shortage of energy in the northwestern states adjacent to British Columbia. For a long time the United States members of the joint industrial mobilization committee of the United States and Canada have been pressing the Canadian members of the committee to arrange for delivery of natural gas from Canada into that area. The provinces of Alberta and British Columbia are convinced that supplies from the areas designated to serve the Pacific coast are ample to guarantee a substantial export of gas to the northwestern states and, in addition,, to serve the present and future needs of British Columbia. This opinion has been confirmed by petroleum experts of the federal government.
Therefore the government has issued an export permit to Westcoast Transmission Company Limited, in terms appropriate with the supply situation in the designated area. While this permit is renewable from year to year, the Canadian government accepts the responsibility of providing gas in quantities specified in the licence granted under the Electricity and Fluid Exportation Act for the full period of the export licence issued by the province of Alberta, assuming that Westcoast Transmission will live up to its obligation to supply customers in British Columbia.


Mr. Macdonnell (Greenwood):: May I ask
the date of that licence?


Clarence Decatur Howe: I have not the date at the moment. I should be glad to get it for my hon. friend. It is about six months old, I should think.
2930	HOUSE OF
Mid-Continent Pipelines Limited
The federal government has accepted this responsibility only after specific assurance from its own experts that it is in position physically to do so, and in recognition of the fact that this is the only practical way of assuring early delivery of natural gas to the industrial areas of British Columbia.
The province of Alberta is now giving consideration to making gas available for export, to move eastward from that province. In order to make the position of the federal government clear I wrote Premier Manning under date of January 2, 1953, as follows:
Dear Mr. Manning:
As I am leaving Canada for some five weeks, on a trade mission to South America, I think I should write you about the views of this department regarding the export of natural gas. You are doubtless aware that this department administers the Electricity and Fluid Exportation Act.
We had a conversation about this subject at Sarnia, when Premier Frost was present. At that time, I stated that gas from Alberta must be available to potential customers in the provinces of Ontario and Quebec, and in the intervening provinces, before further export of gas could be authorized. This attitude is consistent with the position that the government has taken with regard to the export of hydroelectric power for many years. You will appreciate that the supply of gas through a pipe line is analogous with the supply of electric power, in that both demand continuity of supply.
I am aware that, for the period when natural gas is first made available in Ontario and Quebec, and until the load can be built up, such a pipeline project is unlikely to be profitable, either for the producers of gas or for the owners of the pipe line. Nevertheless, there is evidence that a pipeline project for Ontario and Quebec can be worked out and that the project will be profitable over a period of years.
I am well aware that the government of Canada has no immediate concern with this problem, but I hope that it will be helpful for you to have its views before any definite decisions are taken in Alberta. We have worked in harmony to solve marketing problems associated with oil and gas up to the present, and I sincerely hope that we can continue to do so. We are both much concerned with sound development for Alberta and for Canada.
Yours sincerely,
C. D. Howe.
This letter is of course consistent with the government policy I have outlined. While the government of Alberta has proposals before it which involve the movement of gas eastward and across the United States border to Minneapolis, or through the United States to southern Ontario, permits to that end will not be granted under the terms of the Electricity and Fluid Exportation Act. This government has reason to believe that it is economically feasible to build a gas pipe line from southern Alberta to Toronto- and Montreal, serving the intervening Canadian cities, and government policy will require that Canadian gas be used in Canada accordingly.
In licensing the export of gas from Alberta,


I am sure the government of that province will be disposed to conform with the policy of the federal government in that regard.
Attempts have been made to obtain a supply of natural gas for southern Ontario from the United States. Some years ago a pipe line from Texas was extended to the city of Windsor, Ontario, and an export permit was issued by the federal power commission of the United States. However, the permit from the commission contained this clause:
The delivery of natural gas to the Union Gas Company of Canada shall be curtailed or interrupted whenever it is required for the protection of deliveries of gas to any or all of the pipe lines customers in the United States-it being the Intention that at all times, persons and municipalities in the United States are to receive preferential service over that given to the Union Gas Company of Canada.
As a result of this clause, very little gas has been delivered to the Union Gas Company of Canada, and deliveries have been made only in the summer months. Obviously if deliveries of gas to Canada from the United States must be subject to this clause in every case, there can be no possibility of obtaining a reliable source of supply for Canada in the United States.
Suggestions have been made that an exchange of gas can be arranged; that is, gas delivered into the Pacific northwestern states can be exchanged for an equivalent supply delivered into southern Ontario from Texas. I am convinced that the rulings of the federal power commission which recognize the great and growing demand for natural gas in the United States debar any possibility of such an exchange. I am convinced, after thorough study of the matter, that the only reliable supply of natural gas for the provinces of Ontario and Quebec must be from western Canada by means of an all-Canadian pipe line.
Whether supplies of gas in southern and central Alberta are sufficient to justify a pipe line to eastern Ontario at this time is for the province of Alberta to determine. Reports that reach me lead me to believe that present proven supplies are sufficient not only to take care of the foreseeable needs of Alberta, but to supply the capacity of an economical pipeline. In any event, it seems likely that Alberta supplies later can be supplemented by supplies from Saskatchewan and Manitoba. Therefore I am hopeful that the pipeline project to eastern Canada can be undertaken in the near future.
I have outlined the situation as I see it. Hon. members opposite have been demanding a statement of government policy with regard to petroleum and natural gas, and I have-attempted to outline that policy, in the hope:

that there will, in future, be less confusion about permissible export of natural gas from Canada. I believe that the policies I have outlined will commend themselves to hon. members as consistent with government policy as established in 1907 and followed thereafter under the terms of the Electricity and Fluid Exportation Act.
Opposition members have been demanding that this government adopt their policy of Canada first. I think this government have a better policy than that, which is a policy of Canada always. Anything this government has done or may do in the field of petroleum or natural gas, or in any other government activity, is dictated by what this government believes to be in the long-range interest of the people of Canada. In carrying out that policy we keep in mind our association with the United Kingdom and with our fellow members of the British commonwealth of nations, ties of tradition and ties of trade extending over a great many years. We also keep in mind the good relations of this country with our largest customer and immediate neighbour, the United States; but no decision is made that this government does not believe to be in the interests of the people of Canada as a whole.
To me the policy "Canada first" involves the question, who comes second and who comes third? I just want to make the distinction that the policy of this government is "Canada always".


Mr. H. W. Herridge (Kootenay West):: I am
sure very few statements have been made in this house in recent days that will be received with more acclaim than the statement just made by the Minister of Trade and Commerce (Mr. Howe). The statement he has just made to the house fully justifies the efforts that members representing all parties in the house have made during recent years to emphasize the policy of Canada first and always.
I am sure the house was particularly pleased to have his clear exposition of the present situation so far as the law in Canada is concerned, and of the arrangements to pipe gas to Vancouver, with the surplus to go to the northwestern United States in order to assist in the cost of construction and maintenance of that pipe line. I was very pleased indeed, as I am sure all hon. members were, to hear him say that gas from Alberta must be available to eastern Canadian provinces before any is exported from this country. We were also very pleased to hear him say that the government considers it is a feasible proposition to pipe gas from Alberta to Toronto across the north shore of the lakes.
13. 1953	2931
Mid-Continent Pipelines Limited I think his most interesting statement was that in view of the circumstances that exist at the present time, in his opinion the only reliable supply of natural gas for the industries of eastern Canada was that which would come by pipe line from Alberta across Canada.
Before proceeding with the remarks I wish to make, I want to again emphasize the fact that we in this group are delighted to have this statement from the minister. We are glad that he took advantage of the opportunity offered by this debate to explain to the house the government's policy in connection with a matter which is of concern to such a large number of Canadians and a number of members of this house.
We are now discussing a bill to incorporate Mid-Continent Pipelines Limited. May I say that I think the one or two minutes of explanation given by the hon. member for Kindersley (Mr. Larson) were quite insufficient for hon. members to understand exactly what this company intends to do. On the motion for second reading we are entitled to a much fuller explanation of the purposes of this company than was given by the hon. member. He made reference to bringing gas to certain prairie cities, to Winnipeg in particular, and then an almost casual reference to the piping of gas to eastern Canada.
After listening to the hon. member for Burnaby-Richmond (Mr. Goode) this afternoon, and after being present in the committee on railways, canals and telegraph lines when the company mentioned by the hon. member was presenting evidence before the committee, I would say that the members of this house have every reason to be careful in what they do with respect to passing these pipe-line bills.
We have been greatly assured by the minister's remarks concerning the export of natural gas. We are pleased that the minister responded to the request made by the Leader of the Opposition (Mr. Drew) when this matter was under discussion last Tuesday evening, to make a declaration of government policy. The Minister of Trade and Commerce (Mr. Howe) is often considered to be not too tactful at times in this house and his remarks are quoted and requoted in this house and on the public platform; but in fairness to the minister I must say that I think the majority of members believe that he is always straightforward and direct. You always know where he stands.
It is somewhat difficult to continue with this debate when the minister has more or less spiked your guns, but I have some
2932	HOUSE OF
Mid-Continent Pipelines Limited things left to say and I intend to say them. I support the protests and the arguments which have been put forward by other hon. members during this debate. I think these debates on oil and gas pipe-line bills have demonstrated that there can be a strictly non-partisan approach in this house to questions that concern the people of Canada as a whole.
At this time I want to pay particular tribute to the hon. member for Fraser Valley (Mr. Cruickshank). While we do not all support his unconventional effusions, delusions and illusions we all admire his independence and tenacity and courage. He has taken a consistent stand throughout the years on two or three issues that have been repeatedly before this house. He has always shown considerable concern for the protection of Canadian resources and has tried to make certain as far as possible that Canadians will have the first opportunity to use Canadian natural resources before they are exported. He has shown an interest in farmers generally, and particularly those of his own riding. He has advocated that the veterans of this country receive every consideration from this government.
I had a person write to me not long ago to suggest that the hon. member for Fraser Valley should be recognized by the erection of a gas pump in Chilliwack, greased with margarine and capped with a steel helmet. But all joking aside, I do think the hon. member has made a contribution to Canada by spark-plugging this question from year to year.
I am not going to speak at length, as I find that owing to the minister's statement I have had to abandon some of my notes. I repeat with emphasis that we in the C.C.F. believe that the transportation of gas and oil should be under public ownership because it presents an unusual opportunity for that type of ownership and administration. Members of this house other than those belonging to this group have given some support to that form of ownership for pipe lines. By having public ownership of oil and gas pipe lines we would be in position to ensure that the full requirements of Canadian industry and Canadian consumers would be met at all times. From the history of companies in the United States I am quite certain we would be assured of substantial surpluses. This government would have greater bargaining powers than would individual companies when it came to the question of exporting oil or gas to the United States.
The profitable aspect of this form of transportation has been amply demonstrated by the surpluses that have been shown in recent
[Mr. Herridge.l

years by companies in the United States and by the great increase in the prices of shares of companies which have simply obtained a charter and have not yet undertaken the transportation of gas or oil. Public ownership of the transportation of gas and oil would provide an opportunity for planning to meet the needs of Canadian industry and Canadian consumers, and we are very sorry indeed that the government continues to ignore what we consider to be a splendid opportunity.
Not only does the C.C.F. take this point of view. We have the support in this respect of the independent coalition member for Comox-Alberni (Mr. Gibson). While the hon. member is not a frequent speaker in this house, when he does speak he makes a valuable contribution, as he did yesterday. We in the opposition usually consider him as exerting an unseen influence behind the scenes. We term him a behind the curtain diplomat or statesman. I would say, Mr. Speaker, that we often have an opportunity to discuss things with the hon. member for Comox-Alberni behind the curtain. We have discussed forest land taxation, external affairs, internal affairs, cultural trends in Canada and things of that sort. We have also had many discussions on the new Social Credit policy that has been advocated by the hon. member for Comox-Alberni, the formula of which is that rocks plus faith plus a printing press equals abundance for all. We often discuss these matters, and the hon. member has pointed out to us that in his opinion not only would public ownership be of great assistance to the Canadian National Railways and reduce some of the deficits, but would also give the Canadian government much greater bargaining power, when exporting oil or gas.
I might say in passing that the hon. member has been responsible for the development of a new indoor sport in Canada which provides some of us with almost as much interest and excitement as horse racing. At this end of the house that new indoor sport is generally known as "Let's watch and see how Jack votes".


Mr. Byrne:: How is he going to vote?


Herbert Wilfred Herridge: The hon. member for
Comox-Alberni has on occasions expressed his support for the principle of public ownership, and I mention him particularly because he comes from a family with an excellent record of achievement in British Columbia, a family that is known to have a pretty good understanding of the practical problems that arise in industry and government. When we get the support of a person like

him, then it cannot be suggested that it is a Utopian proposal that we are advocating.
In any event, Mr. Speaker, I do want to place on record the remarks of the hon. member on this question. As far as I can judge, no remarks made by a private member of the house in the last eight years have been quoted as often as the remarks of the hon. member for Comox-Alberni with respect to this matter. At page 2808 of Hansard for April 30, 1949 the hon. member for Comox-Alberni had this to say:
There is a very important principle involved. Last night I was protesting against what appeared to me to be a tremendous lack of vision on the part of the directors of our Canadian National Railways. That railway system is in the business of providing transportation and moving freight, whether it be in the form of coal, oil, gas or any other form.
The Canadian National directors are allowing this pipe line method of transportation to be laid all along their right of way. It will be in the hands of private corporations and this tremendous freight which is originating in this north country is going to provide corresponding profits. I sincerely hope that the volume of traffic will be such that the profits will be large.
That is the usual hope of the hon. member.
I think the Canadian National directors-I would not say the Minister of Transport-have been remiss in their duties and have shown an appalling lack of vision in not having investigated this proposal very carefully. I for one, and I am sure this would apply to other hon. members, would have been glad to approve the capital required to put in these pipe lines which would have provided a tremendous amount of freight revenue. I am tired of voting money to defray deficits. I should like to see the Canadian National look into this matter carefully before they permit private companies to lay transportation lines for gas and oil on their right of way. They and the Minister of Transport should look into the possibilities of this form of transportation being provided by the Canadian National system.
We heartily agree with the remarks the hon. member made at that time. I simply want to mention again our great pleasure at hearing the statement made by the Minister of Trade and Commerce (Mr. Howe) this afternoon. As a member of this group I urge the government to give consideration to the possibility of the public ownership of pipe lines that are used for the transportation of gas and oil in Canada, and by so doing assist the revenue and possibly the opportunity to make surpluses for the Canadian National system which is owned by the people of Canada.


James MacKerras Macdonnell: Private Bills
central Canadian market. With them are the men who would distribute the gas when it gets to the market.
I do not propose to take more time today, Mr. Speaker. My hope is that what the minister has said will not be merely an indication of policy but will be an indication of the way that it is going to be carried out as soon as may be. I understand that Alberta is likely to take action before long as they have determined that there is an exportable surplus. Without saying more, Mr. Speaker, may I adjourn the debate.


Mr. Larson:: Is there any reason why we
cannot pass the bill?
On motion of Mr. Macdonnell (Greenwood) the debate was adjourned.



CONSIDERED IN COMMITTEE


[Stage Direction]
The house in committee on Bills Nos. 113 to 142, 151 to 185, and 192 to 222, inclusive, Mr. Beaudoin in the chair.
Bill No. 113, for the relief of Marguerite Irene Bastien Taschereau.-Mr. Winkler.
Bill	No.	114,	for	the	relief	of	William
Gordon Quinn.-Mr. Winkler.
Bill	No.	115,	for	the	relief	of	Joseph
Brennan.-Mr. Winkler.
Bill	No.	116,	for	the	relief	of	Henry
Collingwood.-Mr. Winkler.
Bill	No.	117,	for	the	relief	of	Douglas
Malcolm Stephen.-Mr. Winkler.
Bill No. 118, for the relief of Mary Lane Taylor.-Mr. Winkler.
Bill	No.	119,	for	the	relief	of	Stanley
Gordon Fowler.-Mr. Winkler.
Bill	No.	120,	for	the	relief	of	Ethel
Florence Flack Towne.-Mr. Winkler.
Bill	No.	121,	for	the	relief	of	Mary
Katherine Randell Clarke.-Mr. Winkler.
Bill	No.	122,	for	the	relief	of	Ralph
"Wellington Goodyear.-Mr. Winkler.
Bill No. 123, for the relief of Donalda Gagnon Fontaine.-Mr. Winkler.
Bill	No.	124,	for	the	relief	of	Marie
Sylvaine Alain Dahlstrom.-Mr. Winkler.
Bill	No.	125,	for	the relief	of	Ruth
Schwartz Cohen.-Mr. Winkler.
Bill	No.	126,	for	the	relief	of	Annie
Mislovitch Cohen.-Mr. Winkler.
Bill No. 127, for the relief of Minnie Miki Simon Werkzeig, otherwise known as Minnie Miki Simon Werk.-Mr. Winkler.
Bill No. 128, for the relief of Antonio Proietti.-Mr. Winkler.
Bill No. 129, for the relief of Ida Hier Blant.-Mr. Winkler.
Bill No. 130, for the relief of Hilda Irene Roddis Galbraith.-Mr. Winkler.
Bill No. 131, for the relief of Ivy Helen Jean Morton Starke.-Mr. Winkler.

Bill No. 132, for the relief of Barney Flegal.-Mr. Winkler.
Bill No. 133, for the relief of Marie Renee Emond Walker.-Mr. Winkler.
Bill	No.	134,	for	the	relief	of	Edwin
George Chafe.-Mr. Winkler.
Bill No. 135, for the relief of Phyllis Violet Perlson Wright.-Mr. Winkler.
Bill No. 136, for the relief of Margaret Eadie Kerr Britton.-Mr. Winkler.
Bill	No.	137,	for	the	relief	of	George
Robert Stirling Henry.-Mr. Winkler.
Bill No. 138, for the relief of Margaret Elizabeth Thelma Webb Crothers.-Mr. Winkler.
Bill	No.	139,	for	the	relief	of	Pauline
Liliane Baron Brumby.-Mr. Winkler.
Bill No. 140, for the relief of Madeleine Blain Cousineau.-Mr. Winkler.
Bill No. 141, for the relief of Angelina Maria Di Battista Gill.

Mr. Winkler.
Bill	No.	142,	for	the	relief	of	Charles
Snoade Hilder.-Mr. Winkler.
Bill No. 151, for the relief of Rolph Julian La France.

Mr. Winkler.
Bill No. 152, for the relief of Jack Gold.- Mr. Winkler.
Bill	No.	153,	for	the	relief	of	Hazel
Margaret MacRury Jordan.-Mr. Winkler.
Bill No. 154, for the relief of Anne Agnes Costigan Entwistle.-Mr. Winkler.
Bill	No.	155,	for	the	relief	of	Rachel
Sturman Spirer.-Mr. Winkler.
Bill	No.	156,	for	the	relief	of	Agnes
Kathleen Small Finlayson.-Mr. Winkler.
Bill No. 157, for the relief of Pearl Irene Balogh Katona.-Mr. Winkler.
Bill No. 158, for the relief of Zoe Audrey Birch Butler.-Mr. Winkler.
Bill	No.	159,	for	the	relief	of	Bessie
Mewhirter Mitchell Cameron.-Mr. Winkler.
Bill No. 160, for the relief of Elsie Smith Gray.-Mr. Winkler.
Bill No. 161, for the relief of Rita Lowsky Blatt.-Mr. Winkler.
Bill	No.	162,	for the relief of Anna
Shulemson Heymann.-Mr. Winkler.
Bill No. 163, for the relief of Cecile Lea Sauve Rheaume.-Mr. Winkler.
Bill	No.	164,	for	the	relief	of George
Frederick Shaw.-Mr. Winkler.
Bill No. 165, for the relief of John Arthur Dorsay.-Mr. Winkler.
Bill	No.	166,	for	the	relief	of Dorothy
Green Wainer.-Mr. Winkler.
Bill	No.	167,	for	the	relief	of Mildred
Isabel Lunan Aspell.-Mr. Winkler.
Bill No. 168, for the relief of Minnie Martz Kurtzman.-Mr. Winkler.
Bill No. 169, for the relief of Elizabeth Smaga Melnitzky.-Mr. Winkler.

Bill No. 170, for the relief of Alexander Hillcoat.-Mr. Winkler.
Bill No. 171, for the relief of Georgina Gibbons Bastien.-Mr. Winkler.
Bill No. 172, for the relief of Alice Martha Sharkey Maclnnes.-Mr. Winkler.
Bill	No.	173,	for	the	relief	of	Gittel
Gershonowitch Hammer.-Mr. Winkler.
Bill No. 174, for the relief of Frances Louise Devenish.-Mr. Winkler.
Bill No. 175, for the relief of Marguerite Evelyn Lucy Watts Paterson.-Mr. Winkler.
Bill	No.	176,	for	the	relief	of	Joseph
Edouard Charles Pichette.-Mr. Winkler.
Bill	No.	177,	for	the	relief	of	Cecilia
Rachel Baird.-Mr. Winkler.
Bill	No.	178,	for	the	relief	of	Verna
Kirstine Dam Credico.-Mr. Winkler.
Bill No. 179, for the relief of Diane Parent Leblanc.

Mr. Winkler.
Bill	No.	180,	for	the	relief	of	Blima
Blossom Wendy Weitzman Thompson.-Mr. Winkler.
Bill No. 181, for the relief of Joseph Edgar Roger Roland Bisaillon.-Mr. Winkler.
Bill No. 182, for the relief of Catherine Lois MacLeod McPhee.-Mr. Winkler.
Bill No. 183, for the relief of Dessie Fowler Taylor.-Mr. Winkler.
Bill No. 184, for the relief of Florence Trudy Nugent Barnett.-Mr. Winkler.
Bill No. 185, for the relief of Gordon Dampierre Ross.

Mr. Winkler.
Bill No. 192, for the relief of Mary Rose Anne	Rihel	Kowalski.-Mr. Winkler.Bill	No.	193,	for	the	relief	of	Walter
Critch.-Mr. Winkler.
Bill	No.	194,	for	the	relief	of	Edwin
George Godden.-Mr. Winkler.
Bill	No.	195,	for	the	relief	of	Lottie
Mendelman Brand.-Mr. Winkler.
Bill No. 196, for the relief of Jacob Titsch. -Mr. Winkler.
Bill No. 197, for the relief of Andrew Percy Bell.-Mr. Winkler.
Bill No. 198, for the relief of Eileen Doris Martin Martin.-Mr. Winkler.
Bill No. 199, for the relief of Annie Mou-lard Cumming Wright.-Mr. Winkler.
Bill No. 200, for the relief of William James Dunn.-Mr. Winkler.
Bill No. 201, for the relief of Jean Marion Oickle Joudrey.-Mr. Winkler.
Bill No. 202, for the relief of Alena Estella Welch Ball.-Mr. Winkler.
Bill No. 203, for the relief of Elizabeth Rogers Guerin.-Mr. Winkler.
Bill No. 204, for the relief of Richard Alfred Sutton.-Mr. Winkler.
Bill No. 205, for the relief of Doris Edgar Choquette.-Mr. Winkler.
Bill No. 206, for the relief of Jessie Hazel Kerr Coolon.-Mr. Winkler.
Private Bills-Divorce
Bill No. 207, for the relief of Laurence Christopher Bell.-Mr. Winkler.
Bill No. 208, for the relief of Valorie Leslie Hylda Carson Wallis.-Mr. Winkler.
Bill No. 209, for the relief of Jessie Allan Purdie McCulloch.-Mr. Winkler.
Bill No. 210, for the relief of Alice Mary Barakett Zion.-Mr. Winkler.
Bill	No.	211,	for	the	relief	of Marcel
Clark.-Mr. Winkler.
Bill	No.	212,	for	the	relief	of Sender
Mines.-Mr. Winkler.
Bill	No.	213,	for	the	relief	of Robert
Joseph Albert Pratte.-Mr. Winkler.
Bill	No.	214,	for	the	relief	of Leonard
James Chadwick.-Mr. Winkler.
Bill No. 215, for the relief of Merle Minnie Esther Hoffman Nevard.-Mr. Winkler.
Bill No. 216, for the relief of Doris Ethel Taylor.-Mr. Winkler.
Bill No. 217, for the relief of Gordon Earl Page.-Mr. Winkler.
Bill No. 218, for the relief of Yaroslava Glucka Levandosky.-Mr. Winkler.
Bill	No.	219,	for	the	relief	of Adelard
Gilbert.-Mr. Winkler.
Bill No. 220, for the relief of Celia Tarnofsky Edgar.-Mr. Winkler.
Bill	No.	221,	for	the	relief	of William
Flookes.-Mr. Winkler.
Bill	No.	222,	for	the	relief	of Kathleen
Ada Styles Labonte.-Mr. Winkler. '
Louis-René Beaudoin: Shall the bills carry?


An hon. Member:: On division.


Louis-René Beaudoin: Shall I report the bills?


An hon. Member:: On division.
Bills reported on division.


Mr. H. W. Winkler (Lisgar) moved: the third reading of Bills Nos. 113 to 142, 151 to 185, and 192 to 222, inclusive.
Motion agreed to on division and bills read the third time and passed.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.


[Stage Direction]
The house resumed consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto
2836	HOUSE OF
The Budget-Mr. J. O. Gour of Mr. Macdonnell (Greenwood), and the amendment to the amendment of Mr. Coldwell.
(Translation):
Joseph-Omer Gour: When the debate was adjourned at five o'clock, I was saying: Let us speak of our schools. Some may say: why, our schools receive grants from the provinces. It is true. But were it not for our present prosperity, provincial revenues would be much lower.
At the time of the Conservative administration at Ottawa, provincial revenues were about one-quarter of what they are today, and most municipalities were bankrupt or nearly so; thousands of workers were unemployed and among those that had employment many were getting only 5, 10 or 15 cents per hour. It was at that time that so many of our farmers and businessmen went bankrupt and that quite a few industries had to shut down.
Today, over five million people have permanent employment-and if we include our professionals, our industrialists, our businessmen and our farmers, we have a total of some six million people of all classes drawing a larger income than ever before in Canada or in any other country of the world, except perhaps the country of our American friends.
I challenge our opponents to say that they ever dreamed that Canada would attain such a degree of development and prosperity. Yet, my good friends of the opposition keep on repeating that this country is not prosperous. Be serious! Don't take our Canadian citizens for people who cannot differentiate between truth and falsehood. You had the proof in 1949 and you will get still further and better proof at the next general election.
The citizens of Canada are intelligent enough and sufficiently educated to tell the difference between truth and falsehood. I repeat, our Canadian citizens are intelligent and well educated. They receive newspapers, almost all have radios and a good many of them now own television sets. Don't try to have them believe that a rabbit is as big as an elephant.
I recognize that the opposition has a very unpleasant task, but it is also a very easy task for those who don't take it seriously, because it is easy to criticize and to make requests, but it is not so easy to administer and to give. You have to be serious and your business is to provide constructive criticism. I am sorry to say that that is not the case. Most Canadians share my opinion on that point.
I congratulate the Minister of Finance (Mr. Abbott) on his seventh budget, in which 

he announces another surplus, although this surplus is not as considerable as before, since half the budget is for national defence and millions more go for social services, that is for pensions for our veterans, our older people, our blind citizens, for family allowances, for hospital and university grants. In spite of all this, in spite of all these expenditures, the minister has managed to bring down taxes. He deserves the congratulations of all Canadians. I know that he is not particularly worried about the criticism coming from the members opposite. They criticize in spite of themselves. They know as well as we do that Canada is well administered, which is not to their liking and which explains why their criticism is so often illogical. What can you expect? They are in opposition and are sure of remaining there forever.
I also congratulate the whole cabinet which is composed of most competent men. You may be assured that my electors and myself are happy and proud to have a cabinet composed of men of such calibre.
And as for our Prime Minister (Mr. St. Laurent) what a great favour on the part of Providence to have given us a man of such destiny, whose ability can be compared with that of the greatest statesmen of any nation in any period. What a comparison between our Right Hon. Prime Minister and the Leader of the Opposition; one is qualified to lead and govern our country through the greatest period of prosperity of our history, and the other to remain Leader of the Opposition, until the supporters of his party succeed in replacing him, for I know there are many among them who would like to have another leader, and in fact, I wonder whether they are not going to have another one even before the elections and, if not, certainly not very long afterwards, for it is sure that the same thing will happen to him in Carleton that happened to him in the constituency he represented in 1948.
What is preventing some of them from choosing another leader immediately is the fact that they have changed so often in the past few years that they realize that instead of improving the chances of their party they have lessened them-and I share that opinion.
Consequently, Mr. Speaker, some hon. members criticize the government and say that the present budget is an election budget because taxes have been reduced and radio licences abolished, etc.; some say that the government should have done more and the majority ask for grants and subsidies, pension increases, children's allowances, well,

pensions lor everybody, etc., etc. All this would cost several billions. Furthermore, they call for tax reductions which would result in a loss of revenue and an increase in expenditures of some billions of dollars. What logic!
We are blamed for having shown surpluses which have enabled us to reduce the public debt by more than $2 billion and, consequently, to cut taxes by $63 million, which is the amount of interest we would have had to pay if the public debt had not been reduced.
There are no members more anxious than we Liberals to lower taxes and to increase grants, pensions, etc. We pay taxes and we like to get subsidies and pensions just as much as our friends in the opposition; we know as well as they do that as far as the people are concerned they find it much more popular and agreeable not to pay taxes and receive benefits of all kinds.
But Canadians know that it is easier to criticize and promise than to give and administer. As a result of our perfect administration the government can pay Canadians over one billion dollars per year by way of social security measures of all kinds which did not exist some years ago in Canada while spending over two billion dollars for national defence.
I ask my hon. friends of the opposition to tell me frankly, putting aside all political considerations, whether they are not happy and satisfied with the active and important part we are playing, together with our allies who want to ensure the freedom of the citizens of their countries in the fight against the evil influence of certain nations that want, on the contrary, to destroy freedom. Who among you would rather not pay any taxes and live in slavery behind the iron curtain? If there is anyone among you or if you can find any Canadian who would rather live there, let me know and I will gladly pay his fare to Moscow, on the condition, it goes without saying, that he never be permitted to return to Canada or to any other of the free countries of the world where he could live and make use of his ability and intelligence and express his opinions in an intelligent way while respecting those of others.
No, Mr. Speaker, were it not for the $2 billion which we are forced to spend on defence because of the communist countries, we could have reduced taxes of all kinds by 50 per cent, were it not for the billion dollars spent on social services, unknown in this country twenty years ago, we could have granted a further reduction of 25 per cent; then, only 25 per cent of the present taxes
The Budget-Mr. J. O. Gour would have been left, but we would not be protected against aggression and we would be deprived of social security legislation. And yet, how wonderful it is to be able to help those of our fellow citizens who are less fortunate.
Well, our friends of the opposition should not worry, if divine Providence would allow the hostilities in Korea to come to an end, which would increase our hopes for peace, the estimates of national defence could immediately be cut by one billion. Then, we could reduce taxes by 25 per cent and increase family allowances, old age pension, and probably, unemployment insurance benefits, health insurance, and subsidies for universities and hospitals. And while I am on the subject of educational grants, I would like to ask the government, and especially our great Prime Minister and the members of his cabinet, to find a way to increase these educational grants even though a small-time politician tries to frighten Canadians into letting him remain in power by telling them tall tales about the federal government's intention to encroach on provincial rights. The great majority of them know that there is no truth in this statement as they have shown by their vote in the 1949 election. Is there a single hon. member sitting for a federal constituency who is not as concerned with his province's rights as the hon. member who sits for the same constituency in the provincial legislature? One must be logical. I am as good a citizen of Ontario as my hon. friend who sits tor my constituency in the provincial legislature and the same holds true for every member of the house. But there is nothing new in such petty politics. It dates back to before 1911.
Every time the Liberals, in Ottawa, endeavoured to pass a social security measure, there was shouting about provincial autonomy. It was always a matter of playing a little game of local politics to ingratiate themselves with their constituents. Nobody that I know of returned a single cheque. I have never heard it said that the hon. member for Labelle, Mr. Short-Sight (Untranslatable pun on Courte-manche, "short sleeve"), I mean Mr. Courtemanche; I am sorry if I called him by that name but there are lots of people in the county of Labelle who call him that

However, be that as it may, the Conservative party has often changed leaders- (Text):


Mr. Courtemanche:: On a point of order, Mr. Speaker, I would like-
2938	HOUSE OF
The Budget-Mr. J. O. Gour (Translation) :


Mr. Langlois (Gaspe):: Speak French, please. Mr. Speaker speaks French. Are you ashamed of your own tongue?


Henri Courtemanche: I am not ashamed of my own tongue. I understand, however, that Mr. Speaker knows English better than French.


J. G. Léopold Langlois: He understands
French.


Joseph-Omer Gour: -but its policy has not changed; it has always had a policy for Quebec and another for Ontario, that is a different policy for each province, for each county-


Henri Courtemanche: Mr. Speaker, on a point of order: I would be grateful if the hon. member would not mention the name of a representative in that way.


Joseph-Omer Gour: -and sometimes even, it has five or six different policies for each county. It is currently done by the Conservatives-
(Text):


Henri Courtemanche: I rise on a point of order, Mr. Speaker.


Mr. Speaker:: What Is the point of order? Quel est le point d'ordre?


Henri Courtemanche: I understand that the rules do not allow a member to refer to another hon. member by his name. I should like the hon. member for Russell (Mr. Gour) to withdraw that word.


J. G. Léopold Langlois: You are asking him to withdraw your own name? Are you ashamed of it?


Henri Courtemanche: No; I am not ashamed of it.
(Translation):


Joseph-Omer Gour: -in Russell county; it all depends where they are speaking. The Conservatives did it in 1911, they have been doing it since and they will do so again at the next election. That is also true of the other political parties on the benches of the opposition. But can you not see that the Canadian people- (Text):


Mr. Speaker:: Order. The hon. member
should refer to another hon. member of the house by his constituency and not by his name.


Joseph-Omer Gour: I am sorry if I made a mistake in his name.
(Translation):
-judge you by your deeds; there will be fewer of you after the next election, there 

will be two or three rows of seats less for our friends of the opposition, and these seats will be held by Liberals.
Why not follow the example of our great Prime Minister, who makes the same speech throughout Canada, and the example of all Liberal candidates, who do likewise. The Canadian people know that we preach unity, prosperity and freedom, all over the country. (Text):
That is, in English, unity between races; unity between classes; unity between provinces; not having some member trying to set one province against another, or one race against the other or one class against the other. Liberals want to have unity between races, between religions, between classes, between provinces. No Liberal is trying to get one class of people against the other as the opposition is doing all the time in this house.
(Translation):
And speaking of liberty, which means justice, I would ask the Ontario government to pass legislation in order to do justice to the separate schools by granting them their fair share of taxes on public property. It is a shame that a Catholic in my province who has rented property to the Ontario government or to the federal government, is not allowed to pay his taxes to the separate schools and is forced to pay taxes to the public schools.
I am told that the same is true of every other province except Quebec and Newfoundland.
We, French people from the province of Ontario, are happy to congratulate the province of Quebec on giving a full measure of justice to its minorities; like our good English and Protestant friends, we want them to be treated on an equal footing with the French Canadians. What this country needs is good will between races, between provinces, between classes; that is the policy of the Liberal party. To achieve that, it is necessary that provincial governments should do the same; there can be no good will without justice. French Canadians do not get such treatment outside the province of Quebec. I know that it is a question of provincial legislation. However, all hope is not lost; the situation is gradually improving for the Canadian people are getting more broad-minded in that regard. I would like to see all over Canada the same good will which exists in Russell county.
(Text):
I may say in English that I should like to see conditions throughout Canada the same as they are in Russell with regard to love

between English-speaking Protestant and French-speaking Catholic, between farmer and farmer, between neighbour and neighbour, English or French. In my love for Canada I could wish that the situation in that respect was the same throughout the country as it is in Russell.
(Translation):
And so, Mr. Speaker, when you hear our friends on the opposite side of the house criticizing the government do not take them seriously. In Russell county alone, the many nice buildings which may be found along the countryside, in towns and villages, make it hard for us to believe that such improvements have been made possible since the end of the war; the city of Ottawa itself, our beautiful capital, has improved so much in various parts that it is hardly recognizable. Where there were but open spaces, one can now admire nice buildings. The same goes for all Canada.
Mr. Speaker, they pile criticism upon criticism concerning taxes; yet, it is in Canada that taxes are the lowest, social services so adequate, and where so much is spent, considering our population, for the defence of freedom. They say that we have not yet reduced the taxes paid by the small wage earners. In the ten countries of Europe which I had the privilege of visiting last summer and which have social legislation much like ours, taxes are paid to the government by the employer. Taxes range from 30 to 50 per cent of the employee's salary, and in view of this very fact, the employee's salary is accordingly reduced, while the employee, in Europe, earns from 50 to 60 per cent of what a Canadian gets for the same work; yet, the cost of living is even higher than in Canada. In addition, they also have income taxes to pay.
Some hon. members criticize the government for having reduced corporation taxes too much; the government has done so in order to allow them to spend this money on plant extensions and additions in order to provide more work and, if possible, to give higher wages.
Now, Mr. Speaker, some of th?m find that too much money is being spent for defence purposes. They were the first to blame us in 1950, when the Korean war broke out, saying that we were not adequately prepared and if it should unfortunately happen that our enemies would declare war on us, you would hear them criticize, saying that we were not sufficiently prepared. If we want to avoid war, we must be strong enough to make the communist countries understand that it would be utterly useless to attack us. Taking into consideration all the prayers
The Budget-Mr. J. O. Gour which are being said for the conversion of the communists and the steps which we are taking to protect ourselves, we hope that divine Providence will spare us the horrors of a third world war, so that our efficient government may be able to reduce taxes by at least 25 per cent in the fiscal year 1953-54, to increase family allowances and enact new social measures, thus increasing the present prosperity of our country.
Mr. Speaker, may I be permitted, in conclusion, to state what the facts really are in connection with the declaration which the hon. member for Three Rivers made on December 2, 1952 and which can be found on page 275 of the English version of Hansard. Here is this declaration:
Mr. Speaker, it is up to the people to decide and it will be up to the people of the province of Quebec at the next election to show its appreciation to the leader of the Conservative party, as, for instance, the French-speaking population of Ontario was thankful for the $100,000 grant to the university of Ottawa by the premier of Ontario, as well as for the excellent treatment meted out to the separate schools of his province.
The French-Canadian people of Ontario proved themselves grateful by electing seven members out of its eight candidates. The same thing is happening today and will happen again.
The hon. member for Labelle previously made similar statements. I admit it is a cunning way of convincing oneself, first, and of making the French-Canadian people of Quebec-whom I love so dearly because my father was born in that beautiful province- believe that French Canadians in Ontario, that is to say in those constituencies where French-speaking people are in the majority, liked the Hon. Leader of the Opposition when he was premier of my province and appreciated the $100,000 grant from the province to the University of Ottawa, which he mentions. He gave the sum of $100,000 while the University of Ottawa should have received at least $300,000 every year, to put it on an equal footing with other universities in the province that have the same faculties.
The Oblates of Mary Immaculate are a religious order which has contributed materially billions of dollars in Canada and in the province of Ontario for education, because its colleges and the university have given us priests and laymen whom Canadians are proud of and who are the envy of other ethnical groups; a religious order which is asking half the fees that would be asked by any other similar lay institution to which governments have to contribute 2 or 3 times more than what they give to the Oblates; a religious order whose high spiritual formation is a source of inspiration for our sons and contributes to make them men of a high
2940	HOUSE OF
The Budget-Mr. J. O. Gour standard of morality-and that is true for laymen and religious as well; all of which cannot be expressed in terms of material value; $100,000! Sway French-Canadian opinion in Ontario! Never, my good friends. You don't know the French Canadians of Ontario; you don't know the sacrifices the French Canadians made under the Tory governments, to which the hon. member of the opposition belonged; you don't know the sacrifices we are making at the present time, that I had the pleasure to make and that I am still making to help my compatriots. No, my good friends, there is not enough money in the world to influence the votes of the Oblates of Mary Immaculate and of the French Canadians of Ontario.
That which influenced the French-Canadian vote in Ontario was the Hope investigation which hangs dangling over the head of French Canadians like the sword of Damocles. And so we are waiting, for we are patient and tolerant. Furthermore, we have confidence in the great majority of our good anglo-protes-tant friends. We respect them, we like them and want to live in harmony with them. Let us not forget that the population of Ontario is in fact Liberal and that it will have justice before long. The French Canadians of Ontario prefer not to hasten things; that is why they have voted in this manner. When you compare the popularity of the Leader of the Opposition with that of the Prime Minister, it is in order to mislead the French-Canadian electors of Quebec and of your respective constituencies, for the majority of them can hardly recover from their sad mistake of having voted for you in 1949 and they promise to make you lose your deposit at the next one, should you run again. And I say to my good friend the hon. member for Labelle, in order that he may be better informed, to take up the little red-covered book entitled Parliamentary Guide 1949-50, and if he has not got it, I shall send him a copy free of charge. There you will find proof of the great popularity of the Prime Minister at the time of the 1949 election in the Ontario constituencies where the majority of the people are French Canadian, and I quote:
Ottawa East, Liberal 20,895, Conservative 5,499; Russell, Liberal 12,635; Conservative 5,767; Prescott, Liberal 9,528, Conservative 1,928; Glengarry, Liberal 4,809 Conservative 3,599; Stormont, Liberal 12,639, Conservative 6,667; Sudbury, Liberal 15,636, Conservative 8,009; Cochrane, Liberal 6,352, Conservative 3,885; Essex East, Liberal, 16,709; Conservative 8,204; Nipissing, Liberal 11,061, Conservative 4,836; Total, Liberal 110,269, Conservative 48,357.
[Mr. Gour (Russell).}

Well over 2 to 1, and out of 9 constituencies, Liberals elected, 9; Conservatives, 0. Five Conservative candidates lost their deposits; and now, talk about its popularity.


Henri Courtemanche: Tell us something of 1949 and after.


Joseph-Omer Gour: Now my friends, be .serious with yourselves if you are not serious with your electors. The Leader of the Opposition is responsible for this country being ridiculed in Europe since he sends his children to study abroad. This fact was mentioned to me quite often during my trip abroad, when I was fortunate enough to visit ten foreign countries. I was asked whether we had good schools at home. And when I answered there were none better I was told: "That is what we were always told, but how is it that our newspapers spread the news around here that-


Henri Courtemanche: Cheap politics.


Joseph-Omer Gour: -the Leader of the Opposition in the Canadian government wants to send his children to study abroad?" In this way he gives the impression that according to him our schools are not modern enough or well prepared enough to educate his children. That would be easier to understand were they older, and had they gone abroad for specialized professional training in European universities. I therefore close my remarks, Mr. Speaker, expressing regrets that our friends overseas are apt to have an entirely false idea of what conditions really are with regard to our educational institutions.
Once more I ask that divine Providence keep our Prime Minister in good health for many years to come, so that he may continue to make Canada benefit from this matchless prosperity. You may be assured' that we Liberals have no intention of changing our leader. On the contrary we intend to keep him as long as his age, his strength and his health will allow Canada to benefit from his extraordinary ability.
(Text):


Mr. Gordon Churchill (Winnipeg South Centre):: Mr. Speaker, the debate on the budget sometimes take us far afield, but I intend to confine my remarks to certain of the more technical aspects of the budget itself.
I should like to make a plea for greater clearness and greater simplicity in the presentation of the budget. The five million Canadians who constitute the earning portion of our population have a very great interest in the budget for it informs them whether their incomes are going to be affected for better or for worse. The direct taxation imposed' by personal income taxes is of concern to<

three million people, and is perhaps the most interesting feature of the budget. It is on behalf of this great mass of taxpayers that I suggest that the budget should be presented in such a way that the taxpayer's obligation is clearly evident on the first reading.
For the business world in general there is perhaps no special need for any alteration in the form, because they have experts who can and do make analyses of the budget changes. But is there any reason why the changes in personal income taxes should not be set out with the greatest clearness? In earlier budgets finance ministers went to the trouble of giving precise examples of the changes contemplated, Mr. Ilsley did that with his budget in 1942, when the income tax proposals were combined with compulsory savings.
Contrast that candour with the situation this year. It may very well be said that the personal income tax changes were set out, but I submit that to the taxpayer the 2 per cent charge on his income for old age security, listed as a separate item on the income tax form, is part and parcel of his income tax. Changes in rates were announced and tables appeared in Hansard and in the budget papers showing the details, but the picture was not clear. Concealed in microscopic print was the information that in addition to the rates set out in the table the old age security tax of 2 per cent had to be applied.
Instead of setting out with the greatest clearness the actual amounts, inclusive of the old age security tax, that the income taxpayer will have to contribute, the budget simply sets out the tables and leaves the problem to the individual taxpayer or to the newspapers. Calculations of the old age security tax could have been set up in an adjoining column and the full picture would then have been available to the taxpayer.
There may have been no desire or attempt to mislead, but when due allowance was not made in the tables for the old age security tax, the information supplied was misleading. Also misleading was the emphasis placed on the 11 per cent decrease in the income tax. The actual reduction for the income taxpayer on his 1953 income is certainly no more than 54 per cent.
I am prepared to grant that in the minister's speech, in the table and in the fine microscopic notes all necessary information was available, but I do insist that no taxpayer should have to read the budget twice over to discover its meaning, or sharpen a pencil and make elaborate calculations. The information should be set out clearly. Simple things should be expressed simply.
Ministers of finance could take a lesson from municipal finance authorities. The prop-
The Budget-Mr. Churchill erty owner gets a clear and unambiguous statement as to his assessment and mill rate. No special effort, no detailed calculations are necessary. A similar clear statement could be made to the income taxpayer. There is plenty of scope in the budget for all manner of intricate financial statements and calculations. Economists, accountants, financial experts and ministers of finance may have the clearest knowledge of such terms as extrabudgetary transactions, unmatured funded debt, deferred credits and contingent liabilities, but millions now living will die overtaxed and underinformed about these matters.
I am sure that the average Canadian taxpayer is concerned very seriously in regard to his income tax. He understands very clearly what happens to his pocketbook when he makes his payment, but he tends to leave to others the intricacies of the financial problems involved. Terms should not be unnecessarily invented or distorted. One term is used which as far as I can find out first appeared in the budget speech of 1951. It has now by 1953 reached the status of being incorporated in the tables and in the public accounts. I refer to the term "non-budgetary". How you can have budgetary items and non-budgetary items in what is called a budget raises a problem in the use or misuse of language. The word "budget" is defined by the Oxford English dictionary as follows:
A statement of the probable revenue and expenditure for the ensuing year with financial proposals founded thereon.
Webster's dictionary gives a more detailed definition as follows:
A financial statement of the estimated revenues and expenditures of a country and, by extension, a plan or program for financing a government based on such a statement including authorization to collect the revenues and incur the expenses proposed.
Canadian practice during the last few years has tended to narrow the expression down to merely the revenues collected by taxation and the expenditure of those particular funds. But there are other sources of revenue besides taxation, and there are other uses of government funds besides departmental expenditures. These were formerly called loans, advances and investments. In my opinion that description should have been retained and the expression "non-budgetary" dropped. I suggest that some better description of these other accounts might be devised.
I notice another change of a more serious nature in this year's budget. It is a bookkeeping entry and does not affect materially the over-all picture, except to put things in a better light than the actual facts warrant. I refer to the so-called temporary loan of $100 million to the old age security fund

The Budget-Mr. Churchill shown on page 62 of the white paper under the general heading of non-budgetary disbursements and the subheading of loans, investments and working capital advances. This item appears again on page 69 of the table listing cash and other current assets as a departmental working capital advance. It is considered to be an active asset.
In the budget an asset may be either active or non-active. The distinction was first made about 35 years ago. I searched for a definition of "non-active", and I found it in the budget speech presented by Mr. Bennett in June, 1931, a speech which I think is a model of clarity and orderly arrangement. He defined non-active assets as being loans and advances made for various enterprises which are not presently realizable, yield no direct return to the treasury and in the presentation of the accounts are treated as losses. Examples occur at the bottom of page 2209 of the budget appendix this year. The converse would be true of active assets, and they were defined in the budget paper of 1949 on page 1858 as follows:
Essentially these consist of assets which yield interest, profits or dividends, together with very liquid assets such as cash and departmental working funds.
In the budget papers of this year that definition is watered down a bit to include the words "for the most part", and the definition reads as follows:
These, for the most part, consist of assets that yield interest, profits or dividends, very liquid assets such as cash and departmental working capital funds, and certain prepaid expenditures and sundry suspense accounts.
I do not see that the $100 million loan to the old age security fund is an active asset. It is not likely to be realized, and it yields no direct return to the treasury. It should be shown, in my opinion, as a non-active asset and therefore as an expenditure. It is called a temporary loan, a term usually employed for a three or six months' period. There is no prospect of this advance to the old age security fund being paid back, certainly not in the near future. The expenditures of the fund for the fiscal year now ending exceed receipts by $100 million. In the next fiscal year the estimated expenditures will exceed the estimated receipts by $67 million. Will we then have in the 1954 budget another $67 million listed as a temporary loan to the old age security fund and treated as an active asset?
Since confederation there have been 21 occasions on which the unmatured public debt has been reduced. On each of these occasions there was not only a cash surplus of ordinary revenue from taxation over

ordinary expenditure, but also a decrease in the net debt, which occurs when the net active assets increase and the gross debt is correspondingly decreased. But there have been occasions when ministers of finance have declared that the financial year has ended in a surplus when in actual fact no reduction in the unmatured public debt was made. This declaration of a surplus comes as the result of resorting to the expediency of listing among the active assets items that should more properly be called non-active and appear as expenditures.
Mr. Fielding, minister of finance in 1922, dealt at some length with this matter as reported in the Hansard of that period at page 2105. I should like to quote three or four sections from his budget speech in explanation of this matter. He said:
A finance minister who has the good fortune to produce a surplus . . . may find, and very often will find, that he meets with this criticism: Oh, you have no such surplus; you actually have run into debt during the year. The method in the past of showing a surplus has been to take what is called the ordinary expenditure of the country . . . and set against it the revenue of the year, which left you either a surplus or a deficit. If that revenue is more than the ordinary expenditure you will nave a surplus; if it is less than the ordinary expenditure you will have a deficit.
But every year there are expenditures which do not appear in that calculation. The objection made in times past was well founded. It was and is a fact that there are always expenditures of a special character, and the criticism that has been made in times past is in that respect correct. The distinction that is drawn between capital expenditure and ordinary expenditure has often been a subject of debate . . .
It is not an unfair claim to make if the facts be clearly understood. It has always been the method by which our public accounts have been conducted. So when the accounts for 1920-21 claimed that there was a large surplus of $73 million, the method of bookkeeping was being followed that had existed in the past, yet as a matter of fact during that year there was actually an increase in the public debt of $92 million and over, the difference, of course, representing the charges to capital and special account and that now ever-growing account, the railway service of the country.
Mr. Fielding then went on to give an account of his own fiscal year for which he was then reporting in these words:
The result of the operations for the year just closed-
The reference is to 1921-22.
-is that while we have according to one calculation a surplus, we have to acknowledge an addition to the public debt of $86,417,000.
Then Mr. Fielding proceeded to deal with the accounts which prior to his time had been causing this trouble in the budget presentation, and these accounts largely affected the railways. These are his words, as found at page 2106:
There may be an advantage and a convenience in separating the railway operations from the rest

of our expenditure. However, there is another view of the matter. We have a justification for charging to capital or to a special account some particular thing-the building of a railway, for instance. Various classes of public expenditure having permanent results may properly be classified as assets, may properly be classified under capital account. But if from year to year we are to provide for the ordinary expenses of the railway; if we are to provide for the deficit, the difference between receipts and expenditure; if we are also to provide large sums for interest on the bonds and other securities of these so-called railway companies-if we are to do that unfailingly every year ... it will be open to some to say, with much justice, that this is no longer a special account but part of the ordinary expenditure of the country; and if so, that ordinary expenditure should be included before we undertake to declare a surplus.
It seems to me that there is a great similarity between these railway advances to which Mr. Fielding referred and the loans made in recent years to the Canadian Broadcasting Corporation and certain working capital advances to departments, as for example to the Department of Agriculture for the agricultural prices support program, not to mention this $100 million loan to the old age security fund to which I have already referred.
A search of the budget statements for the last 23 years does not disclose a single instance of a loan appearing as an active asset, in so far as I could discover, unless it was made to a crown corporation or a body expected to produce revenue. There is no instance that I could find of a loan to a governmental department which is merely a spending department. The loan to the old age security fund can be repaid only by means of taxation, for what other source of income is available?
In the year 1953 the Minister of Finance (Mr. Abbott) appears to have reverted to the practice which Mr. Fielding condemned. He has a revenue surplus of $47-8 million, being the excess of tax revenue over departmental expenditures. He has increased the unmatured public debt by $141-7 million. By the expedient of calling the $100 million advance to the old age security fund an active asset, the gross debt has been reduced by $47-8 million and a surplus has been declared. Had the advance to the old age security fund been shown as an expenditure by the Department of National Health and Welfare or as a non-active asset and, therefore, as a loss, the so-called surplus would have been wiped out and a deficit declared of $52-2 million.
The Minister of Finance was able to reduce the unmatured public debt in each of the fiscal years from 1947 to 1952. In the fiscal year 1952-53 he has increased the unmatured public debt by $141-7 million. The year ends with a deficit, not a surplus.
The Budget-Mr. Churchill
Another feature of the budget which is open to criticism is that a complete picture of revenues and expenditures is not presented. At page 2135 of Hansard the minister stated that radio licence fees have never been treated as part of our tax revenue, nor are these receipts shown in the tables in the white paper. This stems, of course, from the desire to treat the Canadian Broadcasting Corporation as a separate corporate body with a direct source of revenue. And the proposed 15 per cent special excise tax on radio and television sets, etc., may be treated in the same way as the former radio licence fee.
Similarly the old age security system has "relieved" the budget of $110 million, as the minister stated at page 2121 of Hansard. In the tables of revenue in the white paper the old age security receipts-being 2 per cent on personal income tax-corporation and sales tax are shown as deductions from the total receipts of these taxes but are not grouped together. In the expenditure table no item appears.
I am not offering objection to the setting up of a separate account or separate fund for old age security as approved in the fall of 1951 but we have now reached the point when the budget does not disclose all the revenue received. Yet the main source of revenue remains the same-taxation.
All revenue is required to be paid into the consolidated revenue fund. In the minutes of the proceedings and evidence of the standing committee on public accounts for December, 1951, the late Dr. Clark called this, and these are his words-
-a cardinal statutory requirement, namely the creation of a single consolidated revenue fund into which all public money is required to be deposited to the credit of the receiver general. This is the most important single principle on the revenue side, the greatest protection of the rights of parliament in the control of the public purse. This goes back to section 102 of the British North America Act.
In the Financial Administration Act public money is defined as:
(i)	duties and revenues of Canada
(ii)	money borrowed by Canada or received through the sale of securities
(iii)	money received or collected by or on behalf of Canada, and
(iv)	money paid to Canada for a special purpose.
That being the case, I would think that in the budget all receipts and disbursements of public money should be disclosed. Unless this is done, we will have for the future some such division as the following: (1) the budget proper being, in part but not entirely,

The Budget-Mr. Drew the receipts from taxation and the departmental expenditures of the same; (2) certain so-called non-budgetary items making up part of our active assets; (3) a separate account, not appearing in the budget, of receipts from taxation for the old age security fund; and (4) another separate account not appearing in the budget of receipts from taxation for the Canadian Broadcasting Corporation. Will we have in future the presentation of the budget proper followed later by baby budgets for special funds or accounts?
In summary, I have been suggesting:
(1)	greater clearness and simplicity in the budget with particular reference to the personal income tax;
(2)	discontinuance of the use of the term "non-budgetary";
(3)	the listing of so-called loans to the old age security fund as expenditures;
(4)	a more careful distinction between active and non-active assets; and
(5)	a complete account in the budget of all public moneys received and expended.


Some hon. Members:: Question.


Mr. George A. Drew (Leader of the Opposition):: Mr. Speaker, before the vote is taken it is my intention to deal with the amendment to the amendment and explain our position in regard to that motion before the house upon which we will have the first vote.
This has been an extended debate, but there have been some encouraging demonstrations of the fact that arguments such as have been made have had their effect. To that extent the people of this country already have benefited very substantially by the discussion which has taken place. For instance, as the result of the statements made in this debate by the hon. member for Three Rivers (Mr. Balcer), the government changed its position in regard to the education tax in the province of Quebec, and that province has benefited by the decision announced in this house a few days ago. The fact that it comes eight years too late is not in any way to suggest that it is not satisfactory to see this very improper situation remedied as a result of discussions which have taken place. It is an argument in favour of this type of free discussion, which sometimes comes under criticism, when we see substantial results of this nature.
There is also the fact that, because of remarks in this debate about taxation which had been imposed on farmers, and which the deputy minister had carefully explained was imposed upon farmers, the Minister of Finance (Mr. Abbott) rose in the house and

gave an interpretation which was much more satisfactory.
We have had other examples of the same kind during this debate, and perhaps it may be very unfortunate that the debate is nearing an end, because who knows but that under constant pressure the government might make further adjustments that are in keeping with arguments made from this side of the house, not during this debate alone but for several years.
I am not going back over some of the things that have been said in this house, Mr. Speaker, and I will do no more in that respect than express the hope that those outside this house who do read Hansard will read a speech that was made here tonight, and will know that the Prime Minister (Mr. St. Laurent) was in his seat at the time, as well as several other ministers. The remarks which are on the record, and which I hope will be read, are an indication of some of the kinds of remarks made on the other side of the house which meet with approval of members on that side.
I need say no more because the remarks that were made speak eloquently for themselves. They are a preview of the kind of thing that doubtless some of us may expect in the coming election, whenever that may be. It is a challenge to the people of Canada to decide what they are going to do upon the basis of the facts presented to them, and not on the basis of any such presentation as that which appears on record in Hansard here tonight.
Now, Mr. Speaker, the amendment to the amendment must be taken in conjunction with the amendment itself and, therefore, I propose to read together the amendment and the subamendment because it is upon the two combined that the vote will be taken. The amendment reads as follows:
That all the words after "that" to the end of the question be deleted and the following substituted therefor:
"this house regrets that under the present budget the government proposes to take more money from the taxpayers of Canada than ever before for non-defence and defence expenditures without any effective steps being taken to:
(a) deal with waste, extravagance and administrative inefficiency; (b) give tax relief to those who need it most; (c) offer any encouragement to Canadian farmers in meeting the serious consequences of lost markets and lower prices resulting from the government's agricultural and marketing policies; (d) permit an independent inquiry into the organization accounting and administration of the Department of National Defence."
Then the hon. member for Rosetown-Biggar (Mr. Coldwell) has moved that the following be added thereto:
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.
Naturally, Mr. Speaker, we support the subamendment which I have read, and I wish to indicate the words that are of importance in that subamendment. First there is the criticism that tax cuts are made retroactive to January 1 for corporations but not for individual Canadians. Some attempt has been made to interpret that as a criticism of these retroactive tax cuts to corporations. That is not what the paragraph says. What it says is that the criticism is directed to the making of the corporation tax cuts retroactive, and not making the reduction to individual Canadians retroactive to that date.
Mr. Speaker, I must say that I do not know how any hon. member in this house can seriously argue that this is not a proper criticism. After all, if it is appropriate to make that reduction for corporations, as I think it is, it is certainly equally appropriate and more appropriate to make the reduction for individual taxpayers who are feeling the burden,. and who have had less opportunity to adjust themselves than the corporations.
Then, under paragraph (2) of the subamendment, we find these words:
-doubles the exemption levels for the full corporation tax rate while leaving exemption levels for individual Canadians unchanged;
Again, this does not say what has been attributed to it. It certainly does not, in the words, no matter what arguments may have been made, criticize the doubling of the exemption levels for the corporation tax. But it does criticize the government for making that adjustment without giving consideration to the further exemption of individual Canadian taxpayers. Certainly we do agree with that criticism. We believe there should have been an increase in the exemption to corporations, but we believe that the first place this exemption should have been increased was in the case of individual Canadian taxpayers. We have argued for that right along.
Then we come to the third paragraph in the subamendment and we find this:
-doubles the credits allowed to shareholders for dividends, but gives no comparable credits to those who do the work that produces the dividends.
Again we find that there is criticism of doubling the credits to those who receive their income from dividends on corporation securities, without any comparable credits to those who produce those dividends by their 68108-1872
Th<? Budget-Mr. Drew work. With that criticism we agree. We say that the first place consideration should have been given right along the line is to the individual taxpayer who is finding difficulty in meeting the tax burdens that he now faces.
There is, of course, one special feature related to this third paragraph which is extremely difficult to understand. Most certainly the Canadian taxpayer who feels the burden of taxes today, whose return from his work is not sufficient to allow him to adjust himself to the increasing burden, finds it extremely difficult to understand how the man or woman who is in the fortunate and rare position of having an income of up to $9,600 exclusively from dividends from corporation securities will not pay one cent of taxes. This is something that has not been in any way satisfactorily explained to the members of this house.
Believing as we do that there should be reductions, and that there could be very much greater reductions all along the line than are before us now, we certainly find it difficult to understand how one can explain to the hard-working man or woman who is earning $2,000, $3,000 or $3,500, why they must be called upon to pay the heavy taxes they do pay, while the person who receives close to $10,000 from corporation dividends pays not one cent in the form of income tax.
I hope no one is going to say, "But how much income tax does a person getting $2,000 pay"? That is, of course, the joker. The joker is that there has been no reduction whatever in any of the taxes that really bear most heavily on the worker and the person with a small income. The place where the taxes really pinch is in the case of a person on a small pension, with a small fixed income from savings which were accumulated during years of work in the hope that he had enough to live quietly, securely and comfortably for the rest of his life. These people now find their dollars worth less than 50 cents in terms of the dollars they put away. They cannot meet their obligations, but those people are paying heavy taxes.
Do not let anyone try to fool them. In spite of the statement by the Minister of Finance (Mr. Abbott) that whatever might be done to fool the public no attempt should be made to fool the members here, we hope no attempt will be made by the government to fool the public in regard to these taxes. These people pay the 10 per cent sales tax on many of the things they need. They pay excise taxes on the things they must have. There have been no adjustments in these taxes, and yet these are the most inflationary taxes of

The Budget-Mr. Drew all. The excise tax is most inflationary, and the sales tax is next. Nothing has been done to adjust those, although our sales tax is at 10 per cent, and although our excise taxes are very high and hit the general public at many points.
We intend to vote for the subamendment. What is more, we hope that hon. members on the other side will read that subamendment carefully, as well as the amendment, and consider quite carefully exactly what it is they are doing if they vote both against that amendment and the subamendment. What they are doing is to express their approval of an adjustment of taxes which offers no relief at all to those with the smallest incomes, which offers very little relief to the worker with a relatively small income, and which offers no appreciable relief of any kind to the farmers of this country, but does offer substantial relief in the higher brackets in corporation taxes.
Once again let me point out that any suggestion that has come from the other side that support of this amendment or subamendment constitutes criticism of the reduction of these taxes is absolutely remote from reality, and I hope that is a sufficiently parliamentary expression to suggest a great deal more. They know perfectly well that we have been arguing in favour of the reductions for years. Last year we argued for them; a year ago we argued for them, and the year before that we argued for them; but we were given many reasons why it could not be done.
One of the advantages of democracy is that we have recurrent elections; and at least to the extent that anybody gets any consideration out of this budget they should express their thanks to the democratic processes which bring an election around from time to time and stir the conscience of the government periodically in this way. A few years ago we had cyclical budgeting. Now we have a cyclical conscience, and that conscience asserts itself. But it did not get a chance to assert itself quite far enough, and it did not assert itself in the very place where that conscience would have produced results most satisfactory to the people of this country.
Yes, we are going to support the subamendment which carries with it the amendment. In doing so we certainly regret that at no stage in the session has there been the slightest indication on the part of the government that it was prepared to recognize that there are things that could be done to lighten the burden of taxation on the people of Canada by reducing the amount which is going to be collected from the taxpayers

during the coming year. There have been, of course, those two satisfactory changes of heart, and we congratulate the government on those. We congratulate the government on the fact that it did respond to the demand of the hon. member for Three Rivers (Mr. Balcer) and made an adjustment with regard to that extremely improper provision under which there was no exemption for the education tax levied in Quebec.


Some hon. Members:: Oh, oh.


George Alexander Drew: When hon. members opposite laugh at that statement, Mr. Speaker, may I ask where has any one of them made any suggestion that this change should be made? They had to wait for the demand to come from this side of the house. Some of those hon. members would have been silent yet, and would have been silent to the end of this session and of this parliament, if the government had not responded to the request from this side of the house and the subsequent demands that followed it.
Mr. Speaker, we welcome the change of heart expressed by the Minister of Finance (Mr. Abbott) when he changed the ruling with regard to the effect of the provision in regard to implements used by farmers. We welcome this. As a matter of fact, strange' though it may seem, we have persisted in the hope that more concessions might be made as a result of the arguments that have been put forward. But having made those concessions-and they certainly were not unimportant concessions; we agree that that is so

we now find that the government has apparently hardened its heart, closed the doors and is saying: Here it is; there is nothing more; we are not prepared to admit that anything further could be done.
Mr. Speaker, it is of interest to members of this house to find, on behalf of this government just within the last few days, a statement that there is no foundation for the suggestion that there is waste and extravagance.


Some hon. Members:: Hear, hear.


George Alexander Drew: And the hon. members opposite still say "Hear, hear."


An hon. Member:: That is right.


George Alexander Drew: Just to emphasize it, I hear the words "That is right" coming from the opposite side.


John Sylvester Aloysius Sinnott: What are they doing up in Toronto?


Mr. Hees:: They are feeling very disappointed at this budget.


An hon. Member:: You mean you are.


George Alexander Drew: I think it would be appropriate if some of the hon. members would just refresh their memories because, whatever might have been said on earlier occasions, it certainly is a surprising thing to hear the statement made on behalf of the government that there is no foundation for the suggestion that there is waste and extravagance.
There is not an hon. member in this house who does not recognize that in the wide ramifications of government today there are bound to be mistakes, and that duplicating services are bound to develop, with the very best of intentions. But also there is not an hon. member in this house who does not know that, when those things occur, prudence would suggest that steps be taken to make inquiries and find out how that situation can be dealt with. There is not a single business enterprise in this country that would not follow that course in attempting to save money by increasing the efficiency of the general operation, without thinking for one moment that they were dealing with the possibility of dishonesty or anything of that kind within their own corporate enterprise. But businesses in this country, whether they be corporate or private, which seek to keep themselves solvent and to make profits, recognize that in the very nature of things, as business expands, various details are not as efficient as they should be, and that therefore it is wise from time to time to conduct an examination and improve the methods by which that business is done. That is what we have been suggesting on different occasions. That is what we have suggested again during this session, and it is what has been suggested over and over again in the course of the arguments during this present debate.
Mr. Speaker, when we talk of no foundation for the suggestion of waste and extravagance, first of all let us remember that we have two reports before us. We have the report of the Auditor General which tells the members of this house that there are eight different systems of accounting in the Department of National Defence, and that nothing effective has been done to improve that situation. That is something about which we should be concerned; that is something we have drawn to the attention of the hon. members of the house; and that is something the government could have assured the members of the house would be dealt with before we passed this budget.
We know perfectly well that, with the presentation of the budget, it is not going to be possible to conduct an inquiry such as is needed with regard to any of these problems before the budget has been passed so
The Budget-Mr. Drew the ordinary business activities of government itself may be carried on. But if the government had given an undertaking that such an inquiry would be conducted and had actually instituted an inquiry of this nature, then the members of this house could have said to their constituents and to the people of Canada generally: As a result of the arguments that have been presented, as a result of the arguments that you have sent in to us, the government has taken steps to conduct the kind of inquiry which we hope will lead to the elimination of waste and extravagance which you know does exist. But that has not been done. On the contrary, whenever the suggestion is made it is laughed at; it is ridiculed and met with the statement that there is no foundation for the suggestion of waste and extravagance.
Every hon. member knows that a system is inefficient, with eight different kinds of accounting and in that way an absence of effective supervision. Then we had the Currie report. There we had the most fantastic waste and extravagance that has been exposed at any time. Let us all remember that the details are still there. A railway siding was stolen; and it must surely appeal to the imagination to have the suggestion that you can build a new railway siding for a few thousand dollars. When we hear the statements that are made as to what it will cost to replace that railway siding that was stolen, then one begins to wonder what kind of accounting system there is at any place in the Department of National Defence. I do not think any hon. member has any doubt as to how expensive it would be to replace that railway siding.
Then let us remember that the horses are still on the payroll, and they still demonstrate the administrative inefficiency to which we refer. Let us also remember that all these bags of cement were stolen, and all the equipment was stolen that was mentioned. The fact that some of it was recovered has not in any way disposed of the fact that here is positive evidence of waste and extravagance, and that we have no evidence before us that anything effective is being done to stop that kind of waste and extravagance elsewhere.


John Sylvester Aloysius Sinnott: You will have headlines
tomorrow.


Mr. Dickey:: We put the culprits in jail.


George Harris Hees: The real culprits are still in office.


J. G. Léopold Langlois: You are in jail already over there.
2948	HOUSE OF
The Budget-Mr. Drew


George Alexander Drew: Mr. Speaker, perhaps some hon. members are beginning to wonder whether the greater responsibility is at the level where a bag of cement is stolen, or at the top where the inefficiency permits the taking of that bag of cement.


George Harris Hees: At the top.


George Alexander Drew: The real responsibility, the heavy responsibility, is with those who are assuming the over-all administration of a department which is going to spend some $2 billion of the taxpayers' money this year. It is also at the top where the over-all responsibility lies for the expenditure of more than $4 billion of the people's money.
When so much emphasis is placed on the fact that this action was taken, let it be recalled that none of this action was taken as a result of the reports made to the government. The action was not taken until an anonymous letter brought to the attention of the Royal Canadian Mounted Police what was taking place at Petawawa, and then finally what had been going on for some time and what had been reported to the government was exposed. Then, with the assistance of the press, which brought it to public attention, these people were prosecuted. Why should there be any claim to credit on the part of this government because those who stole those things were prosecuted? The amazing thing would be if they had not done it. The astonishing thing is that they were allowed to go on so long.


John Sylvester Aloysius Sinnott: Who appointed Currie?


George Alexander Drew: The other astonishing thing is that all the punitive action has been at the lowest level, and that as yet there is no evidence of any substantial measure of concern about the breach of trust that occurred at points above that level where this direct action was taken.
Again we have other things that have been brought to our attention. Let us remember and not be diverted from this simple fact of all the fantastic evidence of waste and extravagance and inefficiency that the Currie report placed before this house and the people of Canada. We must remember that the whole field of that inquiry embraced less than one per cent of the money that was being spent on defence by this government from the money collected from the taxpayers of Canada, less than one one-hundredth; and what we have been asking is that this government take appropriate steps to have a similar inquiry conducted into the remaining 99 per cent of the administrative area of defence expenditure.
IMr. Langlois (Gaspe).]

There is no reason whatever to suggest that similar inefficiency in the administration by the Department of National Defence and other departments is not there to be disclosed by such an inquiry. Even within the last few days the statement has been made that matters of this kind have been before the defence expenditure committee, and that we are waiting to hear from that committee what the situation is. Surely there is no hon. member in this house so naive as to believe at this stage that the defence expenditure committee is really making any serious attempt to come to grips with the waste and extravagance which we know exists.


Mr. Deputy Speaker:: Order. The hon. member knows that he should not refer to the proceedings of the committee.


George Alexander Drew: Mr. Speaker, I am not referring to the proceedings of the committee; I am referring to what comes out of the committee and to the lack of proceedings.


George Harris Hees: Lack of proceedings; that is the point.


Mr. Deputy Speaker:: Order. I distinctly heard what the hon. member said, and if he was not referring to the conduct of affairs by that committee, I do not know what he was talking about.


George Alexander Drew: Mr. Speaker, that committee was appointed some time ago, not during this session, with some measure of hope on the part of hon. members that it was going to attempt to do a serious job.


Some hon. Members:: Order.


George Alexander Drew: I am not prohibited by the rules of the house from referring to the sittings of that committee in other sessions, and that is what I am referring to. I would point out that this committee, set up with great hopes, has on every occasion used the majority supporting the government to prevent the kind of inquiry that all of us hoped would take place when it was set up. What will happen at this time, of course, I am not in a position to guess; but at any rate it would be a very encouraging change if there were any difference.
The point is it is not only before any committee but right in this house that requests have been made for other reports that we know exist, and of which extracts have been read into the record. Let the government deny that those extracts read into the record are not contained in the reports that were referred to. There is the report of Mr. Walter Gordon, another highly competent, reputable, experienced and respected chartered accountant. He also examined into certain aspects of the administration of government. We have

been asking for that report. That belongs to the people of Canada, not to this government. We as the representatives of the people of Canada have a right to see the report that was paid for by the money of the people of Canada, and which this government has no right to hold as its secret possession.
There are other reports which have been referred to and which the government has refused to produce, other reports paid for with the people's money, other reports which deal with the details of government administration. Those reports belong to the people of Canada, and I repeat that the members of this house who are the representatives of the people of Canada have a right to see what those reports contain. The government should have presented those reports to this house without any hesitation when they were asked for. I hope that within the course of this present debate-while I hope a vote on the amendment to the amendment may be taken tonight, it would seem that the vote on the main motion may not be tonight- the government will still let us see these reports which would be extremely helpful in discussing the subjects that are before the house for consideration.
Over and over again we have heard the suggestion that a certain level of taxation is the irreducible minimum. We are told that out of all taxes that are paid so much is for defence and so much for social security, and that these cannot be reduced. The evidence is clearly before us that expenses could be reduced without any reduction of efficiency. That applies to expenditures not only on defence but on other things as well.


Mr. Lesage:: It is on family allowances as
far as you are concerned.


George Alexander Drew: Of course that is the kind of interruption which demonstrates the measure of real argument that has been put forward by the government during the debate in regard to this budget. Apparently the hon. member does not know much about some of these things. The fact is, and he should know, that family allowances were administered by a government of which I had the honour to be the head. At the time we were commended by the Minister of National Health and Welfare (Mr. Martin) upon the effective co-operation that we gave in administering those affairs. May I simply say-


Mr. Marlin:: I did not compliment the hon. member for any co-operative action in respect to family allowances because, as he knows, family allowances were initiated by this parliament and by this government without any request for co-operation by any of the provinces. It represents entirely a measure
The Budget-Mr. Drew introduced by this government and by this parliament.


George Alexander Drew: Mr. Speaker, I certainly do not change what I said. I would remind the Minister of National Health and Welfare that there was very effective co-operation given to the Department of National Health and Welfare by the various service agencies that were available in the provinces in regard to the payment of these funds, and he is well aware of that fact.


Mr. Sinclair:: You said the family allowances were iniquitous legislation which you would fight in every court of the land.


George Alexander Drew: I simply repeat what I said, that interjections of the nature of the one just made are typical of the extent to which members of the government have directed their attention to the real subject matter of the debate.


James Sinclair: Mr. Speaker-


Some hon. Members:: Sit down.


George Alexander Drew: I propose to continue my
remarks.


James Sinclair: On a question of privilege, no member of parliament should be rebuked for quoting accurately what a member had said on a previous occasion. When I said the hon. member had said that family allowances were iniquitous legislation which he would fight in every court of the land, I was speaking the truth.


George Alexander Drew: Mr. Speaker, the interjection that has just been made merely indicates that the speech that was made here earlier tonight, to which I have already referred, was part and parcel of a pattern which has been approved by the government and applauded by its supporters.


An hon. Member:: Guttersnipe tactics.


James Sinclair: On a question of privilege.


Some hon. Members:: Sit down.


Mr. Deputy Speaker:: The minister is rising on a question of privilege.


James Sinclair: My question of privilege is a very simple one. Neither the Leader of the Opposition (Mr. Drew) nor any other member of this house has the right to assert that an hon. member in making a speech in this house is part of a preconcerted pattern.


Some hon. Members:: Oh, oh.


James Sinclair: If that is so, that pattern was laid in the provincial house when the Leader of the Opposition at that time said that family allowances were iniquitous legislation and he would fight them in every court of the land.

The Budget-Mr. Drew


George Harris Hees: Don't take yourself so seriously now that you are a minister. You are no bigger or better.


Mr. Deputy Speaker:: I shall have to ask hon. members not to rise on what I might term so-called questions of privilege. The Leader of the Opposition has the floor.


Mr. Cruickshank:: Make it short.


George Alexander Drew: Mr. Speaker, I propose to make the remarks that I rose to make, and not to be diverted in any way from making them by the kind of remarks which have been interjected by hon. members on the opposite side. If they wish the debate to proceed, then they have one way of assuring that it will proceed.


An hon. Member:: Talk a little sense.


George Alexander Drew: Mr. Speaker-


Mr. MacDougall:: In conclusion.


George Alexander Drew: The bright remark that was just made at least indicates that the hon. member is back in the house again. What we have seen on the other side of the house and on that part to the right which is described in terms which perhaps are not parliamentary-[DOT]


John Lorne MacDougall: On a question of privilege, neither the Leader of the Opposition nor any member of his group has been as consistent in attendance in this house as I. I have not been absent today.


George Alexander Drew: That was why we were so glad to see you back.


George Alexander Cruickshank: Make it before ten, George.


George Alexander Drew: When we have the repeated argument that there is no evidence of or no foundation for the statement that there is waste or extravagance, may I say that on the one hand we have positive evidence such as this house has never seen before. We also have very positive evidence that the government is unwilling to permit members of this house to see how extensive that waste and extravagance is elsewhere. But, Mr. Speaker, no matter what interruptions may be made, no matter what interjections there are, unrelated to the subject matter under consideration-


James Sinclair: Family allowances.


George Alexander Drew: -such as that which I have just heard-


James Sinclair: Agreed.


George Alexander Drew: -which is a perfect measure of the stature of the hon. member who has made it-


James Sinclair: And the Leader of the
Opposition.


Mr. Speaker:: Order.


George Alexander Drew: And, Mr. Speaker, the further observation gives further evidence of the stature to which I have referred.


James Sinclair: I could not think that low.


George Alexander Drew: Mr. Speaker, I feel sure that those who respect our parliamentary system and the position of a member of the government will be interested to see what members of this government look upon as appropriate comments in a debate in this house, made in the presence of other members of the government.


James Sinclair: That is very appealing.


George Alexander Drew: This government has today-


James Sinclair: He is thrown off his base.


George Alexander Drew: No, I assure the hon. member I have1 not been thrown off by any of his interjections, nor will I be.


James Sinclair: You were never on.


George Alexander Drew: I would suggest to the hon. member that if he would discontinue his childish remarks perhaps we might be able to proceed with the debate now before the house.


An hon. Member:: Let us make that unanimous.


Mr. Speaker:: Order. May I suggest to all hon. members that they direct their remarks to the house through the Speaker.


George Alexander Drew: Mr. Speaker, this debate has been dealing with the request from the government for the largest sum of money ever asked for in a single year at any time in peace or war from the taxpayers of Canada. Do not let anyone be beguiled into the mistaken idea that there is a reduction in the amount of taxes to be taken from Canadian taxpayers this year. There is not. There is an increase in both defence and nondefence expenditures. That increase is going to come from the Canadian taxpayers. That increase is going to be paid in various ways. In the end it is going to be paid by the ordinary taxpayer across Canada, no matter where the incidence of that tax may be.
With respect to one of the points that have been raised in this debate, I wish to make it perfectly clear that in supporting the subamendment we do not subscribe to certain things that have been said about corporation taxes. We believe it is desirable that there be a reduction in all taxes, and that the first and most important place to reduce taxes is in the case of those with the smallest incomes. We believe that those whose incomes are too
[Mr. Sinclair.1

small even to be called upon to pay income tax at all should have received some consideration by way of a reduction in both the Sales tax and the excise tax. We believe that reduction should have been general. We say it can be general and that there can be substantial reductions right across the board; but we do not agree with the idea that, having improved the position of the small taxpayer, any advantage is going to be gained by the small taxpayer through piling taxes on the corporations.
There is one perfectly good reason for that statement which should be borne in mind. It is only natural that many people think of corporations as big operations from which money can be taken painlessly without the ordinary taxpayers feeling the pinch. Let us be realists. Everyone in this house knows that as corporation taxes go up, those taxes are added to the cost of the products for which the people of this country pay. The result is that high corporation taxes are and have been extremely inflationary, and have contributed substantially to the inflation that we have felt in this country. When the statement is made that inflation has been licked that is indeed a misconception of the situation. All that has happened is that the very great inflation that has taken place has been halted, but inflation has not been licked.
Ask the person who is getting a pension that he thought ten or fifteen years ago was going to be enough to take care of him, whether he thinks there is no inflation in the country. Ask people who put their money into endowment policies years ago, thinking they were providing enough for their old age, if inflation has been licked. They will tell you it has not. All that has happened is that inflation has been temporarily frozen. We believe that inflation should be tackled and really tackled, and we believe it can be tackled by reducing the expenditures of government. We believe that the effect on inflation will be more than merely a reduction of the amount that would have been wasted otherwise; we believe that the example offered by a real effort to reduce government expenditure will have its impact right down the line.
We have the statements of economists, of businessmen, yes, of bankers, who are in the habit of dealing with these things, that high taxes and uncontrolled government expenditure encourage reckless expenditure both by corporations and by individuals. Over and over again it has been stated by economists of high standing and repute that there is nothing which contributes more to anti-inflationary pressure than an example being offered by government itself of simply good 68108-188
The Budget-Mr. Drew business methods in tackling high expenditures. That is what we have been asking for over and over again.
What we do say is this. Let us have the most efficient and effective defence forces that we can possibly have. Let us make sure that when we are spending the colossal sum of over $2 billion for defence, for something that is not productive in the ordinary sense of industrial, agricultural or mining production, every one of these defence dollars is properly spent and that we get as close as possible to 100 cents on the dollar in value in spending that money. It would be a refreshing and encouraging thing if, instead of this resistance to any suggestions, the government would say quite frankly to members of the house; "We know that, when we get into such an unusual field of expenditure as defence expenditure in peacetime, it is almost impossible to keep the same effective check on spending as it is with respect to ordinary expenditure. We welcome any suggestions that come to us as to ways in which savings can be made. We will listen to your proposals, and we will act upon them wherever they will produce some satisfactory result." But, when we see smiles and laughter on the other side, let it not be suggested for one moment that something cannot be done to tackle this problem.
Again, let us remember that our system of government is a combination of the British and the American systems of government. We have the parliamentary system of Britain and the federal system of the United States; and there are many similarities to both in our own unique system. A few days ago, when it was suggested from this side that an inquiry be conducted to examine the whole organization of government, it was said by a member of the government on behalf of the government-


Mr. Speaker:: Order. I think that was in a debate on another subject during the present session.


George Alexander Drew: Well, Mr. Speaker, I will put it this way. The government has not been willing to agree that it would be desirable that there should be an inquiry into the organization and administration of government. Any suggestion that such a course might not be consistent with the practice at Westminster indicates that anyone who is making such a statement is not aware of what has actually taken place at Westminster; because the fact is that the present organization at Westminster was the result of an inquiry into the organization of government which produced very striking and very effective reforms. It is because that system proved so satisfactory at Westminster many years ago
2952	HOUSE OF
The Budget-Mr. Drew that we have continued to press for an examination of that nature.
Let us see what has happened in the United States. They have had an inquiry there into the organization of certain of their defence administration. The commission that was appointed, as experts, believe they can save 10 per cent of their defence expenditures with an actual improvement in the quality and the effectiveness of the weapons, of the equipment and of the defence forces themselves.
It is not, of course, possible to say that because 10 per cent was the figure found by a highly competent commission in the United States, we would necessarily get the same result here. But it is possible to say that in a government administering a system very similar in many ways to theirs, it would be just a little more than human if some savings could not be discovered at some point by an inquiry of this nature.
Let me point out something else that has been done by the government of the United States. That government have many problems similar to ours because of the fact that they also are on the North American continent. As we are, they are called upon to make certain expenditures overseas for military establishments of various kinds. The committee of Congress that was appointed for the purpose of conducting that inquiry has just reported that immense sums could be saved by applying ordinary business methods to the supervision of expenditures on these overseas establishments, necessary because of the fact that our forces are overseas. We have that report and we have the report of the Sarnoff commission in regard to the military organization. We now know that there is an inquiry being conducted by what President Eisenhower described as "a task force of one hundred experts" into the organization of government.
These are things that are being done by a government situated on the same continent, also with a federal system and also with overseas commitments similar in many ways to our own. While we do not suggest for one

moment that we should imitate anyone else, let us be ready to admit that we have adopted many of our business practices from the United States. We have found many of their systems of accounting suitable to our needs, and we do believe that in those cases we can and will gain some advantage from seeing what they have done.
It is not long since we learned that Canada has spent $129 million on the Korean war. That is a lot of money; $129 million is a tremendous sum of money but, Mr. Speaker, $129 million is only a very small fraction of the $4 billion that we have spent since the beginning of the Korean period. Hon. members of this house have a duty, as well as a right, to find out where that remaining $3,800 million odd has gone and what results it has produced.
These are grave and serious hours. The news that comes to us from Europe today removes any suggestion that we are in a comfortable period where there are no great dangers in front of us. The events of yesterday and today, the cold-blooded murder of British airmen and the interference with the flight of a civilian aircraft going into Berlin, indicate the extent of the danger which is there all the time.


Some hon. Members:: Time.


Mr. Mclvor:: It is still a great budget.


George Alexander Drew: It has still one great supporter, anyway.



BUSINESS OF THE HOUSE

Mr. Fournier (Hull):: Mr. Speaker, I hope that as time goes on we shall conclude this debate. If we do succeed on Monday, we would take as a second item the motion to set up a committee on broadcasting. That, having been discussed for a whole day, could go through very easily, I think. Then we would take up the resolution to introduce a measure to amend the Emergency Powers Act.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Monday, March IS, 1953