1953-03-02

DIPLOMATIC INSTRUMENT


[Stage Direction]
Righl Hon. L. S. St. Laurent (Prime Minister): Mr. Speaker, I should like to lay on the table copies of the convention between Canada and the United States of America for the preservation of the halibut fishery of the northern Pacific ocean and Bering sea, signed at Ottawa today. This happens to be the thirtieth anniversary of the signature for the first time of a treaty on behalf of Canada by Canadians alone. That was the original halibut convention with the United States signed by the late Right Hon. Ernest Lapointe on March 2, 1923. It seemed fitting that this renewal treaty should be signed by the present Minister of Fisheries (Mr. Sinclair) and also by the present Minister of Veterans Affairs (Mr. Lapointe), the son of the signatory of this former treaty in 1923.
Mr. Applewhaite:: Mr. Speaker, may I be permitted to ask a question with respect to the statement just made by the Prime Minister in view of the importance of this matter to my constituency and to the Pacific coast. Would it be possible to ask the Minister of Fisheries to indicate what has been accomplished under the treaty and the changes in the new one?


Hon. James Sinclair (Minister of Fisheries):: The principal achievement, so far as our fishermen are concerned, is in the end result. In 1923 this great fishery on the west coast produced only 15 million pounds of halibut in a full year's fishing by the fleets of both nations. Last year, after thirty years of scientific study and conservation, 62 million pounds were produced by the two fleets in just two months' fishing; that is four times the amount of fish produced in just one-sixth of the time.
A second and equally important result has been the fact that this treaty, which was the first international fisheries treaty in all the world, having been so successful, has been copied by this country and other countries. Here in Canada we have had a succession of international fisheries treaties
all of which are proving extremely successful; they include the international salmon convention for the west coast, the sealing convention and the whaling convention, and the new northwest Atlantic fisheries treaty signed by ten nations to conserve codfish on the Grand Banks. It is because of the fact that we now have several international fisheries treaties that it has been necessary to make the first change in the treaty. The previous treaty was simply called the international fishing convention. There was no other when it was first signed. Now it is to be called the international Pacific halibut convention in order to distinguish it from the other treaties. The United States minister this morning commented on the fact that his country also had used it as a model for other international fisheries treaties they had signed.
The second change is in the number of commissioners. Up till now there were two commissioners from Canada and two from the United States. These commissioners are not paid. In the United States fishing is under the states rather than under the federal government, and the Americans are anxious to give Alaska representation on this commission. So the United States commissioners will represent the federal government, the state of Washington and Alaska. We have agreed, so that each country will have three commissioners.
The only other change is in the open season. The past convention called for one open season and one closed season each year. The scientists' belief is that there are some grounds which could be better utilized if there were different open seasons, and the new convention permits different open seasons to be declared in these great fisheries.



CANADA SHIPPING ACT


Hon. Alphonse Fournier (for ihe Minister of Transport) moved: the first reading of Bill No. 191 (from the Senate), to amend the Canada Shipping Act, 1934.
Motion agreed to and bill read the first time.

Questions PRIVATE BILLS



FIRST READINGS


[Stage Direction]
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
Moulard 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.


Mr. Harkness:: 1.	Is the Lucas-Rotax factory, in the Toronto suburb of Scarborough, manufacturing parts for the Orenda engine?
2.	If so, what capital assistance, if any, has been extended by the government?
3.	Was this capital assistance for construction of the plant or for tooling up?
2.	Province	NavyQuebec	$	92,749.54Ontario	
69,041.20Manitoba	
5,003.76Saskatchewan	
3,533.90Alberta	
6,357.47New Brunswick	
2,882.42Nova Scotia	
4,358.19Newfoundland	
1,236.74British Columbia	
11,455.40Prince Edward Island...	843.14


Mr. Dickey:: 1.	Yes. Fuel systems.
2.	$5,794,104.
3.	Construction $2,630,678. Equipment and installation $3,163,426.


A. V. ROE LIMITED'  CAPITAL ASSISTANCE
Mr. Harkness:: 1.	what is the total amount of capital assistance which has been extended by the government to A. V. Roe Canada Limited?
2.	What is the breakdown of this as between (a)
Orenda engine; (b)	CF-100 airframe; (c) other
capital assistance, and what for?


Mr. Dickey:: 2. $63,453,946.
2. (a)	$52,148,000;	(b)	$11,305,946;	(c)
Nil.



NATIONAL DEFENCE RECRUITING


Mr. Argue:: 1.	How much was spent in 1952 by the Department of National Defence in advertising in connection with recruiting campaigns?
2.	What part of the above amount was spent in each province and how much by each service within each province?
3.	What agencies were employed or given advertising contracts in each province, in connection with recruiting campaigns in 1952?
4.	What sum was paid to each agency for advertising handled in each province?


Mr. Blanchette:: 1. The Department of National Defence spent $2,222,933.15 for recruiting advertising during the calendar year 1952. Of this sum, $245,025.45 was spent on recruiting advertising through other government agencies such as the national film board and queen's printer.
Army	Air Force	Total$ 411,826.81	$ 332,379.42	$ 836,955.77345,462.92	224,598.96	639,102.0845,733.16	22,155.85	72,892.7751,003.69	13,778.04	68,315.6356,274.42	24;581.89	87,213.7832,722.79	13,202.59	48,807.8039,921.54	17,734.36	62,014.095,568.59	2,946.04	9,751.3785,867.00	41,498.79	138,821.198,137.97	5,051.11	14,032.223.	National advertising was contracted Employed to a very limited extent locally with:	Ronalds Advertising Agency, Ltd., were:	Saskatchewan-J. J. Gibbons Ltd.,Montreal, P.Q.; MacLaren Advertising Com- Regina, Sask.; Alberta-Stewart Lovick, pany, Ltd., Toronto, Ont.; Walsh Advertising Calgary, Alta.; British Columbia-MacLaren Company, Ltd., Windsor, Ont.	Advertising Company, Ltd., Vancouver, B.C.;

Manitoba-MacLaren Advertising Company, Ltd., Winnipeg, Man.
4.	All payments by the Department of National Defence are made direct to the advertising media employed.



CATTLE MARKETS, BRITISH COLUMBIA

Mr. Jones:: 1.	How many British Columbia cattle markets or auction sales did government buyers operate in 1952?
2.	What number and grade of cattle were purchased by them in British Columbia under the government price support policy in 1952?


Mr. Gardiner:: 1.	Authorized agencies bought live cattle at all British Columbia markets and auction sales in 1952.
2.	The beef accepted by the agricultural prices support board in British Columbia in 1952 totalled 10,527,004 pounds, equivalent to approximately 17,000 cattle. Over 85 per cent of the beef accepted by the board was from cattle in choice and good grades.



FISHING INDUSTRY, CEYLON  CANADIAN EQUIPMENT

Mr. Robichaud:: 1.	Has the federal government or any department thereof made any commitment to supply motorboats, refrigeration and other equipment to help modernize the fishing industry in Ceylon?
2.	If so, (a) what equipment is to be supplied, giving description of same; (b) what is the estimated cost to Canada?


Mr. Si. Laurenl:: 1.	Yes. The government has agreed to supply fisheries equipment to Ceylon under the Colombo plan.
2.	(a) Two 44-foot fishing vessels (MV Canadian and MV North Star) and related gear; one 127-foot steam trawler (ST Maple Leaf); one refrigeration plant.
(b) $1 million.



NATIONAL DEFENCE


Mr. Harkness:: 1.	Who operated the Department of National Defence sawmill at Petawawa?
2.	If it was operated by a contractor, how was the contract let?
3.	If it was operated by civilian labour, out of what vote were they paid and who was in charge of the operation?
4.	How many logs (board measure) were cut for the use of this sawmill in 1949, 1950, 1951 and 1952?
5.	How many of these logs (board measure) have not been sawn into lumber and what is their estimated value?
6.	Of the logs which have not been sawn, how long is it since they were cut and to what extent have they deteriorated?
Questions
7.	How many cords of slabs are still on hand at this mill and what is their estimated value?
8.	What was the total amount of lumber produced at this mill and what was its estimated value?


Mr. Campney:: Mr. Speaker, I should like to answer orally this question standing in the name of the hon. member for Calgary East (Mr. Harkness), and also question No. 54, standing in the name of the hon. member for Melfort (Mr. Wright), both of which relate to the operation of a sawmill at Camp Petawawa. These questions appeared in Votes and Proceedings for February 26. On February 28, before there had been an opportunity to reply to them, the hon. member for Melfort, as reported in the Ottawa Journal of that date, saw fit to make a number of public allegations charging waste in connection with timber operations at the Petawawa camp.
The facts with respect to the timber operations referred to are as follows:
In the winter of 1950-51 it was considered more economical to carry out lumbering operations on the Petawawa camp properties rather than to purchase lumber in the rising market. Such operations were carried out, and logs were sawn the following summer. This lumber was stockpiled against anticipated requirements. It was considered that this program should continue during the following year and logs to the approximate quantity of 500,000 board feet were cut during the winter of 1951-52 to be sawn the following summer. As a result of reconsideration of this policy, in June of 1952 the operation was discontinued and it was decided to declare surplus the logs then cut and to place the sawmill in storage.
With respect to disposal of the logs Crown Assets Disposal Corporation have advised me as follows:
On July 25,	1952, the Department of
National Defence reported surplus to Crown Assets Disposal Corporation 500,000 feet board measure of jack pine and white pine in logs at Petawawa, Ontario. The declaration was received by the corporation on July 28, 1952, and the availability of this material was circularized to forty-two likely purchasers. Five bids were received. On September 8, 1952, the logs were sold at $29 per 1,000 board feet to the second highest bidder, A. Amyot and Sons, of Hull, Quebec, who put up a deposit of $14,500. The price was in line with the prevailing market.
The highest bid submitted was one of $17,000 received on August 19 from Noik Lumber Company, Pembroke, Ontario but this firm wired on August 26, 1952, that they could not raise the necessary funds and

Questions
cancelled their bid. With respect to the operation of the sawmill, I might say that the declaration of surplus included a right to rent the sawmill which belonged to the Department of National Defence.
On the 15th September, a letter was received from Amyot and Sons requesting authority to rent the army sawmill at Percy Lake and offering to pay as rental $2 per thousand board feet of lumber sawn. This offer was recommended for acceptance and, on the 26th September, Amyot forwarded his cheque in the amount of $1,000 covering the estimated rental and also advising that he had taken steps to insure the mill in the amount of $3,750. Amyot and Sons commenced sawing of logs on the 1st October, 1952, and shut down because of winter weather on 7th November, 1952. The mill has been placed in a state of preservation since that time. Amyot proposes to continue operations in May, 1953.
As will be seen from the foregoing answer to these questions, the allegations made by the hon. member for Melfort as reported in the Ottawa Journal of Saturday, February 28, are not correct. Might I in that connection suggest that if hon. members would avail themselves of the opportunities which exist for securing information from government departments, before hastening to make erroneous charges, the public would be sphred a great deal of inaccurate and misleading information, and public servants would not suffer unfair and unjust criticism.


Mr. Graydon:: More of a lecture than an
answer.


Mr. Harkness:: Mr. Speaker, I hope that
this is not going to be considered as an answer to my question number 49. My question is in eight parts, and the majority of the parts of this question have not been answered by the statement just given by the minister. Of course, I dissociate myself from his speech, in regard to making any allegations which were not correct. I have made no allegations. I would still like to have an answer to these questions.


Mr. Diefenbaker:: We are having difficulty getting information.


Mr. Howe:: Answered.


Mr. Speaker:: Question No. 49 answered.


Ralph Osborne Campney: I believe the question has
been answered.


Mr. Drew:: Stands.


Douglas Scott Harkness: Mr. Speaker, the minister has not answered the question. I have asked, for example, how many logs, board measure, were cut for the use of this sawmill in

various years. I have asked how much lumber was cut, and what its estimated value would be. I have asked how many cords of slabs are still on hand, and what their estimated value is. I have asked whether it was operated by civilian labour. None of these questions has been answered.


Gordon Graydon: He has just thrown a lot of sawdust around.


Ralph Osborne Campney: The logs were sold. I do not know that we are supposed to follow the logs, and to find out what slabs and lumber were cut from them. We sold the logs.


Mr. Speaker:: Of course, I cannot force a
minister to answer a question.


An hon. Member:: Why?


Mr. Speaker:: It is beyond the Speaker's
power to do that.


An hon. Member:: Let it stand.


Mr. Speaker:: If the minister says he has
answered the question, although the answer may not be satisfactory to the hon. member I have to accept it.


Clarence Decatur Howe: Answered.


Douglas Scott Harkness: I do not think the minister contends that he has answered these various questions which I have just referred to. I would ask that the questions stand on the order paper and that answers be produced.


Mr. Speaker:: As I say, I cannot require any question to be answered. Has the question been answered?


Some hon. Members:: No.


Some hon. Members:: Yes.


Mr. Speaker:: I cannot hear. It is only
the minister from whom I would like to get an answer.


Ralph Osborne Campney: I feel that I have answered the question.


Mr. Speaker:: Answered.



INTERNATIONAL PEACE GARDEN INC.

Mr. Thomas:: 1.	Did the Canadian government make grants to the International Peace Garden Ine.?
2.	If so, in what years?
3.	What was the total amount of these grants? Mr. Winters:
1.	Yes.
2.	1936-37; 1937-38; 1938-39; 1939-40; 194950; 1950-51; 1951-52.
3.	$97,000.



NATIONAL DEFENCE, PETAWAWA    LOGS AND LUMBER

Mr. Wrighi:: 1.	How many logs, board feet, were cut on the Petawawa military camp area, during the years 1951 and 1952?
2.	Were contracts let or tenders called for the cutting of these logs?
3.	How many logs, board feet, were piled on skid-ways on Percy lake on the Petawawa river in the camp area?
4.	Who owns these logs?
5.	How long have they been on these skidways?
6.	Who owns the sawmill on Percy lake?
7.	If government owned, when was it purchased, from whom, and at what price?
8.	How many days did it operate during 1952; who operated the mill and how much lumber was cut?
9.	What disposal was made of the lumber sawn?
He said: I do not consider that No. 2 of this question has been answered by the minister's statement.


Ralph Osborne Campney: I think if the hon. member will read my statement in Hansard he will find that his question is answered.


Mr. Speaker:: Answered.



WESTMINSTER HOSPITAL, LONDON, ONT.

Mr. While (Middlesex Easl):: How many patients were hospitalized, excluding outpatients, at Westminster hospital, London, Ontario, (a) as at November 1, 1952; (b) as at December 1, 1952; (c) as at January 1, 1953?


Mr. Mulch:: (a)	1,180;
(b)	1,184;
(c)	1,106.



QUESTIONS PASSED AS ORDERS FOR RETURNS


SOUTH SASKATCHEWAN RIVER


Mr. Diefenbaker:: 1.	Is there a further investigation now proceeding as to the practical feasibility of the South Saskatchewan river project, and to its economic value?
2.	If so, what persons are engaged in such investigation and what is the nature thereof? .
3.	Will such further investigation be confined to P.F.R.A. reports?
4.	If not, what other sources of information will be considered?



FINANCE


Mr. Starr:: 1.	In what departments or corporate bodies of the federal government, or boards or councils established under any act of the federal government, were unspent allotments of money transferred to purchase, holding, special fund or other accounts in each of the fiscal years 1949-50, 1950-51, 1951-52, 1952-53?
2.	What to date were the transfers in each case, giving date, amount and authority under which transfers of unspent money were made?
Orders jor Returns
3.	What was the total to the credit of each of the above accounts as of February 1, 1953?



FINANCE-EXECUTIVE ORDERS SUPPLEMENTING MONEY VOTES

Mr. Starr:: In how many cases, giving department vote number, and total amount of money involved in each case, were executive orders issued in each of the fiscal years 1949-50, 1950-51, 1951-52, 1952-53 to date, temporarily or otherwise, supplementing votes of money by parliament?



FINANCE


Michael Starr: What cheques totalling $100,000 or over, giving date of issue, date cashed, specific amount, to whom issued, and indicating whether it was a direct payment or in trust for payment, were issued in the months of March or April in each of the years, 1949, 1950, 1951, 1952, covering payment for goods or services not at the time delivered or completed, or the purchase of property for the conveyance of which deeds were not completed before the close of the fiscal year?



MAPLE SYRUP, EQUIPMENT AND PRODUCTION

Mr. White (Middlesex East):: 1.	In what year was legislation introduced which granted funds for the replacement of maple syrup equipment?
2.	How many provinces in Canada take advantage of this plan?
3.	How much money has it cost the federal government each year, by years, since the inception of the plan to 1952, inclusive?
4.	How many maple syrup producers are there in the province of Quebec producing over fifty gallons of maple syrup every season, or its equivalent in maple sugar?
5.	What are the export requirements (a) quality basis; (b) documentary requirements, for maple syrup being exported to the United States of America?
6.	What are the export requirements (a) quality basis; (b) documentary requirements, for honey being exported to the United States of America?



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. E. D. Fulton (Kamloops):: Mr. Speaker, on a question of privilege, which I have deferred raising until questions had been dealt with, question No. 1 has been standing on the order paper since January 30, over a month ago. It deals with only one firm and has not been answered, either by being passed as an order for return or by being answered in the usual way. I hope that this is not proof of the pattern we have seen lately whereby-


Some hon. Members:: Order.


Mr. Speaker:: Order.


Edmund Davie Fulton: On the question of privilege, I point out to you, sir, that we have just been given a lecture by the Solicitor General
2512	HOUSE OF
Inquiries of the Ministry (Mr. Campney) saying that we should ask for information. This question has been on the order paper for over a month and I am saying that I hope it is not part of a pattern of suppressing information.


Mr. Speaker:: Order; I cannot allow the
latter part of the hon. member's question of privilege.


Edmund Davie Fulton: I bring up this matter as one affecting the privileges of hon. members who are surely entitled to information.


Leslie Alexander Mutch: Yak, yak, yak.


Edmund Davie Fulton: I know the hon. member for Winnipeg South (Mr. Mutch) does not like this, but I contend that the government is required to give information and I am asking-


Mr. Speaker:: Order. The hon. member
for Kamloops has raised a question of privilege and has stated his question of privilege.


Leslie Alexander Mutch: Plus a lot of other things.


Mr. J. H. Dickey (Parliamentary Assistant to the Minister of Defence Production):: Mr. Speaker, as a question of privilege has been raised perhaps I should say a word. I recommend to hon. members that they read the question to which the hon. member has drawn attention and I am sure they will recognize the difficulty of preparing the answer. The answer is being prepared and as soon as it is available it will be tabled in the house.



RESUMPTION OP DEBATE ON MOTION TO SET UP BROADCASTING COMMITTEE

[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinton):: I should like to ask a question pertaining to the business of the house. In view of the fact that the debate on the budget is being suspended this afternoon for the purpose of taking up a certain bill so that it may be referred to a committee, I should like to ask the leader of the house or the Minister of National Revenue when we may expect the resumption of the debate on the motion to appoint the radio committee, which debate was adjourned five weeks ago tomorrow night.


Alphonse Fournier: I have consulted with my colleagues concerning that committee and they tell me that the moment we get the budget debate out of the way we will call that motion.



LIVESTOCK AND MEATS


[Stage Direction]
On the orders of the day:
Mr. J. A. Ross (Souris):: I should like to direct attention to the right hon. Minister of Agriculture. Has he definite information to the effect that the United States embargo against Canadian cattle has been lifted and, if so, what regulations and quotas will apply in the future?


Right Hon. J. G. Gardiner (Minister of Agriculture):: Mr. Speaker, there is information with regard to the opening of the United States boundary.
The United States today removed the restrictions on the importation of Canadian livestock and meats imposed because of the outbreak of foot-and-mouth disease in Canada. The products freed from these restrictions include live cattle, sheep and swine; fresh and cured beef, veal, mutton, lamb and pork; hides and other animal byproducts; hay and straw.
At the same time the Canadian government removed the import controls on livestock and meats, imposed March 1952, to deal with the emergency situation during the period when normal market outlets were closed.
I think probably I should make a little fuller statement than that on the matter, and if the house will permit me I will do so now. It was announced on February 25, 1952, that the animal disease in western Canada was foot-and-mouth disease. The United States government immediately placed an embargo on the importation from Canada of cattle, sheep, or other domestic ruminants, or swine, or of fresh, chilled or frozen beef, veal, mutton, lamb or pork. Restrictions were placed on the importation of cured pork products, hides and other animal by-products, hay and straw. The controls were imposed by means of amendments to bureau of animal industry orders, under the authority of section 306 of the Tariff Act of 1930. On December 13, 1952, the regulations governing the entry of Canadian hay were amended to permit the entry for use as feeding material of Canadian hay produced in an area east .of the 85th meridian west longitude and transported directly to a port in this area.
The intention to declare Canada free of foot-and-mouth disease on March 1, 1953, "if present favourable conditions continue", was announced on November 28, 1952. The announcement, made by the acting secretary of agriculture of the United States, stated that action had been started on regulations

which would permit the entry of Canadian cattle, sheep, other domestic ruminants, and swine, and fresh, chilled or frozen beef, veal, mutton, lamb, or pork. The restrictions applying to other animal products and hay would be removed. On December 6, 1952, a "notice of proposed determination of nonexistence of foot-and-mouth disease in Canada" was published in the Federal Register.
On March 3, 1952, action was taken under the Export and Import Permits Act and the Emergency Powers Act to prohibit, except under permit, the entry of livestock and meat, excluding canned meat-P.C. 1234. This order is being revoked.
During the past year certain measures have been taken under the Animal Contagious Diseases Act to prohibit or restrict the entry of certain United States products for sanitary reasons. On May 10, 1952, by ministerial order, the entry from the United States was prohibited of certain fertilizers and feeding stuffs, to reduce the danger of the introduction of anthrax. This order was amended on July 8 to prohibit the import from the United States of (a) bone meal, (b) fertilizers containing bone meal, (c) feeding stuffs containing bone meal intended for consumption by cattle, sheep, goats, other ruminants, swine, horses and poultry. This order is still in effect. On August 29, by ministerial order, the importation was prohibited from the United States of swine, uncooked pork, uncooked pork products, pork offal and garbage. This prohibition, which is still in effect, was imposed because of the prevalence in the United States of vesicular exanthema. Further import requirements for sheep and goats of United States origin were contained in an order in council, P.C. 103, of January 30, 1953, as safeguards against the introduction of scrapie. The new regulations provide that sheep and goats, other than those imported for immediate slaughter, will not be permitted entry unless they are accompanied by a certificate that the animals show no sign of scrapie, that scrapie has not existed on the premises of origin for the three years immediately prior to shipment, and that the animals are not the progeny of a sire or dam that was affected with scrapie or other infectious or contagious disease.
Those are the regulations affected by the order, and also the regulations which will not be affected by the order, which have been brought in recently in order to take care of contagious diseases.


James Arthur Ross: Is there a limit to the number of cattle and the amount of beef that can be shipped from Canada to the United States during the calendar year?
Inquiries of the Ministry Mr. Gardiner:	There has not been any
quota up until now. A quota was arranged at the conference held in Geneva some time ago but it has not been made effective up until now. There is no quota at present.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: In
the absence of the Minister of Veterans Affairs, I should like to direct a question to the genial parliamentary assistant. I must apologize for not giving him notice but as it is a matter of great public urgency I trust he can take my' question as notice and if it requires further consideration answer it tomorrow. Is it the intention of the government to introduce legislation at this session to amend the War Veterans Allowance Act in order to increase the amount received by war veteran recipients, in response to the representations of the Canadian Legion?


Leslie Alexander Mutch: The
answer obviously must be that this is a matter of government policy which will be announced by the responsible minister in due course.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Angus Maclnnis (Vancouver East):: should like to direct a question to the Minister of Trade and Commerce. Can he tell the house if there are any further developments in the grain handlers' strike on the Pacific coast? Has he any further information in addition to that which he gave the hon. member for Rosetown-Biggar last Thursday?


Clarence Decatur Howe: All I know is that negotiations are proceeding. I might point out that the most important of the elevators affected by the strike is owned by the producers of the province of Alberta who I presume are the chief sufferers from any delay in settling the strike. I have no doubt that negotiations are being expedited for an early settlement.

Post Office Act CROWN CORPORATIONS



INQUIRY AS TO ORDERS IN COUNCIL RESPECTING SALARIES OF OFFICIALS

[Stage Direction]
On the orders of the day:
John George Diefenbaker: I
should like to direct a question to the Prime Minister arising out of the orders in council tabled the other day by the minister whose department has charge of the Central Mortgage and Housing Corporation. Those orders in council had to do with the payment of salaries to the president and vice-president. Have orders in council also been passed in connection with the salaries of the governor or deputy governor of the Bank of Canada-


Some hon. Members:: Order paper.


John George Diefenbaker: *-of the chairman of the Canadian Broadcasting Corporation, the president and vice-president of the Canadian National Railways and like emanations of the crown? Have orders in council been passed covering their salaries?


Right Hon. L. S. Si. Laurent (Prime Minister):: I will have to see the exact
terms of the hon. member's question and have the records looked up. There are various acts which provide that the salaries of the officers concerned shall be fixed by the respective boards but shall be subject to the concurrence of the governor in council. I will have to check with respect to each of the institutions the hon. gentleman has mentioned.


John George Diefenbaker: Thank you very much. If so, will such of the orders in council as have not been tabled be tabled? Apparently the ones the other day having to do with the Central Housing and Mortgage Corporation had not been tabled previously.


Mr.   Si. Laureni@: I will have the matter looked into.


Mr. Speaker:: Order. A number of hon. members have suggested that the question of the hon. member for Lake Centre should appear on the order paper. Normally it would have to appear on the order paper, but the other day a notice of motion for the production of papers concerning a similar matter was before the house and there was some question as to whether the information should be given. For that reason I have allowed the question to be asked.



POST OFFICE ACT


Hon. Alcide  Cole@Posfmasier General: the second reading of Bill No. 107, to amend the Post Office Act.


Gordon Graydon: Mr. Speaker, at the resolution stage of this measure a rather extended discussion took place, and I think the extent of the discussion was such that there is perhaps no need for a repetition of the many arguments to which the minister listened at that time. But I do want to make one or two observations before second reading is carried. The bill of course will not go to the committee of the whole but, as I understand, will be referred to the special committee set up to deal with post office matters and in particular with the question of rural mail service. There is one thing that I hope the minister will make very clear when the committee sits.
Section 24 of the old act is being amended and provision is being made that when the Postmaster General does not accept the lowest tender for a rural mail contract he must report his reasons therefor to the treasury board. I make this suggestion as a guide to the minister when the committee sits. I hope the committee will insist and that the minister will not object to having those reasons made public, if it becomes necessary so far as parliament is concerned, when a contract is questioned in the house at a later time. I only throw that out so that the minister may be prepared for that kind of suggestion when the committee commences its hearings.
I would also like to make a further suggestion to the minister, and I think I made this suggestion perhaps indirectly or obliquely when the matter was before the house in its resolution stage. I hope that, in dealing with rural mail service in general, the suburban mail service may not be forgotten. I know that in the strict terms of reference the committee has to do with rural mail contracts, but, as I pointed out to the minister before, there is a steadily developing problem in suburban areas. I think it has been met partially by the United States government in similar circumstances and I am wondering if perhaps it might not be advisable for the minister, when the committee does commence hearings, to summon someone or to bring satisfactory evidence as to how the question of suburban mail delivery is being handled in the United States in that intermediate stage between rural mail service and letter delivery service. In certain areas in the United States they have problems similar to those we have in Canada.
I must confess that in my reading of the manner in which the United States government deals with that suburban mail delivery I have not been too clear as to exactly how it is worked. I am sure there must be other members in the house who feel as I do, and

we would like to know whether there are some parts of the system in the United States that could be adapted to our particular circumstances in Canada. Those of us who happen to live in rapidly developing areas have problems which perhaps other members may not be fully acquainted with. I do not want to make it a special regional problem but I do hope that when the committee does sit the extent of the reference will be broad and large enough for us to discuss suburban delivery in connection with the rural mail service.
The committee, of course, will deal with these various matters set out in the bill to amend the Post Office Act. I know that the minister is not prepared, and he indicated at the resolution stage he was not prepared, to grant a full investigation into the Post Office Department. I think that would be a very fruitful investigation but I am not going to renew the suggestion. I will say that when the rural mail couriers are brought down here, or their representatives, I hope the minister will not forget that many of these people are working for a small pittance and are having such a difficult time to make ends meet. As a matter of fact, as the minister and others know, the reason for this legislation is that they are not making ends meet. That is why the legislation is here and I hope that some provision will be made to hear representatives of the rural mail couriers from various parts of Canada. They should not have to come here at their own expense-they could not afford to do so-and if we ask them to come at their own expense it will be tantamount to refusing them a hearing altogether.
I do not know what the general procedure is in connection with committees of that kind, regarding the subpoenaing of witnesses, and whether their expenses are paid; but I do hope that special consideration will be given to the rural mail couriers. I do not think we should just hear technical experts about rural mail. I think we -should hear from at least the odd one of our rural mail men, men who actually have to carry the mail themselves under these conditions which, as best we can, we are trying to remedy.
I am not suggesting to the minister that many of them should come here; I would not suggest that for a moment. But enough rural mail couriers should be brought here to give evidence so that we may have a fairly true, accurate and full picture of what the problems are in the various regions where the rural mail couriers carry on their work.
In addition, I hope that, when the committee does sit, full consideration will be given to every angle of the changes that are
Post Office Act
suggested. We might as well speak frankly about it and not put any false face upon the problem that we face. We have got to find some way of at least giving some equity to the people who carry the rural mail. At the same time, we must avoid putting them in the position where there will likely be any patronage abuses in connection with the system. I can quite understand that the minister will be anxious, of course, not to have too much responsibility left on his doorstep in certain cases. But there might be some minister at some time who would welcome some responsibility with respect to the manner in which these contracts might be changed from time to time. I can only point out that I have been between two fires in my thinking, as far as this is concerned. I want to help the rural mail couriers on the one hand, but I do not want the rural mail couriers to get into the clutches of somebody who might conceivably have some little party political interest in mind. As I look across the chamber here I cannot conceive of anyone there that would have such a thought- particularly at this stage of our parliament. In any event, I do want to suggest that in our committee sessions we will have to avoid that feature very carefully. I may say that we are very anxious, when we take office, not to have in our power anything that would perhaps be regarded as something which could be abused. We are anxious to see that the rural mail courier gets a square deal and that he shall not have to vote in a particular way in order to get it. I think that ought to be the general belief and the general policy of our committee as a whole.
In giving consent to second reading of this bill-and I fancy there will be no division in connection with it at this time, because I do not suppose any of us are in a very good position to say whether this bill ought to be passed or ought to be approved at the moment-I think all of us will welcome the committee's fact-finding adventure. When we get the facts and when we have the evidence fairly in front of us then we will, of course, be in a better position to judge whether this bill ought to be endorsed in principle or not. In the meantime, I think it ought to go before the committee, and I for one will only be too glad to see it get there at the earliest possible moment.
I suggest that when the committee is set up those who are sitting on the committee should park their party divisions outside the door and do a job for the rural mail couriers, because this, I think, is one problem that for a long time has almost baffled solution by people on all sides of the house. I am hopeful that when this committee brings in its decision with respect to the rural mail

Post Office Act
couriers we will not have this evergreen debate year in and year out regarding the rural mail couriers' problems.
I think everyone will welcome some kind of a finale to the problem and to the inequities which have existed so long in connection with the work of such an important section of our Canadian people in the public service.
I would hope that this would be a very fruitful committee and I take it that the house will be prepared to give second reading to the bill in order that we may then be in a position to learn the facts that this committee will no doubt bring to the house.


Mr. Cruickshank:: I did not want to interrupt the speaker, but may I ask him a question?


Gordon Graydon: It is a little premature because I am not postmaster general yet, but I will answer without prejudice.


George Alexander Cruickshank: I sincerely hope that the need for assistance to the rural mail couriers and their alleviation from their present problems will not have to wait until you hold that high office.


Gordon Graydon: I could not hear that.


George Alexander Cruickshank: You will be able to read it in Hansard. It is very good. The hon. member for Peel (Mr. Graydon) suggested that there was patronage. I want to assure him that so far as British Columbia is concerned-I know other hon. members will bear me out-there has been no patronage in ;he Post Office Department. The only patronage in the postal department of which 1 am aware is in connection with the issuance of stamps. The two-cent stamp has a picture of the Leader of the Opposition (Mr. Drew) on it. Take a look at that some time, and see if that is not so. Perhaps the picture is not as good looking, but it bears quite a resemblance to the Leader of the Opposition.
I do not know what the solution is to the rural mail carrier problem. So far as my riding is concerned, we have nothing to say now about rural mail carriers. If the hon. member, on behalf of his party, is willing to accept it, I am willing to hand over any appointments in that regard that I have the privilege of making, because there will always be a defeated candidate in my riding. If you are able to make one appointment, you please only one family but you make enemies of fifteen families. The hon. member can make every appointment in my riding.


Herbert Wilfred Herridge: In:
response to the appeal by the Minister of Public Works (Mr. Fournier) on Friday night,

I shall be quite brief. Before proceeding with my speech I want to say that this is the first time I have heard the member for Fraser Valley (Mr. Cruickshank) admit that there was one problem he could not solve.
In the main, I want to support the remarks of the member for Peel (Mr. Graydon) with respect to giving the carriers from various parts of Canada an opportunity to come before a committee and present their case. The committee will have a very difficult problem in attempting to establish a pattern that will be satisfactory all across Canada. I believe we all admit that, in order to do that, we must have the benefit of the personal experience of some of the men who have carried mail in the various provinces of Canada. The conditions are so different from province to province, the climate, the topography, the density of population, wage standards and so on.
I must say again that I am pleased to see this bill going to the committee as quickly as possible. I do hope that the Postmaster General (Mr. Cote) will listen to the members from this side and provide an opportunity for these people who have carried the mail for some years to come here and give their evidence.


Mr. Robert Fair (Battle River):: On behalf of the Social Crediters, I should like to state that we are glad this bill has been introduced. We hope to receive a lot of information when the committee is set up. For many years we have received complaints from the carriers, and I hope that after the committee has completed its work we shall not receive any more complaints.
I think some solution can be found, perhaps not to all the problems, but at least we can iron out some of the difficulties these carriers have. When this matter was in the resolution stage, I made some suggestions. I expect to be a member of this committee and hope to be able to repeat those suggestions as well as bring forward some new ones as the work of the committee goes along.
I can see some pitfalls in the proposed bill, but with the genial Postmaster General (Mr. Cote) we have now I hope there will be no abuses. I believe some provisions of the bill open the way for abuses. I am not suggesting that the present Postmaster General will abuse any of the opportunities that the legislation does present. I can see some good points in the measures, and I hope to give it proper support at the right time.


Mr. H. R. Argue (Assiniboia):: I am pleased to support the second reading of this bill, and its reference to a committee of this house. I feel that the provision in the bill

which permits an upward adjustment of carrier contracts is a good one. It seems to me that the rates in many contracts are extremely low. It is only fair that some provision be made for an upward adjustment in the rates, so that carriers may be paid a reasonable amount for this essential service.
The provision that contracts for under $1,000 shall be let without tender perhaps leaves the door open for the accusation of patronage. On the other hand, I feel that if that provision were used fairly and equitably it could result in an improvement for the rural mail carriers. It seems to me that the amounts that are paid for this service are sometimes too low. When a service is open for contract a number of people who need some additional money very badly will underbid one another until the person who gets the contract perhaps makes little or nothing out of it. I would suggest that the committee might consider some kind of formula. I believe it has already been suggested that a mileage rate might be established, perhaps based on the topography, the type of highway and so on, in the area. If something could be spelled out that perhaps would not fix the remuneration but at least might serve as a guide to what would be fair and equitable for a certain job, it would be useful.
We might divide the country into various sections. I imagine a rate, for example, could be worked out that would be fair for Alberta, Saskatchewan and Manitoba, because within those three provinces the conditions which a mail carrier must face are quite similar. I would think that a departmental committee might be set up for the purpose of considering applications for contracts. In that consideration I would give high preference to veterans requesting a contract. I would give considerable weight to an applicant who had a family to maintain. I would give him additional consideration if his other income was very low. I can think of young people starting in business or starting on a farm who could very well use some additional income. I believe, therefore, that in determining to whom a contract will be given, where that contract is for less than $1,000, some consideration should be given to the needs of the person applying.
Naturally, you would have to investigate each applicant to see that he could put forward the necessary guarantee that the service would be carried out. There are other types of individual contracts that are made after the applications have been processed by a committee on the basis of need. I know that the provisions of this bill may increase the possibility of patronage. It seems to
Post Office Act
me that there is a lot of consideration being given to the early passage of this bill. Perhaps it has something to do with the imminence of a general election; I am not sure. In any case, I am pleased to lend my support to this bill, as I think the provisions are reasonable if contracts are let after due consideration of the various points I have mentioned. I believe if that were done it would result in definite improvement in the lot of our rural mail carriers.


Mr.  W. Chesier S. McLure@Queens: want to say that I am in favour of the passage of this bill. However, there are a few items in it which I should like to briefly draw to the attention of the Postmaster General (Mr. Cote), with particular reference to my constituency. We find that one of the amendments in this bill gives to the Postmaster General the right to settle contracts for less than $1,000, but he must do that on a basis comparable to the services already existing in that area. Therefore, before deciding on the $1,000 one or less, he will have to take into consideration how it compares with other contracts already in existence in that constituency. For instance, let us take the situation in a constituency that I myself know. In that constituency there are 106 contracts to be let. With the passing of this act the Postmaster General (Mr. Cote) is given almost absolute control, inasmuch as he would control about 75 or 80 of those contracts, unless he is going to compare them with other contracts; and if so, then surely they would step up beyond the $1,000 mark.
In connection with the letting of those contracts I can also see this situation unless this part of the bill is carried into effect, namely, that the services under the contracts must be comparable to the services in other parts of the district. For instance, in our district I have always complained about the terrible discrimination with regard to these contracts. Instead of the situation getting better, I find that it has been getting worse. For instance we find one man, driving a distance of 15J miles and serving 46 boxes, who gets $1,500; while two other mail couriers, or probably four or five, drive twice that distance-that is 30 miles-and the Postmaster General says to them: "You have got to serve 126 boxes but we are going to give you $110 less than the man who is driving 15J miles." Those are things that, when he has this committee, I think the Postmaster General should go into. I believe he should try to get a fair wage scale for those people who are carrying the mail. I could go on, as I have done before, and put on record what has happened in specific cases. Many of these

Post Office Act
cases should be looked into by this committee that is appointed and which should be functioning fairly soon.
Another thing that I should like to bring to the attention of the Postmaster General is this. Where a contract is to be let and tenders are equal-say $1,200 for each contract -what will be the procedure under this amendment? Will they go back and will new tenders be called, or will the Postmaster General reserve the right to give the contract to whomever he desires if the tender is accepted in the amount of $1,200? At the present time I think that in most cases when tenders are equal, are $1,000 or over and have been turned back, it is the only time that the representative in that constituency, whoever he may be, gets an opportunity of naming the man whose tender will be accepted.
Another matter that I should like to draw to the attention of the Postmaster General and which I think should come before this committee is that of the extra help at the Christmas season and the pay that this extra help gets. There is no other time in the whole year, in the service of the Post Office Department, when the extra help employed work harder than they do at Christmas time. They work harder then than at any other time in the year. They work longer hours and are busy all the time. They are not paid a fair wage. In some places we find that they have been receiving as high as 85 cents an hour while in other postal areas the rate goes down as low as 65 cents an hour. They should be placed on a fair wage per hour all over, because they all work about the same number of hours, engage in the same kind of work, and are obliged to work very hard indeed. Any extra help in other departments of government, no matter what they are, get wages higher than 85 cents an hour and I do not think we should discriminate against the extra helpers who are working so hard in order to get the mail out during the Christmas season.
I am not going to take up more time because I know the Postmaster General is anxious to get this bill through; but, as I said before, there are a few items like those I have mentioned that I should like to see the Postmaster General take up with his own committee so that we may get something fair and equitable for the rural mail couriers across Canada. We all know that they have not been fairly dealt with. In fact, they are not getting even a fair wage today in comparison with that of other classes of employees.


Mr. R. R. Knight (Saskatoon):: Mr. Speaker, in generally supporting this bill may I say that I am glad that the committee is going
[Mr. McLure.l
to be set up, before which the members of the various post office workers' organizations will be able to appear. The nature of the work of the post office is such that, although these workers occasionally approach their members of parliament, I am afraid that- speaking frankly for myself-the average layman has difficulty in understanding the technical problems. For that reason I am glad they will have a place in which to appear, where the deputy postmaster general and other experts in this work will be present who will be qualified to judge of the various representations which they care to make.
The reason I rose to my feet, Mr. Speaker, was that the hon. member for Peel (Mr. Graydon) I thought wisely suggested that the reference to the committee might be broadened to take in some of the problems of the people who live in suburban areas; that is to say the deliveries in suburban areas. One can understand the difficulty where new territory on the outskirts of a city grows up quickly and thus creates a special problem. It is about the special problem in my constituency that I just want to say a word at the moment, because I believe it is time that it should be given some consideration.
I am informed-I do not know how correctly-that in certain of these crowded suburban areas, while they have no delivery as such from the, shall I say, branch post office, nevertheless special couriers or workers are sent out from the central office and that they put in time on this work. It may not take them a full day but they deliver the mail in those areas and to all intents and purposes, so far as the residents of the community are concerned, that is just as good as if they had a delivery of their own. I am thinking particularly of the people in the little town of Sutherland who, I expect, would rather resent it if I said they were a suburban area of the city of Saskatoon. Nevertheless they are there. The two places are getting so that they almost touch each other, and there is a first class cement road connecting them. May I say that the population is growing fast, and that it is not scattered. For purposes of delivery, I think the suggestion I make is a very good one. If at the moment conditions in Sutherland are not such as to justify the setting up of door-to-door delivery, perhaps arrangements could be made whereby delivery could be carried out from the city of Saskatoon.
I am not an expert in these matters, but I have had this suggestion made to me by a correspondent who lives in Sutherland but who works in Saskatoon. A good many of the people living in this little town do work

in the adjacent city. Quite often however they find it more convenient to have their mail delivered at the city office than to pick it up in their own home town. During the course of the day, perhaps at the lunch hour, a person could call at the city post office and obtain his mail in that way. If this is done, he will have his mail with him when he goes home. On the other hand, if it is not done that way, he may have to make an extra trip, when he returns to Sutherland, to get his mail.
This was done by one or two people, and the Post Office Department found it out. It was learned that non-residents of the Saskatoon area would have to pay $6 for a box, whereas they would get a box in Sutherland for $2. I am sure more people would be getting their mail in Saskatoon if that were not the case. They find, however, that by getting their mail at the city office they have to pay a higher fee for the box.
I draw this matter to the minister's attention, in the hope that there may be some discussion in committee concerning an arrangement of some kind whereby delivery of the kind I have indicated would be permitted, not from the small town post office but from the main post office in the adjacent city. I do not know what the demand is for mail delivery in Sutherland at the moment, but it has occurred to me that an arrangement of the kind I have suggested might be brought into being.


Mr. F. D. Shaw (Red Deer):: Mr. Speaker, I wish to refer to only one matter which I mentioned before when this subject was before the house. It is my contention that within the bill there may be provisions for removing some of the bugs, as we call them, from the old system of mail delivery. However, there is one practice I would like to see stopped, and that is the practice of acquiring contracts and then subletting them. Certainly certain evils have arisen as a consequence of this procedure.
Persons bid on contracts and secure them at relatively low figures. Then there are always people who find themselves in circumstances where they are compelled to take the contracts at $100 or $200 less than the prices at which the contracts were secured. This results in these poor devils, if I may use that unparliamentary expression, undertaking to carry the mail at a ridiculously low figure.
When the minister's department lets a contract it is my contention that the person who takes the contract should have the facilities to carry the mail, and also the intention of carrying it, rather than subletting it. This practice of subletting should be discouraged,
The Budget-Mr. P. Gauthier even by cancelling contracts in the event of an individual ceasing to carry the mail himself. This is a practice which should be stopped.
Having said this, I shall not detain the house longer.
Motion agreed to and bill read the second time.



REFERENCE TO SPECIAL COMMITTEE

Hon. Alcide Cote (Postmaster General) moved:: That Bill No. 107, to amend the Post Office Act, be referred to the special committee appointed Thursday, January 29, 1953, to consider the said bill.


[Stage Direction]
Motion agreed to.


[Stage Direction]
The house resumed, from Friday, February 27, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Greenwood), and the amendment to the amendment of Mr. Coldwell.
(Translation):
Mr. Pierre Gauthier (Portneuf):: Mr. Speaker, at the outset I wish to offer my congratulations to the Minister of Finance (Mr. Abbott) for the budget speech he made in this house not long ago. Needless to say, it was a budget that brought many criticisms from the members of the opposition and some of their friends. Yet, it has been received by the great majority as a good budget, a businessman's budget, the budget of a man who completely understands the workings of a national economy; the budget of a man who knows he is administering public funds, that the money he is called upon to distribute as treasurer of the nation is derived from the taxpayers of Canada as a whole. It is true that many among us would have liked to see a further reduction in the tax on personal incomes; however, I know and everyone knows that we cannot do everything at once.
I have been listening with much attention to the various speeches delivered by several members of the opposition and frankly I have not yet been able to conceive an opinion as to their views on the budget. One may hear a member of the opposition say that this budget is an electoral one, and then hear another member of the opposition say that this is not a "sunshine" budget, as they say in English, but a sunset budget. Another, and I am speaking of the hon. member for Dufferin-Simcoe (Mr. Rowe), asserts that this
2520	HOUSE OF
The Budget-Mr. P. Gauthier budget indicates that there will be no election this year. Frankly, I am inclined to feel that, from the instructions given the members of the official opposition, the brain trust, of that party must have been operating more or less satisfactorily for the last few weeks.
Mr. Speaker, a moment ago I congratulated the Minister of Finance on his budget. One may hear from time to time from the opposition side the outcry that it is time for a change, that this government has grown old. But the opposition is growing old too, at exactly the same rate, since 1935, as our friends opposite should know. If we are to go by the present budget debate, it has certainly not managed to infuse into its members that new spirit or new blood necessary to demonstrate that the government actually have grown older. I believe that it was not so long ago, in 1949, in fact, that the people of Canada indicated that, in their opinion, the government were, after all, not as old as that. I am convinced that when the bell rings for the next election, the people of this country will find that they are a little younger than the opposition.


Mr. Lesage:: An opposition which is in its second childhood.


Mr. Gaulhier (Porlneuf):: I did not dare say that word.
There is one thing which I notice quite often. The opposition clamours for a reduction in expenses and, at the same time, a reduction in taxes. In the very same effort, they request new expenditures from the government.
I remember

and I know that the hon. member for Three Rivers (Mr. Balcer), who is doing me the honour of listening to what I have to say at this moment, also recalls the Roberval election. On that occasion the present member for Roberval (Mr. Spence) had published an electoral pamphlet, in which one could read in article 5-he was speaking to the Roberval electorate-
That you want the government to help the farmers as it did in the case of the western farmers -Gardiner gave them $65 million last year.
It is in these words that the hon. member was addressing his electors and the member for Three Rivers was one of his most emphatic comrades in arms-I do not want to offend his modesty in saying that he was one of the ablest-but these two gentlemen have voted twice in favour of devoting some $200 million to a project in Saskatchewan. They said it was too much to give them $65 million, but they are ready to give them more than $200 million. For some time I have been wondering whether the "brain trust" is working as it should.
FMr. Gauthier (Portneuf) .1

Now, Mr. Speaker, it is said that the personal income tax has not been sufficiently reduced. Well, I must say that the Minister of Finance has managed to reduce it.
On the* other hand, the Minister of Finance found a way of reducing the personal income tax. In fact, if the hon. gentlemen of the opposition would study closely the events which have taken place since 1945, they would see that the Minister of Finance has lightened the taxation burden by $65 million; for the taxpayers would have to pay $65 million as an annual interest on the debt. They no longer need do so as the debt has been reduced by 30 per cent, that is to say by more than $2 billion, since 1945. That represents a worth while tax reduction. But our hon. friends seem to have a telescope which they use by looking through the large end, rather than through the small one-which is unusual.
On the other hand, the personal income tax has decreased by 11 per cent. The tax on cigarettes has been reduced by 4 cents. True, in Quebec-I do not know if it is in order to safeguard provincial autonomy-half a cent has been added, once the budget had been brought down, so that, in the province of Quebec, cigarettes are 4 cents more expensive than in Ontario. I met a few constituents right after the budget had been brought down and they said "You're buying your cigarettes in Ontario?" I said yes, adding that I paid 4 and even 5 cents less for a pack of 25 cigarettes; that is again due to Mr. Duplessis' tax. As in the case of the gasoline tax, he hastened to put it back, as soon as the federal government had removed it.
This year, the federal government is decreasing taxes by about $300 million. The stamp tax on cheques and postal orders, which was considered a nuisance tax, is removed, and everyone knows how much it annoyed the public. The famous radio licence also goes. The first electors I met right after the budget had been brought down said to me, "The radio licence has gone, at last." Also the exemptions are doubled with regard to dividends paid by Canadian companies. And the limit provided as regards deduction of medical expenses for income tax purposes is lowered from 4 to 3 per cent.
Now, I was surprised, the other day, to hear the hon. member for Roberval say that only very few people would benefit from the deduction allowed for children over 21 years of age who attend a university. Mr. Speaker, I do say a good many French-Canadian fathers, numerous farmers and many workers who send their children to universities and who believe in the necessity of education and

instruction, will undoubtedly avail themselves of this exemption. I know that many fathers do thank the government for this deduction. I hope that in this case the Minister of Finance in no way interfered with provincial autonomy when he decided to allow that reduction and to authorize the head of a family to take advantage of the tax deduction granted in the case of children who go to a university.
There is also the 10 per cent sales tax deduction on low-priced books. That is another point which is rather important and proper in the eyes of the people of Quebec who are interested not only in Canadian literature but also in foreign and particularly in French literature.
I have already pointed out, Mr. Speaker, the 30 per cent reduction in our national debt and the fact that we now pay $65 million less in interest annually. After all, that is something, Mr. Speaker, and when I spoke of the exemption granted to fathers with dependent children over 21 years of age attending university, of course I used the words provincial autonomy.
Countless speeches have been made on the subject of autonomy, especially in the province of Quebec. Mr. Speaker, I am an autonomist. The first time I asked the population of Portneuf county to elect me, I did so for the sake of my county's autonomy.
It is very well to speak of autonomy but one has to give the example. When the premier of Quebec talks about provincial autonomy, he should at the same time remember that taxpayers in his province have also a right to autonomy. His Bill No. 34, amending the elections act, is certainly one of the most grievous attacks which could be made upon the autonomy of the elector. This Bill No. 34 is certainly an encroachment on the voters' autonomy. I abstain from mentioning the autonomy of our school and municipal boards in the province of Quebec.
I understand it has often been said in the province of Quebec that Mr. Frost had been taken by the throat. But Mr. Frost has stated-I have already quoted in the house this clipping from L'Action Catholique of October 21, 1952, according to which Mr. Frost said in the Ontario legislature:
In the circumstances Ontario has not sacrificed any of its constitutional rights.
That is clear, that is absolutely evident and anyone who examines the situation objectively can see that the federal government never took Mr. Frost by the throat.
The Budget-Mr. P. Gauthier
The province of Quebec is losing a good deal of money on account of autonomy. The other day, I heard a speaker say: We do not want to sell our freedom in exchange for federal grants. Words like that may have some electoral effect when spoken on the hustings, but I believe a man should think it over seriously before uttering words like that.
Since 1867, the question of autonomy has often been mentioned and is often brought up. However, in the province of Quebec, we still speak French, sing in French, and we are still practising the same religion as our ancestors did. We actually believe that, even though the federal anti-autonomists, as they are called-and efforts are being made most of the time to describe the present federal government as a foreign government; the word may be strong but it is the word they use-hold to the contrary in spite of all that, there still exist in that province those who still occupy a rank very close to the top, if not the very first rank. I have much confidence in the present government, and at all events, I don't think that the danger of losing all our constitutional rights in the province of Quebec is that ominous at the present time.
There may be people in this country who foster centralization, who don't believe in autonomy as much as we do in the province of Quebec, and I understand them, because they are not in the same position as we are with regard to language, institutions, our civil code and our religion, but, at all events, this government and the present Prime Minister, more than any of the premiers of the various provinces, have given proof that they are in favour of provincial autonomy.
Besides, one thing is reassuring, and that is that our present Prime Minister is sincere when he speaks, his thinking is clear and precise; he speaks objectively and in such a way that we always know where he stands. That is all the difference which exists between a man who understands and puts in its proper perspective the subject he is talking about, and the one who makes of it a political football.
Mr. Speaker, it will possibly appear as though I wish to raise points which have little to do with the budget, but I believe references were made to federal-provincial relations in the budget speech and I have the right to dot my "i's", because it happens too often that in our province we hear grandiloquent speeches about autonomy which are mainly intended for the public. I know that some are sincere, but unfortunately there are still too many who use it as a political springboard. That is why I will speak about it today.

The Budget-Mr. P. Gauthier
The other day the attitude of Mr. Taschereau and of the Hon. Mr. Lapointe at the Quebec Reform Club in 1920 was quoted. These gentlemen were autonomists. They did not shout as long as the present Quebec premier, but they worked harder, more objectively, with neutral glasses, not with red or blue ones. With neutral glasses they looked at the problem, putting it in its proper perspective. They caused our provincial autonomy to take a giant stride forward. They preserved our constitutional liberties in a far more certain fashion than any ordinary politician could. I do not understand very well why certain provincial politicians in the province of Quebec take the stand they do.
If I look back a little, I recall the Bilodeau-Rogers agreement, passed several years ago-


Jean Lesage: In 1937.


Pierre Gauthier: -under the
Union Nationale government. I have it here anyway. I recall that the Hon. Mr. Godbout had asked a question in 1937 in the provincial legislature:
In what year did the government of the province of Quebec sign for the first time with the federal government, or one of its departments or officials, an agreement with regard to the so-called "youth assistance" program?
Who is the minister who signed it on behalf of the provincial government?
And here is the answer given by the Hon. Mr. Sauve:
On September 17, 1937, the Hon. Joseph Bilodeau, K.C., Minister of Municipal Affairs, Industry and Commerce, signed, on behalf of the government of the province, the first agreement, and. under Statute 2 Geo. VI, chapter 5 and 3 Geo. VI, chapter 5, the Union Nationale government put $2,000,000 at the disposal of the Minister of Social Welfare and of Youth.
The federal government placed $2 million at the disposal of the minister of social welfare and of youth, but the thing is being hushed. Besides, Mr. Speaker, I have here a sheet entitled-
Classification of the yearly contributions and grants for capital expenses, paid to the province of Quebec, under the terms of the agreement concerning aid to technical schools.
It goes back to 1945 and I see here that the Montreal technical school, which belongs in a way to the technical schools of the educational system, has been granted, since 1945, $206,250 for building purposes and $66,000 for equipment. The Quebec technical school was granted $204,500 for building purposes and $99,345 for equipment. In Trois-Rivieres, the technical school had $237,000 for building purposes and $42,500 for equipment.


Alphonse Fournier: Have you the amounts for the Hull technical school?


Pierre Gauthier: One moment. The Hull technical school, $97,500 for building purposes and $18,000 for equipment. As for the Sherbrooke technical school, $162,000 for building purposes and $45,000 for equipment.
After all, it is something. The province of Quebec carries on with its education according to the program set up by the committee of education. I think that the encroachment on its autonomy is not very great.
Yet these agreements were signed by Union Nationale governments and, as I said just now, we are losing quite a lot of money because of this appeal for autonomy. And I shall prove it.
I have here the answer given by the hon. Mr. Winters to a question by Mr. Follwell. I am quoting from page 2384 of Hansard for February 25, 1953:
1.	What has been the total cost to the federal government of the trans-Canada highway?
I'll spare you the remainder of the question, but shall give you the answer to No. 1:
1. Totals to February 14, 1953: Provincial commitments, $95,075,540.71; Canada's share, $47,537,770.35; Paid to provinces, $28,319,916.54.
Then we see, under No. 2, the payments made to the various provinces by the federal government. It can be seen that the province of Ontario has received $10,295,333.15, and the province of Quebec, nothing. That is to say, Mr. Speaker, that under the pretext of safeguarding its autonomy, the province of Quebec refuses federal help towards the construction of the trans-Canada highway, whereas Ontario is getting more than $10 million. When the federal government calls upon the provincial governments to fulfil an obligation which is reasonable, sensible and decent, when it asks them to request tenders for road construction and repairs, I do not see how serious people can pretend that it affects provincial autonomy. It is for that reason that the government of the province of Quebec has refused to sign an agreement with the federal government.
Now, Mr. Speaker, before proceeding further I want to thank the government for having designated an ambassador to Spain. This was no mere whim on my part, Mr. Speaker; my wish was based on arguments which I thought serious enough and which I have exposed several times in this house since 1945.
Spain is a country with a very high culture; owing to the character of its people and to its religion, Spain stands as one of the most solid bulwarks against the spread of

communism in the whole world and more particularly in the other countries where Spanish culture has flourished, as in South America for instance.
Moreover, I have always claimed that Spain, on account of its important situation in the Mediterranean, would increase greatly our security since it could safeguard the free and permanent movement of English ships which sail through the Mediterranean and the Suez canal, so that the allies may trade more easily with the countries of the south, of Africa and of Asia.
Now, Mr. Speaker, may I be permitted to say a few words on a subject which was brought up the other day by the member for Saint John-Albert (Mr. Riley) when he took the Leader of the Opposition to task and reminded him of what he had said about family allowances. I do not want to repeat uselessly anything on the subject because I am sure that public opinion is quite definite in that respect. I would like however to quote what the hon. member for Saint John-Albert said on February 27, 1953, as reported on page 2478 of Hansard:
Speaking of old speeches by the hon. Leader of the Opposition (Mr. Drew), as a member from the Atlantic provinces, having regard to the fact that through this social security measure we get back some share of the profits which we send to other parts of Canada, I for one am not going to let the mothers of the Atlantic provinces forget that the Leader of the Opposition said that the family allowances bill was wicked and unjust.
The hon. member for Annapolis-Kings (Mr. Nowlan) then asked him:
How long ago was that?
I know that it was a long time ago, Mr. Speaker, that the Leader of the Opposition (Mr. Drew) spoke that way. In that connection, I wish to recall a saying that goes like this: God deliver me from my friends and I shall myself look after my enemies. The Leader of the Opposition should keep that saying in mind. I have here an item from the Toronto Star-a paper I read every night following the adjournment of the house. It quotes the Globe and Mail which attacks the social security legislation of the Liberal government. If my information is correct, that newspaper befriends the opposition and the leader of the Conservative party. The item I am quoting is dated February 23, 1953: (Text):
The Globe and Mail says it has discovered "the greatest weakness of the budget-one that has developed to an alarming point under cover of past surpluses."
And what is this alleged weakness? The Globe answers: "A large part of present-day budgets goes not to defence but to progressive expenditures (notably welfare expenditures) which depend on percentage taxes."
The Budget-Mr. R Gauthier (Translation):
It shows that the present opposition has always had some kind of grudge against the social security legislation, which, after all, includes family allowances.
Now, going further back, in 1951, the Globe and Mail, still quoted by the Toronto Star, had this to say:
(Text):
It may even prove wise for the Minister of Finance at this time to weigh against an increase in taxation a substantial measure of budget economy such as the suspension of the family allowances.
Those are the words of the opposition.
At present 1,852,000 families receive these monthly cheques which over a year amount to $300 million. This is a large dollop-
And do not overlook those words.
-to take off a budget and its loss would do harm to no one.
That is the writing of the Globe and Mail.
A little further on, in October, 1952, the Globe and Mail has this to say:
Are we to suppose that up until 1945, when the so-called social security program came into effect, the needy got no help? Are we to suppose that if that program were abolished the poor would be allowed to die in the gutter? Is compassion only to be found among Liberal politicians? To paraphrase Mr. Churchill on a famous occasion, what kind of people does the Star think we are?
(Translation) :
And so, Mr. Speaker, these are the words and the writings of the official opposition's friends. When we are asked to forget the words of its leaders, we of course tell ourselves that he has obviously changed his mind. But here we have his friends, and the most powerful among his friends, who carry out consistently more open attacks-though sometimes these attacks are carried out more discreetly

on the social security legislation which includes, among other things, family allowances.
And, as the hon. member for Saint John-Albert put it:
I for one am not going to let the mothers of the Atlantic provinces forget that the Leader of the Opposition said that the family allowances bill was wicked and unjust.
Mr. Speaker, I will not allow it to be forgotten myself. I will not forget, either, that our mothers have been empire builders, as we call them in the province of Quebec. But here they have been publicly insulted by a public figure. I am convinced, Mr. Speaker, that family allowance legislation has been extremely popular, because of the fact that it touches upon the very existence of the family.

The Budget-Mr. P. Gauthier It is true that they all live for one another and all for the home. Canada, Mr. Speaker, is like a family and if a part of Canada is affected, the whole, country is concerned. The province of Quebec is not the only one to benefit from family allowances; all the other provinces also benefit from it. And I believe that the way the Liberal government has been concerned with the welfare of the Canadian families cannot be forgotten. Politicians should cease opposing the maintenance of this legislation; otherwise they would make a false move, a serious mistake, and prove that they don't understand how important is the Canadian family.
The Canadian family is important, especially when we have to fight the communist theories. That is what helps us maintain our freedom, and it is thanks to our families that we have been able to keep our unity.
Mr. Speaker, I also wished to refer to a more restricted field, that of family farms. In Quebec, we have family farms and the acreage of these farms is smaller than in the western provinces. The average farm in the province of Quebec, let us say of 100 to 250 acres, which is good enough for a family farm, compares favourably with those of Ontario and New Brunswick. On the other hand, in the western provinces, especially in Saskatchewan, there seems to be a tendency to monopolization, which is becoming a danger in the neighbouring country, especially in the southern part of the United States where the majority of farms have become farming industries rather than agricultural farms. I have here the figures on the American agricultural census for 1945. You will note, Mr. Speaker, the centralization of acreage in the farms of the southern states. The number of farms of more than 1,000 acres in 1900 was 47,160, and in 1947 it was 112,899. That means that in 1900 the percentage of farms of over a thousand acres, in the United States, was 0-8, and that in 1947 it was 1-9.
I see in volume 2 of the same census that 38 per cent of all farms in the United States which are not over 50 acres represented only 4-1 per cent of the total area of all arable land in the whole United States.
That shows how centralization of farming land has progressed in the United States; as a matter of fact, it is falling into the hands of a few people. We do not want that to happen in the province of Quebec, for we realize that the family farm in Quebec province, as in France, is perhaps the most solid foundation which a national economy can have.
May I be allowed to remind you, Mr. speaker, that when in 1871, Germany compelled France to pay her 5 billion francs in 
reparations, it was France's well-lined stocking which allowed her to meet her obligations; so when we speak of the family farms in Quebec and think of all those personal savings which, in France, were so useful to the mother country, it is easy to understand why we are so attached to our family farms.
I shall quote some figures about family farms in the province of Quebec. In 1901, farms situated on 1 to 10 acres of land represented a proportion of 9-7 per cent; on 11 to 50 acres of land, 14-3 per cent; from 51 to 100 acres, 32-7 per cent; from 101 to 200 acres, 31-6 per cent; as for farms situated on 201 acres of land and more, they represented but 11-7 per cent.
According to the data given to me by the Quebec bureau of statistics, since 1941 things have not changed much, the number of family farms having varied but little, from an acreage standpoint. In 1941, 2-8 per cent of farms still had 1 to 10 acres; 12-2 per cent, from 11 to 50 acres, a group which, in 1901, represented a percentage of 14-3 and thus saw its percentage fall. Farms on 51 to 100 acres of land reached a percentage of 39-1; the proportion for farms of 101 to 200 acres was 34-3 while in 1901 it was 31-6 per cent.
As you can see, Mr. Speaker, the proportion of farms of 101 to 200 acres has not increased very much, only 3 per cent from 1901 to 1941 in the province of Quebec. That is to say that the system of farms operated on a family basis is being maintained in the province of Quebec. We are asking protection for the family farms of Quebec because we believe they constitute the strongest foundation we can have. Anyone who looks objectively at the situation readily sees that the federal government is thinking of the family farms of Quebec. One only has to look at the statistics I have just quoted to be convinced.
Last year the federal government paid over $7 million-$7,616,770.42 to be exact-in the province of Quebec, in the form of subsidies for the transport of grain from western to eastern Canada. Since that legislation was passed, some $69 million have been paid for the transport of grain.
That shows that the government is looking after the agricultural family in the province of Quebec, and this government should be proud of that policy.
I could quote other figures to show how much this government is concerned with the economy of the province of Quebec, as it is with the economy of all the provinces. But, we know that the population of this

country is only 14 million, that it is an immense country, not easy to run, and that the government has to endeavour to meet the various interests of the different provinces in order to maintain the economic unity of the whole country. And, moreover, it must keep the country united and its achievements in that connection speak for themselves. This reminds me of a sentence written by Graham Spry, I believe, which describes Canada as-
A nation, two cultures; a loyalty, two races; two glorious pasts, one future.
Mr. Speaker, that is how the member for Portneuf considers Canada. Oh, going through my former speeches, one may find rather bitter and violent words, relating to certain statements of mine. Still, I remind myself of something Abraham Lincoln once
The Budget-Mr. P. Gauthier said: I know of no man wise enough today not to be wiser the next day.
That is why, Mr. Speaker, I congratulated the government for looking into the problems of the province of Quebec and more especially of the French-Canadian families and family farms. In other provinces such as Saskatchewan, Alberta or Manitoba, the centralizing tendencies for farms is stronger than in Quebec, Ontario or New Brunswick. The situation is different there.
I have here a table which I would like to have printed in Hansard, with the permission of the house.
(Text):


Some hon. Members:: Agreed.


Pierre Gauthier: The table is as follows:



NUMBER OF OCCUPIED FARMS, VALUE OF PRODUCTS SOLD, AND FARMS CLASSIFIED BY SIZE OF FARM

[Stage Direction]
1951 CENSUS, (June 1)
Item
Canada1
No.
1. Total occupied farms
623,091
2.	Farms reporting value of products sold in 19501 2:
Lessthan$ 250	
$	250- 1,199	
1,200- 2,499	
2.500-	3,749	
[DOT]3,750- 4,999	
5,000-	7,499	
7.500-	9,999	
10.000-	14,999	
15.000-	19,999	
20,000 and over	
87,057 148,962 151,290 91,660 53,162 50,035 18,984 12,594 4,240 4,409
3.	Farms classified by size of farm:-
Under 3 acres	
3-	9 acres	
10-	69	"	70- 129	"	....130- 179 "	180- 239	"	240- 399	"	400- 559	"	560- 759 "	760-1,119	"	1,120-1,599	"	1,600-2,239	"	2,240-2,879 "	2,880 acres and over	
2,258
22,446
83,264
293,872:
102,946
48,192
30,831
22,665
9,899
6,728
New- found- land	Prince Edward Island	Nova Scotia	New Bruns- wick	Quebec	Ontario	Manitoba	Saskat- chewan	Alberta	British ColumbiaNo.	No.	No.	No.	No.	No.	No.	No.	No.	No.3,626	10,137	23,515	26,431	134,336	149,920	52,383	112,018	84,315	26,4062,264	1,372	7,757	8,754	24,187	17,172	4,285	5,976	8,141	7,148955	3,506	9,169	9,959	39,359	26,792	10,735	23,148	18,082	7,256204	2,898	3,760	4,422	35,407	32,742	12,824	33,236	21,177	4,61850	1,309	1,253	1,598	17,606	24,747	9,042	20,720	12,841	2,50029	535	631	704	8,392	16,382	5,822	11,466	7,762	1,43935	343	525	583	6,186	16,770	5,770	10,520	7,748	1,55532	97	165	194	1,731	6,804	2,115	3,709	3,400	73720	53	112	121	883	4,651	1,200	2,156	2,828	57014	13	55	37	208	1,801	313	549	1,015	23517	6	69	45	175	1,922	240	392	1,231	31251	7	67	30	222	652	240	115	195	6791,884	170	1,181	975	2,258	6,733	1,278	656	1,203	6,1071,400	2,819	6,478	6,852	21,377	26,243	3,160	1,505	2,039	11,389169	4,214	6,508	9,172	58,286	53,459	)	f	2 12960	1,588	3,171	3,130	21,983	24,893	1 16,326	19,373	23,712	1,93939	882	2,878	3,093	17,543	18,708	1	54517	406	2,199	2,219	10,257	14,265	16,135	31,224	24,562^	1,6614	44	705	646	1,832	3,3S5	7,399	21,354	12,071	'7526	198	178	402	992	4,433	16,490	7,664	4582	92	101	111	368	2,411	12,871	6,369	3401	20	23	39	101	728	5,499	3,309	179f	180	1,756	1,536	18	12	26	49	38	519	5S2	228l	55	656	1,073	1	Includes data for Yukon and Northwest Territories.2	Does not include institutional farms, etc. which were not distributed by value of products sold.
For 1951 census a farm was defined as a holding carrying on agricultural operations if the holding is:-
(1) three acres or more in size, or (2) from one to three acres in size if the agricultural production in 1950 was valued at $250 or more.
[Stage Direction]
w
[Stage Direction]


hi
o
o
[Stage Direction]
o
w
The Budget-Mr. P. Gauthier

Translation):
I shall quote but a few figures, from a report tabled in the house, in reply to a question. I want to show you the difference between Quebec, Ontario and Saskatchewan farms.
According to the 1951 census, there are in the province of Quebec, 222 farms of less than 3 acres; 652 in Ontario and 115 in Saskatchewan.
From 3 to 9 acres: Quebec, 2,258; Ontario, 6,733; Saskatchewan, 656.
From 10 to 69 acres:	Quebec, 21,377;
Ontario, 27,243; Saskatchewan, 1,505.
From 70 to 129 acres: Quebec, 58,256. You can see there the truth of my statement, when I say that centralization of farms is not so great in Quebec and in Ontario as it is in certain western parts of this country.
Take for instance farms of 240 to 399 acres in Quebec, there are but 10,257; in Ontario, 14,265 and in Manitoba, 16,135, while there are less farms in Manitoba than in Quebec, because in Quebec there are 134,336 farms and in Manitoba only 52,383. In Saskatchewan, there are 112,018 farms and of these, 31,224 are between 240 to 399 acres.
You may see then that the province of Quebec is really the family farm province. I shall go even further: there are but 39 farms, in Quebec, ranging from 1,120 to 1,599 acres, there are 101 in Ontario and in Saskatchewan, mind you, 54,999-
Mr. Speaker:: I regret to inform the hon. member that his time is now up.


Pierre Gauthier: I am about to finish, Mr. Speaker. Since you have allowed me to put this report on record, I do not see the necessity of going any further and I shall leave the floor to somebody else.
I wanted to tell you that in Quebec, we attach great importance to social security legislation, such as family allowances or old age pensions, which after all were adopted by the federal government as a result of agreements with the provinces. I fail to see that provincial autonomy has been affected thereby. I add that thought to what I was saying a while ago on the question of the Rogers agreements.
We also attach a great deal of importance to the dairy industry since the revenue accruing therefrom, on our family farms, is most important indeed to the Quebec farmer.
In conclusion I have a request to make of the government. In any event I wish to give every support to the measure put through the other day by the parliamentary assistant 68108-161
The Budget-Mr. Nowlan to the Minister of Finance (Mr. Lesage), with regard to farm improvement loans. I would like, then, to ask the government to give the owners of family farms in the province of Quebec all the assistance which they require.
I am also aware, Mr. Speaker, that this government has bought pork in order that farmers, who are also hog breeders, will not be forced to sell at a price below 26 cents, and that this government has sold to other countries pork which had been bought at 20 cents a pound. That is all I want to say on this subject, because I don't want to enter into a debate with another member of the opposition. In concluding, I want to thank you, Mr. Speaker, and this house for listening with such kindness and attention to the remarks of a humble member who wants to assert himself as a "front back bencher".
(Text):


Mr. G. C. Nowlan (Annapolis-Kings):: Mr. Speaker, I could not entirely follow the hon. gentleman who has just spoken, for obvious reasons, although I could understand and follow him in part of that which he said.
I want to discuss for a little while some phases of the budget, and matters to which I think more attention should have been paid. One thing which certainly can be said with respect to this budget is that never before have the drums of propaganda or, perhaps I should say, the guns of propaganda been so cocked and primed as they were for this one. The papers were filled the next day with photographs of jubilant people standing in front of the cash registers and getting cigarettes at prices at which we could not get them here in the government buildings. Those of us who had sometimes wondered where the Minister of Finance (Mr. Abbott) had been during the week or two before he presented this budget, thinking that he had been working very hard on its preparation, after seeing the pictures in the paper next day judged that he must have spent most of his time in having his photograph taken; because down in the east, where we have to work very hard, in the Halifax Herald the minister is portrayed in his shirtsleeves-


Mr. Abbott:: That picture was taken two years ago.


George Clyde Nowlan: It is a complimentary picture of the hon. gentleman. As he moved nearer to the centre of Canada he became more effete and more insouciant in his appearance, in handing out cancelled stamps and other matters. But on hearing the propaganda and reading it in the press, one could not help thinking that after all the poorer

The Budget-Mr. Nowlan the product, the more salesmanship is required in order to put it over. You do not need any gilt to paint a gold brick, but you do need it to paint a copper brick if it is to be portrayed as gold. I think that is the effort that was made in this case, and perhaps not too successfully because I am sure it has boomeranged.
There was a great deal of talk in the press about the jubilant government benches on the night of the delivery of the budget. I think that is a reasonably fair statement. When the Minister of Finance was speaking of the iron ore of Labrador, the oils of Alberta and the aluminum of British Columbia, I thought that Divine Providence came in for a tremendously greater amount of praise and applause than did the minister himself, when he announced his tax reductions. I thought those were greeted with much less applause than were the tributes to the bounteous wealth of this nation from which we derive a great deal of our prosperity and for which the government apparently is taking much of the credit at the moment.
We have also seen the references to the gloomy looks that were on the faces of the Tories over here when they listened to the wonderful words of the minister. Mr. Speaker, we poor fellows did not even know we looked sad. As a matter of fact, we did not feel that way at all.


James Sinclair: You look that way all the time.


George Clyde Nowlan: We may look that way all the time. After all, we get kicked around a great deal by this government. We perhaps have some reason for looking a little bit sad at times. I know that the fishermen down on the east coast have a far-away look in their eyes and are a little bit sad, waiting as they are for the Minister of Fisheries (Mr. Sinclair) to come down there and do something more for them than has been done hitherto. There is good reason for their being sad, as I will suggest to the minister in a moment.
However, we did not know that we looked sad on that occasion. We knew that we were listening to a minister of finance who had, throughout the years, taken away a million dollars a day in surpluses for almost every day during which he had been minister; and we expected that there would be substantial tax reductions to the people of Canada when this his last budget-or presumably so, according to press reports-was being presented. We knew that we were facing a government which, by reasonable economies, could curtail the expenditures of this nation greatly, and we expected to hear of something of that kind.

With those two factors in the background we thought there would be a substantial reduction in taxation, and we were prepared for it. If we looked so sad, Mr. Speaker, as some of our friends have suggested, the only reason I can suggest for it is that we must have been feeling sorry for the taxpayers rather than for ourselves; because I can assure you, sir, that we did not feel sorry for ourselves, and I do not think we are at the moment.
After all, what does this budget do? If the Minister of Finance had come before the house frankly and said that this was a businessman's budget, a budget for businessmen,
I think he would at least have been entitled to credit for his frankness. Although the budget might have been open to criticism on various grounds, I think at least he could not be accused of trying to guild the gold brick or to paint a lily where no lily existed. But of course that was a rather difficult course for this government to take. This party or this government which calls itself Liberal, which has been here for so many years, and which has become a sort of political dinosaur, as it has crawled down the government road sometimes veered to the left and sometimes to the right. This time it took a sharp turn to the right; it got away from the left side of the road and headed far over on the right. Of course that could not be admitted because, after all, this is something which must be for all the people and not just for perhaps the business interests.
So the minister was heralded as having been the giver of great gifts. From reading the speeches, the propaganda and even the editorials at the beginning, one would have thought that the budget combined all the generosity of the Marshall plan, the Point Four program of Mr. Truman, and the Colombo plan thrown in for good measure. Actually it gave reductions to certain classes of people, and only on a limited scale. The minister does not make a good Santa Claus, Mr. Speaker. He is described as genial and debonair and dashing. With all those qualifications, descriptions and appellations we will agree. But when he tries to come into this house carrying a Santa Claus pack on his back and to be portrayed as distributing largesse to the taxpayers generally, may I say that he did not do such a good job at it. After all, the few presents he had in his sack still carried the sales tax label upon them; and he was standing fairly well in the shadows of extravagance and wastefulness so we could not see too well just what it was that he was distributing.
With many of those reductions we on this side of the house agree. In fact, in many

cases we have urged those reductions. It is highly satisfactory to see that matters which we have recommended in the past, such as abolition of the radio fee and reductions in other taxes, have been accepted by this government and by the Minister of Finance. The financial critic of the opposition, the hon. member for Greenwood (Mr. Macdonnell), and others have dealt with those matters fairly extensively, and I am not going to attempt to elaborate upon what they have said.
I think, generally speaking, we have levelled two criticisms at this budget. When the Klieg lights of the propaganda machine have been turned off, what does the ordinary taxpayer find? Well, of course those who wish to smoke their way to prosperity find that reductions have been made for them which, of course, are undoubtedly appreciated. Then the individual income taxpayer has received varying degrees of relief. Those on the lower scale, however, received very little indeed.
We are told by the Minister of Finance (Mr. Abbott) that these tax reductions amount to 11 per cent, and then he qualifies his statement by saying that, of course, it is 11 per cent for the full year, and only 5J per cent for this year. But he suggests that we look forward to the next year, and that possibly we will get the 11 per cent reduction. Let me say, in parentheses, that anyone who takes the promise of tax reductions by this government for more than a year in advance is certainly very much of an optimist, because we have had more than one instance of taxation being changed in the middle of the year. I do not think anyone can look forward with any great degree of certainty to what may take place in the coming year.
After all, as has been pointed out, it is not 5J per cent for this year. Why the Minister of Finance persists in his description of this as a 5J per cent reduction, and excludes from it the social security tax, is more than the ordinary individual can understand. It is true that that tax is earmarked for a certain purpose. But, Mr. Speaker, it comes out of your pocket and out of mine; it comes out of the pockets of all the taxpayers. It is computed on the same income tax form upon which we make out our tax return. It is forwarded to the same income tax office; and the security tax payment itself is made with the same cheque and with the same kind of money, as is suggested by the hon. member for Greenwood. Usually it is borrowed money; we have to negotiate loans from the bank to pay it. How anyone can distinguish between them and say it is not included in 68108-1614
The Budget-Mr. Nowlan the computation of the tax is something beyond my understanding. In any event, as has been pointed out by others who have preceded me in the debate, the extent of the relief is such that the vast majority of the people do not benefit by the reduction at all.
I was looking up the statistics prepared by the Minister of National Revenue (Mr. McCann) as they apply to my own constituency. I find that in the county of Annapolis there are 21,747 people, and that of that number 920 pay income tax. In the county of Kings there are 33,183 people of whom 2,100 pay income tax. We realize that they are the heads of families. In some cases there may be two or three children who would benefit directly or indirectly from this reduction. But when you take that proportion and see how low it is when compared with the vast majority of people in these constituencies-and this would apply to every constituency across Canada-then one must suggest that the relief obtained from the budget does not warrant the pounding of the heavy bass drum of propaganda which was beating so long and so loudly after the budget was brought down, and which apparently had been all set up for playing many, many days before the budget was delivered.
Hon. members on this side of the house on more than one occasion have suggested a reduction in the sales tax. We have pointed out many times that there is no tax which could be reduced with less impact upon the treasury and greater impact upon the taxpayer than this particular one. I shall not repeat the arguments which have been made already, but we know how the pyramiding takes place in the hands of the wholesaler, in the hands of the broker and then in the hands of the retailer. The proportion of that tax borne by the consumer is out of all proportion to the amount the treasury receives, in its original application.
There could be a reduction made in the sales tax which would be beneficial to all the taxpayers, and which would not cost the treasury a tremendous amount. Of course we realize that this is an indirect or a hidden tax, and I suppose the political kudos for having done away with it would not be such as to permit the minister to pose as a Santa Claus.
In the second place, the budget is criticized because it is superficial and is not based upon savings or economies of any kind. That was dealt with most ably this morning in an editorial appearing in the Montreal Gazette, where it is pointed out that the minister has referred to the budget as a social dividend. The editorial goes on to suggest that if it
2530	HOUSE OF
The Budget-Mr. Nowlan is a social dividend, then surely it is something payable to society as a whole. Yet we see from his own figures and from estimates before us that more money is to be taken from society as a whole, and that the taxpayers as a whole are made the losers. If that is so, how one can term it a social dividend is more than I can understand. And, as the Gazette suggests, it is at the best a discounted one.
You have to anticipate the fact that inflation will not wreck the financial structure, and anticipate the fact that the gross national product will continue to increase, and anticipate the fact that expenditures will be held at a level which has been suggested. That is quite a stretch of the imagination, when one considers what is done by -this government.
You have to imagine all those things; and then you are faced with the fact that, at the end, more money will be taken out of the group as a whole than was- taken last year, because no economies are being made, no greater savings being made, than were made before.
As an aside, let me say that I listened to the hon. member who preceded me in the debate read from an editorial in the Globe and Mail; and the hon. member for Saint John-Albert (Mr. Riley) on Friday afternoon dealt at length with certain alleged statements he said were made with respect to family allowances. The inference was obvious, that when we talk about economies we are talking about economies which can be made in the field of social security. Well, I trust that record has been played for the last time by hon. members opposite.


Pierre Gauthier: Pass the word on to the Globe and Mail, then.


George Clyde Nowlan: I am not responsible for what is said by the Globe and Mail, or by anybody else. However, I would say that those of us who listen to the C.B.C. on Sunday afternoons used to hear some old records of music played 20 or 30 years ago. For instance, we used to hear Caruso's voice as it was recorded on scratchy old cylinders. Undoubtedly the reproductions were made as faithfully as possible but, at best, they sounded very ancient. In addition, we heard many other artists whose records were replayed, perhaps without too profound effect.


Mr. MacDougall:: Still good music, though.


George Clyde Nowlan: It may have been good music, but it sounded muted and did not make the impression it would have made at one time. I was going to say that there seems to be an attempt at this time to develop such a record with respect to social security, and that it


would be in the same category as the kind of musical program the C.B.C. was playing on Sunday afternoons.
Without further elaboration of the facts, we do know that economies can be made; and they can be made without interfering in any way with one cent of expenditure for social security in this country. That is what the people have been asking for, economy and savings. That is what they have not been getting from this government, and certainly did not get from the budget.
I am reminded of what happened in France in the early days, when Marie Antoinette said, "Let them eat cake", when the people were asking for bread. Well, in this budget we did not even get our cake; we got only a little frosting. Indeed, I think we were offered a macaroon, rather than a cake, on this occasion.
I do not think many of the smaller people of this country have as great an appreciation of these alleged reductions as they would have if they received a little better treatment from those responsible for collecting taxes. I am not in position to speak as to the inner workings of the Department of National Revenue, but certain things are obvious. They tell us that they have caught up with their arrears. We know they have a large staff to do this.
But we find now that there is a large staff out in the country driving around from place to place and making surveys as to arrears of taxation on the part of farmers and small businessmen who filed their returns years ago. As far as they knew these people felt that those returns had been complete and had been accepted. Then along come this group of collectors looking for taxpayers in the same way a fisherman looks for trout in a pool. When they find a prosperous farmhouse they go in and start giving the farmer the works.
I know in my county they were driving along the other day and they saw a farmhouse with a new chimney and fireplace. They decided that if this man could afford to build a fireplace they had better put him through the wringer. So they went in and started to work on him. Before they got through they had built up a net worth statement going back into the 1930's and coming down into the 1940's almost to the present time. They alleged that they had found that in 1942 he must have taken in a little more money than he reported because he had installed a monel metal sink so that his wife would not have to wash the dishes in the old wooden sink. They assessed him for arrears of income tax in that year. Of course

they say to these people, "If we are wrong you can go to the exchequer court and fight it out; if you can prove we are wrong, we will withdraw the assessment". That is a sample of the treatment handed out.
These farmers and small businessmen are expected to keep the type of records which the United States Steel Corporation does not keep, and which certainly the Department of National Defence does not keep. If they cannot produce that kind of records they are assessed.
You would think that when they had dealt once with a man they would leave him alone, but there is a farmer in my county who was assessed for $700 tax in a certain year, let us say 1942. He went to a lawyer and told him that he had no records and could not remember anything about that year. In checking through some old material he found that in that year he had cashed a life insurance policy which accounted for the increase in his bank account, and wiped out the tax for which he was assessed.
One would have thought that that would have been the end of it; but no, not at all. Having beaten them on that, or having satisfied them that he had a reasonable explanation which they had always denied, they came along six months later and made another net worth assessment in which they took in another year or two years. They assessed him for about $800 for that year. After making inquiries it developed that in that year he had married the second time and his wife, who had been a widow, had sold her farm and equipment and had deposited the proceeds in his bank account. That wiped out the second assessment.
What happened then? They waited another six months. I do not know how many men were reviewing this man's file, but they were determined to get him some way. So they assessed him for about $1,600 for another year, overlooking the previous assessments which had been made.
I had a man come into my office not long ago to tell me that two or three years ago he had retired from his farm and was in receipt of an old age pension. He had turned his farm over to his son. He had filed income tax returns for each year he had been in operation. He went to the department and asked them if there was any further information he could give them. They assured him that everything was quite clear, that he had filed his returns properly and there was nothing more he needed to do about it. Three months ago he was assessed for arrears of income tax, made up largely of interest, amounting to $1,800.
The Budget-Mr. Nowlan
This is typical of what is happening in this country. I believe it is happening in every province, and it is certainly going on in the rural areas of Nova Scotia. I cannot see any excuse for a department as well manned and as efficiently run as this department, having all the complicated accounting machinery that is available, and having everything in the form of records of all taxpayers, waiting for years and years and then coming along and reviewing the assessments of these individuals who are completely honest.
I am not saying a word for the man who has not filed a return or who has cooked up his return. I am not saying a word on behalf of the business which conceals income, which is simply fraud. But when two or three years have elapsed an assessment should not be open for review and these men who are honest should not be penalized or charged interest which quite often is more than the original tax.
These reductions in income tax have done nothing to ease the plight of many taxpayers across the country. There was a time when the government was not as omnipotent or omniscient as it professes to be now. It is hard to believe it, but after the war this government indicated that it felt there was going to be a depression, and attempted to prepare for it. They had a shelf of public works and many other things. They were so anxious to avoid excess unemployment that they decided to send home all married women who were in government employ or m the employ of industry. Certain tax reductions which had been in existence were revoked.
Instead of a depression we now have full employment, inflation and a high cost of living, due largely to government policies adopted at that time when there was fear of a depression. We are faced with a bad housing situation across this country. Many young married couples are finding it hard to get established. We hear talk of revising mortgage arrangements in an effort to encourage the building of houses and the establishment of homes by young people. But how can they do this with the present high cost of living and the burdens which they have to carry?
I suggest that if the minister had wanted to help a large group in this country which needs help, the many thousands of young married couples from Halifax to Vancouver, from St. John's to Victoria, where the wife has to work in order to help meet the cost of living and the responsibilities of establishing a home, he should see that these people are not penalized by the provisions of the
2532	HOUSE OF
The Budget-Mr. Nowlan Income Tax Act which puts them on a different basis than that of other married couples.
There is a large group of young people in this country-many of us have them in our own families-young men and women who are trying to establish homes for themselves but who are penalized by the cost of living and the inflationary policies of this government. They are finding it most difficult to carry on. I suggest that if the minister had wanted to be of assistance to a fairly large group something should have been done that would have been of more assistance than perhaps some of the other things which have been done.
I see my time is running out, and there are many phases of this matter with which I should like to deal. I think I have about seven or eight minutes left, or perhaps ten minutes.
I was intrigued the other day by the speech made by the hon. member for Saint John-Albert (Mr. Riley), who is not in the house at the moment. He dealt with certain phases of the problems of the maritimes when he was discussing the budget. Altogether he painted a very doleful tale with which 1 certainly am not fully in accord. I think he said that our industries could not stand competition. I do not accept that in full. The hon. member for Charlotte (Mr. Stuart) can think of an industry in his constituency which is in competition with others all across Canada in that particular line. The hon. member for Colchester-Hants (Mr. Stanfield) is associated with an industry that is in competition with others across the country. The hon. members for Halifax have industries in their riding which are in competition across Canada. The hon. member for Westmorland (Mr. George) has a heavy steel industry at Sackville making furnaces and stoves which is competing successfully with other similar industries across Canada.
In saying that, I do not want to minimize for a moment the difficult economic circumstances in which industries in the maritimes generally find themselves, but I do not accept for one minute the statement that there are many industries down there which find it impossible to stand competition. Nor do I like the suggestion that if it were not for the moneys being received from mothers' allowances, old age pensions and other matters-I think his implication was obvious-we would be getting no money in the maritimes at all. Whether or not the hon. member meant it, that was certainly the implication he left. Personally I did not like it, and it is untrue. We are not people who are supplicants. We are not asking for largesse from the federal treasury.


Given the opportunity we can earn our own living in that area, as we have in the past, equally with people in the rest of Canada.
But I do agree with him that there are economic difficulties. There are difficulties with respect to freight rates and also other problems which need attention. He referred to certain remarks of mine which he said I had made some time ago, but he did not mention that at that time I raised the question of the movement of freight through Canadian ports and pointed out that during the past few years there has been a marked reduction in the export of Canadian goods through eastern Canadian ports. When the Minister of Trade and Commerce (Mr. Howe) spoke the other day he referred to the great increase in our trade with Latin America, an increase from approximately $40 million to over $500 million. I wonder through what ports that trade is proceeding. Certainly it is not going through the ports of the eastern seaboard.
We in the opposition should be complimented by the suggestion of the hon. member for Saint John-Albert that after all it was our responsibility and we should do something about it. I realize that we will have additional responsibilities in the not too distant future and probably will have to deal with it at that time. It was a tribute to the opposition.
The hon. member said he has had a heavy heart during the past winter over the situation. I thought he looked his usual debonair self; and when he did not, I thought he was probably worrying about the action of the government with respect to the port of Saint John, because it is the responsibility of the government if action has to be taken in these matters.
I do not think one accomplishes much in this field by making sarcastic references to big businessmen, wealthy interests or anything of that kind. After all, whatever may have been the influence of wealthy businessmen in the past on any political party, certainly anyone who knows the workings of government in Canada today, with a centralized government such as we have-I am not saying this politically; it may be necessary-knows that in this country the minister of trade and commerce, the minister of finance and the minister of defence production exercise more influence on industry with their little fingers than do all the financial colonels so-called to whom reference has occasionally been made in the past.
Let us not hear any more talk about the influence of wealthy men or what they can do to assist in solving these problems. The hon. member for Saint John-Albert said that

leadership was needed now, and I agree with him. That is what we have been saying. We have said that there has been a lack of vision, and we are glad to hear these criticisms coming from the government side although it is a rather belated repentance. Saul of Tarsus saw a great light when he was on the way down to Damascus, and he kicked against the pricks. Apparently my hon. friend also saw a great light when he suggested there was a lack of leadership and a lack of vision. I am glad to hear his voice raised in this connection in support of those who have spoken about it from this side of the house, and I am looking forward to the time when more leadership will come from that side of the house than there is at the moment.
The Minister of Fisheries (Mr. Sinclair) spoke a moment ago. I am not going to deal at length with his department now because his estimates will be before the house and we can deal with them at a later date. Anyone who knows the situation on the east coast will agree that more fish have been caught this year than ever before. The warehouses and storage plants are full of fish. The market price has broken, and there is a marketing problem which must be faced. The Minister of Trade and Commerce referred to Cuba the other day, and the great development in the market there for maritime products. It is true that we are selling in Cuba a certain amount of salt, cured and smoked fish. That amount has been constant for some years. But something must and should be done to encourage the development of our own Canadian market for fish.
It is all right to talk about the development of South American markets. We welcome it. It is all right to talk about the importance of the United States market. We appreciate these markets and realize that we must maintain our connections, but far less fish is consumed in Canada than in almost any other nation in the world. There could be encouragement, impetus and leadership given there which is lacking today, and to that one looks with some degree of anticipation for the future.
The hon. member for Cape Breton South (Mr. Gillis) spoke very forcibly the other day about the coal and steel industry of the mari-times and the plight in which it finds itself. I am not associating myself with him in all the things he said about the operations there, but I do agree with him that it is one of the primary industries upon which the maritime economy, and particularly the Nova Scotian economy, is dependent. The other two are agriculture and fishing.
The Budget-Mr. Thatcher
What does the budget have for the agriculturist? Nothing at all. Figures have been given in the house about the decline in agricultural production over the last few years. Last Friday the hon. member for Dufferin-Simcoe (Mr. Rowe) spoke forcibly on that point. There has been a reduction of 13 per cent in farmers' income and an increase in their labour costs and other costs of production. If that is the average reduction across Canada, as it is, it is far greater in the east. You can say what you like about the beauties of trade moving north and south-and we accept that as far as you can develop it-but the fact remains that we have been brought up and are dependent upon an economy which necessitates substantial trade moving east and west across the Atlantic to Great Britain and other sterling markets.
We read that Great Britain is facing a deficiency in trade and that some adjustments must be made in that connection but certainly there is no suggestion of encouragement in that regard so far as the budget is concerned. The apple producers and potato growers and farmers generally of my constituency have to get more extended markets than they have today. So far as the fruit growing industry is concerned, it is true that last year we had a small crop and therefore were not faced with the disastrous circumstances that ordinarily would prevail, but in the coming year we hope to have an average crop and if so it is absolutely essential to get access to the sterling markets. Otherwise we will face a really serious situation indeed.
There are other matters with which one could deal. While the minister is here I should have liked to refer to educational grants, but we will probably have a chance to deal with that subject when his estimates are before the house. It is a matter of substantial importance to the maritimes and the universities of the east, and it must be discussed. However, I do not want to trespass beyond my time, and I shall leave those observations until later.


Mr. W. Ross Thatcher (Moose Jaw):: 
On page 2121 of Hansard, in his budget speech, he said:
The government has not relaxed its efforts toward maximum economy and efficiency in all government operations.
That is the same old assurance he has been giving us year in and year out. What are the facts? When you examine page 82 of the budget papers you find that in the current fiscal year spending is up in all but two departments-those of the Secretary of State and the Minister of Trade and Commerce. In the case of the former the reduction was very minor. The reduction in the case of the Department of Trade and Commerce was more substantial, but the reason was not because of economies. In 1951 we had a census and in 1952 we did not.
During the past year civilian expenditures, or non-defence expenditures, have been more than $100 million greater than in the previous year. If there is any evidence of economy there I wish some Liberal member would tell me where it is. The fact is that the economy drive which the government announced some years ago has pretty well broken down. This government has discounted and disparaged any suggestions for savings which have been made in the house, and it does not seem to be very much interested in economy. In parliamentary circles the word "economy" sounds like a foreign language. The Liberals say in effect: We are living in dangerous times. Defence spending and social service spending are high. We are caught on the wheel of fate, and nothing can be done.
I do not believe that thinking of this kind should exist in a dynamic country like Canada. I say that cuts in federal expenditures are possible, desirable and feasible. Large sums could be saved, I suggest, by the introduction of sound business methods into government. Parliament, in running the biggest business in the country, frequently adopts methods and practices which would quickly bankrupt any small business. I mention again, as I have many times in the past, the duplication of services in this building. About thirty odd departments are completely duplicated. What business would not do something about such a situation, particularly after it was pointed out?
I still cannot understand why the government does not adopt central purchasing. I doubt if there is a single large company in Canada which does not have a central purchasing department. They have to have, if they are going to buy efficiently. However, here in Ottawa instead of central buying we have dozens of departments and agencies,

each one spending vast sums of money for the crown. We have even had cases of one department bidding against another. I think this is something to which the government should give attention.
I wonder how often private business would use the cost-plus method of letting construction contracts. In this past year a high percentage of the construction contracts awarded by the Department of National Defence was on a cost-plus basis. I contend that the practice has cost the Canadian taxpayers many millions of extra dollars.
I heard a story last week which, in my opinion, sums up the weakness of this cost-plus method of giving contracts. Two salesmen who were interested in getting defence contracts came to Ottawa from the city of Toronto. They worked all day and decided, after five o'clock, that they would like to have a round of drinks. So they went down to the Chateau Laurier, to the Jasper room, and sat down at a table. The first salesman said "Let me buy this round of drinks. I am on an expense account." The second said: "No, let me buy the round, my company has a cost-plus contract with the government, and we might as well make a profit on the round."
That, I think, sums up the weakness of these cost-plus contracts. Government officials in the past have themselves admitted the weakness. Yet, despite such an admission, if you look at the public accounts, for this year, pages N-23 to N-65, you will find that in the last fiscal year the Department of National Defence alone let 231 contracts on a cost-plus basis, valued at well over S106 million. Small wonder that our defence is costing us so heavily.
Perhaps there may have been some reason for cost-plus contracts in the war emergency, but I say there is no excuse whatever for them today. I think the government could save the taxpayers a good deal of money if, in the future, all contracts were let on a tender basis.
Today about half our budget is being spent for national defence. It is quite true that taxation adequate to build up our defences at home, and carry out our commitments abroad, has been approved by all parties in this house, and I am sure that support will continue. However, after several years of rearming, a great many Canadians are alarmed to find that in order to equip one man in the armed forces of the United Kingdom it costs $5,000, in order to do the same in the United States it costs about $13,000, but here in Canada it costs $18,000 to $20,000. It is very difficult to understand 68108-162
The Bridget-Mr. Thatcher why our defence costs should be so out of line with those in Britain and in the United States.
In this debate I am not permitted to discuss the Currie report. However, I want to say that on every hand there is increasing evidence of neglect and carelessness in the administration of the armed forces. It is now fairly clear that the government has tossed money around recklessly on defence in the past year.


Mr. Byrne:: Just as reckless as your
statement.


Wilbert Ross Thatcher: I do not think it is so reckless. I charge this government with milking the Canadian taxpayer in those years to provide frills in defence spending. I read a news item which Arthur Blakely of the Montreal Gazette wrote for his newspaper about a week ago, on defence expenditures. I thought it was an effective job, and very well done. I refer hon. members for a moment to the public accounts of last year, pages N-35 to N-60. You will find some pretty interesting reading if you look there.
In the first place, as has been pointed out in recent days, you will find 25 contracts for landscaping various government buildings, with more than a million dollars spent for this particular service. At Fort Nelson, $27,500 was paid out for the construction of a single well. At Wainwright, Alberta, a swimming pool cost $22,000; a gymnasium, $280,000; bowling alleys, $54,000. Is it for such things that this government is taxing the Canadian people? On page N-32 of the public accounts we find that to provide the Wainwright army camp with water, it cost $1,830,000. This figure seems to be rather excessive.
Here in Ottawa, at No. 26 central ordnance depot, over $25,000 was spent on air conditioning offices. At Longue Pointe a ventilating system for one building cost the taxpayers $48,000. At Whitehorse in the Yukon, according to page N-35 of the public accounts, the government spent $701,000 to erect 30 prefabricated houses. This works out at a cost of $23,380 per house. I know that transportation costs are quite high, but that figure certainly seems excessive to me. At Churchill the department paid $7,765 to an architect simply to design a chapel and I can find no evidence that the design was ever used.
Now, despite the fact that we have a good many architects on the federal payroll, several millions of dollars were paid in fees during the last fiscal year for architectural services. On page N-24 of the public accounts we see that 500 huts were built at Bouchard,
2536	HOUSE OF
The Budget-Mr. Thatcher Quebec, at a cost of $3,555,000. This works out to $7,110 each, and these were huts, not houses. On page N-35, we And that another 500 were built by Eastern Woodworkers Limited, at a cost of $4,343,000 or $8,700 each. These huts were not used, but were placed in storage at a military camp at De-bert. On page N-36, we find 140 more of these huts which were built by North American Buildings Limited at a cost of $1,177,000. This works out to $8,400 each. These huts are not being used, but are stored at Winnipeg. Three hundred prefabricated huts were built by Shoquist Construction Company, at a cost of $2,300,000 or $7,725 each. These huts are stored in Edmonton. I doubt whether, in such expenditures, the taxpayer is receiving value for his dollar.
At Dartmouth one street in the married quarters area cost $100,000. At page N-38 we find that engineering services incidental to the design of a heating installation cost the taxpayer $31,560. On page N-39 we find that it cost $110,000 to rough grade streets and lanes in the married quarters of Belmont park. The paving of streets and driveways in the same area cost another $144,000. Across Canada millions of dollars were spent in these camps to pave streets, sidewalks, parking lots and parade squares.
On page N-41 we find that $314,000 was paid at Greenwood to replace sub-floors in various R.C.A.F. buildings. At St. Hubert $15,000 was paid for inspection of various runways. At St. Hubert also $38,500 was spent for a five-cell guardhouse. Construction of a single mess at Camp Borden cost $560,000. At Centralia, according to page N-48, renovating and partitioning a barracks cost $475,000. Repairs to hangar aprons, taxi strips and parking areas cost $57,000. On page N-61, we find that a lean-to at Fort Nelson cost $36,000. Alterations and additions to the officers' mess at Kingston cost the taxpayer $340,000. In Quebec an armoury was re-wired and re-lighted at a cost of $67,000, while one in Sherbrooke cost $30,500.
I say that on every hand, Mr. Speaker, there is evidence of extravagant spending and lax administration in the armed services. Thieving is apparently much more widespread than Canadians realize. From June 1, 1950 to November 24, 1952, there were 601 fires at defence establishments, causing damage of over $5 million. There are many indications that a number of these fires were deliberately set in order to hide shortages of equipment and stock. I quote from a report in the Ottawa Journal:
Second most costly fire in Canada's defence establishments in the two-and-a-half-year period was that at No. 26 ordnance depot, Flouffe Park,


Ottawa. Losses in that blaze are placed at $673,832, and cause of the fire is listed as "suspected arson".
Two outbreaks of fire at Petawawa military camp causing losses of $188,096 are also set down to suspected arson. In a fire at Winnipeg in which property to the value of $12,000, the cause is definitely cited as "arson".
I do not think I have to tell hon. members that it looks as if something is wrong, when such situations can arise.
In my opinion, there is another way this government is spending money needlessly at the present time on defence. I seriously question the wisdom of this country spending many millions of dollars pioneering in the field of military weapons. It seems to me that this phase of defence could be more economically and more efficiently undertaken by the larger allied nations who are better equipped for the purpose. To give one example, Canada at the moment is spending hundreds of millions of dollars pioneering in the field of advanced military aviation. Every hon. member knows that much of that work is being duplicated by other NATO countries.
This government spent millions of dollars subsidizing the Avro company in building a jet transport plane. One plane came off the assembly line, and the project was dropped because it was found that the British Comet had a cruising range almost three times as great as the Avro plane. I believe also that it is fairly apparent to an unbiased observer that the CF-100 project, if it is not a fiasco, is at least a very very costly experiment. For four years now this project has dawdled along and has cost the taxpayer well over $100 million, according to the last figures I saw. I understand that so far 16 planes have been delivered from the assembly line. Even if that project is not a dud, unless something is done to get quantity production soon, I think there is a real danger that the plane may be obsolete.
It is very interesting to note that around the same time the government embarked on the F-86 Sabre project. I understand that, in the same period, roughly 700 of those planes have been turned out. Although it may give us a sense of pride to read of Canadian achievement in this field, at the same time we should keep in mind the staggering costs which are involved in such experimentation. In addition to the cost there is always the danger of the new weapons bogging down some place between the blueprint stage and the production line. I contend that the taxpayers would save millions of dollars annually and have weapons which are just as good or better, if in the future the government left most of the design

headaches to Britain and the United States. After all, they have better facilities for this work. Canadian manufacturers could concentrate on the best American and British weapons under some licence arrangement.
Everyone wants Canada to have adequate defence, but more and more Canadians are asking themselves whether they are better defended because the defence department goes on periodical wild buying streaks; because the defence department decides to build swimming pools and bowling alleys; because it decides to fix up officers' messes in a very plush way, because it beautifully landscapes defence projects. The evidence is mounting daily that the government's own officials have warned them in the past that there is something wrong in the department of defence. Yet those reports apparently have been ignored. Apparently a special government investigator, in September, 1949, made a damning report to the government, according to evidence which was brought forward last week. According to the Montreal Gazette of February 26, it contained sentences like these:
I could not fail to be impressed with the fact that for such a tremendous administrative machine, there appears to be little effective fighting strength.
And another one:
A tremendous amount of money is being spent to provide an administrative machine which, to my way of thinking, occupies a large part of its time in a futile paper war with the reserve army which has neither the strength in numbers, the equipment, nor the inclination to respond.
There were other sentences. I repeat that this is a damning report, and I am amazed that the government refused even to discuss it. In view of evidence like that, how can any Liberal say that the average taxpayer is receiving value for his defence dollar? Despite all of these reports, the government continues to increase defence spending. All parties in this house, and most citizens in the country have in the past backed government demands for adequate defence appropriations; but many citizens of the country are beginning to doubt whether those appropriations have been well spent. Personally I sincerely believe that defence costs could be cut not by 10 per cent but by 15 per cent or 20 per cent if the government really got down to business.
I say this budget has failed to meet the main financial problem facing the Canadian people, namely the need to reduce federal expenditures. At a time when tax relief is urgently needed, this Liberal government continues on a spending spree which is unparalleled in our history. A few months ago a United States government was overturned. One of the reasons it was overturned was the 68108-162^
The Budget-Mr. Thatcher corruption, waste and inefficiency which had crept into the administration. It is becoming daily more apparent that Canadians will be forced to take similar action if they want to get taxes back to a reasonable level. This government is tired. It has been too long in office. It is encumbered by deadwood and hangers on; and it lacks the initiative needed to meet the challenge of overtaxation. I say that federal waste and extravagance have reached scandalous proportions in this country. In view of that fact, I think the only honourable course for this government to take is to resign without delay. By that I mean to resign, not next August or September, but this week. I challenge the Liberal party to go to the people with this budget as an issue. I say that the people of Canada will welcome the opportunity to show their dissatisfaction at the polls.


George Alexander Cruickshank: Will the hon. member permit a question? Is he speaking for his party when he demands that we have an election?


Wilbert Ross Thatcher: I would not be surprised if I were.


George Alexander Cruickshank: Are you?


James Sinclair: Will the hon. member permit me to ask a question?


Wilbert Ross Thatcher: Go ahead.


James Sinclair: In his speech last fall, in dealing with taxation, the hon. member advocated substantial cuts in corporation taxes on the ground that this government had bled the corporations of this country white. The question I should like to ask him is this. Does he approve of the modest reduction in corporation taxation which the Minister of Finance (Mr. Abbott) has incorporated in this budget?


Wilbert Ross Thatcher: I thank the hon. member for his question. I suggest that he read the Regina manifesto and he would then have a fairly good idea.


George Alexander Cruickshank: Do you still go by that?


Some hon. Members:: Oh, oh.


James Sinclair: Mr. Speaker, I am afraid that the hon. member-probably because of the acoustics of this chamber-did not hear my question. I have read the Regina manifesto, which says that no C.C.F. government will rest content until it has the ownership of all means of production including, I suppose, hardware stores. What I wanted to ask the hon. member, and I do again, is this. Having requested the Minister of Finance to make substantial reductions in corporation taxation,
2538	HOUSE OF
The Budget-Mr. Sinclair does he now approve the very modest reductions which were incorporated in this budget by the Minister of Finance?


Wilbert Ross Thatcher: I thank the minister for his question. In reply I would say that I was greatly disappointed to note that the Department of Fisheries, in its fiscal year, had increased its spending by 30 per cent. I would tell the minister that this is not a good record for the few months he has been in office.


George Alexander Cruickshank: Answer the question.


Wilbert Ross Thatcher: In reply to the former question I would suggest that, like other hon. members, he read Hansard and that he can find my opinions on taxation expressed there at various places during the past session.


James Sinclair: Just to close this discussion, Mr. Speaker, may I say that hon. members of this house who remember his demand for substantial cuts in corporation taxes-


Some hon. Members:: Order.


James Sinclair: I have not taken part in this debate as yet, Mr. Speaker. I have as much right to speak as any other member. In closing my address, I would ask every member of this house to go back and read the hon. member's speech on taxation last spring.


Some hon. Members:: Order.


Mr. Deputy Speaker:: Order. It is our practice in a budget debate to follow a list which has been handed to the Speaker at the beginning of the sitting. According to that list the speaker who is to follow the hon. member for Moose Jaw (Mr. Thatcher) is the hon. member for Moose Mountain (Mr. Smith). If he wants to yield to the minister and to allow the minister to make a speech, that is all right. I am afraid that I shall have to recognize next the hon. member for Three Rivers (Mr. Balcer).


Mr. Smith (Moose Mountain):: I will yield.


James Sinclair: I thank the hon. member for Moose Mountain for his kindness. I had not intended to make a speech. But now that I am on my feet, may I say that I am always amazed at the absolute inconsistency of the hon. member for Moose Jaw when he rises to make a speech. Every member of the house recalls that spectacular speech he made last year in which he, a member of the C.C.F. party, demanded a substantial reduction in corporation income tax because, as he said, this government was bleeding corporations so white they did not have any money to expand. I drew attention to the fact that the hon. member was a very
fMr. Sinclair.]

successful businessman and that he had found lots of money to expand greatly during the post-war era. That is why I listened to his speech today with such great interest, because now we have this reversal to party line; we have a complete reversal of last fall's speech.


Wilbert Ross Thatcher: I rise on a point of order, Mr. Speaker. The minister has no right to say that there has been any reversal. I said today that if this government would meet head-on the problem of waste and extravagance, they would be able to make tax cuts all across the board, particularly to those in the lower income groups who especially need it. That is what I said in November, and that is what I said today.


James Sinclair: I am a little bit amazed at
the point of order I am not a constitutional authority like the hon. member for Winnipeg North Centre (Mr. Knowles), but this is a new point of order to me. As I said, he has now reversed himself and has got back to the party line, no doubt in anticipation of the coming election.


Wilbert Ross Thatcher: Mr. Speaker, I have not
reversed myself at all.


Mr. Depuiy Speaker:: Order. The hon. member may interrupt the hon. member who has the floor by asking him a question, but he must not rise on so-called points of order simply in order to make another speech.


Wilbert Ross Thatcher: I wonder if the minister
has read the Gallup poll taken in British Columbia last Saturday. His	thinking
makes me believe that he has.


James Sinclair: Once again the hon. member is very uncomfortable about having his speech of last year remembered; but it made a great impression on members of this house to hear it from the only man in the C.C.F. who is a businessman and who has employed labour. We all recall the remarks of the hon. member for Vancouver East (Mr. Maclnnis) on the combines committee last year, and his views that people who employ labour do so only to exploit other people's work. That is why it came as such a surprise to us to have a C.C.F. member stand up in this house and advocate substantial reductions in corporation income tax.


Wilbert Ross Thatcher: Pretty weak. The minister can do better than that.


James Sinclair: Some modest reductions having been made, I would have thought that the hon. member for Moose Jaw would have leapt to his feet and claimed credit for having secured those reductions, and would have approved the action of the Minister of Finance in making those reductions.

What I really rose about was this. If he had answered yes or no in a direct way to my question as to whether or not he did approve of these reductions, I would have asked another question. If he had said Yes- and most of us who remember his speech would have hoped that, of necessity and for consistency, he would say Yes-then I was going to ask how he was going to vote on the C.C.F. amendment as set out on page 2354 of Hansard, which is so violently critical of this modest reduction in corporation taxation. I think all hon. members in the house will watch his vote with great interest indeed. And we will hope that on this occasion the hon. member will not go fishing, and so miss the vote.
The other point I would like to make while I am on my feet is this matter of the article in the Montreal Gazette. This new type of C.C.F.'er seems to read from the Tory paper with great approbation-


Wilbert Ross Thatcher: Pretty weak.


James Sinclair: Yes, it was pretty weak, when the hon. member for Moose Jaw (Mr. Thatcher) had to fall back on a rehash of a front page article a week old in the Montreal Gazette that every member has read-yes, it is pretty weak. I suggest to the hon. member that the proper place for the discussion of this item is in the defence committee, where these things are being discussed, rather than making-


Wilbert Ross Thatcher: The government will not let us discuss it there.


James Sinclair: -rather than making a partyline speech of which undoubtedly he will have ten thousand copies printed, to send home to Moose Jaw, saying, "Look boys, I am back in the C.C.F. party; forget about that corporation tax speech."


Mr. Leon Balcer (Three Rivers):: Mr. Speaker, I hope I am not taking the time allotted to the minister. I would not like to deprive him of the opportunity of taking part in the debate.	.
(Translation):
Mr. Speaker, since the beginning of the debate on the budget, the government's supporters have felt the need to defend themselves every time they spoke of federal-provincial relations.
The members of the province of Quebec, especially, faced with the almost unanimous decision of the population to put a stop to the centralizing ways of the federal government, have deemed it necessary to stress their innocence in the matter.
Now that the province of Quebec has been isolated, they, who are chiefly responsible
The Budget-Mr. Balcer lor such isolation, now loudly, in turn, defend the purity of the intentions of the federal government towards the province of Quebec.
On the contrary, it is obvious that the government wish to continue their centralization policy and that they intend to do nothing in order to remedy the situation, even less to settle it in a manner which would be satisfactory to all concerned.
I believe that it is now more urgent than ever to remedy in a fair and reasonable manner the situation of inferiority in which the government has placed the province of Quebec. Such a situation is fraught with danger not only for the people of Quebec but for the whole of Canada.
I wish today to offer further proof of the centralization threat. I intend to call the attention to a further encroachment of the central government upon the rights of the provinces and, unfortunately, this injustice is once more directed against Quebec; once again, Quebec will find itself in a position of inferiority compared with the other provinces. And yet, this is a field which really comes within the jurisdiction of the provinces, since it has to do with assistance to education.
I would refer to the clause of the Income Tax Act which the federal government uses to tax the contributions which are paid by certain taxpayers of Quebec, whether private individuals or companies, into the special fund established by the provincial government of Quebec to help education.


An hon. Member:: Sit down.
(Text):


Jean Lesage: You had better understand what I am talking about before you say, "Sit down".


Donald Methuen Fleming: Don't lose your head. (Translation):


An hon. Member:: Sit down.


Jean Lesage: This is no time for me to sit down; on the contrary, since this is an extremely important matter, Mr. Speaker, I am obliged to call your attention to the fact that the matter about which the hon. member for Three Rivers wishes to speak is now before the courts.


Léon Balcer: Mr. Speaker, I would like very much to point out to the hon. member for Montmagny-L'Islet (Mr. Lesage) that the matter is not sub judice, but that judgment has been handed down and that, up to now, no appeal has been lodged.


Mr. Deputy Speaker:: I would very much like to do justice to both hon. members, but on the other hand, as far as I know, a judgment has been handed down concerning the

The Budget-Mr. Balcer taxes paid by certain corporations which paid certain sums into the educational fund of the province of Quebec. I do not remember exactly whether it was an Exchequer Court ruling. In that case there might have been an appeal to the Supreme Court of Canada.


Jean Lesage: It is a judgment of the Exchequer Court, and the time limit for appeals is not yet expired.


Léon Balcer: I am not concerned with that-


Jean Lesage: We do know that an appeal will be lodged and the time limit for the appeal has not yet expired.


Mr. Deputy Speaker:: In the circumstances, and if the information given by the parliamentary assistant to the Minister of Finance is correct, the member for Three Rivers will have to admit that the case is still, in fact, sub judice.


Léon Balcer: Mr. Speaker, in spite of all the respect I should like to show to one of my colleagues in this house, I regret to say that the hon. member for Montmagny-L'Islet is completely mistaken in this matter and that I intend to claim my rights as a member of this house and speak about a matter which is of the utmost importance to the province of Quebec. I intend to defend the rights of the population of my province, as well as those of my electors, in this house.
I do not think the hon. member can set himself up as a judge in the matter and decide whether a member is allowed to choose his topic and the time when he should speak. I intend to deliver my speech, as I feel I am within my rights. With your permission, Mr. Speaker, I shall continue my remarks.


Jean Lesage: On the same point of order, Mr. Speaker-


Mr. Deputy Speaker:: The hon. member for Three Rivers wishes to deal with a judgment passed in a case affecting taxes levied upon certain Quebec corporations, the proceeds of which are turned over to an education fund established by the provincial legislature.
As Deputy Speaker of the house, I cannot rely solely on the arguments presented by the two hon. members participating in the debate at this time.	The hon. member for Three Rivers contends that the case is not sub judice while the hon. member for Montmagny-L'Islet maintains, on the contrary, that the case is sub judice.

Consequently, if the two members persist in maintaining, on the one hand, that it is and, on the other hand, that it is not, I shall necessarily have to post myself up on that matter, because at this time I am not able to decide that point. However, both hon. members seem agreed on one point, namely that if the case is now sub judice, the hon. member for Three Rivers cannot refer to it. I believe the hon. member is of that opinion.


Léon Balcer: Certainly.


Mr. Deputy Speaker:: It is ten minutes to six, and I know that the hon. member does not want to be out of order, in view of the fact that there may exist a serious doubt as to whether the case is sub judice or not.
The hon. member has just made a statement on his honour, and it being ten minutes to six and inasmuch as it can be ascertained during the dinner recess whether the case is sub judice or not, I would ask the hon. member for Three Rivers if he could not proceed with his speech and turn to another matter. I shall be able to give a ruling at eight o'clock; if the case is not sub judice the hon. member will then be able to proceed. Unfortunately, if the case is sub judice, he will have to submit to the ruling which I will make then, a ruling he knows in advance.


Léon Balcer: Mr. Speaker, I readily submit to your ruling, but I am bound to admit that it seems strange to me that an hon. member should be able to rise in this house, start speaking, and that the member the Speaker has seen and indicated should be compelled to prove that a certain case is not sub judice-for the sole reason that another member claims to have read somewhere or to have been informed in one way or another that the said case is sub judice.


Mr. Deputy Speaker:: I wish to enlighten the hon. member as to what I have said. I only ask for his co-operation. If the hon. member for Three Rivers wishes, before six o'clock, to speak on that judgment in spite of what has been said by the parliamentary assistant to the Minister of Finance, I cannot prevent him from doing so. However, if between six and eight o'clock I have been able to ascertain that the case is really sub judice, the hon. member will not be allowed to speak on it at eight o'clock. He will then be able to judge himself of the stand he has taken between seven minutes to six and six o'clock.


Léon Balcer: Mr. Speaker, would you
call it six o'clock?

(Text):


Mr. Deputy Speaker:: Is it agreed that I call it six o'clock?


Some hon. Members:: Agreed.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.


James Garfield Gardiner: Mr. Speaker, if I might have unanimous consent to revert to motions I should like to read a further statement on the opening of the cattle market in the United States.


Mr. Deputy Speaker:: Is it agreed?


Some hon. Members:: Agreed.


James Garfield Gardiner: The President of the United States today proclaimed the termination of the abnormal situation in respect of cattle and meats which has been in effect in the United States since 1943. During the existence of the abnormal situation all tariff quota arrangements on cattle were suspended.
As a result of this announcement the tariff arrangements on cattle negotiated at Geneva in 1947 will apply from April 1. The Geneva agreement provided for increases in the annual tariff quotas from 225,000 to 400,000 head of heavyweight cattle weighing 700 pounds and over, and from 125,000 to 200,000 head for calves. Quarterly quotas within the annual quota of 400,000 head of heavyweight cattle were increased from 60,000 head to 120,000 head per quarter. A lower rate of duty of 1J cents per pound applies on imports within the tariff quota for calves and heavyweight cattle. Cattle and calves imported into the United States in excess of the quotas are dutiable at 2 J cents per pound. Dairy cows enter at 1J cents per pound and purebred cattle for the improvement of stock are admitted free, without tariff quota limitations in either case.
There is no tariff quota on fresh beef and veal imported into the United States. As part of the Geneva agreement the customs duty on such meat was reduced from 6 cents to 3 cents per pound. Exports of slaughter cattle and calves from Canada to the United States have been well within the tariff quotas which now come into effect. In 1951, the last full year before the embargo was imposed, Canada exported to the United
Livestock and Meat
States 124,000 head of heavyweight cattle and 11,000 calves. In the same year Canada exported 92 million pounds of beef and veal. These figures indicate that the quotas that have been set are well above any number of cattle that we are likely to have in Canada for some considerable time at least.



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Greenwood), and the amendment to the amendment of Mr. Cold-well.
(Translation):
Jean Lesage: Mr. Speaker, with your permission, I would like to add a few words to what I said just before you left the chair, in connection with the point of order raised about the speech which was then being made by the hon. member for Three Rivers.
I contended, Mr. Speaker, that the hon. member for Three Rivers was not in order when he referred to a certain matter, that is the question whether the federal government, or rather the Department of National Revenue, could decide not to authorize the deduction, for income tax purposes, of the tax paid for educational purposes by certain corporations of the province of Quebec. A judgment has been handed down by the income tax appeal board to the effect that the said corporations could make those deductions. That decision was quashed by a judgment of the exchequer court, on January 23 last. There were nine cases, including that of the Shawinigan Water and Power Company Limited v. the Minister of National Revenue. I have made inquiries and am in a position to say that the said companies have not yet lodged an appeal to the Supreme Court.
Therefore, Mr. Speaker, I submit that, as far as this house is concerned, a case must be considered as pending before the courts as long as a judgment is not final, that is to say as long as an appeal is still possible.
I base my argument on the fact that this rule must be followed-I say this in all due deference-very rigorously by this house. It is an application of the principle that the executive power and the legislative power are not allowed to do anything that might jeopardize in any way the independence of the third power, which is the judicial power. The appellant has not waived his right of
2542	HOUSE OF
The Budget-Mr. Lesage appeal and an appeal is still possible. I said that it is possible that an appeal may be lodged. The question is whether or not it would be proper for the members of this house to express their opinion on a matter with regard to which a final decision will probably be rendered by a court of appeal.
Would it be proper for us to prejudge what the hon. judges of the Supreme Court might finally say on the question?	Mr. Speaker, I have found no authority dealing directly with this point, with the matter of finding out whether a case is still considered to be pending before a court, even if a judgment has been handed down and is not yet final because of the fact that the time reserved for the appeal to be made has not yet expired. Nevertheless it is clear. I do not wish to quote the authorities which I have found. I simply refer you to Beau-chesne, third edition, citation 490; May, fifteenth edition, pages 380 and 437. The latter citation reads as follows:
(Text):
Matters awaiting the adjudication of a court of law should not be brought forward in debate...
(Translation):
This question, Mr. Speaker, is one which cannot be discussed until final adjudication has been made of it by a court of law, through a final judgment.
(Text):


Donald Methuen Fleming: I should like to address you, Mr. Speaker, on the point of order raised by the hon. member for Montmagny-L'Islet prior to the dinner adjournment and continued by him now with the argument which he has just delivered.
The facts pertaining to the case in question are, I understand, the following: An appeal was taken to the income tax appeal board by a certain Quebec corporation, against an assessment made by the Department of National Revenue in relation to its taxable income, the point involving the right of the company to claim deduction on account of certain school rates paid in the province of Quebec.
The income tax appeal board upheld the appeal and found that the assessment had not been correctly made. From that decision of the income tax appeal board an appeal was taken by the Minister of National Revenue to the exchequer court. The appeal to the exchequer court was sustained, and the decision was handed down just a few days ago.
There, Mr. Speaker, according to my information the matter rests. No further appeal has been taken yet. An appeal might be taken later; there is still time for an


appeal. An appeal will not be open to the Minister of National Revenue; it will be an appeal open to the corporation in question, but as yet the fact is that no appeal has been taken.
That, in my submission to you, Mr. Speaker, is conclusive of the point raised by the hon. member for Montmagny-L'Islet (Mr. Lesage). Had an appeal been taken and were that appeal now pending he would be quite right in his contention that the matter is sub judice, but as no appeal is pending at the present time and as none has been taken the matter is not sub judice; therefore, it is perfectly competent for any member of this house to discuss the subject matter of the decision, whether of the income tax appeal board or of the exchequer court.
As my hon. friend has said, the reference is to paragraph 246 (c) of Beauchesne's third edition, where we find the following:
Besides the prohibitions contained in standing order 41, it has been sanctioned by usage both in England and in Canada, that a member, while speaking, must not:
And then paragraph (c):
refer to any matter on which a judicial decision is pending;
Will you please observe, Mr. Speaker, the words "any matter on which a judicial decision is pending". That is to say, in my submission, a matter in which some proceeding has been taken to the court upon which the court has not yet delivered a decision. The only other two references in Beauchesne are, as I have no doubt you are well aware, Mr. Speaker, paragraphs 252 and 490, neither of which I think is of direct assistance to us on this point.
But my hon. friend the member for Montmagny-L'Islet has quoted May, fifteenth edition and has invoked the expression "matters awaiting the adjudication of a court of law". On that phrase the hon. member bases an argument that until a matter is disposed of conclusively by the final court of law that matter is sub judice; and if the time for entering an appeal has not fully run, the matter is still sub judice.
In my submission, Mr. Speaker, that would be a most unwarrantable extension of the rule. There is nothing pending in the courts about this case at the moment. It may be that at some later time, perhaps a month from now, the matter will come back to the courts if notice of appeal is served on the minister by the corporation in question, but at the present time there is no proceeding pending before the courts. The income tax appeal board is through with it, and the exchequer court is through with it. There is nothing pending before the Supreme Court of Canada

at this moment, and that is the only court to which an appeal can be taken from the exchequer court.
Therefore, at this moment, there is nothing pending before any court. There is no proceeding before any court in this land on this matter that is awaiting judicial decision. No judicial decision is pending within the rule as stated in Beauchesne, paragraph 246 (c). In my submission, Mr. Speaker, the point taken by the hon. member for Montmagny-L'lslet is not well taken, and my colleague the hon. member for Three Rivers (Mr. Balcer) is perfectly within his rights in proceeding to discuss a matter which, so far as the exchequer court is concerned, is disposed of now, so far as the income tax appeal board is concerned is disposed of now, and is not pending before any court in the country.


Mr. Robicnaud:: I was not here when the point of order arose but I think the hon. member for Montmagny-L'Islet, from the information I have, has correctly stated the facts. The hon. member has asked you, Mr. Speaker, and this house, to make a strict interpretation in the matter in issue. I submit that neither you nor this house should make, or should be asked to make or render a stricter interpretation than the courts of law would under similar circumstances. I agree with the hon. member for Eglinton (Mr. Fleming) that there is no proceeding pending before the courts because unless and until notice of appeal is given, no proceeding has been initiated and until a proceeding is initiated there is nothing before the courts.
I submit for your consideration that the words "sub judice" have been given legal interpretation in the following words: "Under or before a judge or a court; under judicial consideration". That interpretation has been made in a case, the name of which I could not find tonight because the reports were not in the parliamentary library, but it is reported in 12 East's King's Bench Reports, page 409. I understand those reports are not here but they are in the supreme court library. I submit that the words "sub judice" are synonymous, in a matter of this kind, with "pendente lite" which have been judicially interpreted as meaning "pending a suit, during the actual progress of a suit, during litigation". I submit that we should accept this judicial interpretation of "pendente lite"; and there is no suit before the court until notice of appeal has been given. There is no litigation. We are not dealing with a matter that is in litigation. It has been solved, and until its decision has been thrown overboard by the court of appeal, which presup-
The Budget-Mr. Balcer poses that a notice of appeal has been given and the ordinary procedure has then been carried on, there is nothing "pendente lite". Therefore I submit that the hon. member for Three Rivers is perfectly in order.
I wish to quote from Redlich's "The Procedure of the House of Commons", volume III, page 59:
Nothing has been done to weaken the force of another rule of a similar kind, that no reference must be made in debate to matters before the courts of law in some pending litigation.
I submit that this is a well-recognized authority and it corroborates, I think, the points that have been made in favour of allowing the hon. member for Three Rivers to continue to refer to the matter to which he had already referred before the point of order was taken.


John Horace Dickey: Mr. Speaker, if I might say a word, it is simply this. I think the point which the hon. member for Eglinton (Mr. Fleming) and the hon. member for Gloucester (Mr. Robichaud) have missed is that a court proceeding is not concluded until an order for judgment has been signed. I understand in this case that, pending a decision as to whether or not there will be an appeal, there is no order for judgment; therefore, the matter is still before the court.
(Translation):


Léon Balcer: Mr. Speaker, before the dinner recess, I think the point at issue was a question of fact: had an appeal been lodged, yes or no?
As for the expression, sub judice, Your Honour, being a lawyer, knows very well that it is a definition, and it is said that a case is sub judice inasmuch as it is before a court; therefore the debate was not so much on a point of law but on the facts.
During the recess, I got in touch with the counsel for the company, the only party who can lodge an appeal. He told me himself that he had not yet lodged an appeal. Besides, the hon. member for Montmagny-L'lslet (Mr. Lesage) has admitted that himself a while ago. He wished no doubt to raise a point of law, but I am convinced that the jurisprudence of our courts and this house reject it entirely; therefore, I shall abide by Your Honour's ruling.


Jean Lesage: Mr. Speaker, may I be permitted just one word? I wish to draw your attention to the last statement of the hon. member for Three Rivers (Mr. Balcer). He said that he communicated with the company's counsel, who advised him that he had not yet lodged an appeal. The facts are very clear and the case will be brought before the

The Budget-Mr. Balcer Supreme Court, since the hon. member for Three Rivers stated himself that the appeal had not yet been lodged.


Mr. Deputy Speaker:: I thank the hon. members who have participated in the debate on this point of order with a view to helping me find a solution.
The hon. member for Three Rivers was right when he stated that the point under discussion was whether the decision had been appealed or not. If it has not been appealed, is the matter nevertheless sub judice, since the time allowed for appealing has not yet expired? According to the rules of the house, should the matter be considered as sub judice?
The first question is a matter of fact. As for me, I have been in touch with the clerk of the Supreme Court and even though, according to certain steps which have been taken, it appears that they intend to lodge an appeal, from a technical point of view, the case has not been brought before the appeal court. Consequently, the other point must now be decided: Should a case which has not been brought before the appeal court but regarding which the time allowed for appealing has not expired, be considered, according to the rules of the house, as being sub judice? The hon. member for Montmagny-L'Islet (Mr. Lesage) referred to citation 490 of Beauchesne, third edition. Personally, I do not think that this citation is relevant. We all agree that if the case could be considered sub judice, it could not be discussed before this house.
The hon. member mentioned page 380 of May, fifteenth edition, and also page 437 of the same edition. I would ask him to refer to that page and in particular to the subtitle which is as follows:
(Text):
Matters Pending Judicial Decision
Matters awaiting the adjudication of a court of law should not be brought forward in debate (except by means of a bill; see p. 380). This rule was observed by Sir Robert Peel and Lord John Russell, both by the wording of the speech from the throne and by their procedure in the house regarding Mr. O'Connell's case, and has been maintained by rulings from the chair (e).
(Translation):
Then, between brackets, there is the letter <e). If he refers to the bottom of the page, to this footnote (e), he will read, among other things:
(Text):
A matter decided by a court but open to appeal is not sub judice unless notice of appeal has been
given.


(Translation):
Therefore, I think the matter of the point of order has been settled. The hon. member for Three Rivers has the floor.


Léon Balcer: I thank you, Mr. Speaker. When the house took recess at ten minutes to six I wanted to draw its attention to the section of the Income Tax Act to which the federal government resorts to levy a tax on contributions made by certain taxpayers of Quebec, corporations and individuals, to the special education fund set up by the Quebec provincial government.
I would like to give a brief outline of the creation of this fund.
In 1946, school boards, large and small, were in terrible financial straits. A large number of them were more or less bankrupt. Not only were they unable to borrow but they could not even amortize their debt or even pay the interest.
Most of the school boards were physically incapable of improving their schools and even less of constructing new ones. Due to our traditionally large families, classes were soon overcrowded. Notwithstanding the good intentions of the school trustees and of the government, teachers were receiving starvation wages because it was impossible to tax real property any more. The position was tragic. Our whole system of primary education was paralysed.
It was then that the provincial government decided to create a special fund in order to assume all the debts of all the school boards.
Finally the primary schools in our towns and in the country as well, the very basis of our system of education, were going to be salvaged and put on a progressive basis and would afford to give the French-Canadian youth of the province of Quebec the training essential to their future.
These huge liabilities had reached the fantastic figure of $100 million. The provincial government decided to use the resources of the province to build up this educational fund.
The government called upon all those who owned hydraulic resources and those who developed the huge forestry resources of the province of Quebec, beyond the boundaries of the school municipalities.
Thus, a tax of 15 cents per cord was levied on all the lumber cut on the crown lands and of 10 cents per thousand kilowatt hours with regard to all the power developments located on crown lands or held by right of

property. Later on, the oil and the telephone companies were also required to do their share.
But although these contributions had been used exclusively for the purposes of the fund, that is to help education, the federal income tax department refused to consider this contribution as a school tax and it taxed these amounts as being part of the profits of the said companies and individuals.
Yet, these contributions, paid for a legitimate purpose by all the companies operating in the province of Quebec, represent in fact necessary operating expenses for all those who wish to operate lumbering enterprises or hydroelectric works. Besides, the income tax law aims at taxing profits and not expenses.
But, by some stretch of the imagination, the dominion puts those expenses in the category of corporation taxes-even in such cases when it is possible to deduct from this contribution the school taxes which companies or private citizens pay to the various school boards where those companies own properties.
Moreover, from the constitutional standpoint, the thing is quite clear: those taxes are nothing but school taxes-paid in order to provide for the educational needs within the province of Quebec.
By taxing this fund, the federal government would set the first example since 1917 of school taxes which might not be deducted from the income tax. By following such a policy the income tax department would discriminate against the Quebec corporations, as Quebec would thus become the only province where school taxes would not be deducted from the income tax.
Confronted with this attitude adopted by income tax officers, some electricity companies decided to protest against this encroachment of the federal government, by appealing to the income tax appeal board; strangely enough, this board, set up by the dominion itself, has refused to acknowledge the claims of the national revenue department and has delivered a circumstantial judgment.
Logically, this decision should have satisfied the federal government, had they been so scrupulously intent on preserving the rights of the provinces. Had they truly intended to recognize as an exclusive preserve of these governments the field of education and the direct taxes to be levied for that sole purpose, they were there provided with a wonderful opportunity of showing the people that they meant to leave the provinces free to levy those school taxes which they might require.
The Budget-Mr. Balcer
At that time, in order to do away with any possible confusion they could have clarified their own regulations or amended the Income Tax Act so that, according to the spirit of confederation, the holders of water power in Quebec would not be taxed twice for having assisted the Quebec primary schools. Such, however, is not the case. The very same people who are at present attempting to blackmail Quebec with their grants to universities, decided to appeal the decision of their own court to the Exchequer Court of Canada.	|l
And there, unfortunately, their appeal was sustained, but not before the judge had expressed the opinion that he is bound by the orders in council and that even though, from any logical business point of view it would seem that these taxes should be deductible, it was his duty to enforce the law as expressed by parliament.
I sincerely believe, Mr. Speaker, that there is a case which demonstrates the necessity of holding a federal-provincial conference in order to define once and for all, if not in an equitable fashion, the taxation fields that belong to the central government. After all, in this case the government is actually taxing twice those companies who have had to make certain outlays in order to contribute to the establishment of a fund to help education in one province.
The fact that the federal government refuses to consider as a school tax a contribution to such a fund and denies these companies the right to deduct these expenses which for them are compulsory, puts these companies in an inferior position in regard to companies paying school taxes in the other provinces.
Besides, the fathers of confederation wished without any doubt, to reserve to the provincial legislatures, under section 93, the exclusive right of legislation in matters of education. And this exclusive right which is guaranteed by section 93 would become an illusory right if another exclusive right were attached to it, that is the one under section 92, which provides for legislation on direct taxation in the province in order to levy funds for provincial purposes.
If the provincial legislature has the exclusive right of legislation with regard to the levying of the necessary funds for education purposes, it is unconstitutional for the federal government to impose a new tax on these school taxes which are paid for the sole purpose of aiding education.
2546	HOUSE OF
The Budget-Mr. Balcer
These taxes which are being levied by the federal government amount to over $2 million a year. Might it be, then, that the $2 million for the universities which the federal government wants the province of Quebec to accept and is so insistent upon it, is the same $2 million which is being levied on the contributions to our elementary schools? If such is the case, one must admit that the formula is rather lacking in elegance. In other words, $2 million is being taken away from the companies which help elementary schools and this money is being used as gifts to universities.
The federal government accumulates surpluses and is in a position to blackmail the Quebec government with grants to universities or with direct subsidies in the amount of $50 million, in return for taxation rights. The federal government is satisfied to place Quebec in a position where it has the choice between $50 million or agreeing to surrender forever vested rights. The Quebec government shows quite a strong will in refusing the $50 million because it well realizes that part of those $50 million comes from taxes collected in the province and that there are many fields of administration where the money could be well spent.
But we all know that if Quebec refuses those direct subsidies it is to check Ottawa's centralizing efforts.
The federal government boasts of assisting in the building of hospitals, of paying old age pensions, family allowances, and granting moneys for the construction of highways. All these fields are allocated to the provinces by the constitution but the federal government has encroached upon them. If you let the federal government take over one right, you soon find that it never gives it back.
The federal government always seems to have too much money and always wants to make gifts, but it never returns to the provinces taxation fields they claim as theirs.
Yet sections 92 and 93 of the constitution state that education, hospitals, highways and social services come within the exclusive jurisdiction of the provinces.
Why should the central government interfere in those fields? The main reason is that it is the only one in a position to offer such gifts. Now that it has those sources of taxation which it took over during the two wars, it has the upper hand in so far as taxation in our country is concerned.
Where the federal government has passed, there is nothing left for either the provinces or the municipalities.
[Mr. Balcer.1

What substantial social service improvements would the provinces not grant, if they could do so by reasonably taxing the taxpayers. For let us not forget that whatever be the source of taxation-municipal, provincial or federal-it is always the same taxpayer who pays.
And we see today municipalities on the verge of bankruptcy, confronted with well-founded requests for municipal services and unable to meet them.
In their turn, they look to the provinces for assistance, since property taxes can no longer suffice while the other taxation sources have been drained by the federal government.
But the federal government, rather than giving back the least of those taxation fields which they took over during the wars, prefer encroaching upon those fields that do not concern them.
Our whole federative system is being jeopardized. Every day the federal authority takes a further step in the same direction. Though the Minister of Finance asserts with a pious and offended look that the present government has no centralizing tendencies, the encroachments of his government upon fields which do not concern them prove just the opposite.
We have now come to a point where any objection to federal interference in fields strictly provincial brings immediate cries of separatism and isolationism from the central government's followers.
When the premier of Quebec insists on having the fields of taxation objectively defined instead of accepting the gifts and intervention of the federal government, there are cries that "he stoops to mean politics". Should he refuse to heed to blackmailing under the guise of federal grants to universities, it is said that he seeks to destroy Canadian unity.
It is the duty of all provincial governments to claim the fields of taxation they need for the administration of their respective provinces. But the government of the province of Quebec has yet another reason to be very careful and jealous of its rights. It is not by accident that we have a federal system instead of a Unitarian state.
Ours is a federal state because there happened to be two different racial groups in Canada when confederation took place; in Lower Canada lived a group of the French Canadian race.
In 1867, the leaders of the French Canadians played the part that French-Canadian history had wrought for them.

French-speaking Canadians had seen their racial group recognized and their rights enlarged first under a responsible government and finally along with all our democratic freedoms.
Since confederation and thanks to confederation, the whole of Canada has developed at an extraordinary pace and has become one of the foremost industrial powers of the world.
Its population has risen to almost fifteen million people, nearly one-third being French-Canadian.
Canada is an example of two racial groups living side by side in the best of spirit. But the French-speaking group is still very jealous of its rights whilst remaining fundamentally Canadian.
It is therefore deeply regrettable to see the spirit of the constitution of 1867 deteriorating constantly through the actions of the federal government and it is also deeply regrettable to see the province of Quebec isolated from the other provinces and, for the first time since confederation, in a position of inferiority.
Quebec is accused of separatism if it refuses to sign agreements which restrict the powers and the rights of provincial governments. It is suggested that Quebec wants to live alone and become a part of the country in which French Canadians would be isolated. But Quebec has always shown tolerance and worked for Canadian unity. In no other province is to be found, in the field of education for instance, such a tolerance towards minorities as that which is shown in Quebec.
An example of that is Three Rivers, very likely the most predominantly French city in America, where the English-speaking people, who do not make up more than 5 per cent of the population, have been given a wonderful school, very modern in design, and 90 per cent of its cost has been paid through direct provincial subsidies. It is a far cry from the scandalous happenings at Maillard-ville!
Mr. Speaker, when Quebec refuses federal subsidies and asks that a fair basis for the allocation of taxes be further considered, it does so in the best interests of the whole Canadian people.
What we need today is a federal-provincial conference which would draft a new and truly Canadian constitution, equal to the needs of a great modern nation.
But the government obviously does not want it; it is perfectly satisfied to leave Quebec isolated, with a financial status inferior to those of the other provinces.
The Budget-Mr. Shaw
When the calling of such a conference at the earliest possible moment is requested, the ministers suggest that to believe an agreement is in the least possible, is to deceive oneself. This is but a poor excuse, for one need only read the proceedings of the last two conferences, and particularly the speeches of the Right Hon. Prime Minister (Mr. St. Laurent), in which he commends all provincial premiers for their sincere co-operation and understanding.
This request for a new and essentially Canadian constitution, where the powers of everyone would be defined anew, does not come as a surprise to anyone. The speeches made by Liberals today are very remote from those with which they used to welcome the federal-provincial conferences. I remember the high praises then addressed to the Prime Minister.
I remember that government followers stated in fact that he would go down in history as the Prime Minister who "repatriated the constitution".
This conference has not been held now for three years. Has the Prime Minister decided not to repatriate the constitution? If he has so decided, why does he not come out and say so? If he has not, why has there been no conference for three years? Was it only an election pledge? Is it intended to be used anew next summer?
If the reports of the last two constitutional conferences are studied, it will be noted that the Prime Minister had only praise for the spirit of co-operation of the premier of Quebec.
On the other hand the Minister of Justice, at the end of the conference, stated that this meeting had given rise to great hopes and that success could not fail to attend the next one. But where is the Minister of Justice's optimism at this time? Whose fault is it if such a conference has not been held?
This decision is one man's work, and that man is the present Prime Minister of Canada. (Text) :


Frederick Davis Shaw: Mr. Speaker, this afternoon the hon. member for Moose Jaw (Mr. Thatcher) delivered what I considered to be a thought-provoking speech. Probably the Liberals would rather have it described as just a provoking speech. Certainly no hon. member could do better than commend that speech to the very serious consideration of all hon. members sitting on the Liberal side of the house.
The hon. member for Moose Jaw indicated the urgent necessity for economies in gov-
2548	HOUSE OF
The Budget-Mr. Shaw ernment. He underscored the Department of National Defence and the Department of Defence Production as the fields in which we could effect very important and substantial economies, and do it in a hurry, if a proper course of action were followed. Many of us have felt very keenly to the same effect. On the basis of information we have, and with which other hon. members are familiar, we are not convinced that Canadians are securing full value for the dollars being spent for defence.
I suggest to the Liberals that the best thing they can do during the course of this debate is to give less consideration to minor tax cuts and more consideration to such vitally important matters as the effecting of economies in government fields of activity. When the Liberal ship cracks up on the reef it will be said that one of the principal reasons was the very things to which we have made reference, which have been characterized variously as extravagance, waste and the like.
This afternoon when the Minister of Fisheries (Mr. Sinclair) expropriated the time of the hon. member for Moose Mountain (Mr. Smith) -and perhaps "expropriated" is not the best word to use-I had expected the minister to deal with certain of those references made by the hon. member for Moose Jaw. After hearing from the minister I felt a compelling urge to send a note to the hon. member for Moose Mountain offering him my time, although I would have had to assure him at the same time that I would expect more value for my time than he had received for his.
Much has been said about the so-called sunshine budget. After a long period of persistently stormy tax weather, through which the Canadian taxpayers have suffered, possibly it would be correct to conclude that a slight ray, just a glimmer, of sunshine did break through as a consequence of that budget. However, those storm clouds have not been completely dispelled; and judging by experiences of the past we can still expect much stormy weather from the government so far as taxation is concerned.
With the present Minister of Finance (Mr. Abbott) as skipper at the helm we can assume that, if the government gets by the reef known as an election, we will still have a rough passage. It is amazing to note how under a given set of circumstances he can reach certain conclusions at one time and, with the same set of circumstances, reach entirely different conclusions at another time. For example, can anyone feature the Minister of Finance reaching the conclusions which he did reach on February 19 a year ago or even two years ago with an election as far away as it would be then? Can anyone


feature the Minister of Finance reaching his February 19 conclusions next year or two years hence? Certainly I cannot. It is amazing what can be done with $50 million this pre-election year, and what could not be done a year or two years ago when the surplus was much more substantial. Can the Canadian taxpayer count on next year bringing such a so-called sunshine budget if the circumstances in the main are the same at that time as they are now? I think they cannot count on it.
One great reason for the difference is the fact that this must be regarded as an election year. Possibly this was the reason behind a constituent of mine writing to me recently urging that I sponsor a private bill which would have as its purpose amending the constitution to provide for an election every two years. It is conceivable that behind his thinking was the knowledge that strange things can be done in an election year when similar things cannot be done at other times, even under more favourable circumstances.
It was interesting for me to note that after all these years of experience in connection with the levying and collection of the radio licence fee it was finally learned that it is, and I use the minister's exact words, uneconomical to collect such a small individual fee from such a high proportion of Canadian families. The government knew that last year; the government knew that two years ago, but suddenly it has dawned upon them that it is uneconomical to collect such a small individual fee from so many Canadian families. This matter has been debated in this house year after year, and the government has always found good cause to retain this fee. I am not complaining that it has been abolished, as that action was certainly long overdue; but it needs an election year for some people to conclude that it is a wise course of action to pursue.
I hope the people of Canada are not going to be kidded too much in connection with this matter, because the C.B.C. will still be there with its mouth wide open, regulating and competing with the private stations and yet waiting for tremendous handouts. While those handouts may not come from licence fees designated as individual fees imposed upon individual families, they will come from the general treasury of the country.


Mr. Kansell:: From the lefthand pocket instead of the righthand.


Frederick Davis Shaw: It is interesting to note that after all these years the government has learned that the stamp tax is, and I again use the minister's words, definitely of the nuisance variety. Apparently it is principally because

of its nuisance value that it has gone, although I recall that during the course of his speech the minister did indicate that he might not be as pleased as some inasmuch as it would mean a loss of revenue of some $10 or $12 million a year. But it is gone at last after all the trouble we have gone to in connection with this nuisance tax, licking and licking stamps. It is a wonder someone has not written a poem with that theme. The point is that now on the eve of an election it has become a nuisance. Is it any wonder that the general public look forward to elections, not because they give them an opportunity to go to the polls and mark their ballots but because it invariably happens that at that time some justice is rendered.
It is interesting to note that soon after he registered such vehement support for the maintenance of the 4 per cent floor under medical expenses the minister found, after conferring with the Minister of National Health and Welfare (Mr. Martin), who never thinks in terms of politics, that-and again I use the minister's words-it would appear that the range of medical expenses which would qualify for inclusion in the deduction under the Income Tax Act would not on the average exceed 3 per cent of income.
It is unfortunate that before this matter was discussed in the house not long ago, or before it was discussed in the house last year, the Minister of Finance did not suddenly hit upon the idea of consulting with the Minister of National Health and Welfare. Apparently as a result of that conference it was concluded that it would appear that the range of medical expenses which would qualify for inclusion in the deduction under the Income Tax Act would not on the average exceed 3 per cent of income.


Mr. Low:: Blessed consultation.


Frederick Davis Shaw: Yes, blessed consultation. This drop from 4 to 3 per cent resulted, so the minister said, from a further examination of the statistical information or data. I suggest that they consider the statistical information a bit more closely, and also examine that flaw which seems to exist in the minister's thinking even with respect to this 3 per cent floor.
The Edmonton Journal dealt rather well with this in an editorial which referred to the serious flaw in the minister's thinking. This editorial pointed out the fact that the Minister of Finance had referred to medical expenses under 3 per cent as being normal. As the Journal points out, normalcy might prevail as far as the ordinary cold or a short bout with the flu or measles or mumps were concerned, where you might have the doctor in once and need a bottle of pills or medicine.
The Budget-Mr. Shaw But when it ran into $20, $30, $40 or $50, as it does for too many families in this country, it becomes anything but normal. It is certainly to be hoped that the ministers will get their heads together and conclude that there is no more justification for the 3 per cent than there was for the 4 per cent. In fact I think a stronger case can be made for the abolition of the floor entirely.
It is a matter of very keen regret to me- and this is not the first time I have brought this question before the house-that long before now the government has not given consideration to the removal of the sales tax on municipal purchases. It is a rather strange situation. Here is the municipal government serving the people within its field of jurisdiction in much the same manner as the provincial governments serve the people within their field of jurisdiction. There is an arrangement under which a concession is made to the provincial governments, but the municipal governments are compelled to pay.
In the past two arguments have been advanced in support of the government's stand. One relates to the loss of revenue. While there may have been some justifiable argument with respect to that aspect of the matter at one time, surely that same argument would not prevail today. Second, it has been argued that there is a serious administrative difficulty, but let us never forget that the United States has been able to solve whatever difficulty may have arisen. There is no problem at all so far as they are concerned with respect to administration.
Municipalities find it impossible to tax federal property. We know there is a provision whereby under certain circumstances, provided there is a certain amount of assessable property belonging to the federal government within the municipality, grants in lieu of taxes may be made, but most municipalities simply do not qualify under that provision. It is a matter of very keen disappointment to me that we have reached this stage without the federal government having found it possible to give favourable consideration with respect to this question. It would certainly alleviate the burden that our municipalities are bearing at this time, a burden created not by themselves but as a consequence of federal government policy.
This afternoon the hon. member for Anna-polis-Kings (Mr. Nowlan) referred to a matter to which I should also like to make reference. It was brought up in the house before Christmas by the hon. member for Acadia (Mr. Quelch). I have in mind the practice of the Department of National Revenue of sending out teams of inspectors, I suppose you would call them, to examine into the business operations of farmers. I am not suggesting for a
2550	HOUSE OF
The Budget-Mr. Shaw moment that farmers should not abide by the law. Certainly they should, but this is a strange procedure. A team of collectors, examiners, inspectors or whatever you want to call them move into my home town, for example; but prior to coming there they send notices to a certain number of farmers telling them that on such and such a day they must appear with their records.
Apparently this plan is to result eventually in complete coverage. They have not picked out these fellows because they suspect they have broken the law or have failed to make the declarations they should make. They bring them in and examine their records and if they are not satisfied they order them to report at Calgary on a certain day with other records. I have suggested to such farmers that they might try an experiment. I have suggested that the next time they file their income tax returns they should charge as an expense of operating their farms the cost of going to my home town in the first instance and the cost of going to Calgary, if necessary, when they are ordered to do so. I do not know what attitude the Department of National Revenue will take, but I think these farmers are justified in doing that.
The best judgment is certainly not exercised by these teams of men when they go out to conduct their examinations. They are anything but psychologists. I think some of them had better be given a little additional training. I realize of course that what is happening is not pleasing the Liberals any more than it is pleasing us. I am not looking at the question from a political point of view, because if there is political damage being done it is being done to the Liberals, and I would be encouraging it if that were my only motive. But, Mr. Speaker, I do not like the way these men conduct themselves. I do not like the dictatorial manner in which they order these farmers to travel to a certain point and be there at a specified hour, and then possibly to travel to another specified point in order to try to satisfy the department with respect to their operations.
There is a second point I wish to raise in connection with income tax administration.
I realize that there is a provision under which a farmer, if he purchases another equipped farm, is able to charge depreciation on the farm machinery even though the previous owner may have completely depreciated it during his operation of the farm. However, if it happens to be a transaction that the department interprets as not being at arm's length, in other words between father and son, for example, he simply cannot claim that depreciation. My contention is if satisfactory evidence can be produced indicating [Mr. Shaw.l

that he has bought the farm and the machinery and has paid for it or is in the course of paying for it, then certainly a farmer who has purchased under those circumstances should be granted the same consideration as a farmer who has bought from a person not related to him.
There is one other point that I trust will be given consideration so far as income tax is concerned, which seems rather strange to me. A doctor attending a convention-may I tell the hon. member for Lanark (Mr. Blair) that I am not opposed to this concession-can deduct his expenses from his income. I understand such a provision exists. But a doctor who goes away to take a post-graduate course to improve his qualifications, conceivably to earn more money, and who would thus be called upon to pay more taxes, cannot deduct his expenses. Where is the fairness? While I am not opposing doctors being allowed to deduct their expenses for attending conventions-


Ernest George Hansell: How about the preacher when he goes to a convention?


Mr. Dupuis:: Don't worry about the doctors.


Frederick Davis Shaw: I have had representations from many doctors with respect to this matter, and I am sure my hon. friend would feel much the same as I do with respect to the taking of post-graduate courses.


Hector Dupuis: Don't worry about the doctors. They can look after the excise tax all right.


Frederick Davis Shaw: Maybe that has a deeper meaning than I detect at the moment. May I underline the fact that a number of doctors have brought this matter to my attention, and certainly the situation does not seem reasonable as it stands today.
In the course of his budget speech the minister laid considerable emphasis upon debt reduction. According to the white paper tabled in the house Canada's estimated unmatured funded debt-it may even go beyond an estimate-will stand at March 31, 1953, at $14,837,630,437.68. The interest on that debt totals $409,456,495.84, the greater part of which is payable in Canada, part in New York and part in London. The minister emphasized the benefits of his $2,200 million debt reduction, as he calls it, but I have not been able to satisfy myself yet with respect to one aspect of it. 1 wonder whether this debt reduction actually resulted from the conviction on the part of the minister that debt reduction and the eventual elimination of debt is desirable, or whether it resulted from the fact that he was faced with a series of embarrassing surpluses accruing, as certain hon. members have

charged, from overtaxation. That might sound like a queer question until one examines the record of the banking and commerce committee of 1939. Mr. Graham Towers is the governor of the Bank of Canada, and Mr. Graham Towers, it is assumed, is one in whom the minister has great confidence and to whom the minister turns very frequently for advice. Mr. Graham Towers takes a very strange attitude towards the elimination of debt. He was asked in 1939, by the hon. member for Acadia (Mr. Quelch) in the banking and commerce committee:
Is It possible for you to imagine any way by which we are ever going to pay the debt we have got?
Mr. Towers answered:
As the debts of the government are an asset of the Canadian people I do not see much point in the thing; except that, to the extent that the government thinks that the distribution of those assets of the Canadian people-which are its debt-is unsatisfactory, it may take steps to remedy that distribution in any way that lies within the legislative power; in fact, in any way, I suppose.-by income tax or succession duties or any other action it cares to take.
This is another very interesting part of his answer:
So that all I can say would be this, that in a country where the sum total of public and private debt was decreasing you have a country which is going backward and which is becoming more poverty stricken. Generally speaking, in a country where you find there is no public and private debt you have a country resembling darkest Africa; there is nothing else.
Now, Mr. Speaker, I repeat my question of a moment ago. Did the minister's debt reduction result from a conviction on his part that it is desirable to reduce debt and eventually eliminate it, or did it result from a succession of what he found to be rather embarrassing surpluses which he quickly credited to debt reduction?
Well, I have always been led to believe that it is very desirable to reduce debt, if not eliminate it; but I also realize that under the system as we know it today Mr. Towers was probably absolutely right. I think one of the most difficult things that a Liberal government, following strictly orthodox policy, could be faced with would be the elimination of national and personal debt in this country.


Solon Earl Low: We would not have any money.


Frederick Davis Shaw: As the hon. member for Peace River (Mr. Low) says, we would not have any money; and that is how their system works.
Now, Mr. Speaker, when the hon. member for. Peace River referred to that supposed reduction of $2,200 million in debt he also pointed out that it was not an accurate picture of the whole situation. He stressed the foreign holdings of Canadian assets. He stressed the fact, I should say, that foreign
The Budget-Mr. Shaw holdings of Canadian assets had increased by $2,300 million, almost equal to the total reduction in the national debt, or a little more, as a matter of fact. He pointed out that there were total foreign holdings in excess of $9,400 million gross in this country, and he also pointed out that the net holdings by Americans were $5,800 million, which constituted a foreign debt owed by Canadians collectively. He also referred to the fact that if the assets earned 5 per cent it would mean $290 million exported each year, with no corresponding imports. He stressed, Mr. Speaker, that there were certain types of United States capital or certain types of investment which were desirable, and he also pointed out that there certainly were types of investment that were not desirable at all.
On February 27 it was pointed out by a government member that apparently the hon. member for Peace River had forgotten something. The hon. member for Vegreville (Mr. Decore) indicated that the hon. member for Peace River had apparently forgotten that a substantial amount of United States capital had been invested in Alberta's oil fields. Well, Mr. Speaker, that was true; but that capital came into Alberta substantially as a consequence of what? The failure on the part of Canadians to invest in that industry in the province of Alberta, and the failure of British financiers to invest in the oil industry of that province.
I well recall our former minister of lands and mines spending weeks in this part of Canada trying to bring about the investment of capital from central Canada. That was prior to 1947, when Leduc field came in. He Went overseas as well; and when it became obvious, Mr. Speaker, that Canadian and British capital had refused to invest in Alberta oil, United States capital was definitely invited to come in. Possibly those who opposed that action might change their tactics and tell us exactly how they would have handled the situation under similar circumstances. Would they have said, upon the failure of Canadian capital to invest, upon the failure of British capital to invest: We are just going to leave the industry undeveloped?
Well, Mr. Speaker, we certainly did not do that in my province. Those with money were invited in, but it was made abundantly clear to them that there would be hard and fast terms and conditions under which they would operate. They would have to bid for leases. If successful they would have to enter into contracts which were terminable if broken. They had to pay lease fees and royalties. Up to and including 1951 the oil companies actually did take $300 million out of the country. Only $190 million of that

The Budget-Mr. Shaw came from crown-owned lands over which the government of that province had no control; but of that $190 million the government of that province procured from fees, royalties, etc., $125 million, which was 66 per cent of actual production.
Mr. Speaker, there is no government in the world that has procured a larger percentage of the production of its oil industry for its people than has the government of the province of Alberta. There is no country anywhere where such proportional sums have been recovered for the people.


An hon. Member:: Where did it come from?


Frederick Davis Shaw: If my hon. friend has any comments to make he can reserve them and make them during the course of his own time. We will deal with anything he wants to bring forward on such an occasion.
There is not an area where oil development has been undertaken-take the Far East, take Venezuela, take the United States, and take Alberta-where the net profits of the oil companies have been less than they have been in the province of Alberta. The Far East runs approximately 25 per cent; Venezuela 19 per cent; United States 12 per cent; and Alberta 10 per cent. Let us not forget that while a substantial part of this was United States capital, in 1951 alone that industry benefited our exchange position by $155 million.


An hon. Member:: Canada's exchange
position.


Frederick Davis Shaw: Yes, Canada's exchange position. Up until 1949, which is the latest figure I have, Canadians did pay $30 million less for petroleum products purchased than would have been the case had that industry not been developed in the province of Alberta.
I mention this, Mr. Speaker, because of the fact that the hon. member for Peace River had said that some of this type of investment was desirable but certain types of foreign investment are not desirable. This is certainly a case where all of Canada and all of the people of Canada have benefited measurably as a consequence of that foreign investment.
But of course if I were dealing with bonds as a type of foreign investment, I might have a different story to tell. I do not intend to pursue that any further, Mr. Speaker, except that I should like to say this in passing. I wonder why the hon. member for Athabaska (Mr. Dechene) persists in speaking on the floor of this house and uttering things which he knows are not true.


Mr. Speaker:: I cannot allow the hon. member to make that statement. He must withdraw it.


Frederick Davis Shaw: I gladly withdraw it. Actually, sir, I saw the hon. member for Montmagny-L'lslet (Mr. Lesage) half rising before I said that, and I was just seeing if I could get him all the way up. The point I want to emphasize is this. I will not repeat what I said. With you, sir, I should like to believe I was wrong. The hon. member for Athabaska persists in making the statement that the farmer in Alberta who does not hold mineral rights does not get one cent. That is not a statement of fact. There is no farmer anywhere in Alberta who does not benefit from the industry. I do not want to be misunderstood in saying that. There is not a case in Alberta where a farmer, upon whose land there is drilling, gets nothing, whether he owns the mineral rights or whether he does not.
I could quote cases, as I have done before time and time again. Here is one farmer who did not own the mineral rights. This was a case in Redwater. There were four wells on his quarter section, and he did not own the mineral rights. He got $4,792 for the first year, and will get $1,586 for each subsequent year the wells are in operation. Here is the case of a farmer in the Millet district, who was awarded $840 for the first year and $380 for each subsequent year, with one well on his property. In each case the first payment is a cash payment. One could go on for hours citing cases. As I said on the floor of this house once before, we have the right-of-entry arbitration board in our province. A farmer definitely can stop an oil-drilling concern from entering upon his property, and can force them to go before the arbitration board, where an award will be made.
Some of these people desire to convey the impression that it would be fair if one per cent of the people of the province of Alberta-only about one-tenth hold mineral rights-were allowed to secure enormous returns from what might be discovered on their property, while 99 per cent of them are not afforded the same opportunity. The best way to acquire benefits for all the people of the province is under the policy we have out there.
Now, Mr. Speaker, I was amazed also that the hon. member for Athabaska would practically condemn the Alberta policy of setting up loans for self-liquidating projects from which municipalities can borrow funds at a very low rate of interest. In fact, he condemned a policy recently announced in that

province under which municipalities will be able to do their entire borrowing from similar funds set up by the provincial government.
I know the people of Alberta are not going to be very happy when they read what the hon. member for Athabaska said about that.
In the minute or two that is left to me I should like to say that reference has been made from time to time to the fact that there has been a decline in some prices. It seems rather unfortunate to me that, so far as agriculture generally is concerned, the major part of that decline has been in the livestock industry. From the information I have acquired, and which has already been put on this record, it seems to me that the income from farm production in 1952 is approximately $1,900 million, representing a very substantial drop in net earnings from the previous year. The hon. member for Battle River (Mr. Fair) said it was high time some action was taken by this parliament to institute an investigation into the cost of farm machinery. The farmer would be prepared to see his prices falling providing his cost of production or the cost of the things he has to buy was falling at the same time. But to be faced with a situation where his income is falling while the costs of machinery, services, wages and so forth are mounting, is unbearable.
It seems to me most unfair that the burden should fall upon that group within our country, while the net rental income from interest is increasing; while government investment is showing increased returns; while corporation profits have remained about the same; while the net income of non-farm corporate business remains substantially unchanged. It seems unfair that the farmer should be subjected to a substantial loss of anywhere from 12 to 14 per cent in 1952 as compared with 1951. In my own area, which is a cattle area, the drop in farm income has varied from about 20 to 25 per cent. It is true that the opening of the United States market may have a beneficial effect, but let us not forget that it could also have the reverse effect since the Mexican, market has also been opened.
In conclusion may I say I am personally convinced that the time has now come when the government should see fit to call an election just as soon as they can possibly do so.
(Translation):


Mr. Lucien Cardin (Richelieu-Vercheres):: Mr. Speaker, I am happy to avail myself of the opportunity offered by the budget debate to extend to you, Mr. Speaker, as well as to
The Budget-Mr. Cardin all members of this house, most cordial greetings from the people of the constituency of Richelieu-Vercheres. At the same time I wish to say how honoured I feel to have been chosen to represent the constituency of Richelieu-Vercheres in this parliament.
Besides bringing these greetings, Mr. Speaker, I have pleasure in expressing, in a tangible way, the admiration, esteem and loyalty in which the constituency of Richelieu-Vercheres holds the persons of the Right Hon. Prime Minister (Mr. St. Laurent) and of the members of the present government, as was so well demonstrated by the crushing victory of the Liberal party at the Richelieu-Vercheres by-election. This victory was not a personal one for the candidate. It was a spontaneous gesture on the part of the electors of my county in favour of a government who, in spite of a world war and of the difficulties of the post-war period, have managed to give and preserve for this country an ever increasing prosperity.
I deem it an honour to have been chosen as member for Richelieu-Vercheres and I am proud to take my place with the Liberals. I also wish to convey to all his former colleagues the most sincere congratulations of my predecessor, Mr. Gerard Cournoyer who, as you all know, is now fighting valiantly to preserve what remains of democracy in the province of Quebec.
I do not intend to give a description of my county, but I should like to recall to the house that, for some years now, the county of Richelieu-Vercheres has become an important industrial centre of which the whole of Canada may be proud. Even if I should be accused of being conceited or of constantly boasting about it, I feel I should mention the name of P. J. A. Cardin who did so much for the county and Canada as a whole. It is difficult, Mr. Speaker, to replace as member for Richelieu-Vercheres remarkable men like Cardin and Cournoyer who, each in his own way, have shone by their imposing personality. I only wish to do my best to understand the problems of my county and endeavour to find the necessary solutions to them.
I deplore bitterly the fact that the premier of the province of Quebec (Mr. Duplessis) deemed it necessary to stir up the people of my county by telling everybody that the county of Richelieu-Vercheres can be browbeaten by anyone or anything. Well, I think I should let it be known here that neither Messrs. Simard, nor the Hon. Mr. Duplessis himself are strong enough to intimidate the
2554	HOUSE OF
The Budget-Mr. Cardin people of Sorel and of the county of Richelieu-Vercheres to compel them to act against their will. Nor will there ever be anybody powerful enough to abolish or violate any of the basic rights of the people of Richelieu-Vercheres or of the people of any county of the province of Quebec. If some difficulties have arisen between the Hon. Mr. Duplessis and Mr. Simard, it would seem only fair to ask them to settle their differences between themselves, without jeopardizing the reputation and the welfare of my county.
I am proud of the people of Richelieu-Vercheres county, and all Canada can be proud of them, for in a few short years and starting from scratch we have built up, through the efforts of our workers and the co-operation of industry, a very important industrial centre of which everyone can be proud.
(Text):
Mr. Speaker, I should like to take this opportunity to express my appreciation of the honour that was given me in having been chosen to represent the constituency of Richelieu-Vercheres in this house. I also want to express the pleasure I feel in being associated with all the members of this house, and in working with them. I do not imagine that I need to go into any detail in expressing what I may feel as a new member. I rather imagine that all hon. members still recall with what timidity they looked upon the profound political knowledge of their colleagues. So, Mr. Speaker, this speech cannot be more than perhaps an expression of the impressions and the sincere opinions of a new member.
I have listened with a great deal of interest to the speeches from both sides of the house, but I have paid particular attention to the criticisms that have been levelled at the government by the members of the opposition. Although the opposition has no administrative powers, although it has no responsibility, and although it does little but criticize, it is not itself above serious criticism. In its criticism of government policy the opposition invariably neglects to make mention of anjt problems that the government has to face, and for which they have to find a solution, with respect to any of their legislation. The opposition will take a particular measure away from all the conditions or circumstances that may have a direct bearing on it and will criticize the thing in itself without looking around to see what were the factors that forced the government to act in a par-


ticular way. The fact that the opposition does not consider any of the problems involved leaves them with a free hand to make interesting and popular-sounding speeches, by having things both ways. No government, Mr. Speaker, can have things both ways; and no serious government can afford to leave out of any discussion in this house any of the problems that the government has to face. If the opposition wants to be fair it cannot but make mention of these problems and take them into consideration.
I was saying that the opposition wanted things both ways. For example, Hansard is full of speeches by members of the opposition demanding an increase in practically all the social measures; and there are an equal number of speeches from members of the opposition demanding a reduction in taxes. The opposition speaks of the urgent need of maintaining the national defence program, and it also speaks in favour of redistributing the very taxes that make this national defence program possible. The opposition speaks of the autonomy of the provinces and of the wrong principle being followed in a centralized government. At the same time, however, it speaks in favour of adopting legislation that has to do with the exclusive provincial rights of the various provinces, such as in the field of education, labour, etc. It is simple, Mr. Speaker, to touch the hearts of the people by making speeches in such a way; but one cannot do that, I submit, without running the grave risk of being considered most illogical.
No government can have things both ways, and no government can ignore the problems. Some of the most important ones are, for instance, the social security measures. I do not intend here to repeat all that has been said in this house on social security measures; it resembles a broken record, it has been repeated so many times. But I should like to mention the fact that all the social security measures that now exist in Canada have been the creation of this government. This government is therefore aware that there is a social need, and would be the first to increase all the social security measures if it were possible. But on the other hand, Mr. Speaker, this government cannot speak only of social security measures; it has to put them into effect. That means finding the ways and means of doing it; and, as you know, that can be done only by having the people themselves contribute.
A short time ago I read an interesting article in the Ottawa Journal of January 2, 1953, entitled: "Cost of 'Social Security'", which reads in part as follows:
Mr. Paul Martin said In the House of Commons the other day that the estimated expenditure of

public funds (that is of tax money) on "social security" in Canada for the current fiscal year will be $1,349,100,000. Of that enormous total the dominion government will pay $1,010,500,000, the provincial governments $255,400,000 and the municipal governments $83,200,000 . . .
In other words, on the three levels of government there is being collected through taxes close to $100 a year from every man, woman and child in Canada for social security, which means for family allowances, old age pensions, unemployment relief, aid for distressed individuals and families in the many forms it takes.
The Journal does not suggest that too much is being done or that it is being done wastefully and extravagantly. It does seem, however, that all of us should realize what social security is costing us and should understand the necessity of moving slowly in making new commitments.
That, Mr. Speaker, has been the policy of this government. It is not merely a question of introducing in legislation new or increased social measures. They not only have to be adopted, they have to be maintained; and they have to be maintained in periods of peace as well as in periods of war, and despite any crisis, and despite also the increasing demands of the Canadian public. All these questions have to be taken into account before any reasonable solution can be had, if we are to consider the economic security of this country.
In the past few days we have listened to innumerable speeches from the opposition criticizing the 1953 budget. To some it was a thoroughly bad budget; to others it was so good that the government had adopted it just because it was an election year. But on the other hand, no one said what it actually was, a necessary budget based upon the demands of the Canadian people; and that it was also the continuation of an economic policy that has been loudly applauded by all the leading economists throughout the world.
I had the opportunity of putting my hands on an address that was prepared by the late Dr. W. C. Clark, who was deputy minister of finance. It was supposed to have been delivered at a joint meeting of the American economic association, the American finance association and the Chicago association of commerce and industry, on December 29, 1952. I am only sorry I cannot go through the whole of the address, because I think it is one of the most enlightening I have ever read. At this time I can give only an inadequate outline of what he said. He pointed out that the economics of a country is not something that can be brought up and down, like an elevator, as it were, to suit any purpose. Any serious government has to consider all the problems involved in the economic set-up of its country.
The Budget-Mr. Cardin
At that particular conference the late Dr. Clark would have shown exactly what those problems were, and what the solutions were that have made possible the prosperity we now enjoy. If hon. members will recall, the war had cost $20 billion; and even though the financial policy during the war was as rigorous as that of any other belligerent nation, the national debt increased from $3 [DOT] 2 billion to $13-4 billion.
Industry at the same time had so greatly expanded for war purposes that the national production potential had been greatly augmented, and the government was faced with the problem of integrating a large war plant capacity into the peacetime economy. The government had to find employment for about a million and a half war civilian workers, and demobilized service personnel. Canada's normal production in time of peace represented from 20 to 25 per cent of its total wartime production. After the war the government was worried about the destruction that had taken place in the countries with which Canada normally traded. It was also greatly worried about the breakdown in the multilateral system of trade and payments. These were the problems with which the government was faced, and about which we hear nothing from hon. members on the other side of the house.
How can anyone suggest any solution to a problem without first delving deeply into those problems? Also it might be well to recall at this time that at the lowest point of the depression in 1933 our production had fallen to $3-6 billion. In 1939 it had climbed back to $5-7 billion. In 1945 it stood at $11-9 billion; and today it is more than $23 billion.
The opposition, of course, calls this rapid expansion a war boom. As a matter of fact it is still waiting for the depression that was predicted six or seven years ago. Unfortunately the opposition will be disappointed, because this is not a war boom. This expansion was purposely balanced; and as a matter of fact the increase in Canada in the field of industry is common to industries throughout all Canada, and there are no excesses or distortions such as are prevalent in all war booms.
This is made very clear if one considers what caused the rapid economic expansion in Canada. The war itself of course was a great factor, with all its new industries, qualified technicians and production machinery. Then there was another important factor, in the growth of population which came about through natural increase, as well as by a more vigorous immigration policy and by the accession of Newfoundland. Since 1939 the population of Canada has been augmented to the extent of 28 per cent.
2556	HOUSE OF
The Budget-Mr. Cardin
Another important factor was the wide search for hidden riches with the use of all our modern equipment. There was no longer any prospecting with the aid of a mule and a hammer with which one would knock once in a while on a rock. There was the new magnetometer, and other instruments; and with those instruments, and the will of the Canadian people, there were huge discoveries in the Laurentian field, in the Appalachian field, in the Rocky mountains and on the plains of Alberta. These included nickel, copper, zinc, cobalt, uranium, asbestos and oil; and most important in this expansion were the vast sums of money that were spent on new capital investment. In 1946 new capital investment was 14-2 per cent of our national product; in 1951 it came up to 21-6 per cent, and in 1952 it was 23 per cent of our national product. And this new capital investment is responsible for the employment of 800,000 people, representing 15 per cent of our total labour force.
There is no war boom; and it was only because the government had the foresight to control development in the industrial field to such an extent that it avoided all the excesses that might have come about. At the close of the war the government was aware of this natural development, and it adopted a definite policy. It did not leave anything to chance, as the opposition have claimed. It adopted a definite policy that was designed, first of all, for a smooth transition from a war economy to a peacetime economy. It endeavoured to restore and maintain a free enterprise economy. It tried to promote a rising level of employment and income. It adopted a policy to avoid inflation, particularly at the outbreak of the Korean war when our national production was already under stress from the expanding economy that had taken place in Canada in previous years.
Those problems were the same as those faced by any large nation, such as the United States. It was not chance that made us succeed more than they did. Even the Americans themselves are aware of that particular fact which was indicated by an editorial in the Daily News of June 10, 1952, entitled "Oh, Canada-How do you do it?" and which reads:
We hope none of the readers missed Robert Conway's June 8 Sunday News report on Canada and why its dollar, for the first time in history, is worth more than ours.
The humiliating upset is only a dramatic part of a larger picture. That picture includes Canadian government encouragement of private enterprise, farming out of government powers to provincial (state) officials instead of hogging them in the dominion capital city of Ottawa, firing useless public payrollers, and in various other ways firmly refusing to imitate the U.S. fair deal.


We move that Truman & Co., using the Conway report as a guide and blueprint, send a commission to Ottawa to find out more-much more- about how Canada does it. This would involve a feat of pride-pocketing of which, frankly, we don't think the fair dealers are capable. But it would also dig up a barrel of useful tips and information which the people of the United States badly need. What ho, Harry?
That is the attitude of the United States people toward our economic policy. How did the government do it? It did it by organizing the industrial development bank to furnish necessary funds for new sound enterprises and to furnish capital for existing enterprises. It adopted the Farm Improvement Loans Act. It organized the Central Mortgage and Housing Corporation. It set up the Export Credits Insurance Corporation. It authorized the Minister of Finance to grant export credits, and as a matter of fact $1-25 billion were loaned to the United Kingdom. In that way Canadian industry was able to convert to a peacetime economy with a rapidity that astounded everyone.
This is the whole scheme of things which the opposition is criticizing so strongly; and under it, it was necessary to have taxation. Although hon. members of the opposition do not seem to realize it, the budget forms part of the nation's business. It has an influence on and is influenced by employment, income and prices. The taxation policy must be decided in the light of the economic problems to be solved.
When we look at the question of taxation we should consider that after the war the government was faced with a dilemma. The necessarily high taxes of wartime had impaired and weakened our national production, and at that time we had to maintain the maximum effort in that particular field if we were going to keep our economy on a sound basis. That was one argument for reducing taxes.
On the other hand, there was a good argument for maintaining the high tax rate because it was a good thing for the country to pay off its national debt when it could do so. It must be remembered that we had spent $20 billion during the war. By having budgetary surpluses the inflationary pressure caused by deferred demands and the great volume of liquid purchasing power could be checked. Those were the two horns of the dilemma upon which the government found itself, the one in favour of raising taxes and the other in favour of lowering them.
What did the government do? The government followed a happy medium; it adopted the golden rule. It reduced taxes in order to promote national production, and it did it in such a way as to allow a sufficient surplus with which to pay off the national debt

and in a particular way help to avoid the tendency toward inflation which was so predominant throughout the world.
Then as time went on and the surplus was sufficient to look after its needs, the government started to reduce taxes. The excess profits tax was first reduced and then repealed in 1947. I might say here that 1947 was not an election year. The corporate income tax was reduced from 40 per cent to 30 per cent in 1946, again not an election year. Personal income tax rates were cut successively in 1946 and 1947, and they were not election years. They were cut again in 1949, not because 1949 was an election year but because it was part of a program being followed by the government. Since 1946 the total reduction in taxes has amounted to 70 per cent for the great majority of taxpayers. In 1949 taxes were back to their normal prewar rates and Canada was enjoying the prosperity which still exists.
The Budget-Mr. Cardin
Then in 1950 came the Korean war. Members of the opposition have told us that we lowered taxes in 1949 and then put them up again in 1950. Why do they not consider the Korean war? The government did, and the government had to provide for an immense defence effort in order to look after the national safety of the country. Those are arguments that stand up, and it is high time that the opposition gave some real reasons for the fluctuations in taxation.
On motion of Mr. Cardin the debate was adjourned.



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow we shall continue this debate.


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


Tuesday, March 3, 1953