1953-02-25

DIPLOMATIC INSTRUMENTS


Hon. Brooke Claxton (Acting Secretary of State for External Affairs):: I would like to lay on the table an exchange of notes between Canada and Italy constituting an agreement regarding the issuance of multientry visas to diplomatic representatives, officials and non-immigrants, signed at Rome, October 10, 1952; and, if I may, the exchange of notes in the other three agreements the description of which shall appear on Hansard:
List of diplomatic instruments, Canada treaty series, as follows:
Exchange of notes between Canada and Italy constituting an agreement regarding the issuance of multi-entry visas to diplomatic representatives, officials and non-immigrants. Signed at Rome, October 10, 1952.
Exchange of notes between Canada and the United States of America constituting an agreement for the construction and operation by the United States air force of communications facilities in Newfoundland. Signed at Ottawa, November 4 and 8, 1952.
Exchange of notes between Canada and the United States of America constituting an agreement regarding allocation of television channels. Signed at Ottawa, April 23 and June 23, 1952.
Exchange of notes between Canada and the United States of America constituting an agreement regarding the extension and co-ordination of the continental radar defence system. Signed at Washington, August 1, 1951.



NATIONAL DEFENCE


Brooke Claxton: Mr. Speaker, on February 9, 1953, the hon. member for Lake Centre (Mr. Diefenbaker) asked me a question regarding the "robbing"-I think that was the word used-of luggage of Canadian soldiers on the way back from Korea when passing through Seattle. We have had a report from the United States authorities from which it
appears that a United States air force airman stationed at McChord air force base near Seattle has now confessed to the pilfering of articles from the baggage of both Canadian and United States soldiers returning from Korea by air.
A number of the stolen items have been recovered and, after proper identification, returned to their owners. United States authorities are hopeful that further investigation will result in the recovery of other stolen items not yet recovered. In that event, arrangements have been made to return the property to the owner following proper identification.



INDUSTRIAL STATUS OF WOMEN


Mrs. Ellen L. Fairclough (Hamilton West) moved: the first reading of Bill No. 188, to provide equal pay for equal work for women.
Motion agreed to and bill read the first time.



PRIVATE BILL


[Stage Direction]
Bill No. 187, respecting a certain patent and patent application of Florence F. Loudon. -Mr. Cavers.


Mr. Fair:: 1.	Since January 1, 1945, how many increases in freight rates have been granted to the Canadian railroads?
2.	What percentage in each case, based upon the January, 1945, rates?
3.	What amount, in dollars, did each such increase amount to?
4.	What provinces have borne the heaviest burden as a result of the increases allowed?


Mr. Benidickson:: 1. Four.	
2. Actual	Cumulative ov
21%	21 %
20%	45-2%
17%	69-9%
9%	85-2%
3.	While no actual figures as to the dollar value derived from each increase in rates are available, the following estimate

Questions
has been made, based upon the traffic carried by the Canadian National Railways and Canadian Pacific Railway for the years 1948 to 1952 inclusive:
21 %	increase	$282,000,00020%	increase	197,400,00017%	increase	86,700,0004.	No information available.



DOCTORS, LAWYERS, ETC.  INCOME TAX

Mr. Knight:: What was the average income tax paid for last year on record by doctors, chiropractors, civil and electrical engineers, lawyers and dentists, respectively, in (a) Manitoba; (b) Saskatchewan?


Mr. McCann:: The taxation division does not maintain a statistical record of tax paid by individuals according to occupational classifications.
A statistical record is, however, maintained of tax declared on income tax returns filed by individuals in certain occupational classifications where the individuals concerned are not employed on a straight salary basis.
In respect of individuals in the following occupational groups the average amount of tax declared by such individuals for the 1950 taxation year was:
Manitoba Saskatchewan
Medical doctors and
surgeons	
$2,143	$2,671Dentists	
626	536Lawyers	
690	860
As chiropractors, and civil and electrical engineers are, for statistical purposes, included in general occupational groups, no separate statistical record is maintained as to the amount of tax declared by individuals engaged in such particular occupations.



TRANS-CANADA HIGHWAY-PRINCE EDWARD ISLAND

Mr. McLure:: 1.	How many miles of roads have been surveyed in the province of Prince Edward Island for the building of the trans-Canada highway?
2.	On how many miles have tenders been called for?
3.	How many miles have been completed, giving the location?
4.	How many more miles are to be built and where are they routed?
5.	Are there special plans and specifications for building these highways?
6.	Who inspects the road building where work is going on?
7.	Who inspects the mix for the top paving?
8.	Is the mix of the top paving analysed in order to know if it is equal to the specifications ordered?
9.	Are inspectors on trans-Canada highway construction. government employees, and, if so, of what government?
10.	What assurance has the federal government that the road is built according to plans and specifications?
[Mr. Benidickson.l
11.	Who was the inspector or inspectors on the highway built from Borden to Bonshaw?
12.	To whom does the inspector report and how often?
13.	Who pays for the inspection?
14.	Have any repairs been made to any part of the new highway just completed? If so, at what cost?


Mr. Winters:: 1.	Information not available.
2.	Grading-32-2; Paving-31-2.
3.	Grading Paving
Wood Islands-
Pinette	
Bonshaw-Borden . Cornwall East ...
11-5 miles 11-5 miles 19-7	"	19-7	"
1-0 " 0-0 "
32-2	"	31-2	"
4.	Approximately 42. The route which has been designated and which remains to be built is as follows: From Pinette through Mill-view to the east boundary of Charlottetown; and from the west boundary of Charlottetown through Cornwall to Bonshaw.
5.	Plans, profiles and specifications meeting the requirements of the trans-Canada highway agreement are prepared by the province.
6.	Detailed and continuous inspection of construction operations is carried out by the province. Federal supervising and inspecting engineers examine the work periodically.
7.	Special inspection of paving and paving mix is carried out by the Milton Hersey Company who are employed by the provincial government.
8.	Yes.
9.	Yes. Inspectors on trans-Canada highway are employed by both the provincial government and the federal government supplemented by the Milton Hersey Company on behalf of the province to inspect paving.
10.	Federal supervising and inspecting engineers inspect the work to ensure that the plans and specifications are adhered to.
11.	Names of provincial inspectors not available. The federal government inspection work is carried out by supervising engineer
A.	S. Gunn and inspecting engineer H. A. Woodroffe.
12.	Provincial government inspectors report directly to provincial officials. The federal inspecting engineer reports directly to the federal supervising engineer who in turn submits reports to the chief engineer of the trans-Canada highway division. Detailed reports are made to the chief engineer periodically.
13.	Federal government administration costs are borne by the federal government. Provincial government inspection costs are considered to be part of construction costs under the terms of the agreement and shareable as such.

14.	No knowledge of any repairs to the new highway just completed.. Repairs are a provincial government responsibility.



GLOUCESTER COUNTY, N.B.  BUOYS

Mr. Robichaud:: 1.	What is the total number and type of buoys and/or spar-buoys in the following harbours in the county of Gloucester, New Brunswick, (a) Petit Rocher; (b) Stonehaven; (c) Caraquet; (d) Lower
Questions
Caraquet; (e) Inkerman; (f) Bathurst; (g) Grande Anse; (h) Middle Caraquet; (i) Saint Simon; (j) Tracadie?
2.	How many contracts are presently in force for the setting, removal.and maintenance of buoys and spar-buoys, in the county of Gloucester?
3.	What are the names, addresses and remuneration of each contractor, and expiry date of each contract?


William Moore Benidickson: Location
Types of buoys
Spar
Can Conical Cask Electric
Total
Number
(a)	Petit Rocher	
(b)	Stonehaven	
(c)	Caraquet	
(d)	Lower Caraquet	
(e)	Inkerman (Pokemouche)
(f)	Bathurst	
(g)	Grande Anse	
(h)	Middle Caraquet	
(i)	Saint Simon	
(]) Tracadie-
(North Gully)	
(South Gully)	
44
9
nil
7 |	9 |	
part of and included in (c)
nil
part of and included in (c)
40
9
2.	10 plus 2 informal agreements.
3.
Name of Contractor and Address
Remuneration
Expiry Date
Allie J. Doucet; East Bathurst, N.B	
Charles Lantigne; Middle Caraquet, N.B	
William Hache; Maisonnette, N.B	
Charles J. Biseau; Miscou Harbour, N.B	
William Monzerolle (Muzerole); Tracadie, N.B,
Eloi J. B. Roy; Petit Rocher Nord, N.B	
Joseph R. Robichaud; Inkerman, N.B	
Aurele J. Albert; Centre St. Simon, N.B....
Martin Savoie; Savoy Landing, N.B	
Mederic McLaughlin; Tracadie, N.B	
Stillman Blakeley; Miscou Harbour, N.B	
Ernest P. Lozier; Lozier Settlement, N.B...
$855.80 p.a.
450.00	p.a.
25.00	p.a.
180.00	p.a. 154.80 p.a.
15.00	p.a. 99.99 p.a.
90.00	p.a. 1,541.25 p.a.
78.00	p.a. 5.00 p.a.
35.00	p.a.
July 2, 1953 July 2, 1953 July 2, 1955 July 2, 1953 July 2, 1954 July 2, 1954 July 2, 1953 July 2, 1955 July 2, 1953 July 2, 1954

Questions



SHIPPIGAN GULLY LIGHTHOUSE

Mr. Robichaud:: 1.	Was any report made to the marine services branch, or any other division of the transport department, in the year 1952, to the effect that the light of the Shippigan gully main lighthouse was completely out during a stormy night or early morning?
2.	If so, what action was taken by the Department of Transport to investigate the matter complained of?
3.	Was an investigation made?
4.	If so, (a) who was the investigator; (b) when and where was such investigation made; (c) what was the result of the investigation and the nature of the report?
5.	If not, what were the reasons for failure to investigate?
6.	What steps have been taken to avoid a repetition of the matter complained of?


Mr. Benidickson:: 1.	Yes.
2.	The department immediately requested the district marine agent at Quebec, who has jurisdiction over this lightstation, to investigate.
3.	Yes.
4.	(a) and (b). The district marine agent at Quebec investigated the matter and reported that the failure had been due to a minor defect in the mechanism, which was repaired as soon as it was discovered.
5.	Answered by Nos. 3 and 4.
6.	The defect in the mechanism has been repaired. The lightkeeper is on duty during the hours of darkness to take all reasonable precautions to ensure that there is no interruption in the operation of the light. This is the first interruption in service reported for this lightstation, and the lightkeeper at this lightstation is considered to be performing his duties in a 'satisfactory manner.



EXCESS PROFITS TAX


Mrs. Fairclough:: 1.	Have all remittances for the refundable portion of excess profits tax been made to the taxpayer?
2.	If not, how many are still pending?
3.	In what amounts?


Mr. McCann:: 1.	There are no refunds outstanding in respect of refundable portion of excess profits tax.
2.	Answered by No. 1 above.
3.	Answered by No. 1 above.



MILITARY PROPERTY, PETAWAWA-SAWMILL

Mr. Harkness:: 1.	Is there a sawmill on military property on the shore of the Petawawa river?
2.	If so, who is the owner of this mill and what were the circumstances under which it was built there?

3.	Is this mill powered by motor from a Canadian army tank?


Mr. Blanchette:: 1.	Yes.
2.	The Department of National Defence. It was constructed in 1949 to provide lumber for use at Camp Petawawa military installations.
3.	The sawmill is powered by a General Motors diesel engine which was stripped from an obsolete Canadian army tank.



IMPORTS OF COAL AND OIL

Mr. Catherwood:: 1.	What was the tonnage of coal imported into Canada from the United States, during the year 1952?
2.	What was the total quantity of oil or oil products imported into Canada from the United States in 1952?


Mr. Howe:: 1.	24,576,821 tons.
2.	The following amounts of petroleum oils and products were imported from the United States in 1952:
Oil for the concentration of ores, 217,530 gallons; Crude petroleum for refining,
711,758,000	gallons; Petroleum tops for refining, 54,303,428 gallons; Fuel oil, ex-warehoused for ships' stores, 15,598,798 gallons; Crude petroleum, n.o.p., 19,192 gallons; Aviation gasoline, 64,257,454 gallons; Gasoline, n.o.p., 122,644,273 gallons; Casinghead gasoline, for blending, 23,501,268 gallons; Kerosene, 27,970,000 gallons; Engine distillate, 178,785 gallons; Lubricating oils, 31,211,612 gallons; Stove oil, No. 1 fuel oil, 57,330,476 gallons; Light fuel and furnace oils, Nos. 2 and 3, 211,438,117 gallons; Heavy fuel oils, including Bunker and Navy, 222,681,583 gallons; Diesel fuel, 64,789,871 gallons; Other mineral oils, 2,366,442 gallons; Petroleum and lubricating greases, 17,995,239 pounds; Paraffine wax, 30,277,222 pounds; Liquefied petroleum gases, 191,700,940 pounds; Naphtha, including solvent Naphtha, 6,403,118 gallons; other products of petroleum, 5,911,561 gallons.



TRANS-CANADA HIGHWAY    COST AND CONSTRUCTION

Mr. Follwell:: 1.	What has been the total cost to the federal government of the trans-Canada highway?
2.	How much has been spent by the federal government, in each province?
3.	How much has been spent by each province?
4.	How many miles have been completed on the trans-Canada highway?
5.	How many have been completed in each province?

6.	How many miles are now under construction in each province?
7.	When will the trans-Canada highway be completed?


Mr. Winiers:: 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.
2.	To February 14, 1953, in
Newfoundland	$ 2,106,360.16
Prince Edward Island ....	565,966.07
Nova Scotia	 Nil
New Brunswick	 1,733,866.65
Quebec	 Nil
Ontario	 10,295,333.15
Manitoba	 1,666,546.05
Saskatchewan	 2,608,963.21
Alberta	 2,090,867.83
British Columbia	 7,252,013.42
Total	$28,319,916.54
3.	Complete information not available. The federal government is aware of commitments but has no detailed knowledge of expenditures made by the provinces for which claims have not been made.
4. Grading-997-0 miles. Paving-490-1 miles.
Equivalent
5. Province	Mileage Grading	completed PavingNewfoundland 	. 122-0	NilPrince Edward Island	. 32-2	31-2Nova Scotia 	. Nil	NilNew Brunswick 	. 45-6	33-1Quebec	. Nil	NilOntario	. 249-2	126-3Manitoba 	. 55-5	73-5Saskatchewan	. 216-8	93-3Alberta	. 188-2	51-3British Columbia	. 87-5	81-4Total:	997-0	490-1
Mileage
6. Province	under construction
	Grading	Paving
Newfoundland 	. 85-0	NilPrince Edward Island	. Nil	NilNova Scotia 	. Nil	NilNew Brunswick 	. Nil	12-5Quebec 	. Nil	NilOntario	. 60-1	75-3Manitoba 	. 15-4	NilSaskatchewan	. 19-3	35-3Alberta	. 8-7	5-3British Columbia	. 22-4	1-9Total:	210-9	130-3
Questions
7.	Terms of the trans-Canada highway agreement provide for the completion of the highway on or before December 9, 1956.



ROYAL CANADIAN AIR FORCE PERSONNEL, FRANCE

Mr. Dinsdale:: 1.	Are air force personnel located in France? If so, where?
2.	How are the quarters of these personnel (a) heated: (b) lighted?
3.	What facilities are provided for entertainment, recreation, and welfare for these personnel, and who provides these services?
4.	Who is responsible for the catering for these air force personnel?


Mr. Blanchette:: 1.	There are personnel of the Royal Canadian Air Force located at Paris and at Gros-tenquin in France.
2.	The quarters are (a) steam heated (oil fired boilers); (b) electrically lighted (supplied with power from the French power distributing system).
3.	At Grostenquin, the Royal Canadian Air Force has provided facilities which include a theatre for movies and stage shows, lounges, wet and dry canteens, reading and writing rooms, a bicycle shop, a radio ham shop, a hobby shop and a commissary. Construction of a gymnasium has been started. In addition to gym floor space, this building will provide space for a snack bar, sports equipment storage room and four bowling alleys. In the spring an outdoor sports field will be prepared. Programs have been arranged for periodic sightseeing tours by bus.
To assist in recreational planning, the R.C.A.F. has on loan from the government of Ontario an expert in adult education and recreation. He is now in France to organize recreational and entertainment programs.
4.	The Royal Canadian Air Force.



POST OFFICE BUILDING, WINNIPEG

Mr. Knowles:: 1.	When is it expected that actual construction work on the new post office building in Winnipeg will commence?
2.	When is it expected that the new post office building in Winnipeg will be ready for occupancy?


Mr. Fournier (Hull):: 1.	Plans are being prepared, and it is expected that construction will commence next fall.
2.	It will take at least two years to complete construction of the building.

Orders for Returns QUESTIONS PASSED AS ORDERS FOR RETURNS



FREIGHT RATES, TORONTO TO WESTERN POINTS

Mr. Fair:: 1.	As at February 1, 1945, what was the freight rate per 100 lbs,, on shoes, blankets, other dry goods, nails, canned goods, barbed wire, electrical appliances, farm machinery, automobiles and farm trucks, from Toronto to (a) Winnipeg; (b) Regina; (c) Edmonton; (d) Vancouver?
2.	What were corresponding rates on same classification of goods to above points, from Toronto on (a) February 1, 1950 and (b) February 1, 1953?


William Moore Benidickson: Return tabled.



VESSEL &quot;LEHAVE&quot;

Mr. Nowlan:: 1.	Was a vessel by the name of LeHave purchased by any department or agency of the government of Canada?
2.	If so, from what person or corporation was the said vessel purchased, and for what purpose or purposes?
3.	What was the amount of the purchase price?
4.	Has the said vessel been manned by a crew since its purchase? If so, how many comprised the said crew, and how many knots has the said vessel travelled?
5.	How much has been expended for the operation of the said vessel since its purchase?
6.	Exclusive of operating costs, how much money has been expended for, or in connection with, the said vessel, its machinery and/or equipment, and for what purposes were such expenditures made?
7.	Are further alterations, repairs, improvements or additions contemplated for the said vessel, its machinery or equipment?
8.	If so, have tenders been called therefor, and how much is estimated to be spent for such alterations, repairs, improvements or additions, and for what purposes?



NEWFOUNDLAND-EXPORTS, IMPORTS, ETC.

Mr. Browne (St. John's West):: 1.	What was the value of exports from Newfoundland ports, during the fiscal year 1951-52?
2.	What was the value of imports consigned to ports in Newfoundland, during the fiscal year 1951-52?
3.	What quantity of freight was carried by the Canadian National Railways to North Sydney for shipment to points in Newfoundland, during 1949-50, 1950-51, 1951-52?
4.	What quantity of freight was carried by the Canadian National Railways from points in Newfoundland to North Sydney for shipment, during the same period?



NATIONAL DEFENCE CONSTRUCTION PROJECTS

Mr. Knowles:: 1.	What are the names of the contractors engaged on defence construction projects at Churchill, Rivers, Shilo, Portage la Prairie, Gimli, Moose Jaw, Saskatoon, Claresholm, Penhold, Calgary, Namao, Edmonton, Cold Lake, Uplands, Rockcliffe, Downsview, Cobourg and Ville La Salle?
2.	What is the amount of the contract or contracts awarded to each of the contractors mentioned in question (1), since January 1, 1948?
3.	What are the total amounts spent on each contract in all cases where such contracts have been completed?
[Mr. Fournier (Hull) .1
4.	How many of these contracts were completed in the time specified? What contracts are still unfinished?
5.	On which contracts was extra money required before completion?
6.	Have complaints been received by the Department of National Defence, the Department of Defence Production, or Central Mortgage and Housing Corporation from officers of NATO with respect to training bases not being completed? If so, of what nature?
7.	Are the air force officers satisfied with progress made on construction projects to date?
8.	Have any complaints been received by the Department of National Defence, the Department of Defence Production, or Central Mortgage and Housing Corporation, coming from contractors, with respect to slow delivery of plans and specifications from Ottawa, and with respect to slow delivery of steel?
9.	How many meetings were held in the years 1950, 1951 and 1952 by the Ministers of National Defence, Defence Production and the Minister of Resources and Development, for consideration of co-ordination of their efforts, in view of the large amounts of money involved in defence spending?
10.	How many meetings did representatives from these departments hold in the same years for the same purpose?



CHATHAM, N.B., AIR FORCE BASE  FURNITURE PURCHASES

Mr. Robichaud:: 1.	How many chesterfield suites, parlour chairs, radios, carpets, rugs and what other articles of furniture have been purchased for and installed in the different messes; (a) officers (b) N.C.O.'s; (c) men, at the Chatham, New Brunswick jet operational and training base of the Royal Canadian Air Force, since the 1st day of January, 1949 to date?
2.	What price was paid for each of the above mentioned items?
3.	Were tenders called for the supply of the said furnishings?
4. If so (a) when; (b) what are the names, and addresses of those submitting tenders and the amount of each tender; (c) to whom were the contracts awarded, and when?
5.	If no tenders were called, (a) from what firm, individual or individuals were the said furnishings purchased; (b) what are the dates, details and amounts of each purchase?



COMOX AIRPORT


Mr. Cruickshank:: 1.	What is the name of the contractor and the amount of the contract, in each case, for the fourteen contracts let at the Comox airport?
2.	How many hangars are being constructed?
3.	How many hangars were available prior to the awarding of contracts?
4.	What are the other buildings to be used for?



BUSINESS OF THE HOUSE


Right Hon. L. S. St. Laurent (Prime Minister) moved:: That in relation to the adjourned debate on the motion of the Minister of Finance that Mr. Speaker do leave the chair for the house to resolve itself into committee of ways and means and any amendment or amendments thereto, on the budget

brought down Thursday, February 19, 1953, the provisions of standing order 28 be suspended for Thursday, February 26, and Friday, February 27, next.


Mr. George A. Drew (Leader of the Opposition):: Before the motion is adopted, I should like to direct a question in connection with it to the Prime Minister (Mr. St. Laurent). I notice that the motion is framed in the same form as that of last year, but not in the same form as was adopted in earlier years. Is it the intention of the government to introduce similar orders in the succeeding weeks or next week, in the manner that was done last year, or could the Prime Minister inform us what the intention is in regard to this debate?


Mr. Si. Laurent:: It is difficult to
determine at this time just what might have to be done next week. I do not think it would be unreasonable to hope that such a motion might not be required after this week in order to bring to a vote the amendments and the motion itself. We shall try, however, to make such arrangements for the procedure next week as will seem to suit best the convenience of most hon. members.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. George H. Hees (Broadview):: I should like to direct a question to the Postmaster General, of which I have given him notice. As Toronto will soon pass an important milestone in Canadian traffic history, by opening the first subway transit system in Canada next November, will the government give consideration to the issuance of a special stamp to commemorate this important event?


Hon. Alcide Cole (Postmaster General):: Mr. Speaker, may I first thank the hon. member for giving me notice of his question. I am glad to tell him that the Post Office Department always gives consideration to requests for the issuance of stamps to commemorate events of national and historical interest.



VANCOUVER HARBOUR


[Stage Direction]
On the orders of the day:
Mr. Arthur Laing (Vancouver South):: I
have advised the Minister of Public Works of my intention to ask him to make a progress report on the proposed dredging of Vancouver harbour, as requested by the British Columbia merchants' exchange on January 5.
Inquiries of the Ministry


Hon. Alphonse Fournier (Minister of Public Works):: Mr. Speaker, the government has considered the deepening of that channel in the first narrows to 40 feet. I have instructed my officials to prepare an estimate of the cost, and it is the intention of the government to have a supplementary estimate for this work.



REQUEST FOR REPORT ON WHARF IN FALSE CREEK

Mr. J. L. MacDougall (Vancouver-Burrard):: I should like to direct a question to the Minister of Fisheries with respect to a progress report which he may be able to give on the question of wharfage and dockage in False creek.


Hon. James Sinclair (Minister of Fisheries):: That is primarily a question for the Minister of Public Works, but I do know that the department is negotiating with the Indian affairs branch for the foreshore. Once that deal is completed, they can start on the dredging.



INQUIRY AS TO REMOVAL OF RIPPLE ROCK

Mr. J. L. Gibson (Comox-Alberni):: I
should like to ask a question supplementary to that asked by the hon. member for Vancouver South. Can the minister make a progress report concerning the removal of Ripple rock and other obstacles to navigation?


Alphonse Fournier: I understand this question is still
under study. In the past this matter was under the jurisdiction of my department, but it has become such a problem now that it interests nearly every department of government. I hope that some day we will receive a report on the possibility of doing that.


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Perhaps I could give an answer supplementary to that given by the Minister of Public Works. A committee has been established to undertake a study of conditions at the first narrows bridge in order to determine the effect that widening of the channel would have on currents within the harbour. The same committee is conducting a study of the problem of the removal of Ripple rock, and is also studying problems on the west coast having to do with aids to navigation and other related matters. The chairman of the committee is Mr. N. Wilson, assistant director, marine services, Department of Transport. The secretary is Mr. J.
B.	Marshall, of the national research council. The members of the committee are:	E. R.
Birchard, vice-president, national research council; J. H. Parkin, director of the division of mechanical engineering, national research

The Budget-Mr. Lesage council; F. G. Goodspeed, formerly assistant chief engineer, Department of Public Works; Dr. H. J. MacLeod, dean of the faculty of applied science, University of British Columbia; and Mr. M. Archer, vice-chairman, national harbours board.


Mr, Green:: Mr. Speaker, may I ask the
minister a question arising out of his statement? Will the dredging of the first narrows be held up until there is a report by this committee which is considering the widening of the channel?


Clarence Decatur Howe: No. There are two problems, Mr. Speaker. The first has been reported on by the Minister of Public Works (Mr. Fournier), that of the deepening of the existing channel to 40 feet.


Mr. Green:: That is to go ahead right away?


Clarence Decatur Howe: Yes; that is to go ahead right away. There is another problem, that of the widening of the entrance. A study is required to determine what effect that dredging would have on the currents within Vancouver harbour. The latter study is being undertaken by the committee that I have just named.


Howard Charles Green: The dredging goes on right away?


Clarence Decatur Howe: That is my understanding.


Mr. Cruickshank:: Mr. Speaker, I should like to ask a supplementary question with regard to the minister's statement. Will that committee also study the Fraser river?


Some hon. Members:: Oh, oh.


George Alexander Cruickshank: Why not, Mr. Speaker? It is a navigable river.



THE BUDGET


[Stage Direction]
The house resumed, from Tuesday, February 24, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Greenwood), and the amendment to the amendment of Mr. Coldwell.
Mr. Jean Lesage (Montmagny L'lslel):: Mr. Speaker, in an editorial appearing in the New York Times of Saturday last one can read that the faces of some New Yorkers who had read Mr. Philip's dispatch telling about the cuts in Canadian taxes were pale and green with envy. If the writer of that article had been sitting in my seat last Thursday evening, he would have seen
IMr. Howe.]

across the alley nothing but green, pale, grey faces, gloomy with envy and jealousy, and of course with disappointment.


Some hon. Members:: Oh, oh.


Jean Lesage: Why is that? Some laughs are sometimes yellow laughs, as we say in French. Why is that?


An hon. Member:: You feel sorry for yourself.


Jean Lesage: Oh, you have enough being sorry for yourself. It is because the budget brought down by the Minister of Finance is a just and equitable budget, the best that we could have under the circumstances.


Mr. Murphy:: "Under the circumstances".


Jean Lesage: The vast majority of the Canadian people think so as well as do the vast majority of the newspapers; and the newspapers from abroad share the same opinion.


Mr. Ross (Souris):: Good old St. James street!


Mr. Chevrier:: Hon. members opposite do not seem to like this.


Mr. Speaker:: Order.


Jean Lesage: One is usually a bad judge of his own actions. But of course one's nagging wife is also a bad judge; and the opposition is nothing but the terribly nagging wife of the government. It therefore might be a good thing to have a look and to see what the neighbours have to say about the budget so that we may have an independent opinion.
The New York Daily News-


Joseph Warner Murphy: They do not vote here either.


Jean Lesage: -says, "Look at Canada go", and commenting on the budget they called the Minister of Finance the wizard of Ottawa. That is not the hon. member for Greenwood.


Mr. Graydon:: The wizard of Oz.


Jean Lesage: Jealousy and envy.


Mr. Fraser:: One never knows what is coming up next.


Jean Lesage: It says;
Our shrewd friends up there-
That is the Canadian government.
-have made a truly sensational post-war recovery. We take off our hats . . .
And the Mirror said:
Our congratulations to Canada and its Finance Minister, Douglas C. Abbott, who should be nicknamed the wizard of Ottawa.
What about the United Kingdom? In the United Kingdom the Manchester Guardian-


Joseph Warner Murphy: They do not vote here either.


Jean Lesage: -says this:
The repeal of the sales tax on books removes an obstacle to the spread of British publications in Canada. This is the only change of direct interest to this country. "But the whole list of tax reliefs will be keenly studied here."
"They show how much encouragement a government can give to hard-pressed people in many walks of life by renouncing only a moderate fraction of its revenue."
The Financial Times says:
Wise government and willingness of all sections of the community to work and save has produced in Canada over the last few years a rate of progress rarely equalled. Now it would seem the efforts and sacrifices Canadians have made are beginning to bring them appropriate rewards.
And then it goes on to say:
Mr. Abbott is to be commended for the way in which he has distributed his tax reliefs.


An hon. Member:: That is from wise
people.


Gordon Knapman Fraser: That is from outside the
country.


Jean Lesage: That is surely from independent people, anyway. The writers of these articles are not especially prejudiced in favour of the present Canadian Liberal administration, and their judgment is that it is a good and fair budget.
The hon. member for Greenwood-and I am sorry that he is not in his seat-is I am sure not far from sharing the same opinion because, after all, when he spoke at length yesterday he devoted only a few minutes to a criticism of the budget itself; and during those few minutes he succeeded in contradicting himself completely. He put forward two propositions. He expressed indignation because, as he says, the budget has been framed as a vote-catcher for the mass of the electorate. Yet in the same breath he contends that the benefit from the tax reductions will go to only a small and select group, and that it is a rich man's budget. Even if I do not agree with that statement, I can well understand that that last remark might come from the leader of the C.C.F. but not from a Tory and especially, of all the Tories, not from the hon. member for Greenwood. I am losing my "Latin".


Mr. Fulton:: He can recognize facts when
he sees them.


An hon. Member:: You are losing a lot of
things. You are going to lose your seat.


Jean Lesage: I understand that the hon. member said a few words about federal-provincial relations. I do not intend to go back to that subject this afternoon. It has been dealt with by the Minister of Finance, and I spoke at length on the subject on December 2 last.
The Budget-Mr. Lesage
Then the financial critic went on to a long dissertation on tariffs. In that part of his speech he really paid the government a great compliment, unintentional though it might be;
I am sure it was unintentional. In effect he said that the trade policies of Liberal governments have been so sound and so successful in promoting the welfare of the country that the Conservative party would like to call those policies their own. Liberal policy has always been to work out trade agreements with friendly countries and to try to remove barriers here in Canada and elsewhere in order to encourage the expansion of our exports and all world trade generally. The tremendous expansion of our trade during the last seventeen years, during which our party has been in office, is the best proof of the success of our policy.
Since 1935 our total exports have increased from $738 million to $4,355 million in 1952. Since 1946 they have almost doubled. Our exports today are at the highest level ever reached in our history. It is no wonder, sir, that the Conservatives want to draw the Liberal trade mantle around themselves. But regardless of what the hon. member for Greenwood says, the public has not forgotten the protectionist policies which his party has advocated both in and out of power. The hon. member for Greenwood cannot dissociate himself from this historical position of his party at this late hour.
We all remember what happened when his party was last in office. We remember that Mr. Bennett-I was young at the time. In 1930, sir, at the age of 17 I took part in my first political campaign for the Liberal party, and I was proud of it. I remember very well that Mr. Bennett was going to blast his way into world markets. He raised Canadian tariffs to the highest levels in 40 years. When he got finished with blasting, Canadian exports had fallen from $1,364 million in 1928 to $498 million in 1932. These high trade policies of the Conservative government and the high protectionist tariffs which they put into effect helped to prolong and deepen the worst depression we had ever had in our history.
When the Liberal party came into office it began immediately on a program for the expansion of trade through the conclusion of trade agreements with all our important customers. Since 1935 the Liberal government has made no less than three trade agreements with the United States and more than thirty with other countries. These agreements have opened up tremendous new opportunities for our industries, and the result is there for all to see in the record level of our exports and our prosperity.
2390	HOUSE OF
The Budget-Mr. Lesage
Then the hon. member tor Greenwood, out of order, began to speak about the Currie report and alleged waste and extravagance. I do not wish to be out of order, sir-


Some hon. Members:: Alleged?


Jean Lesage: Alleged, yes. But I think I might quote the following sentence from his speech. He said that the Minister of Finance is apparently a prisoner of other departments and therefore helpless. The whole assumption underlying his speech and the whole thinking of the cabinet is that spending at she present level is practically irreducible and therefore no more tax relief can be given.
Well, sir, that is more along the Tory line. It coincides with the Tory thinking, of which we are given a good idea by the Globe and Mail of February 21, that is Saturday last,
as follows:
A large part of present-day budgets goes not to defence but to progressive expenditures notably welfare expenditures which depend on percentage taxes. These taxes in turn depend on the buoyancy of business. What happens if business does not stay buoyant? Where will the money come from to pay a social security bill that already has soared past the billion-dollar mark?
It is not the first time the Globe and Mail attacks family allowances and old age security along with the party line. For example, in June, 1951, the Globe and Mail said:
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. At present 1,852,000 families receive these monthly, cheques, which over a year amount to $300 million.
Well sir, of course, that was along the Tory line to help the masses and the poor people.
In March, 1952, the Globe and Mail again referred to social welfare payments as class handouts. I am sorry the Leader of the Opposition (Mr. Drew) is not in his seat because I could prove again that which has been proved time and time again, namely, that all that one sees in the Globe and Mail comes from the inspiration of the Leader of the Opposition, especially his utterances of 1944 and 1945. But he is not here. I know this is a sore spot with him, and I will pass on.
I will change the subject and come back to the remarks of the hon. member for Greenwood, who I regret is absent at the moment. Is the budget an election one? Well I should like to show what some papers have had to say about it.


George Harris Hees: You are not nearly as funny as Jimmy used to be.


Jean Lesage: Here is one. It is from Le Soleil, and reads as follows:
(Translation):
In short this budget is so remarkable that some people call it an election budget. We prefer to follow the minister's lead in calling it a "social dividend" budget, one that has been earned by the hard work and initiative of Canadians. The Canadian government is the only one which has succeeded, in the very midst of the cold war, in cutting taxes and earning a slight budgetary surplus while, at the same time, increasing its defence effort.
This constitutes both a tribute to the resources of this country and to the wisdom of its leaders. (Text):
I did not hear anything from the other side. I shall switch to the Montreal Star: The prophets were right-


George Harris Hees: Why not say something on
your own?


Jean Lesage: I will say plenty; I have
already said plenty and I am just starting. Mr. Speaker:	Order.


Mr. Garson:: Say something simple so that he may understand.


Jean Lesage: I continue:
The prophets were right. Taxes did come down. But it is doubtful if anyone could have forecast the brilliant and soundly-devised distribution of the relief. Not for the .first time' Mr. Abbott has refused to take the easy way out. This is supposed to be an election year and cynics always say that tax cuts at such a time will be put where they will do the most electoral good. But, Mr. Abbott, while offering many a small favour which might be interpreted as election bait, has stuck firmly to the major principles of a policy laid down and carried through when there was no election in sight at all.
The -only other criticism voiced by the hon. member for Greenwood and by the leaders of the other two groups in the house is mainly that it is a rich man's budget; that there was nothing in it for the small man. Well, I can quote some papers in French and English, but one might say that it is not the opinion of the independent people, and since-well, sir, it is important, and in spite of the opposition of the opposition I will do it. The first is from La Presse of Montreal of February 20 and reads as follows: (Translation):
The list of tax cuts shows to what extent the federal authorities are seeking to ease, as much as circumstances will permit, the lot of those who, in one field or another and by various ways, feed the treasury of the nation. Those tax cuts which affect directly or indirectly individual or corporation incomes, or the complete abolition of certain taxes which are more annoying than remunerative, such as the tax on cheques or the sales tax, will have favourable repercussions in all homes and among all categories of citizens.
(Text):
The next quotation is from the Ottawa Citizen of February 21, and reads as follows: The first reaction of Mr. J. M. Macdonnell, the Progressive Conservative party's financial critic, to

Mr. Abbott's budget was that it seemed likely "to benefit most those who perhaps need it least".
This particular line of criticism, however, overlooks the point that it is becoming increasingly difficult for any minister of finance to give substantial help through tax relief to people in the lowest ificome brackets, largely because they have had repeated consideration in the framing of earlier budgets. Many are exempt from income tax, or else are assessed a relatively small amount. As to the sales tax, the list of exemptions is already so wide that most sheer necessities are covered.
But the lower ranges of incomes can and are being augmented in other ways-through family allowances and other forms of social services. About one billion dollars of the total national budget is now being spent in this manner. The bill for social welfare is bound to become larger still, for it is obvious that many important steps remain to be taken in the broad field of welfare; not least, is that leading to a sound and equitable scheme of national health insurance.
Both the hon. member for Greenwood and the hon. member for Rosetown-Biggar suggested that the sales tax should have been reduced as a means of easing the tax burden for the low income groups. Hon. members will recall that in 1951 the Minister of Finance tabled data which showed that persons in any income group spent about 30 per cent of their income on goods which are subject to sales tax. This means that a taxpayer with an income of $2,400 would spend approximately $720 on goods subject to sales tax. A reduction of 2 per cent would, at best, benefit the taxpayer to the extent of $14.40 a year-that is to say, a little more than a dollar a month.
The sales tax is surely not, sir, a regressive tax. On that point I wish to quote the Minister of Finance as he is reported at page 388 of Hansard for the second session of 1951.


Mr. Fleming:: Is that an impartial source?


Mr. Abbott:: Very-and an accurate source, coo.


Gordon Knapman Fraser: Glad to have your word for it.


Jean Lesage: He said:
Contrary to much that has been said in this house and elsewhere about our sales tax, it does not discriminate against low income groups. The figures which I placed before the house last spring show that in the lower ranges of income the tax is progressive rather than regressive. What is frequently overlooked is that practically all foods are exempt from sales tax, all fuel is exempt, building materials are exempt, and through wide income ranges not more than one-third of consumer expenditure is on goods subject to sales tax.
I believe that the sales tax forms an integral part of our tax structure, particularly when it is combined with the special excise taxes. The Minister of Finance said in his budget speech that, broadly speaking, we have achieved in this country a pretty sensible balance in our tax structure between direct and indirect taxes. In the fiscal year
The Budget-Mr. Lesage which will end on March 31 direct taxes will yield 57 per cent of our budgetary revenue; indirect taxes 34-3 per cent; and the balance of 8-7 per cent will be accounted for by non-tax revenue and by special receipts.
In the direct tax field the two most important taxes, from the revenue producing aspect, are the corporation income tax, which in 1952-53 will yield 28-1 per cent of all budgetary revenue, and the personal income tax, which will yield 27-2 per cent of all budgetary revenue.
By contrast, the excise taxes, including the 8 per cent sales tax-and 2 per cent is earmarked for old age security-will yield approximately 19-5 per cent of the budgetary revenue. After giving effect to the tax reductions announced in the budget speech, the direct taxes will provide approximately 57-5 per cent of the budgetary revenue and, of the remaining 42 * 5 per cent, indirect taxes will account for 34-2 per cent in 1953-54. In other words the ratio of direct tax revenue to indirect tax revenue will be changed only slightly.
Those who spoke yesterday also referred to the pre-Korea tax structure. The comparison is, I think, highly relevant, because we are returning-and this is important, and was forgotten by those who criticized yesterday-we are returning to the personal income tax structure which obtained pre-Korea, in 1949 and 1950.
Hon. members will recall that in September, 1950, owing to the outbreak of conflict in Korea and our urgent need to obtain tax revenue to provide for our expanding defence program, a number of tax changes were made. Before these changes were made, the personal income taxes were the same as those which will apply in a full year, according to the budget proposals.
But, sir, the corporation income tax rate was 10 per cent on the first $10,000 of profits and 33 per cent on profits in excess of $10,000, as compared with-and this is important, when hon. members talk about a rich man's budget-as compared with 18 per cent on the first $20,000 and 47 per cent now on the excess in 1953, when the personal income tax is back to what it was in 1949.
The only increased rates are on profits of large corporations. I believe it is fair to say that the most important difference in our tax structure as it now stands, and that which was in effect in 1949, is to be found, as I said, in the corporation income tax. I have a table here showing the percentage of income tax for various levels of corporation net earnings. It shows the percentage taken in 1949, the percentage as it now stands, and the percentage as it will be with
2392	HOUSE OF
The Budget-Mr. Lesage the proposed reduction. If I may have the consent of the house I should like to have this table printed in Hansard at this time. May I have that consent?


Some hon. Members:: Yes.


Mr. Hodgson:: No. He has read all his speech so far, so he can read that, too.


Jean Lesage: Then I shall read it, sir.


Douglas Charles Abbott: There are always some you-know-what hanging around.


Mr. Speaker:: Do I understand the parliamentary assistant has the leave of the house to have the statement put on Hansard?


Douglas Charles Abbott: Yes, of course he has.


Clayton Wesley Hodgson: No. I was denied the same right less than a year ago. I want him to read it.


Mr. Speaker:: I think it is customary in the house to allow hon. members to put factual statements on Hansard. Probably the hon. member for Victoria, Ont. (Mr. Hodgson) would reconsider what he has said, and allow the statement to go on.


Some hon. Members:: Yes.


Clayton Wesley Hodgson: I was denied the same right by the same gentleman less than a year ago.


Jean Lesage: Then, Mr. Speaker, I shall read the table. It is as follows:
Percentage of Profit taken by Corporation Income Tax in 1953 as compared with 1949 and 1952
	1949	1952	1953
		(Including	(Including
		2 per cent	2 per cent
		Old Age	Old Age
		Security	Security
Company profits	Tax)	Tax)$	Per cent	Per cent	Per cent10,000	10	22	2020,000	21*5	37	2030,000	25-33	42	29-6750,000	28-4	46	37-40100,000	30-7	48	43-2200,000	31-85	50	46-1500,000	32-54	51-4	47-841,000,000	32-77	51-6	48-425,000,000	32-95	51-94	48-88


An hon. Member:: That will hold you.


Jean Lesage: It will be noted, despite what is said by members of the various groups of the opposition, that according to the table I have just read this budget is far from being a rich man's budget. The sales tax is the same as it was in 1949. As a matter of fact, it has not been changed since pre-war days, pre-1939 days. I am not talking about the 2 per cent social security tax with which I shall deal later.
The personal income tax rates are back to what they were in 1949. It will be seen from


the table I have just read that the small corporation, the corporation with profits up to $20,000, is now in the same position as it was in 1949, but the large corporation, the one with net earnings of $100,000, paid a tax of 30.7 per cent in 1949; 48 per cent in 1952 and will pay 43.2 per cent in 1953. The corporation with net earnings of a million dollars paid 32.77 per cent in 1949 while the percentage in 1953, in spite of the decrease, will still be 48.42 per cent. The tax last year was 51.6 per cent. I submit that the proposals for relief in connection with personal and corporation income taxes have the effect of bringing us back to where we were in 1949 when we had a so-called sunshine budget with which everyone was satisfied. Everyone is back in that position except the large corporations. Is this a rich man's budget?
All this leads me to an examination of what was said yesterday by the hon. member for Rosetown-Biggar about the increase in the tax credit on dividends received by individuals from Canadian corporations. In 1949 the first step for the removal of double taxation was introduced. The credit at that time was 10 per cent of the dividend received. At that time the legislation made provision for a low rate of tax for small businesses, which instead of paying the standard rate, at that time 30 per cent, was reduced to 10 per cent on the first $10,000 of profit. Thus the tax credit of 10 per cent, coupled with the rate of tax of only 10 per cent, meant that the double taxation had been completely removed on corporations with profits up to $10,000.
The present budget proposes that the bracket to which the low rate applies shall be $20,000 instead of $10,000 and that the tax credit shall be 20 per cent instead of 10 per cent. This is only normal and goes with the other. The result is that double taxation will have been completely removed on all small businesses with profits up to $20,000.
The hon. member for Rosetown-Biggar gave the example of a taxpayer whose only income was from dividends from Canadian corporations, a rather unusual set of circumstances, if not impossible. The taxation statistics for 1952 which deal with the 1950 taxation year, the latest for which full information is available, show that in that year there were 21,790 taxpayers whose income was between $8,000 and $10,000. The total income declared was approximately $193 million, of which only $8.4 million or 4.5 per cent was from dividends. In other words, the average taxpayer in that income group had dividend income of less than $400.

I use these figures simply to show that there must be very few taxpayers, if any, whose tax liability would be cancelled by the 20 per cent tax credit on dividends. It is possible that the sole owner of a small corporation might decide to take no salary and receive all the profits of his company in dividends.
Let us assume that the profits of a company were $12,000. The corporation income tax would take $2,400, leaving $9,600 available for dividends. That was the exact figure mentioned yesterday by the hon. member for Rosetown-Biggar. If that $9,600 was paid out in	dividends	to	a shareholder	who wasmarried with	no	dependents, his	tax wouldbe	$1,904 for	the	full year 1954.	From thishe	could deduct	his tax credit	and would
have no liability, as the hon. member for Rosetown-Biggar said, but his company would have paid $2,400.
If he had taken all the $12,000 profits of the company in salary, his tax would be only $2,320. So if the sole shareholder of that company took the profits out in the form of salary he would pay less tax. Where is there any incentive for him to take it out in the form of dividends? If he takes it out in the form of salary he will pay a little less income tax than if he takes it out in the form of dividends. Of course the hon. member for Rosetown-Biggar would like to have the people believe that we are allowing people to receive dividends without paying tax. That is not true. Nobody can escape the tax.
If he takes it out in dividends he pays more than he would if he took it out in salary. That is the answer. We are avoiding what we want to avoid, having him pay a tax on the profits and another tax on his dividends. We believe that the hon. member for Rosetown-Biggar would be the last to say that the owner of a small business where the profits were under $20,000 should pay double taxation while the salaried man should pay only once.
Several speakers in criticizing the budget referred to the fact that the reduction in the tax burden for individuals is effective July 1, whereas the reduction in the corporate rate is effective from January 1, of this year. This timing of the coming into force of the tax reductions follows exactly the pattern established in previous years. For example, in the budget changes of 1951 the increase in tax for individuals came into effect only as from July 1, whereas in the case of corporations the increase was made retroactive to the first of the year. Accordingly it seems only fair that in making reductions the same pattern should be followed.
The Budget-Mr. Lesage
Moreover, the Minister of Finance in his budget speech has explained already why it would be impracticable in the case of individuals to make the decrease retroactive to the first of the year because of deductions at the source having been made already. In the case of corporations, this limitation on his action does not apply.
Incidentally, let us not overlook the fact that the rate of reduction for individuals is greater than that for corporations. The loss of revenue to the treasury in the case of the personal income tax, as it will be applied from July 1, is, for the 1953-54 financial year, $87 million, while for corporations, starting from January 1, it will be $85 million, or $2 million less. That is in spite of the fact that corporations as a whole pay more tax to the federal treasury than do individuals. In the full year the reduction for individuals is $155 million and for corporations $119 million.
Well, sir, I do not believe that I shall have time to discuss the old age security tax, and I can leave that for another occasion. I shall now refer to another thing the hon. member for Greenwood said yesterday, and I quote from page 2335 of Hansard:
In 1951, the last year for which I have figures available, there were 4,950,000 earners.
Nearly five million earners.
Of those, 2,172,000 paid no income tax, and 1,694,500 of those who paid taxes had incomes of $3,000 or less.
He concludes:
The result was that roughly 75 per cent of the earners got practically no benefit from tax relief at all.
How can you give relief from taxation to people who are not paying taxes? How can you say that no relief has been given to 75 per cent of the population-and it has been said by both the member for Greenwood and the leader of the C.C.F. party-when they do not pay any taxes?


Donald Methuen Fleming: Will the hon. member permit a question? I think he will recall that reference was made to the fact that there was no income tax relief for those people who pay these indirect taxes-


Jean Lesage: There is a lot of relief from indirect taxes for all of these people.


Some hon. Members:: Where?


Jean Lesage: On special excise taxes, on cigarette taxes, on radio licences and all these things where small people have been relieved. We have extended the field of exemptions from sales tax, stamp tax-and all those indirect taxes.
Let us not forget that the opposition is always talking about the 8 per cent sales tax.

The Budget-Mr. Lesage It is exactly the same today as it was before 1939 when the needs of revenue for this government were far from being as high as they are now. Then we had no family allowances, we were paying for no old age security and no grants to provinces for health. We were not required, because of these international obligations which we now have, to spend $2 billion a year and yet, except for the 2 per cent social security tax which my hon. friend and others of all parties approved in 1951, even the hon. members for Eglinton (Mr. Fleming) and Rosetown-Biggar (Mr. Coldwell) approved, the sales tax has shown no increase since pre-war.
I am afraid that, as my time is up, unless I have the unanimous consent of the house,
I cannot go on.


Some hon. Members:: Agreed.


Mr. Speaker:: Has the hon. member the
unanimous consent of the house to continue?


Gordon Knapman Fraser: We are enjoying this. It is most amusing.


Some hon. Members:: Agreed.


Jean Lesage: One example given by the
members of the opposition concerned a married man with two children of family allowance age earning $2,400 a year. If he has no charity receipts, if he had no unusual medical expenses, according to present rates he would pay a $17 tax, $16 for 1953, and $15 for a full year-let us not forget that he is receiving an average of $150 in family allowances. The reduction is small, it is true, in the absolute, but that reduction is percentagewise the same as for the taxpayers in other brackets. If the reduction for that particular taxpayer had been 50 per cent the reduction in dollars would have been only $8.50. It cannot be more because the man pays only $17 a year.
We must not forget that one cannot expect a reduction of $20 a year for a taxpayer who is paying only $17. That is common sense, unless you wipe out this tax completely; but then you have to increase the exemptions.
A tax of 15 per cent on the first $1,000 of taxable income is far from being unreasonable. Wherever you start to tax the first dollar the same arguments that were used by members of the opposition about any percentage rate can always be used in the absolute. The real question is: When should we begin to tax? In other words, is it possible at this time to lower the basic exemptions?
That has been proposed by the hon. member for Rosetown-Biggar. It has been estimated that if the exemptions were increased from $1,000 to $1,500 for single persons and from


$2,000 to $3,000 for married persons-a proposition which we hear very often-the loss of revenue to the treasury would in a full year, with the new reduced rates, be $425 million. If you add to that the loss of revenue of $155 million due to the reduction in the rates announced by the Minister of Finance last Thursday, you reach a figure of approximately $580 million, which is nearly half the total estimated revenue from personal income tax for 1953-54.
I do not believe I have to comment on the figures I have just given to show that at this time it was surely impossible to increase the exemptions. This is, no doubt, the most costly kind of reduction as far as revenue is concerned.
Sir, I would have liked to make comparisons of our exemptions in Canada with exemptions in other countries, but it will suffice to say that our exemptions are, for single and married people respectively, $1,000 and $2,000. In the United States they are $600 and $1,200; in the United Kingdom, $328 and $566; in Australia, $224 and $447; and in New Zealand, $574 and $861. Those figures show that in comparable countries the level of exemptions is much below the level in Canada. I could give example after example of what the status of any taxpayer in any one of these countries would be. They show that any one of them will pay more income tax, more personal income tax, than any individual of comparable status and with the same earnings here in Canada. We must not forget that in spite of all we have had to do in all fields, in spite of all that we have done, our rates of income tax here in Canada are the lowest in the world and our exemptions are the highest in the world. That is true in spite of the fact that the government here in Canada has one of the best systems of social security in the world; in spite of the fact that we have the best system of old age security in the world today; in spite of the fact that we are looking, through social security, after the small people of this country-because, contrary to what has been said on the other side, we are making transfer payments to those who are in need. We are protecting the small people and that is to the credit of this Liberal government in the last seventeen years during which it has been in power; but especially, I would say, to the present government. I believe that we owe a great deal, and much credit is due, to our own Minister of Finance.


Mr. Clarence Gillis (Cape Breton South):: Mr. Speaker, I listened with a great deal of interest to the parliamentary assistant to the Minister of Finance (Mr. Lesage). He is

learning fast. Of course, he has a good tutor. While listening to him this afternoon I got the impression that he was making a desperate attempt to convince his own followers that this is a good budget. If the attention they were paying is any criterion, it showed that they were doubtful, and I am still doubtful as to whether or not he convinced them.
Now, whether or not we agree with the budget, there is one thing that we shall have to admit. The Minister of Finance (Mr. Abbott) did his usually masterly job in the presentation of that budget. I always enjoy listening to him. While listening to his presentation of this budget I was convinced that the minister missed his calling. I believe that if he had gone into the field of salesmanship he would have been Canada's supersalesman. I believe that the minister could sell Roman Catholic bibles to the Orange Lodges.


Douglas Charles Abbott: Or sell an orange banner to you.


Clarence Gillis: Quite possibly. Until I read the budget for myself, I was convinced the minister had presented a good budget. After I took a good look at it, I changed my opinion. Our leader dealt with the financial aspects of that budget and the manner in which tax relief was brought about. He did an excellent job, and I am not going to touch that particular angle of the budget at all. I am prepared to rest our case on the statement made by the hon. member for Rosetown-Biggar (Mr. Coldwell).
During the course of his address the minister emphatically stated, and repeated it, that the reason the government could give some tax relief at this time was that the country's production had increased by about 7 per cent over the previous year. It was because of this increased production that he was in a position at this time to grant relief in certain fields. I am going to try to prove to the minister, during the course of my discussion, that the country as a whole did not share in that increased production. The people have suffered to that extent, and are getting very little relief out of this budget.
Before I do that, I am going to say a few words about the budget itself, and comment on certain aspects that were not mentioned by the hon. member for Rosetown-Biggar. While listening to the parliamentary assistant make his case for the budget, I was struck by this thought. There are more that 137,000 Canadian families who live on incomes of less than $2,000 a year. You could multiply the number of families by four, so you can see
The Budget-Mr. Gillis that represents a lot of people. The parliamentary assistant wanted to know how relief could be granted to those people who are not in the tax brackets. There is a way that that could have been done. Personally, it would not have bothered me if the minister had left the tax structure as it was, if he had only done things like these. If he had said: So far as I am concerned, I think that the
137,000	families who do not pay taxes are entitled to some measure of relief. The first thing I am going to do is to remove the means test from the blind pension. I am going to give those people, who live in darkness and eke out an existence on $40 a month, some relief.
Then if he had said, I am going to remove the means test from the war veterans' allowance. I am going to give these prematurely aged veterans, who offered their lives for the maintenance of the institutions of this country, some relief by removing that means test. If he had made the announcement that he was going to remove the residence clause, as it affects imperial veterans' wives or widows under the war veterans' allowance, I would have been happier. These are outstanding grievances, and if the minister had done something to remove them he could at least have marked his budget as a humanitarian budget. I believe it would have been supported by all Canadians in this country.
In order to help those 137,000 Canadian families who do not pay taxes, he could have increased the family allowances and removed some of the inequities that exist in that legislation. For example, I might mention the allowance for children over sixteen years of age who are continuing their education. If those four steps' had been taken and the tax structure had remained as it was, so far as I am concerned I would have been standing here this afternoon supporting the Minister of Finance; I would have been doing so on the hustings too. But that was not done. Perhaps the reason why that was not done is explained by Mr. Warren Baldwin, the parliamentary reporter for the Citizen. In a recent issue of that paper he wrote a very thought-provoking story. He says:
Behind the Thursday budget is a radically changed philosophy, at least within the finance department, that has pushed state welfare and social security into the background in favour of private enterprise and dividends. Stripped of a few plainly political measures, including cigarette tax reductions, the budget has a double theme song. Encouragement to the small man to think less of pension plans, unemployment insurance and government annuities, and put his savings into the growth factor instead of the debt structure-
Perhaps Warren Baldwin is right, and there is a change in the philosophy of the finance department. Perhaps the end is in sight so
2396	HOUSE OF
The Budget-Mr. Gillis far as social security is concerned. If that is so, in my opinion it is a backward step. The government was making strides forward in the field of social security, but there are some very serious gaps in that structure as yet. There is a gap for the woman in the age group between 50 and 65, many of whom are prematurely aged and broken in health. Some of them live in areas in which they cannot secure any employment. They finish on the scrap heap because of the 15-year gap in the social security legislation, which denies them any help. This gap should have been filled, but it was not.
I seriously suggest to the members of this house that if we are going back to the old philosophy, the old tooth and claw law of the jungle where it is every man for himself, a backward step is being taken by the Dominion of Canada which is out of tune with this particular era in which we are living.
There is another matter that I invoked the thoughts of the minister on by a letter and that I think should have been taken care of. He answered me on January 19. That matter was this. In my riding, for example, there are twelve volunteer fire departments. The communities are small. They are not rich. They have little money. However, they are obliged to take in fire-fighting equipment from the United States, and that fire-fighting equipment is heavily taxed. Those fire departments are part of our national defence set-up in the event of some catastrophe happening. In correspondence at that time I suggested to the minister that he might remove that tax because they work under great difficulties. They are essential to our national defence set-up in the event of anything happening in this country. The minister, as he always does, graciously answered the correspondence and he said:
You may be assured that this representation will be carefully considered when I am preparing the budget.
I am sorry that it was omitted from the budget and I think even yet the minister might give some consideration to it before the resolutions are brought down, because it is a terrific handicap on those small communities.
Another matter which I think should have received consideration, but which apparently did not, is this. I have a letter from the mayor of Glace Bay, Nova Scotia, suggesting that it seems ridiculous that local governments should pay a ten per cent sales tax to the federal government on their purchases. They in turn take in from the United States a great deal of fire-fighting equipment and many other essentials. The provincial governments are exempt with respect to those 

The Budget-Mr. Gillis
I have an answer from the Department of Transport in regard to money paid under the Maritime Freight Rates Act to the Sydney and Louisburg Railway. That railway is 26 miles long. It runs from Sydney to Louisburg. That coal company hauls its own coal over that road, and it received a subsidy of $459,920.68 during that year for that service to itself. Therefore you see you are on pretty safe ground when you suggest that the federal government has a right to see that the moneys of the Canadian taxpayers are protected, and that services are rendered to the country for the money the federal government are putting into those operations. That industry is going down and down, and the mechanization program has been on since 1949.
I picked up the Halifax Herald and noticed an item under a red headline which said that one of the largest collieries, No. 1-B, which employs some 1,500 men and is very important to that community of Glace Bay and Dominion, is apt to close down because conditions have become so bad. If it does close down it will be quite a threat to that whole area.
I would suggest to the Minister of Mines and Technical Surveys (Mr. Prudham), who is in his seat, that that condition is so serious at this time that it would be advisable for him and perhaps a couple of his engineers, who I believe are competent people, to take a look at what is going on in that regard alone. After all, a matter of $7J million is involved, and something should be done by the federal government in the matter of straightening out what I believe at the present time is faulty engineering in the installation of heavy equipment. In my opinion these old mines are not adaptable to the installation of that type of heavy electrical equipment. I leave that thought with the Minister of Mines and Technical Surveys.
On the question of the welfare state, I think the figures I have given of subsidies and subventions to the coal industry indicate pretty definitely that the big fellows in this country have not very many complaints when it comes to getting money from the federal government, and they enjoy the welfare state.
I am not objecting to these things, but I am using' that as an argument to refute the suggestion you hear from time to time, that we are against the welfare state; that we must give nothing to the little fellow who lives on an income of under $2,000 a year. But with respect to ah organization like the Dominion Steel and Coal Corporation, with about 28 subsidiaries across the country running all the way from Louisburg to Vancouver, with millions of dollars of capitalization, and with their directorate sitting on boards of directors of banks and trust companies across this 
country, it is all right to throw money to them. That is not considered the welfare state; but don't do anything for the little fellow who is getting an income of around $2,000 a year.
For a few minutes I am going to take a look at the steel industry. The steel industry is a very important one in this country. In fact in my opinion-and I have said this many times in this house-steel is the most important industry in this country because it is the base of the whole economy of Canada. If there is anything wrong with steel there is something wrong in the whole economy.
I had a bit of a squabble with Mr. Lionel Forsyth during the recess. I criticized the fact that steel was expanding in the other basic plants across Canada but was static as far as the Dominion Steel and Coal Corporation was concerned. He objected to that, and in a press statement he put figures on the record that I have seen there since 1949. I am not interested in these figures; I am interested in increase of production.
They have not a program of expansion at Dominion Steel. Dominion Steel and Coal Corporation's program is one of replacement. It is replacing obsolete equipment. That is not expanding. As a matter of fact, when they swing from the old equipment to the electrical equipment they are not expanding steel; they are creating unemployment, because it will take -many fewer men to operate the electric battery than it did the old type of equipment, and steel has been static there.
The parliamentary assistant to the Minister of Defence Production indicated that there is not very much going on by way of increased production at Dominion Steel. On December 11, at page 581 of Hansard, he made a statement on the question of steel. He said:
One of the essential materials over which we have had to exercise control has been steel, but there are now indications of improvement in the steel supply. Our Canadian industry has been producing steadily at high levels, and steel production in the United States has recovered quickly from last summer's work stoppage.
Last month a new steel finishing mill came into production at Sault Ste. Marie which will give us an additional 250,000 tons of rolled steel products annually. In addition, new facilities came into production this week at Hamilton which will add 650,000 tons of steel ingots a year to our present production. However, in spite of this increase in Canadian production the demand for steel is; growing steadily, so we expect to maintain our level of imports from the United States, the United Kingdom and other countries.
So you see in that statement there is no mention made of Dosco at all. At Algoma and at Hamilton, Stelco have embarked on

an increased production program that has brought results. You are getting that much more steel in the Canadian market today, but there is not a word about Dosco. Dosco has remained static. Because of that statement by the parliamentary assistant to the Minister of Defence Production I raised the matter at the Rotary Club meeting in Sydney.
In addition to that angle, the wire and nail mill at that plant, one of the small bits of fabrication they do there, has been working at one-third capacity for the last six months. Many of the men employed in the mill were out in the general yard; and the general yard is the road to the street; and the street is unemployment.
I had it from what I thought was good authority that that mill was going to close, and that they were going to move out to the west coast because there was a better market out there. I brought this to the attention of a group of businessmen in Sydney, because I thought they had a right to know. It is too late, after the mill is moved, to begin to squawk about it. I thought the time to do it was then. They had a right to learn from that company about the future of the mill, because there are men in that city who have investments in it.
Now, let us take a look at this whole primary steel question. I will stick pretty close to my notes because what I shall have to say is supported by facts and figures, and I do not wish to depend upon my memory for those.
Canada s primary iron and steel industry has itself, during the last three decades, provided the soundest evidence for its own socialization. Private profit time and again has been placed ahead of the national welfare of this country. This industry has been foremost in developing modern industrialization, and continues to be one of the most critical producers in peace or war, even with the introduction of oil, hydroelectric power and new industrial material. That was what I said a moment ago, that steel is an important industry in this country.
Consider the requirements of the Canadian economy last year. The hydroelectric in Ontario and Quebec needed 140,000 tons of steel; the oil industry required 200,000 tons; capital equipment plant needed 86,000 tons; the building of the Toronto subway and the laying of the railroad north from Seven Islands; the electrical industry, construction, hydro expansion, automobile manufacturers and lesser industries-all needed large amounts of steel.
That resulted in a consumption of 4,795,200 tons. Without it their programs would have 68108-153
The Budget-Mr. Gillis been at a standstill. The proof of this is clearly seen when the effect of the recent steel strike in the United States is remembered. Thousands of workers not employed in the steel industry itself found themselves laid off because of the close interdependence of modern industry, and the key nature of steel.
Only within the past two years have the primary steel firms undertaken a noticeable expansion plan with Dofasco, Stelco and Algoma currently spending $120 million to add 1 million tons to their steel ingot capacity. Even with this increased capacity, however, the Canadian firms will still fail to produce sufficient for domestic consumption even at the present level, and the indications are that consumption is going to continue to increase steadily. Unless these companies overcome their lethargy, the great bulk of the 15 to 20 million tons of iron ore which will soon be mined annually in Canada will be shipped to the United States, and Canada will still have to import large quantities of primary steel from the United States.
That is one thing to remember. If we are going to use iron ore from Labrador, then we have to increase our capacity in this country to produce steel. What were Canada's steel imports from the United States in the last ten years? 1 have before me a table showing the figures year by year. I shall not place them all on record, but shall record only the total.
We imported steel from the United States m the last ten years to a value of $6,268,535,415. That is a lot of money going out of Canada. These iron and steel imports prove conclusively that there is a vast market in this country for steel, a market that could replace annually more than $600 million worth of imported steel. In addition there is a large market in Central and South America.
While Canadian manufacturing as a whole increased its capitalization by more than 50 per cent between the two world wars, the iron and steel industry remained virtually static with less than a 1 per cent increase. It is therefore not difficult to see why Babson's Canadian Reports in 1949 had good cause to state that the steel industry was the bottleneck of Canada's national productivity and that only government help would bring about an improvement in the situation. The industry had, however, rejected a government offer in 1947; and during the 10 years 1939-48 when it received $50,589,000 in government subsidies there was no appreciable expansion in capacity, but the profits of the three major steel producers benefited by $58,981,000. That sounds like the welfare state.

The Budget-Mr. Gillis
More than anything else, the thing which held up Canadian recovery after the war, which produced more shortages in more fields than anything else, and which was more responsible for the resulting inflation in Canada than anything else, was the failure of Canada's privately owned primary iron and steel industry to expand to meet the industrial needs of the Canadian economy. Hon, members who were in the house during that time will recall our discussions here, and will recognize that statement as being absolutely accurate.
The inability of Canada's primary iron and steel companies to meet national needs became apparent during the war. During every year of the war, and indeed every year since, the government has paid out subsidies to the iron and steel industry in various forms to ensure that Canada had the maximum possible amount of steel. It has been apparent during all this time that if it were left to its own profit-seeking devices the iron and steel industry would not meet the nation's needs for iron and steel. The government have, during this period, brought every kind of pressure to bear on the steel companies to expand. They have offered them dollar for dollar assistance in paying for new capital equipment. They have pleaded with them. They have paid them subsidies, and only belatedly have the steel companies undertaken the expansion so badly needed. For example, the minister of reconstruction (Mr. Howe) told the House of Commons on December 19, 1947:
Canada today is producing about 3 million tons of basic steel per annum. Present day requirements are about 4 million tons. Canada has sufficient finishing capacity for the steel that can be produced in Canada. Consideration is being given to inducing our manufacturers to provide more basic steel. Conversations are proceeding on that subject, but no conclusion has yet been arrived at.
So I am not blaming the government altogether. My criticism is of the industry itself; because I have listened to these discussions concerning the matter of increasing the supply of basic steel. For the past decade, until recent months, Canada has had a total of 14 blast furnaces with an annual capacity of 2,745,000 tons. These figures are supplied by the dominion bureau of statistics.
Then I have here figures showing the subsidies paid to the steel industry from 1939 to 1951. I shall not put them all on record, but I believe hon. members would be interested in the last three years, namely 1949, 1950 and

1951, so they may know just what those subsidies were. The following table will show the subsidies paid in the years I have
indicated:
1950
Stelco

Algoma

nil
Dosco

Then, in addition, Dosco received by way of coal equalization subsidies the sum of $401,053 in 1949, a further $335,351 in 1950, and $424,725 in 1951. These make a total of subsidies in those years of $62,030,058. That sounds like the welfare state, also. In addition to that they received in the form of accelerated depreciation allowances between 1939 and 1946 a total of $14,128,447. I have the figures for Stelco, Algoma and Dosco, but I shall give just the total figures. Extra depreciation allowances, in addition to the normal rates, were granted to these companies.
The Canadian steel corporations, like their counterparts in other nations, have always tended to view large-scale expansion with suspicion because of the large capital investment required. This policy has kept our capacity at less than demand', with the result that our steel production cannot maintain full employment and our secondary industries must depend upon imports.
This became quite obvious diming the time steel was under discussion in the years immediately after the war. This was never better illustrated than by the reluctance of the steel companies to expand their capacity with government assistance, as proposed in 1948 by the federal cabinet. I have always given the government credit for trying to push the primary steel industry of this country.
From 1939 to 1951 inclusive the Canadian government paid out $61,457,663 in direct subsidies of various kinds to the iron and steel industry, because of its inefficiency, because of its lack of capacity to produce the steel needed, and because of its refusal to expand to meet Canadian needs. That statement was made in the public accounts of 1949-51.
The steel companies have always used high construction costs as an excuse for their failure to expand. According to reliable estimates a new blast furnace to produce
400,000	to 500,000 tons of steel annually would have cost approximately $15 million in 1948. That statement is taken from the Financial Post of October 14, 1948. If the industry had been publicly owned, the government, for less than half what they paid out in subsidies, could have built the two blast furnaces required to make up the shortage of one million tons in Canadian primary capa-

city, and could have done it when it was required instead of half a dozen years later. The construction costs would have been lower and the industrial recovery of the Canadian economy would have been speeded up. The Canadian people would have been saved not only the additional subsidies that were required in the years following, but the higher prices of steel resulting from the expansion undertaken in a high-cost construction period.
Steel capacity is not a matter to be decided by management alone. Millions of dollars of public funds have been paid out over the years to the steel-producing companies of Canada, and the public has a right to know whether that investment has been wisely handled. The workers in the industry are vitally concerned. While we were debating this matter a few years ago hundreds of steel workers were unemployed in Cape Breton and Hamilton.
I am particularly interested in Dosco, and it is interesting to note that their basic capacity today is less than it was in 1947-49. In 1947-49 they had a pig iron capacity of
730,000	tons, whereas in 1952 that capacity was only 595,000 tons. Their capacity in steel ingots dropped from 789,000 down to 713,000. Instead of there being expansion at that particular plant, capacity has gone down.


Mr. Blackmore:: Is the hon. member referring to capacity to produce or to the actual production?


Clarence Gillis: Their capacity to produce. I wanted to put these facts on the record in view of the statement by the Minister of Finance (Mr. Abbott) that he was providing relief to certain sectors of our economy in the way of relieving people from the payment of taxes. He assumes that he has given them some relief. He says he has done that because the productivity of this country has increased 7 per cent.
I would point out that the two basic industries in Nova Scotia, around which the whole economy revolves, have not shared in that increased productivity. Productivity has gone down in that part of the country. I leave these thoughts with the government to be considered in connection with the huge amounts of money that have been put into the coal industry and the steel industry of that province.
In view of the importance of these industries to the economy of Nova Scotia it is time the Canadian government gave some thought to having a share in the management of these companies if the money of the taxpayers is going to be poured into them.
The Budget-Mr. J. A. Ross


James Arthur Ross: Mr. Speaker, I listened with great interest last Thursday to the Minister of Finance (Mr. Abbott) presenting his annual budget. As was the case in the previous year, upon reading his remarks the following day and giving them some study I found that they were not altogether as they sounded during his very fine presentation in the House of Commons. I want to repeat what was said by the official opposition critic, the hon. member for Greenwood (Mr. Macdonnell), that there are a great many people in this nation who will not benefit directly from this budget.
This afternoon the parliamentary assistant to the Minister of Finance (Mr. Lesage) referred to a great many editorials in a humorous and jocular manner. He was tossing around many figures and arguing that we were now back to where we were in 1949. I do not think that is a fact. Any reductions that have been made are because we have been greatly overtaxed during the past couple of years.
The propaganda bureau of the Liberal party has put out an analysis of this new budget which points out that it is saving the people $1 million a day. We have maintained during the past year or so that the people of this country have been overtaxed by over $1 million a day. I have also been reading some newspaper accounts, and I note that the president of the consumers' organization in Winnipeg states that the new budget does not mean anything for the homemakers of this nation, and she thought something should be done for them. I noticed also that Mr. McLean, secretary of the Manitoba federation of agriculture, points out that the small considerations granted to the farmers, when compared to those given to mining and other large corporations, will prove a very serious disappointment.
More serious disappointment will be felt when it is discovered that we now have an excise tax of 15 per cent on all replacement tires for power equipment on the farm. Instead of giving relief to our farm producers, this added tax is provided by this budget.
I listened to the parliamentary assistant quoting various editorials this afternoon. There was one from the United States which pointed out what a wonderful minister we have and what a wonderful job he had done.
I am one of those who are absolutely convinced that there is terrific extravagance and waste in this great national defence undertaking of ours and that great savings could be made. Without discussing the Currie report I just wish to say that while Mr. Currie
68108-153i
2402	HOUSE OF
The Budget-Mr. J. A. Ross only investigated a fraction of 1 per cent of the expenditures of the defence department-


Some hon. Members:: Order.


James Arthur Ross: -he pointed out that no one could estimate the losses in that one branch which he investigated. So the propaganda put out on behalf of the government that there is only about $50,000-


Mr. Croll:: 


James Arthur Ross: -is not in keeping with the statement of Mr. Currie who made the investigation. The government has on several occasions refused a full investigation of the entire department of defence in this country.
With respect to the editorial which was referred to by the parliamentary assistant this afternoon, in contradiction I should like to quote from the Montreal Gazette of February 23, 1953-


An hon. Member:: A good Liberal paper.


James Arthur Ross: -on the expanding waste. It states:
One might only wish that what Senator Taft said were true. But the hard fact is that the government of Canada is not cutting down its spending. It will spend even more in the next fiscal year than it is spending in the present fiscal year. Such tax cuts as are being made are not being made out of economy. They are being made on the speculation that there will be more money to tax in the next year. This is not cutting taxes on the basis of economy, as Senator Taft mistakenly assumes. It is cutting taxes on speculation.
But whenever it is suggested that government economy should make way for tax cuts, the same answer is always given by those in authority. Defence is taking nearly half the budget, with social security and debt charges taking most of the other half. Where is economy to come from? After all, these are "fixed" obligations.
This is a rather lengthy editorial. It deals with a great many cost-plus contracts across this nation from coast to coast, and points out that these cost-plus contracts are an invitation to great waste and extravagance. Mr. A. O. Matthews, financial adviser to the Department of Defence Production, has admitted that such contracts are an invitation to extravagance.
The editorial concludes:
Instead of making tax cuts on the speculation of higher revenues, it would have been far sounder to have made them on the basis of efficient economy. And the field for such economy seems wide open.
Mr. Speaker, this booming prosperity we hear so much about is chiefly brought about by the expenditure of the taxpayers' money through national defence. I am sure that all of us are in favour of proper national defence in this country, but that is not in keeping with the tremendous amount of extravagant waste we see. Stockpiling is taking place in raw 

The Budget-Mr. J. A. Ross in the past. One of the great difficulties facing western agriculture is the repeated increases in freight rates. When you read of an increase of 15 per cent in the freight rates, that is not 15 per cent on the basis of some few years ago but on the immediately preceding rates which have been raised several times in the past few years. It must be remembered that everything the western producer buys is plus freight from these industrial centres, while everything he sells is less the cost of freight. This is becoming the real bugbear to the existence of the western producer.
These problems do not rest on the western producer alone, because the whole agricultural population of Canada is greatly worried about the immediate future. The dairy producers of this country, whether in the maritimes, the central provinces or British Columbia, are all greatly concerned, as are the fruit producers. Those engaged in any line of agriculture are deeply worried by the steadily falling market prices with which they have to contend. At the same time they are met with greatly increased costs of production. It can be easily understood, therefore, why these people are so disappointed that something was not done for them in this budget.
When it is pointed out to the agriculturists, as has been done in this house, that people with large investments in securities may have an unearned income of from $8,000 to $10,000 and still be tax-free, they are not going to feel any better. It may be that some of these people are eligible to draw old age pensions. In contrast, many of those who are working and making meagre incomes will have to make their contributions to this social security about which we have spoken. To these many agriculturists, this is an almost unbelievable situation.
It is well to remember that it is only a matter of months or a year before the economy of the whole nation suffers when agriculture is not prosperous. It behooves those in responsible positions in the government, therefore, to see that proper assistance is rendered to the agricultural producers of this country who are so important, not only in producing food in surplus quantities for the underprivileged countries, but to the economic prosperity of this country. They are deeply grieved. I hope that even yet something will be done to assist them. There is not one section of the agricultural producers of this nation of ours who feel very happy about their immediate future at this time.
There is another matter to which I should like to make reference, and that is municipal problems. These problems may affect rural areas more than other areas, but the large


centres do have their municipal problems as well. Municipalities have important problems now, chiefly because their only source of revenue is the taxation on real estate. This means that real estate must pay the cost of education, hospitalization, health services and any other community service which may be desired. When one realizes that the federal government is taking approximately 71 cents out of every tax dollar and that the municipalities are left with a little over 10 cents, one realizes the dire circumstances in which they find themselves. I believe the government should allow rural municipalities tax exemption on the machinery and equipment they need, just as the provincial governments are allowed tax exemption. I believe the government could do that for these municipal corporations.
I should like to see some scheme evolved whereby there could be a dominion-provincial-municipal conference to give consideration to these various problems and try to work out some scheme for alleviating the hardships of the municipal authorities in this country, who are faced with difficult problems today. I shall certainly be supporting the amendment proposed by my colleague, the hon. member for Greenwood (Mr. Mac-donnell). This amendment reads:
That all the words after "that" to the end of the question be deleted and the following substituted therefor:
"this house regrets that under the present budget the government proposes to take more money from the taxpayers of Canada than ever before for non-defence and defence expenditures without any effective steps being taken to:
(a)	deal with waste, extravagance and administrative inefficiency;
(b)	give tax relief to those who need it most;
(c)	offer any encouragement to Canadian farmers in meeting the serious consequences of lost markets and lower prices resulting from the government's agricultural and marketing policies;
(d)	permit an independent inquiry into the organization accounting and administration of the Department of National Defence.


David Arnold Croll: Mr. Speaker, I do not think housing has received the attention it deserves and needs, at the present session of parliament. I think it is still a serious problem that is facing the Canadian people. It is true that we are more prosperous than ever, but we have not been able to satisfy our people's needs and desires for homes. Despite the great achievements in the field of housing by the government, we have not been able to overtake the family formations nor have we been able to reduce the backlog of housing.
I want to place on record the number of new units built and the number of new family formations from 1946 to 1952 inclusive.

I give first the year, then the units and then the family formations. They are as follows:
Year	Units New Families
1946	
67,200	108,0001947	
81,276	75,0001948	
95,340	83,0001949	
93,931	77,0001950	
95,270	74,0001951	
72,079	96,0001952	
76,000	93,000581,096	606,000
Since the end of the war we have built a new house every six minutes and we have housed 2,500,000 Canadians in new homes. One Canadian in five today has a post-war house. It is a great achievement and I think the minister has every reason to be proud of it. I am prepared to give him high praise. Nevertheless there is still a great deal to do. We had anticipated that by this time we should have been able to meet our current demand for housing. The year 1952 was not a bad year, but it was not a good one either. The spurt in the last few months of 1952 increased the number of units above that of 1951. The blame for not doing even better than we did is not with Ottawa. It has been due to the failure of the provinces to take full advantage of the generous and progressive federal housing plans.
We were doing very nicely; the 1950 figure indicates 95,270 units built, which was more than 20,000 above the family formations for that year. We were just rolling into high gear in our house building when the Korean war came upon us in June of 1950. In 1950 we built 95,000 units; in 1951 we built 72,000 units and in 1952 we built 76,000 units.
Today labour and materials are in good supply. We have a large working force. The building industry is geared to high and is ready to go. The demand for housing is still very strong. In addition to that, builders have learned the art of building the year round and we have a great deal less seasonal unemployment in the building industry than we have ever had before. I think the time has come when we must set for ourselves new and imaginative targets. In the year 1953 we can, and we must, reach an all-time high by building at least 125,000 houses.
The demand for housing is due to many causes, including our unparalleled prosperity and the people's faith in the country and its institutions. Immigration has brought us needed people who require homes, but they have also added to our working force. The movement of people to industrial areas has continued since the war, and we have been fortunate in having a high number of family formations. But we are now faced with some problems which, in my opinion, require action at the policy level.
The Budget-Mr. Croll
From time to time one hears the statement that the federal government is not doing enough in the field of housing. Quite often the criticism continues to the point of suggesting that what we really need is a dynamic federal housing policy. Several years ago we heard that same talk. I was a party to it, and suggested that the cure-all would result from the federal government being willing to enter the field of public housing.
Hon. members in this house will recall that section 35 of the National Housing Act was introduced in 1949. It provided facilities for public housing, to the extent of 25 per cent of the capital investment and operating losses. The provinces would participate and the dominion would pay 75 per cent. Many of us who were insistent on a public housing section of the National Housing Act must now realize that any housing venture involves more than the federal government. Up to date, every proposal put forward by a province has been entertained under section 35 of the National Housing Act. Yet after three years' operation, only 3,000 units under that section are under way.
The Canadian Welfare Council, in their 32nd annual report, have some significant remarks to make. I quote from it as follows:
Whatever else is done, subsidized low-rental housing remains indispensable and Canada fortunately is in the position of having provided for projects of this kind in the 1949 amendments to the National Housing Act. We need perhaps to remind ourselves that section 35 of this act authorized the federal government to enter into agreements with provincial governments for low-rental housing and for its part to contribute 75 per cent of the capital costs and of operating deficits. The amazing thing is that in spite of the mounting need and the agitation that preceded this progressive enactment, so little has been done with it since.
They give the reasons for the failure, which I quote:
The first of these obviously is that many individuals and groups throughout the country, and some elected representatives at all levels of government are altogether opposed to the idea of public housing.
Another reason-
I am still quoting:
-for the present state of inactivity, strange as it may appear, is that Canadians in general are not aware of the legislative provision which now exists for rental housing subsidies.
There are three main problems that we face at the present time and I think they need decisions at the policy level. The first is the shortage of mortgage money. This is a very serious matter, and I will deal with it in just a few moments. The second is lack of serviced land, roads, water mains, sewers and schools. This is particularly true in suburban areas which have been areas of

The Budget-Mr. Croll most rapid growth. The third is the down payment, which is considered too high. It is now 20 per cent on an 80 per cent loan and 10 per cent on defence worker's housing. That means about $2,100 under a normal loan and about $1,000 under defence workers' housing.
Let me deal first with the shortage of mortgage money. David Mansur, the very able and energetic president of Central Mortgage and Housing said to the committee in giving evidence last year that 10,000 additional starts would have been made if mortgage money had been available in 1952. That means that we lost the use of some
10.000	houses during 1952 because we did not have enough mortgage money. That is a very serious matter.
Since 1947, under section 31A of the National Housing Act there is authority to make loans on its own account when joint loans are not available from lending institutions. To meet the shortage of mortgage money direct loans have been made available in municipalities under 5,000. In August of 1952 that was extended to communities under
50.000	such as Oshawa, Barrie, Brampton, Orillia and similar municipalities. I raised the question in this house last year as to the availability of mortgage money in communities over 50,000 where money through normal channels was not available. I said at that time, referring to the lending institutions, and I quote from Hansard of May 5, at page 1875:
The other argument they use is that the bond market gives them a good return. They say that they can obtain 4 per cent or something slightly in excess of that on bonds, and that they receive a better net return on a 4 per cent bond than on a 5 per cent mortgage.
In the same speech I said:
We now have on the statute books the authority to make direct loans for homes. If they are not forthcoming from private enterprise, then there is no alternative for us but to enter the field.
Once we are in the field we will never vacate it.
Lending institutions were exhibiting greater interest in investment in commercial real estate than in small homes. Particularly last year there was a noticeable drying up of money available for residential building.
After I made the speech of May 5 Mr. J. K. Macdonald, president of the Confederation Life Association, told the Canadian Manufacturers' Association on May 30:
Mr. Macdonald declared that the drop in housing was due to "the rising cost of building due to increases in costs of materials and particularly wages, to the point where the buyer in the lower-income group could neither afford the increased down payment nor the heavy mortgage charges necessary. While we are singled out, this criticism by politicians and others is unfair in that over the past five years our disbursements on new mortgages have exceeded $1,500 million."

Then, Mr. Macdonald said-and I draw your attention particularly to these words:
The interest rates on bonds have risen more than those on mortgages, so that the latter are relatively less attractive than they were some time ago.
Following that, on October 23, the Minister of Resources and Development (Mr. Winters) spoke to the Canadian institute of plumbing and heating at the Seigniory club and as reported in the Globe and Mail of that day he had this to say:
Resources Minister Winters appeared to be dropping the proverbial word to the wise today when he said the government would not hesitate to step into the field of private financing if such became necessary to stimulate the building of houses.
"The point I wish to make is that although the policy of the federal government is to remain in a secondary position in respect to housing, should the circumstances warrant . . . there will be no hesitation to act ..."
"With the increasing of the general interest rate structure, loans under the National Housing Act were becoming less attractive to the lending institutions. They were finding that there were other and more attractive avenues of investment."
Then he goes on:
While he said that the private lending institutions had done a good job, and he was confident they would continue to do so, Mr. Winters cited an instance where the government already had had to step in with direct loans.
Private firms withdrew from lending in some 75 communities with populations of between 5,000 to 50,000 with the result that CMHC was authorized to make loans under the NHA "with or without the lending institutions acting as its agent in making the loans."
The minister followed that by a speech on February 9 at Winnipeg to the Winnipeg real estate board and he had this to say:
Another example is that when credit circumstances changed during 1951, loans under the National Housing Act were not available in a number of communities of 5,000 to 50,000 in population.
Then he said that they stepped into the breach and made money available. These are his words:
I mention these examples to show that whereas the basic principles behind the operations of the government under the National Housing Act are designed as stimulus and encouragement in a secondary role, nevertheless where circumstances arise wherein it is felt that the national interest is not being served, the federal government has not hesitated, and will not hesitate in the future, to step into the field.
My suggestion to the minister now is that this has become a matter of national concern. We are faced with a social vacuum, which is always a dangerous thing in this day of social dividends. I ask why should the credit-worthy Canadian be deprived of money to build a house because institutions fail to discharge their responsibilities in their eagerness for greater profit. Government then must take the inevitable and essential step to make mortgage money available in

communities over 50,000. Parliament has sanctioned it and has authorized it. We need the mortgage money to build houses tor our people. We need it now. We are willing to pay the going rate of interest. We ask no favours, but we cannot put it off any longer. The building season is on us.
I think I should say this to the lending institutions. There is still time to save the situation and for them to retain the field of enterprise that is traditionally theirs. I believe the vast majority of us in this house want to see them in that field and want them to remain in that field, but I must also tell these lending institutions that we in the government are not without ability to handle the mortgage situation.
I think it will come pleasantly to this house to learn that Central Mortgage is good business. Since its inception in 1945 it has had an operating profit of $17,200,000, after paying income taxes and charges in the same way that any private institution would pay them.
I said that the government must make mortgage money available to credit-worthy Canadians in municipalities over 50,000. I am saying to the minister now that if these private institutions will not make this money available we cannot possibly dissolve this house until this matter is settled. In 1952 some 10,000 Canadians were deprived of homes because they lacked mortgage money. Surely that must not happen again. We need across this country $225 million of mortgage money for 1953. Last year we used $175 million. Of that amount Toronto and the Toronto area will use about $70 million.
It may be that these institutions have not that kind of money available, in which case, of course, there is no alternative but for the government to step in and do what is necessary. Or, as the minister puts it-and I repeat these words because I think they are significant; all his words are significant, but I think these are particularly so: Nevertheless where circumstances arise wherein it is felt the national interest is not being served the federal government has not hesitated, and will not hesitate in future, to step into the field.
The second proposition I made was one having to do with a lack of serviced land. All the serviced land available in fast-growing communities has been used up. Yet the need in those communities is greatest. The dominion can do very little about it. Under section 35 of the National Housing Act they could partake in land assembly projects which would make available roads, sewers and water mains without costing the municipality one penny, because it provides that the dominion and provincial governments should share the cost on the basis of 75/25.
The Budget-Mr. Croll
Usually the municipalities take the view that they cannot undertake these projects because they are not able to build schools, and they are reluctant to undertake land assembly plans for house building. They lose sight of the fact that if they are not required to spend money on' the services, that money which they would normally spend is available for schools and for other purposes.
The Toronto area is particularly hard hit in this respect. I understand a bill was introduced in the Ontario legislature today. I hope it is helpful and that it will correct the unhealthy municipal situation. I do not know what it contains, so I am not going to discuss it at this time. There will be ample opportunity at a later date.
As for the down payment, I think the figures have already been given. I do not take very great pride in reiterating the fact, but it is true that 75 per cent of all Canadians earn less than $3,000 a year. The present down payment on a house that has an 80 per cent mortgage is about $2,100. And Central Mortgage and Housing Corporation requires the buyer, in order that he may qualify, to pay 25 per cent of his earnings in monthly payments. The minimum payment, including carrying charges and services, is $71 a month.
That means that a buyer must earn at least $3,800 a year. And there's the rub; 75 per cent of our people earn less than that. Obviously the need is for a lowering of the earning requirements, or a lowering of the down payment, or a little of both.
The lowest income group for whom this legislation was intended is not being served. They need our help most. As I recall it, the high down payment was originally an anti-inflationary measure; at least that was the reason given at that time. We do not need it any longer. I have heard some talk, not in the hoifse but in the country, about homes for workers for $8,600 on 35 or 40-foot lots. I have seen some of those houses. They were built by private enterprise. All I can say to this house of parliament is that there should be a law against them. As a matter of fact I am told there is such a law in some cities, particularly in Peterborough.
I agree that they are shelters. I cast no reflection upon the people who occupy them; but these tiny houses are no more than glorified chicken coops. They are unfitted and unsuited for their purpose; they are unworthy of our efforts and our enterprise. I am not prepared to support any such undertaking.
One thing we cannot do in housing; we cannot lower our standards. Our job is still to build homes worthy of Canadians. We have good homes for defence workers priced

The Budget-Mr. Croll in the neighbourhood of $10,000 with a 10 per cent down payment, and that may well be extended to the public generally. I would much rather recommend that course than the one of lowering the standard for these other homes.
On May 5, 1951, the Minister of Resources and Development made a statement of new policy in the house. It provided that defence workers would be able to obtain houses under easy conditions. It was stated that a defence worker is a person certified by his employer to be engaged in the production of defence supplies in a plant designated in whole or in part by the Department of Defence Production as a defence plant. The only requirement must be that the house must be owned and occupied by a defence worker.
The defence worker can build a house himself, or he can purchase it from a builder who will build it under the supervision of Central Mortgage and Housing Corporation, which will be the architect, the planner and the guarantor as to quality of the building, and as to the adequacy of the house. All he has to pay is 10 per cent down. The rest is amortized over a period of 25 years. The loan would be 90 per cent on the agreed contract price fixed by Central Mortgage and Housing Corporation, and the monthly payments would include principal, taxes and interest.
All the employer had to do was make monthly deductions to meet the payments while the employee was so employed in the plant. There was to be no liability on the employer. If at any time the employee terminated his employment, the employer had no further responsibility toward Central Mortgage and Housing Corporation, and the employee Who had obtained a home as a defence worker could retain the home.
He could sell it, if he wanted to, to other than a defence worker, during the first five-year period, if he paid one-ninth of the original amount of the loan. If he paid that, he could sell the house to anyone. And he could sell it to another defence worker without having to pay the one-ninth. I cannot recall having considered more generous terms.
Yet we find this: All the employer had to do was to have the plant certified in whole or in part. At the request of the employee, and without any liability to himself, he would pay over to Central Mortgage and Housing Corporation the monthly instalments agreed to by the employee. If the employee left that employment, (the employer was under no further liability to collect any of the monthly instalments. It is interesting for hon. members to know, and I think they
IMr. Croll.]
should know, that no application to certify a plant in whole or in part has been turned down by the Department of Defence Production since 1951.
One would have thought there would have been a great demand for these homes. I am sorry to tell the house that the response by industry has been disappointing. As a matter of fact it has been downright frustrating. Industry is a social institution clothed with functions and responsibilities, both of which are equally important.
I think we ought to take a few moments to examine the position of industry. Industry buys machinery, tools, vehicles and buildings, and it buys all of those with great care. It looks after them with even greater care. The building is painted, repaired and maintained; the machinery and tools are greased, oiled and housed; the vehicles are attended to and placed in the garage at night to protect them against the elements. There are some who treat their employees as well as they do their machinery, but there are others who will not raise a finger to help house their employees.
I received from the Department of Defence Production a publication which sets out the Canadian firms who have been receiving large defence orders during certain periods. This information is sent out every two weeks. I have examined two of them. One covers the period November 17 to 30, 1952 and the other the period from January 16 to 31, 1953. I find that in Toronto alone in the November period 20 plants could have qualified, and the same number could have qualified in the January period. The same thing is true of Montreal for the same two periods.
I shall leave Montreal for the Montrealers to deal with, but from October 1 to date only 11 plants in Toronto have asked to be designated as defence plants, and only 1,700 houses have been provided for employees under this plan of 10 per cent down with a 25-year amortization. The minimum should have been at least 5,000. The following plants have been declared as defence plants for housing purposes, and I indicate also the date of their certification, as follows;
Modern Tool Works Limited, Toronto, May 29, 1952; Instrument and radar division ot Canadian Arsenals, Leaside, July 7, 1952; Lucas Rotax, Scar-boro, July 17, 1952; Frigidaire Products, Leaside, August 14, 1952; Carriere and MacFeeters, Toronto, August 14, 1952; Scarboro Works of John Inglis Co., November 18, 1952; Fort Union Works, Canadian Johns-Manville Co. Ltd., Scarboro, November 18, 1952; Aluminum Goods Limited, Toronto, November 18, 1952; Avro of Canada, Malton, October 1, 1952; Small arms division of Canadian Arsenals, Ltd-Long Branch, December 18, 1951; Canadian Steel Improvement Ltd., January 26, 1952.

The A. V. Roe Company have given leadership in the field of housing in the Toronto area. At least 100 plants could have qualified. I do not like doing this, but I think it is the only way I can get any results. I have indicated that Frigidaire Products, Lea-side, were certified on August 14, 1952. Here is a plant engaged mostly in defence production work. On March 31 it had 113 employees; on June 30 it had 589; on August 31 it had 1,170 and on November 30, 1,550 employees. Although that plant was certified at its own request on August 14, 1952, it has not submitted the name of one employee. It refuses to co-operate or to make any deductions.
When we have a plant that started with 113 employees on March 31 and increased that number to 1,550 by November 30, are we to assume that every one of their employees is satisfactorily housed? Is there no man who needs a house? I feel that an employer of that sort is a menace to the vast majority of decent employers. I do not think it is too much to expect that industry should treat its employees with the consideration it shows its vehicles, machinery and tools. By refusing to co-operate, without any expense or obligation to themselves, they have deprived their workers of homes which they can afford and need and want, a display of human callousness unworthy of this day and age.
On February 13 Clarence B. Randall, president of Inland Steel in the United States, the high priest of capitalism, the man who led the fight against the president when he attempted to take over the steel industry, addressed the Empire Club in Canada, and I quote from the Toronto Star as follows:
Business' first responsibility was to develop human resources. Housing in new areas of industrial development was a legitimate charge against business, although the steel executive stated he felt management should not complicate its relations further by adding landlord-tenant responsibilities in built-up areas.
But plants must consider housing on a long range basis, otherwise many firms 15 years from now will be "strangled" by the shortage of housing in dense industrial areas, he said.
If industry will not face up to its social responsibilities, then there is only one thing to do. We must point out to labour that it has a new task to perform. Mr. A. R. Mosher, president of the Canadian Congress of Labour, speaking in Atlantic City on December 2 is reported as follows in the Toronto Star:
Mosher told the annual convention of the congress of industrial organizations that Canada had a "deplorable housing situation". The 400,000-member C.C.L. is a C.I.O affiliate.
"Many thousands of our families are without adequate shelter", he said, "and health is under-
68108-154J
The Budget-Mr. Croll
mined by lack of proper sanitary conditions in the living quarters of large numbers of our people, if you can describe their hovels by such a term."
I could quote a dozen labour leaders who have spoken in the same vein. Labour unions hold collective bargaining agreements in nearly all the large plants in the Toronto area. I suggest that the Trades and Labour Congress of Canada, the Canadian Congress of Labour and the Canadian and Catholic Confederation of Labour advise their locals of the easy terms that are available for the purchase of homes. They should also ask the employers to have their plants designated as defence plants and to notify Central Mortgage that their employees are anxious to purchase homes under the defence workers' housing act.
Surely there is more to labour's obligations than wages, working conditions and pensions. That cannot possibly be their ultimate goal. The government is prepared to build and sell good homes on easy terms with easy down payments. Labour must interest its members and must help create a demand. If they do that, not only will they provide housing for their people but they will rise in public esteem and responsibility.
On the other hand, if they do not want homes, the sooner we know that the better so we can direct our energies to some more fruitful field. The government has given labour political action, and it is up to labour to give us some social action. Legislation does not build homes, it only takes off the brakes. Here is an opportunity for labour to call the government's hand. The offer has been open now for over a year and there have been far too few takers.
We need the help of organized labour in order to give our workers the benefit of enlightened legislation which can be trans, lated into homes. Here are homes for the asking. My advice to labour is not only to ask but to insist that action be taken by employers. As I said, 100 could have qualified, and actually more than that could have qualified. Ten did qualify, but as I have indicated one has reneged. I do not believe it is true that industry cannot be bothered to deduct a monthly payment and send it on to Central Mortgage. I do not believe it is true that some industries do not wish to have their employees living close to their plants, that they prefer that they should not be too close together in order that they may meet and discuss their common problems and take common action.
I wonder sometimes, in the light of such irresponsibility, whether they are not too much interested in profits, or trying to be men of distinction, and have not time for the

The Budget-Mr. Hees
welfare of their employees. Does industry believe that their responsibility ends at the pay wicket? I can tell them that it does not in this day and age. That sort of mentality belongs to another day and is sometimes referred to as the station-wagon mentality-callous and hard. It is not only a menace to the welfare state, it is a menace to capitalism itself.
Well, I have spoken and my time is just about up. I have spoken in harsh terms of what I consider to be neglect where neglect should not exist. I feel that neglect of employees by defence plants is unsocial. They are very eager and very happy to obtain contracts from defence production, and we are very glad to let them have them. On the other hand, they must also bear some responsibility.
The offer to build houses for working people is the best that has ever been made in this country within my memory. They get better value than in anything a private builder can do for them, because they have the facilities of Central Mortgage and Housing working for them to make sure they get the best possible value and house. I want these people to take advantage of the offer. It is there. If they take advantage of it and it becomes popular the minister may then decide to extend it to other people so there will be thousands of homes built in this country for people who need them and who are not employed in defence plants.
I am asking industry and labour to reexamine their duties and their responsibilities; and to take action together in order to provide for employees homes which the government is ready and willing to build.
Does the government mean business? Well, let them call the government's hand and find out. I am satisfied that the government will do everything it has said it will do, and that they are as eager as anyone else to build not 1,700 houses for defence workers in Toronto but to build 2,700, 3,700 or 5,700, for as many as can qualify.


George Harris Hees: Mr. Speaker, when I was home over the week end I talked with many of the people in my riding, and I found that the general reaction to this budget is one of extreme disappointment and disillusionment because so little has been done to help the man with a small income, while the government has been very generous indeed to those with considerable means.


An hon. Member:: Another tale of woe.


George Harris Hees: I heard this budget described
as a "mink coat" budget, and I think that term pretty well fits it. Mr. Speaker, I
[Mr. Croll.l
think it is fantastic that regulations which this government has brought into effect make it possible for a man who does no work whatsoever and who derives his total income from dividends from Canadian corporations, to pay no income tax whatsoever-


Jean Lesage: But you know that is not true.


George Harris Hees: -on an income of nearly $10,000.


Gordon Knapman Fraser: But the minister said it was
true.	*


George Harris Hees: At the same time a man who
works for his living and who contributes materially to the productivity of this nation pays an income tax of nearly $2,000 on a similar income. I believe the privileges which this government has accorded to the gentlemen of leisure make very clear the meaning of the phrase "a social dividend" which the minister used in his budget speech the other night.
The people I represent find it hard to understand why no reduction was made in the sales tax. They feel that the sales tax is a regressive tax which hits poor and rich alike and completely disregards the principle of taxation according to ability to pay. They know that it affects practically everything they buy, and they believe that it should have been substantially reduced.
They also find it hard to understand why the 4 per cent limit on medical expenses, as a deductible item for income tax purposes, was not completely removed instead of being only slightly reduced. They know that last year parliament voted unanimously to abolish this 4 per cent limit on medical expenses as a deductible item for income tax purposes and, for that reason, they are at a loss to understand why it was not abolished in this budget.
The people I represent also believe that the tax reductions which we have received could have been far greater if this government had shown any interest whatsoever in eliminating the waste and extravagance which was typified by the Currie report. They know that the tax reductions we have been given are due solely to the increased productivity which is forecast for industry in 1953.
In short, Mr. Speaker, they know we have received tax reductions despite the waste and extravagance indulged in by this government, and not because of anything done by this government to eliminate that waste and extravagance.
Finally, I think we must remember that the government in making these tax reductions is only handing back to us one-tenth of what it took from us in overtaxation

during the past six years. During that time, the average Canadian family of five has paid in taxes to the government over $750 in excess of what the government needed to pay for all commitments it was called upon to meet.


An hon. Member:: What about debt?


George Harris Hees: This family has been handed
back, just before the election, a mere $75, or $1 for every $10 the government took which it did not need. It means that we have been handed back 10 cents out of every dollar of overtaxation which has been extracted from us, and it seems to me that 10 cents or a dime is getting pretty close to that five cent piece which figured so prominently in the defeat of another Liberal government.
Like the member for Spadina (Mr. Croll) I was very disappointed that we did not hear anything in the budget to help the desperate housing situation in which we find ourselves today, and I would like to deal briefly with it.
According to the report of the dominion bureau of statistics, 73,087 new houses were built in Canada during 1952. I suggest that we examine that performance in the light of the new houses which this country needs, and the new houses which the construction industry of Canada is capable of producing. First of all, I should like to deal with the need.
On page 12, clause 17, of the report of the advisory committee on reconstruction, known as the Curtis report, dated March 24, 1944, we find that the total urban housing backlog in 1944 was estimated to be 320,000 units. Since that time we have built 660,000 houses, but we have also added 710,400 new families to our population. The backlog of housing has increased, therefore, by 50,000 units during the last eight years. This figure does not even include the houses which should have been replaced because of obsolescence.
On page 12, clause 19, of the Curtis report, it is estimated that the number of houses which should be replaced each year because of obsolescence is 13,500 units. Between 1944 and 1952, therefore, the total number of houses which should have been replaced because of obsolescence amounted to 121,500. Now, if we add that to the 320,000 backlog which accumulated prior to 1944, and the
50,000	surplus of new families over housing construction between 1944 and 1952, we arrive at a total housing backlog in this country of 492,000 or let us say half a million houses which are needed in Canada and which have not been built.
The Budget-Mr. Hees
Now, I should like to examine the possibilities for additional construction of houses in Canada. I think we should see what the leaders of the construction industry have to say about this possibility.
Mr. P. G. Wilmut, president of the Canadian construction association, in his presidential address to the association in Montreal on January 19 last said that the construction industry should aim at producing up to
125.000	houses a year. He said that the construction industry should consider this a normal, minimum target. This opinion is concurred in by the Canadian house builders' association.
While speaking to the American marketing association in Toronto on September 17, 1951, Mr. Firestone, the economic adviser to Central Mortgage and Housing Corporation, said that the productive capacity of the Canadian construction industry could conceivably rise to 130,000 houses a year.
From this I believe that two things are apparent. First of all, we have a backlog of unbuilt but needed housing amounting to half a million houses; second, the potential pioductive capacity of the construction industry, which has been estimated by those who are best able to estimate it, is anywhere from 125,000 to 130,000 houses per year.
Yet we find, Mr. Speaker, that in the year just passed we built only 73,087 houses. This figure is 20,000 fewer than the number of new family units formed during that year. If we add the 13,500 houses which became obsolete and should have been replaced during that year, we And that we have built
33.000	fewer houses than we needed during the past year. I believe that this situation is particularly shocking when we realize that we have a potential productive capacity of between 125,000 and 130,000 houses per year, or about 70 per cent greater than the number of houses we built during the last year.
I feel that we must ask ourselves what has brought about this shocking situation. I believe it is due to three causes. First of all, it is due to the inability of municipalities to provide serviced land. Second, it is due to the high down payment, which makes it impossible for a man with a modest income to buy a new house. Third, it is due to the high interest rate and the short amortization period of N.H.A. housing loans which make it impossible for a man with a moderate income to carry the charges on a new house.
I should like to deal with each of these in turn. First of all, I shall deal with the question of serviced land. Most municipalities simply do not have the financial resources necessary to meet the cost of schools, roads,
2412	HOUSE OF
The Budget-Mr. Hees
water mains, sewers and other local improvements which are necessary to the building of new houses. For that reason, many municipalities do not encourage the building of new houses, and they very often forbid the construction of new houses in their localities.
In order to overcome this and many of the other difficulties which municipalities are encountering today, the Leader of the Opposition (Mr. Drew) suggested a course of action while speaking in this house on November 24 last, as recorded at page 33 of Hansard. On that occasion he urged the federal government-	'
-to each agreement with the provincial governments in regard to a clearly defined re-allocation of taxing powers so that the provincial governments and municipal councils may have adequate financial resources to carry out their rapidly increasing responsibilities.
I believe that if this suggestion is followed by the government, the municipalities will be provided with sources of revenue from which they can finance the improvements which must be provided if new houses are to be built. I think it is obvious that we simply cannot build new houses unless the land is made available by the municipalities. Under present conditions municipalities have been reluctant, and as I have said, have often been completely unwilling to allow the building of new houses within their boundaries.
Secondly, Mr. Speaker, I should like to deal with the 20 per cent down payment which is now required on N.H.A. housing. The cheapest house that one can buy today through the Central Mortgage and Housing Corporation costs $10,000, which means that the prospective buyer must find $2,000 in cash before he can purchase a new house. In order to accumulate that $2,000, this man must earn at least $5,000 a year for at least four years. This means setting aside 10 per cent of his income for four years in a row, which I believe we will all agree is no mean feat.
For that reason I believe we will agree that a salary of $5,000 a year is the minimum on which this down payment can possibly be raised. I therefore believe that by following its present policy the government is rationing housing by the purse, and is making it virtually impossible for those with an income of less than $5,000 a year to buy a new house. After all, those are the people who need new housing most.
The government in the United States has taken a far more realistic attitude toward


this problem than has our government here. In the United States, the federal housing authority have set their down payment on a sliding scale, starting at 5 per cent, or $350 on a $7,000 house. When the value of the house is increased to $10,000, the down payment is increased to 12J per cent, or $1,250. This sensible policy which the United States government has adopted has made it possible for those with low incomes to buy new houses, and I believe that it is worthy of serious consideration by this government.
Finally, Mr. Speaker, I should like to deal with a third obstacle in the way of those who want to buy new houses in Canada today. It is the 5| per cent interest charge on National Housing Act mortgages, and also the 20-year period within which those N.H.A. mortgages must be paid off. The combination of those factors puts the monthly carrying charges on a new house beyond the reach of a man with a modest income.
Once again, the United States government has taken a more practical view of this problem, and has made mortgages available at rates as low as 4 per cent. There, the regular amortization period is 25 years, and in many cases this period is extended to 30 years. These more generous terms have made it far easier for a man on a small income to buy a new house in the United States than is the case in Canada today. Once again, I believe that this policy merits serious consideration by this government.
In view of the far better housing effort in the United States owing to a more realistic housing policy, and in view of the fact that housing production in this country is falling farther behind demand every day, I believe there is no justification whatsoever for the obsolete and reactionary housing policy which this government is following. If the government persists in following its present policy, the present alarming housing shortage will continue to grow worse every day and families with four and five children will continue to live in one room for which they pay as high as $60 a month rent simply because they can find no other place in which to live.
Mr. Speaker, I believe that these conditions cannot be allowed to continue in a country which prides itself on having the highest standard of living in the world. I therefore urge this government to reconsider its housing policy in the light of three things; first, the present housing shortage which is increasing day by day; second the

ability of the construction industry to build far more houses than are being built at the present time, if given an opportunity; and third, the success which has been achieved in the United States, where practical housing policies have made housing available to the families which need it most.
As it is about one minute to six o'clock, Mr. Speaker, and as I have considerably more to say, I would ask whether we could call it six o'clock.
The Budget-Mr. Hees


Mr. Riley:: It is three minutes to six.


An hon. Member:: Go ahead.
On motion of Mr. Hees the debate was adjourned.



BUSINESS OF THE HOUSE

Stuart Sinclair Garson: Tomorrow we shall continue the same debate.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, February 26, 1953