1953-03-05

[Stage Direction]
Mr. L. Langlois (Gaspe) presented the first report of the special committee on the Post Office Act, and moved that the report be concurred in.
Motion agreed to.

Mr. Matthew MacLean (Cape Breton North and Victoria) moved: that the third report of the standing committee on standing orders, presented to the house on Tuesday, March 3, be concurred in.


[Stage Direction]
Motion agreed to.


Hon. Stuart S. Garson (Minister of Justice):: Mr. Speaker, Canada has dispatched a detachment from the Royal Canadian Mounted Police to all jubilee and coronation celebrations beginning with Queen Victoria's diamond jubilee in 1897. In that year a detachment was included in the Canadian contingent, and the same action was taken at the coronations in 1902, 1911 and 1937. This year the Royal Canadian Mounted Police will provide a full mounted troop which will lead the Canadian contingent in the coronation procession. It will also provide a mounted escort for the carriage of the Prime Minister in order to conform to the practice to be followed by the prime ministers of the commonwealth. The force will also supply four mounts for the officers of the Canadian army forming the Canadian element of the Queen's commonwealth escort, and a mount for General H. D. G. Crerar, who will ride in the procession in his capacity as honorary aide-de-camp general to Her Majesty.
This year, in addition to the actual participation in the coronation parade, the troop is training as a musical ride, and has been invited to appear at the royal tournament at Olympia in the presence of Her Majesty the Queen. They will also appear 68108-1681
at some outstanding agricultural fairs in the United Kingdom. Just what engagements the troop can fulfil has not been finalized, but it is clear that there is a very considerable demand for its attendance, and it is proposed to accept as many engagements as can be filled between the date of the coronation and the return sailing date of July 7, 1953.



INVITATIONS TO HOLDERS OF VICTORIA CROSS

[Stage Direction]
On the orders of the day:
Mr. L. E. Cardiff (Huron North):: Mr. Speaker, I would like to address a question to the Prime Minister (Mr. St. Laurent). I understood that an invitation to attend the coronation was to be extended to all those who received the Victoria Cross in the last two wars. Have the invitations been sent to all those men holding the Victoria Cross?
Righl Hon. L. S. St. Laurent (Prime Minister): I will have to take the hon. member's question as a notice and make inquiries from the office that is handling the matter.



QUESTIONS


THE CORONATION


Mr. Balcer:: 1.	Are any Canadian horses being sent to Britain for the coronation at public expense?
2.	If so, how many?
3.	What is the estimated cost and how is this cost
made up?
4.	From what part of Canada are these horses being shipped?


Stuart Sinclair Garson: In conjunction with the statement I have made today with respect to participation of the Royal Canadian Mounted Police in the coronation, I should like to give the following answers to the hon. member's question No. 17 on today's order paper. The answer to question No. 1 is yes. The answer to question No. 2 is 46. With respect to question No. 3, the estimated cost is $31,649.84, made up as follows: Transportation, Ottawa to London and return, $29,414.24; feed for 81 days, $2,235.60. The answer to question No. 4 is Ottawa, Ontario.



PEAT DEPOSITS, NORTHUMBERLAND COUNTY, N.B.

Mr. McWilliam:: Has the Department or Resources and Development. or any other department of government, data

Questions
concerning peat deposits at or near Escuminae, Northumberland county, New Brunswick?


Mr. Prudham:: Yes.



DEFENCE PRODUCTION


Mr. Robichaud:: In connection with defence production contract for wooden boxes, No. R-20-H4-9OA:
1.	When were tenders called for the above mentioned contract?
2.	What are the names, addresses and amounts tendered, by each and every tenderer?
3.	Has this contract been awarded yet? If so, to whom?


Mr. Dickey:: 1.	January 28, 1953.
2.	It has been the policy of this department to publish details of the successful tender only.
3.	No.



TOOLING EXPENDITURES, ORENDA ENGINES AND CF-100 AIRCRAFT

Mr. Fulton:: 1.	Does the $38,785,500 total expenditure on
production of the 96 Orenda engines delivered to December 31,	1952, include $15,029,350 expenditures on tooling, or is this latter figure additional to the former?
2.	Does the $59,803,000 total production costs of the 16 CF-100 aircraft delivered to December 31,
Halifax, N.S	  2,877
Saint John, N.B	 480
Quebec, P.Q	 5,827
Montreal, Que., (including airport)	389
Vancouver, B.C. (including airport)	375
1952, include $15,882,450 for tooling expenditures, or is this latter figure additional to the former?


Mr. Dickey:: 1.	The tooling expenditure is additional to the production expenditure.
2.	The tooling expenditure is additional to the production expenditure.



AERO MAGNETIC SURVEY MAPS


Mr. McWilliam:: 1.	Are aero magnetic survey maps available for all areas of Northumberland county, New Brunswick?
2.	If not, when will they be available?


Mr. Prudham:: 1.	No.
2.	Of the portion of the county surveyed, five maps have been issued, three will be issued in one month, and three are in the preliminary stages of preparation.



IMMIGRANTS ENTERING CANADA

Mr. Brooks:: How many immigrants entered Canada, during the years 1939, 1949, 1950, 1951 and 1952, through the following ports, respectively: Halifax, Saint John, Quebec, Montreal and Vancouver?


Mr. Harris:: 1949	1950	1951	195245,782	30,865	93,840	71,305445	1,878	6,086	5.14324,661	20,414	51,676	45,3145,435	2,111	11,652	10,255815	660	1,473	2,236



NATIONAL HEALTH GRANTS TO ONTARIO

Mr. MacKenzie:: What financial assistance has been provided, year by year, by the federal government under the national health grants program to the province of Ontario, for (a) the training of mental health personnel; (b) the development of mental health preventive services; (c) the development of mental health treatment services?


Mr. McCusker:: (a)	Assistance provided to the province of Ontario for the training of psychiatrists, psychologists, psychiatric social workers and psychiatric nurses is as follows:
1948-	49
1949-	50
1950-	51
1951-	52
1952-	53
$ 49,178 116,462 220,985 176,181 154,285*

(b)	Assistance provided towards the development of preventive mental health services at mental health clinic, Hamilton; mental health clinic, township of York; psychiatric service, Victoria hospital, London; child guidance clinic, Windsor; mental health clinic, Sudbury General hospital; psychiatric unit, Ottawa General hospital; psychiatric clinic, Ottawa Civic hospital, is as follows:
1949- 50	 $ 25,328
1950-	51	
50,0471951-	52	
72,8611952-	53	
120,293*Total	
$268,529(c)	Assistance provided towards the development of treatment services in Ontario hospital, Langstaff; Ontario hospital, Fort William; Ontario hospital, Toronto; Ontario hospital, Brockville; Ontario hospital, New Toronto; Ontario hospital, Penetanguishene;Total	

Ontario hospital, Hamilton; Ontario hospital, Woodstock; Ontario hospital, Kingston; Ontario hospital, London; Ontario hospital, St. Thomas; Ontario hospital, Whitby; Ontario hospital, Aurora; Toronto psychiatric hospital, Toronto; Toronto General hospital (Wellesley division), Toronto; hospital for sick children, Toronto; Ontario school, Smiths Falls; Ontario hospital school, Orillia, is as follows:
1948- 49	
$	4001949-	50	
33,1141950-	51	
25,1381951- 52	
420,4471952- 53	
462,303*Total	
$941,402
(*Actual to January 31 plus estimate for February and March)



WAR VETERANS ALLOWANCE RECIPIENTS

Mr. Brooks:: 1.	How many	(a)	veterans;	(b)	widows	ofveterans; (c) orphans, are receiving allowances under the	War	Veterans	Allowance Act, as	of
March 1, 1953?
2.	How many veterans receiving war veterans allowance have taken advantage of section 4, War Veterans Allowance Act, as of March 1, 1953?


Mr. Lapoinle:: Figures for month of February, 1953 are not yet available; the answers are provided as of February 1, 1953:
1.	(a) 29,998; (b) 10,261; (c) 158.
2.	258.



QUESTIONS PASSED AS ORDERS FOR RETURNS


NATIONAL DEFENCE


Mr. Macdonnell (Greenwood):: 1.	What are the names and addresses of all persons, business or companies, engaged by any branch of the Department of National Defence and/or Defence Production since January 1, 1950, for the purpose of repairs, maintenance, alteration, overhauling, storage or inspection of motor vehicles, where the amount paid by the department concerned was more than $1,000?
2.	What were the total payments made in each case?



P.W.D. DREDGE 110

Mr. Fulton:: 1.	What are the particulars of the item for P.W.D. dredge No. 110 and miscellaneous equipment sold to Marine Industries Ltd., for $5,100, as surplus crown assets, as shown at page 20 of the Crown Assets Disposal Corporation report for 1950-51?
2.	What was the original cost of acquisition of this item?
3.	Were tenders invited for the purchase of this item?
Orders for Returns



OTTAWA-BUILDINGS SOLD AS SURPLUS CROWN ASSETS

Mr. Fulton:: 1.	What are the particulars of the buildings and appurtenances at Elgin and Argyle streets, Ottawa, sold to C. E. Bouchard, for $10,000, as surplus crown assets, as shown at page 21 of the Crown Assets Disposal Corporation report for 1950-51?
2.	What was the original cost of acquisition of these buildings and appurtenances?
3.	What had they been used for?
4.	Were tenders invited for the purchase of these items?



ADVERTISING AGENCIES, BRITISH COLUMBIA  FEDERAL EXPENDITURES

Mr. Diefenbaker:: 1.	What is the total amount of expenditure by the federal government to advertising agencies in British Columbia, during each of the fiscal years, 1949-50, 1950-51, 1951-52, and to February 28, 1953?
2.	Of this amount, how much was received by O'Brien Advertising Limited of Vancouver?



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Arthur Laing (Vancouver South):: Mr. Speaker, I would like to address a question to the Minister of Labour in connection with the grain handlers' strike on the Pacific coast. In the event of a joint request of management and labour, would he be prepared to appoint a mediator, and would he be prepared to bring the house up to date on the latest events in the dispute?


Hon. Milton F. Gregg (Minister of Labour):: I thank the hon. member for having given me warning of this question.
I should add that the hon. member for Kindersley (Mr. Larson), the hon. member for Vancouver East (Mr. Maclnnis), as well as others from the wheat growing and wheat shipping points of western Canada, have shown concern over this matter.
It would be fair, I think, to both parties in the dispute to reply that they have taken the position publicly that they are willing to negotiate at any time with a view to settling the dispute. The union has addressed a letter to such effect, I understand, to the Vancouver representative of my department in connection with an offer of mediation by a Saskatchewan farm union council. Counsel acting for the grain companies has stated to third parties that the companies are prepared to consider any new proposals by the men and that mediation by any other agency than my department would serve no good purpose as such outside agency would have no knowledge of the background of labour relations and the present position of the parties.
2636	HOUSE OF
Inquiries of the Ministry
Hon. members, I think, must keep in mind that my department has already provided in this dispute all available conciliation services, and, in fairness to my officers, I must say that any indication by the parties to them that further mediation by my department is desired has been so indirect as to constitute no real approach for further assistance.
We are, however, in spite of that, watching this situation closely and will be happy to intervene again at the first sign that such intervention will bear fruit.



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. Leon Balcer (Three Rivers):: I would
like to direct a question to the Minister of National Revenue. My question is: Will the government consider amending the income tax regulations so as not to impose income tax on contributions to the Quebec education fund.


Hon. J. J. McCann (Minister of National Revenue):: Mr. Speaker, although the hon.
member for Three Rivers (Mr. Balcer) was good enough to give me notice of his question, I wish to defer answering it until such time as I have had an opportunity of conferring with my colleague, the Minister of Finance, and with my own officials.



INTERNAL SECURITY


[Stage Direction]
On the orders of the day:
Mr. Henri Courlemanche (Labelle):: I
would like to direct a question to the Minister of Justice (Mr. Garson). Can the minister confirm or deny the statement of Mr. Pat Walsh that the chief communist school operating in the province of Quebec is located at or near L'Ascension, in Labelle county? If this statement is true, does the Minister of Justice plan to take any action respecting this school?


Stuart Sinclair Garson: In reply to my hon. friend, may I say that the hon. member for Portneuf (Mr. Gauthier) on February 27 last asked me a question based upon a statement made by Mr. Walsh. To the answer which I gave the hon. member for Portneuf on that occasion I have nothing further to add at this time.



INQUIRY FOR RETURNS


[Stage Direction]
On the orders of the day:
Mr. F. E. Lennard (Wentworth):: On January 28, Mr. Speaker, a number of questions standing in my name were passed as orders for returns. I should like to ask the parliamentary assistant to the Minister of Defence Production when I might expect an answer to some of those twenty questions.


Right Hon. C. D. Howe (Minister of Defence Production):: Mr. Speaker, I think the position of the department should be stated. I presume that we have the largest staff of any department engaged in dealing with questions and orders for returns. I point out that this department was formed towards the end of 1950. Many of the questions go back far beyond that date, and I believe that applies to the orders for returns of the hon. member. The answers to these questions entail a good deal of research. We have buying officers in every part of Canada, in London and the United States. When we are asked about general purchasing, we have to get reports from all these agencies.
It is the policy of the department to give first priority to answering questions which come from the committee on defence expenditure. I think hon. members will realize that that is an active committee and entitled to get information just as fast as it can be prepared. The second priority is given to answering questions asked here in the house. We cannot do the impossible. In between answering questions and looking up data to prepare orders for returns, the senior members of our staff are required to carry on the day to day activities of the department. I may say that our department is not overstaffed and our responsibilities are heavy. It may be good fun for some of our junior members to pile questions on the order paper, and while they are entitled to their fun we can only do the best we can in answering them. We are doing just that. I cannot promise when the orders for returns will be answered.


Mr. Fulion:: When we get around to it; that is what you said yesterday.


Frank Exton Lennard: First, I want to say that none of my questions were funny, though they might be a bit embarrassing.


Mr. Speaker:: Order.


Frank Exton Lennard: 

THE BUDGET


[Stage Direction]
The house resumed, from Wednesday, March 4, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Greenwood), and the amendment to the amendment of Mr. Coldwell.
(Translation):
Mr. Raoul Poulin (Beauce):: Mr. Speaker, when I requested the adjournment of the debate at six o'clock last night, I was saying that the Canadian people will be rather poorly rewarded for redoubling their efforts during the last year since they are being asked to pay in taxes, during 1953-


Mr. Speaker:: Order.


Raoul Poulin: -during the year 1953-1954, $335 million more than they paid during the fiscal year 1952-1953.
I	would now like to resume my speech by adding that, in my humble opinion, in order to reward the Canadian people the government should have avoided increasing the amount of taxes they will have to pay next year. I must add that the Minister of Finance (Mr. Abbott) did not apply the reductions in rates in the best possible places. For instance, the 11 per cent reduction in the individual income tax rate will benefit a class of people who are undoubtedly worthy of compassion and brings them a small measure of relief that will be welcome, but, just the same, the class of people to which it applies is not the poorest. There is another and even poorer class which would only be happy to be able to pay a little income tax. To that class of people, the minister has brought no relief whatsoever; I am referring to small labourers, farmers, at least small farmers, settlers, the sick, the crippled, and to all those who, for one reason or another, earn barely enough to feed themselves miserably and to dress and house themselves even more miserably. Still, it would have been possible to grant them some relief, by reducing the general sales tax which will yield next year, according to present forecasts, $590 million. A rate of 6 instead of 8 per cent, for instance, would have represented a saving
The Budget-Mr. Poulin of $150 million, and everybody would have benefited by it, the poor as well as the rich.
As a matter of fact, the public is wondering whether this budget will be the last before a general election.
Should this not be the case, I wonder if the Minister of Finance would not be well advised to lend an ear to my humble suggestion so as to implement it in his next budget which, of necessity, would be the last before the great adventure! Alternatively, there would be another measure with an almost similar effect and which would benefit everyone, or at least all those families with children-the very group which we should protect more than any other-and that would be to increase the family allowances to a level more or less proportionate to the rise in the cost of living we have experienced since this excellent social measure was introduced in this country.
And this brings me to say that, to my mind, the state does not give sufficient practical recognition to the importance of the part played by the family in our Canadian society. I can of course well imagine what some people will say to that: "But what of family allowances or income tax exemptions which increase with the number of children?" Now, it will be noticed, first of all, that I have not said that the state refused to recognize the part played by the family. I claim, however, that this recognition is not tangible enough.
Nowadays, every thinking person-thank God, there are still many, and fortunately even in our parliaments-wonders anxiously what means should be taken to provide the community with the well-trained subjects it needs so much. And yet, the answer is there, the machinery exists. It merely needs to be activated, improved and applied fully. This machinery, the only one which, to my mind, can be utilized, is the family to which the state should give all the necessary help and protection. The distinction is not sufficiently clear-cut in our fiscal methods, between families with children and those who have none or only a few; the former are in a state of inferiority compared to the latter. As the number of children increases, so does this disadvantage.
In the case of income tax, for instance, the amount of the exemption for each child is absolutely inadequate and illusory, and should be increased. Let us take, for instance, the case of a head of family who is the sole supporter of a household comprising a wife and
2638	HOUSE OF
The Budget

Mr. Poulin 5 children, or, sometimes, 8 or 10 children. Who will believe that family allowances or the lowering of income tax rates, if he pays income tax, will compensate for the amount he will have to pay in the form of excise tax or sales tax, since he has to foot the bill for 5, 8 or even 10 consumers? That, I believe, is a serious mistake which it is urgent to correct if the government wants to show that it really has faith in that sacred institution, the Canadian family.
In another chapter of his statement, under the title "Federal-Provincial Relations", the hon. Minister of Finance said, as reported at page 2130 of Hansard:
Of course the extent of federal taxes does make substantial tax increases by provincial governments more difficult. No royal commission is needed to discover this truth.
The minister was undoubtedly referring to the commission of inquiry just set up by the Quebec government.
The field to be covered by that commission is quite extensive. It will not limit itself to finding out whether it is difficult for Quebec to increase taxes further, as might be implied by the rather pungent innuendo of the hon. Minister of Finance.
That commission will inquire fully, at least I hope so, into the matter of fiscal relations between the federal government, the provinces and the municipalities; it should then be in a position to make suggestions acceptable to all concerned, which would precisely permit the correction of the present state of affairs.
Might it be, perchance, that the minister would want to limit the commission's field of activity? Would he have us believe that the province of Quebec must accept what has already been done and welcome any proposal made by the central power? If such is the case, the minister may have to sing a different tune one of these days.
The hon. member for Montmagny-L'Islet (Mr. Lesage), for whom I have much respect and whose talent I appreciate, has asked more than once since last year, of what taxation rights the federal government had deprived the provinces? The answer is that of course the federal government has not taken the rights themselves, since it cannot do so, but it has taken the taxes, the money, and that is the reason why the minister, whose worthy assistant he is, said in his speech that it would not be easy for Quebec to increase her own taxes. The federal gov-


ernment has not drained out the spring, but it has taken almost all the water, which amounts to the same thing.
Now, the minister having mentioned the Quebec royal commission on constitutional matters, it may be in order to quote here an appreciation which may be found in UAction Catholique for February 23, 1953, in an article entitled "Researchers worthy of their task", over the signature of Mr. L. T. Roy, editor-in-chief. I quote:
When the provincial government decided to implement the suggestion made by the chambers of commerce and to institute an inquiry into constitutional problems, there were some skeptics who doubted the seriousness of that suggestion. The act setting up the commission only reassured them to a limited extent. In other words they were waiting for the designation of the commissioners to form a definite opinion.
Now that these have been named, it is extremely difficult indeed not to find this choice excellent. Along with many others, this paper had expressed the wish that the persons chosen should be both competent and detached from politics. There is no possible doubt about the matter, this wish has been fulfilled.
With such commissioners the investigation into constitutional problems will most certainly be serious and the report which will result therefrom will no doubt be authoritative.
This at least holds out some hope that, at the next federal-provincial conference, if it is held, Quebec will have some concrete proposals to submit and its position will thus be strengthened.
There is no need for a royal commission, the minister said. Not any more, indeed, than there was need for the Massey-Levesque commission to establish a learned distinction between education and culture and to recommend that the central government should go still further in its encroachment upon the field of education. Not any more, I presume, than there was need for a Rowell-Sirois commission to recommend fiscal centralization.
No need for a royal commission? And yet, the federation of chambers of commerce of the province of Quebec came to Ottawa, on February 25 last, to remind the government that there would be one.
What is more, it told the Minister of Finance and the government that they should take its recommendations into account at the federal-provincial conference it has asked them to call.
However, Mr. Speaker, 1 would be unfair if I did not have a word of praise for the Minister of Finance, that is for the good and reasonable features of the budget he recently brought down.

For instance, I find excellent the tax credit allowed in respect of corporations operating in the provinces which have not signed a tax rental agreement with the federal government. Such a tax credit places corporations in our province on the same basis as those operating in other provinces and does away with a policy of discrimination. I thank the minister for that intelligent and commendable move, even if some smart people pretend to see in it a coarse appetizer placed on the table of the great electoral banquet which is near at hand.
As for the radio licence, it is a nuisance which is disappearing but I am not sure that this new 15 per cent tax on radios and their various components-tubes included if I am not mistaken-will not actually impose on radio users a financial burden which may equal or even sometimes exceed the amount of the former licence.
I also thoroughly approve of the discontinuance of stamps on cheques and other instruments. I must admit however that all this will profit but very little the farmer or worker with a small income. As I said at the outset, I am delighted with the 11 per cent income tax reduction; however, I contend that a more practical formula might have been adopted in this field. In my humble opinion, before granting this reduction-or better still, instead of granting it-the government could perhaps have raised the basic exemptions to $2,000 for the single person and to $3,000 for married men.
I also welcome the government's decision to grant a $400 exemption for each child over 21 who pursues special studies.


Mr. Lesage:: Will the hon. member allow a question?


Raoul Poulin: Yes.


Jean Lesage: Is the hon. member not aware that by bringing the level of exemptions to the figure just mentioned by him, our revenues for the current fiscal year would decrease by $425 million, apart from the annual reduction of $155 million already announced in the budget speech with regard to personal income tax?


Raoul Poulin: I can well imagine, Mr. Speaker, that it would mean a considerable loss to the federal treasury. But, if the government, despite the generosity of its intentions, had found the $3,000 maximum too high, could it not have granted an exemption of $2,500? Thus the loss would have been less considerable.
The Budget-Mr. Poulin
Besides, I indicated yesterday, I hope the parliamentary assistant to the Minister of Finance (Mr. Lesage) has not forgotten, the cuts that could have been made in order to grant relief to the Canadian taxpayer. I do not deem it necessary to go into that -.gain.
Besides, the hon. member for Montmagny-L'lslet, who is also parliamentary assistant to the Minister of Finance, surprises me very much. Just now I offered him my best congratulations and I thought I had succeeded in drugging or chloroforming him, but I see that he is livelier than ever. Maybe he is one of those patients who are not easily put to sleep by anaesthetics, or maybe he is still in the early phase of anaesthesia which is called excitement phase.


An hon. Member:: Hear, hear!


Mr. Rochefort:: Provincial anaesthesia?


Raoul Poulin: I can see no difference between provincial and federal anaesthesia.
Let us say, without malice of course and without labouring the point, that the budget would be worse without those features. I say "without labouring the point", because I know that the government's sympathizers will be more than apt to do the labouring.
And now, Mr. Speaker, before I conclude these remarks I want to say a few words on a subject which I believe comes under the authority of the Minister of Finance, the printing of bilingual old age pension cheques to be distributed everywhere in Canada.
Bilingualism is officially recognized in our country.
We already have bilingual money, not only in the province of Quebec, but everywhere in Canada. Objections were made at first but who dares complain now?
We are using bilingual stamps everywhere in the country. Has this done any harm? These past few years, family allowance cheques, and more recently, old age pension cheques have been bilingual, in the province of Quebec only. Has there been a single citizen in Quebec, out of four million people, to protest? Nobody in the province of Quebec-I insist on that point-has been offended because English words appeared on the cheques which have been distributed in that province, even though the French element represents nearly 85 per cent of the population. Why should citizens in other provinces be offended at the sight of French on their own cheques? Would that prejudice
2640	HOUSE OF
The Budget-Mr. Poulin someone in any way, except perhaps a few employees who, through fanaticism and intransigence, are tarnishing the reputation of tolerance and broadmindedness of which the vast majority of the Canadian people, whatever be their racial origin, are justly proud.
Those responsible for such a state of affairs should remember that there are more than four million citizens of French origin in Canada, including one million outside Quebec, who are entitled to treatment equal to that given Canadians of English origin.
It seems evident that in our country, where two great races are intermingled and are called upon to live side by side, where there is neither victor nor vanquished, it is desirable that there be an atmosphere of mutual confidence and respect. In my humble opinion, such confidence and respect cannot [DOT]exist unless each of our two great races gives to the other all possible means of enjoying fully its rights and privileges.
This is an excellent occasion for the most numerous ethnical groups in this country, as well as for the government, to grant to one of those two races the enjoyment of a right- and not a privilege-which would entail no sacrifice whatsoever for the other group and not the least difficulty for the government.
Truly, I ask you, Mr. Speaker, why should it be more difficult for the government to issue bilingual cheques than for the Bank of Canada to issue bilingual notes? As a matter of fact, there is no such difficulty, because the cheques for the province of Quebec are already printed in both languages. All that is necessary to implement that recommendation is a little understanding and good will, of which, fortunately, increasing examples are to be found among the majority group in Canada.
And not only pension cheques, but all cheques issued by each and every department of the federal government should be bilingual.
This is, in my humble opinion, an opportunity for this government to correct a situation which is abnormal in a country like ours.
This might also give the Minister of Finance food for thought. I know he is intelligent, extremely gifted and well intentioned. He is from the province of Quebec and consequently, even though I hardly expect from him an immediate reaction, I am convinced that, deep down, he must admit the reasonableness of my request. In any event, he sets us an example since he is himself perfectly bilingual. It is said of him that he might possibly, some day, become the Liberal party leader. Such being the case, the prov-

ince of Quebec could not help but be grateful to him were he to make this gesture, inspired by the most genuine Canadian patriotism.
Consequently I have no doubt that it will be agreeable and possible for the government to lend an attentive ear to my humble suggestion, a suggestion which I have put to him at the request of several thousand citizens of the constituency of Beauce which I have the honour of representing here.
(Text):


Mrs. Ellen L. Fairclough (Hamilton West):: Mr. Speaker, there are several matters I should like to discuss in this budget debate, but before doing so I will make a few observations about comments already made by other hon. members who have spoken. I would refer first of all to some examples given on February 27 by the hon. member for Vegreville (Mr. Decore). As reported at page 2465 of Hansard he made reference to the married man with two dependents and earning $2,400 a year, and stated that this taxpayer is paying only $15.
In the first place that is wrong because the hon. member, had forgotten the 2 per cent social security tax, which brings this man's tax up to $17. However, I do not know that I would stress that as an objection to his observations. The particular exception I take is to the word "only". Particularly is this so when the treatment received by this man is compared with that received by another man in the same circumstances-married with two dependents-and with an income of $10,000, received entirely from investments. This man would pay nothing, not even the social security tax, because on the $10,000 he would have a tax of $1,582, and he would then add $60 as social security tax, bringing the whole tax up to $1,642. May I comment at this point that the 2 per cent tax would be $200, of course, if the whole amount were applicable. But because of the ceiling of $60 having been placed thereon, he would be charged only at that rate.
Even so, the 20 per cent rebate on dividends given to him not only completely wipes out this amount of indebtedness, but would allow him to make even more than $10,000 before he would have any tax whatever to pay.
In this connection I should like for a moment to refer to some observations made by the hon. member for Montmagny-L'Islet (Mr. Lesage) the other afternoon when, referring to this provision, he said:
-there must be very few taxpayers, if any, whose tax liability would be cancelled by the 20 per cent tax credit on dividends.

Well, as the hon. member says, there may be very ffew. But according to the figures of the Minister of Finance (Mr. Abbott) presented in his budget speech there is $20 million worth of tax relief given to people whose incomes are from dividends paid by tax-paying Canadian corporations.
It would seem to me therefore that if this relief can be given to these people, then it should have been possible to give at least some measure of relief to those in the lower income brackets by way of increased exemptions, or it should have been possible to do something in respect of medical expenses. I shall make further reference later to medical expenses but, at the moment, I should like to revert to what was said by the hon. member for Vegreville. He made further reference to a man with a wife and two children, having an income of $3,000, and estimates his tax at $205. I think perhaps he did not say that, because the actual amount is $105. I would suppose that is an error in printing. But, of course, to the $105 he would still have to add his social security tax of 2 per cent, or $14, bringing the amount up to $119.
True enough, the man who makes $3,000 would probably receive family allowance payments for children amounting anywhere from $120 to $192 a year, depending upon the age of the children.


Jean Lesage: The average is $146.


Ellen Louks Fairclough: I said anywhere from
$120, at the lowest age up to $192, if both children happen to be over 13 years of age. In this connection the hon. member said:
In fact the so-called little man gets a bonus, if you want to put it that way, from the government of some $45 for that year.
Well, let me ask what the man receiving $10,000 a year gets. He gets exactly the same thing. He, too, has two children. The family allowances to him are exactly the same as those to his brother who receives only $3,000 a year.


Mr. Blue:: Why should they not be?


Ellen Louks Fairclough: I did not say they should not be. I am merely pointing out that the situation is exactly the same. The man receiving $10,000 gets exactly the same family allowance as the man in the $3,000 bracket; and if his income is entirely from investments in Canadian corporations he pays no income tax whatever.


Donald Buchanan Blue: Very smart.


Ellen Louks Fairclough: What is frequently overlooked is the fact that, in benefiting by family allowances, the average taxpayer is
The Budget-Mrs. Fairclough precluded from taking his complete allowance of $400 for a dependent child, and is allowed only $150 for that child. In other words he forfeits $250 in exemption for each child in the age group up to 16 years, whether or not he receives family allowance for that child.


Jean Lesage: Oh, no; I am sorry-


Mr. Drew:: Oh, sit down.


Ellen Louks Fairclough: Yes, that is perfectly true. I think what the hon. member was going to say was that in some cases, where children are not eligible for family allowances, this does not apply. That is perfectly true; but those cases are few and far between. In other words, a child must be out of the country, or just recently arrived in the country within the year. But, in most cases, the test is whether or not it is eligible for family allowance, not whether the parent receives it.


Jean Lesage: Now the record is straight.


Ellen Louks Fairclough: When I began this speech I did not expect to have to give a lecture.
I should like to refer again to the example of the man with an income of $3,000, and two dependent children. As I said a moment ago, his tax would be $119. But let us suppose that he had the full $400 exemption for each child; in such event his tax would be only $34. In other words he has forfeited $85 in taxation for the privilege of receiving the family allowance.
True enough, there is some slight advantage to him. But I cannot go along with the hon. member for Vegreville in his suggestion that it is all cream and honey. I cannot find anything in the remarks of the hon. member applying to those in the lower income brackets which does not also apply to those in the higher income brackets. I contend it is all very well to say that these social services were intended for and designed to assist the so-called little fellow, but whoever it is that they were designed for, whoever it is that they were intended to assist, they also assist those in every income tax bracket whatever their classification may be. However, I will agree with the hon. member for Vegreville (Mr. Decore) when he talks about applied psychology because I am sure there are no greater experts in the field of applied psychology than this government, which has been leading the people of Canada around by the nose for far too many years. It is typical, I think, of the reasoning of the followers of the government that when their propaganda begins to go stale they try to decry that same propaganda and

The Budget-Mrs. Fairclough use such phrases, as used by the hon. member to whom I have referred, as "undesirable and also detrimental to our Canadian way of life".


An hon. Member:: They are undesirable,
though.


Ellen Louks Fairclough: With that I definitely agree, but I might remind hon. members that what is sauce for the goose is also sauce for the gander.


Donald Buchanan Blue: That is right, and the gander is getting old too.


Ellen Louks Fairclough: The hon. member for Vegreville has also referred to the net income after taxes on an income of $50,000. The taxpayer would still have $29,000 even if he had no rebate from dividends, and he would also probably have another $4,000 or $5,000 from that source. It seems to me this compares very favourably indeed with the $2,881 which is left to the fellow who earns $3,000. Then he goes e'ven further.


An hon. Member:: Poor fellow.


Ellen Louks Fairclough: Yes, "poor fellow" is
right. You try to live and support a couple of children in any city in Canada today on $2,881, with the prices of everything you have to buy what they are, and you would say "poor fellow" too. The hon. member for Vegreville goes further and cites the man with an income of $200,000. He feels very sorry for this man who has to pay taxes of . $125,504. As a matter of fact he forgot the $60 social security tax in this case also which brings the gross amount up to $125,564. But again, Mr. Speaker, that is before tax credit for dividends. It seems to me that the hon. member neglected to read the fine print at the bottom of table 5 on page 2127 of Hansard for February 19. It states:
In calculating the above taxes it has been assumed that where incomes are in excess of $30,000, that part of the income which is in excess of $30,000 is from investments, but no account has been taken of the tax credit for dividends from Canadian corporations.
Let us look at this fellow who has $200,000 and assume that he owes a tax of $125,564. He has a tax rebate given to him for 20 per cent of $170,000, the amount over the $30,000 which the government has taken as the average. Therefore he has a tax rebate of $34,000 bringing his tax down from $125,564 to $91,564, which leaves him with over $100,000 on which to struggle along with his wife and two children.
The remark was also made by the hon. member that he was a great believer in free enterprise. I too am a great believer in free enterprise, but I am not a great believer in the type of free enterprise that is shackled


by government regulations, heavy taxation and the practical prohibition of the expansion which is expected from the combination of personal initiative and capital investment.


Mr. Sinnott:: That is nonsense and you
know it.


Donald Buchanan Blue: In the province of Ontario, too.


Mr. Speaker:: Order.


Ellen Louks Fairclough: Let it go, Mr. Speaker,
considering the source from which it comes. I am so weary of the theories of these people in ivory towers who try to compare the results of their weak theories with the practical application of crippling taxation. It has got to the point where about the only people who emerge with any kind of capital resources are those who are able, either by trickery or through the intricacies of the law, to evade with the help of skilled counsel the practical application of the taxes which the government has seen fit to impose over the past decade.
It is all very well to talk about lowering the national debt, but what good does it do the little fellow with two or three children, living in a small house with half a dozen rooms which he has bought at great personal sacrifice, to know that he has reduced the national debt by $2,000 while his own mortgage remains in effect and interest accrues against it? The hon. member for Vegreville says the budget indicates that not only has the government been able to bring in tax reductions but that the dangers of inflation have been lessened and that at the present time they are not as real as they were before. The budget merely indicates that the tax reductions which were made should have been made last year and the year before and the year before that if it had not been for the complete inefficiency and extravagance of the present government.


Donald Buchanan Blue: Next year, too.


Ellen Louks Fairclough: I am sure that the average small taxpayer who is getting a $1, $5 or $10 reduction in his tax will not think that much has been done to lessen the dangers of inflation. So long as the sales tax remains, boots and shoes will cost just as much for the small family. Mortgage interest will be just as high and principal payments will come due with the same regularity. It may well be that the man with $10,000 in investment income will now have an extra thousand or two to spend on the things he wants, perhaps a trip to Florida, Nassau or the Bahamas, perhaps to pay off the mortgage on his home; but to the fellow who has to get out and slug for his living and

who makes a very modest sum in comparison with his rich brother, this budget brings very few signs of relief.
I should also like to refer to certain remarks made by the hon. member for Montmagny-L'Islet which are found on page 2384 of Hansard for February 25. He speaks about the exemptions from income which are given for tax purposes in various countries, and makes this remark:
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 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 . . .
I agree that the hon. member has protected himself pretty well by in all cases using the words "income tax". What he has not said is that there are at least three countries whose per capita tax is lower than Canada's. I do not think you can take income tax alone as an indication of the tax that the individual pays in any country. On a per capita basis the figure for Canada is $329.45, but the United Kingdom, which we think is heavily taxed, extracts from its taxpayers $258.81.


Jean Lesage: What is the per capita income? Mrs. Fairclough: It is comparable.


Jean Lesage: Oh, no.


Ellen Louks Fairclough: I have not figured the per capita income. Total receipts for tax purposes amount, at the current rate of exchange, to $13 billion with a population of 50 million. Australia, on the same basis, pays $258.14 and France $238.70. I believe the parliamentary assistant asked to be informed if anyone could find any country that had lower taxes, and those figures are for his information.


Mr. Hellyer:: Do you have the figures for per capita tax as a percentage of per capita income?


Ellen Louks Fairclough: I have not the time to calculate them now, but I will give you some more figures.
It is interesting to notice that taxes collected by this government amount to five times the sum spent by the people of Canada on clothing; to three times the amount spent in grocery and meat stores; to four times the total sales of all department stores; to twenty times the total value of all farm machinery bought in a year; to twenty times the total national coal bill; and they amount to fifty per cent of the total amount of sales of all retail trade in this country.
5,	1953
The Budget-Mrs. Fairclough Now, Mr. Speaker, I would like to spend a little time on some of the'omissions from the budget. I will deal first of all with medical expenses. As this house knows, I have been interested in this matter for some time. I do not believe that the slight nod which the government made in the direction of the taxpayer is going to benefit him to any marked degree. I would like to draw attention to the fact that there is the same deduction for medical expenses whether the taxpayer is married, single, or married with other dependents.
If the government was not willing to wipe out the 4 per cent floor it could at least have applied that 4 per cent on the taxable income rather than on the net income as at present. In the case of a single man this would mean, with a salary of $3,000, instead of a $120 floor for medical expenses he could deduct his statutory exemption of $1,000 and calculate his medical expenses on the remaining $2,000 and have an $80 floor. However, when it comes to the case of married people and people with dependents the situation would improve to some considerable degree. Take the case of a married man with a salary of $3,000. Instead of a $120 floor he would have a $40 floor, calculated on his taxable income of $1,000. If he happened to have two children dependent on him, instead of that $40 floor he would have a $28 floor, and so on.
It seems to me, Mr. Speaker, that would have been a much more practical approach to the problem than the approach which the government took, merely taking off 1 per cent. That, as I said before, is nothing more than a friendly nod in the direction of the taxpayer and one that I doubt he is going to return with any degree of warmth.
There is another aspect with respect to these medical expenses which I believe has been overlooked. It is the problem which I mentioned last year of those who have in any year lost a dependent and who are now faced with the cancellation of that dependent's allowance and also with ^ the accrued debts which they must pay. This is particularly true of those persons who are now classified as single persons and who were formerly classified as married persons- who have lost $1,000 additional exemption from income for tax purposes. Here they are now with a $1,000 exemption instead of $2,000 which they had formerly. They are saddled with the debts which have accrued during the illness of their beloved person and they also have funeral expenses. The reduction in the exemption in itself makes them liable for another $150 basic tax plus another $20 social security tax. In other

The Budget-Mrs. Fairclough words, they have an additional $170 tax on account of the lost exemption alone.
They have their accrued medical bills, their accrued hospital bills and funeral expenses.
I might point out one thing here, and it is that in spite of the fact they still have the bills to pay they cannot claim them as medical expenses at all because they are no longer for a dependent. You can only claim medical expenses on behalf of a dependent.
I think that the law should be changed to permit claiming for medical expenses for say two years after the demise of the dependent -provided	the payments are properly
vouched and that it can be proved that they applied to the dependent who has been lost.
There is still another aspect of medical expenses which should be investigated, and it is the matter, in these days of very high costs of hospital and medical services, of exemptions for those persons who contribute toward the cost of such services to members of their family who are not direct dependents. There are people I know who pay hospital and medical expenses for parents, for brothers and sisters, for nieces and nephews, for uncles and aunts who are not actually dependents of the taxpayer. Because they cannot properly be classified as dependents, the taxpayer is prohibited from claiming these expenses as a deduction from his income tax.
It would seem to me, Mr. Speaker, that it is a very desirable thing that those people who are able to help their relatives who are not well off should be encouraged to do so.
I would urge upon the government consideration of this problem and suggest that they seriously go into the matter of permitting these deductions from income tax on the part of anyone who can produce vouched proof of their expenditure on behalf of relatives who are not dependent upon them, but on whose behalf they have paid medical bills. After all we do allow charitable deductions to the extent of 10 per cent of net income, and I might say, Mr. Speaker, that there is an age old adage that charity begins at home. There is also another saying that blood is thicker than water, and it seems to me that the government might very well take cognizance of the fact that these people have a duty to perform to those less fortunate than themselves, and they should not be discouraged from performing that duty by a failure on the part of the government to recognize that responsibility.
I should like also to speak for a few minutes about the situation which was raised by the hon. member for Greenwood (Mr. Macdonnell) in his official criticism of the budget and on which he did not speak at (Mrs. Fairclough.]

any length. I recall that he said municipalities cannot be ignored any longer. With this, Mr. Speaker, I could not agree more heartily. I do not have time in this short debate to go into the ramifications of the cost of housing, the burden which local improvements place upon that cost, the charges for welfare, hospitalization and such like, which are borne entirely by real estate within the municipalities today.
I only wish to repeat that which I have said on former occasions, and to agree with the member for Nanaimo (Mr. Pearkes) in the plea that those requirements of the municipalities which are presently subject to sales tax should be exempted from that duty. It seems to me this is a very small way in which the federal jurisdiction could take cognizance of the plight of the municipality and assist to a small degree in the alleviation of the distress which the municipalities are suffering at the present time without upsetting jurisdictional balance.
Surely for an administration which takes 71.7 per cent of the tax dollar, as the official critic of this party has indicated, there might be some recognition, at least, of the plight of the municipality to the extent of allowing them the exemption from sales tax on their own purchases which they seek. After all, except in rare cases the dominion government does not pay any taxes to the municipalities for the premises which they occupy; and while they are ahsolved from this levy, they nevertheless practise a Scrooge-like policy in the strict accounting for sales tax on a great many of the supplies which are necessary to the life of the municipality.
In the city of Hamilton, this would amount to about one-third of a mill on the tax rate because, I am informed, the sales tax paid by the city of Hamilton to the federal government is in excess of $100,000, whereas the total assessment is some $365 million. This in itself would be a matter of some considerable relief to the hard-pressed taxpayers of the city of Hamilton who pay not only their federal income tax and their indirect taxation in the form of sales tax and other levies but also the taxes on the dwellings which they occupy.
Now, Mr. Speaker, while it is true that the government has given relief to small corporations, I should like to draw their attention to the fact that there are still a large number of small businessmen in the category of nonincorporated business, proprietorships or partnerships, who have not received any relief whatever except the small concessions which have been made to the individual taxpayer under this budget. If there is one class of

taxpayer in this country which has suffered throughout the years by reason of the high taxation imposed upon business, it is the proprietor of the small business who is in the non-incorporated category. Whether he withdraws his earnings or leaves them in the business for expansion, nevertheless he is subject to personal income tax on the total profits of his business. I have long felt that some concession should be made to this category of taxpayer, by making provision for those profits which are reinvested in the business through the purchase of additional plant, and equipment.
There are several other matters, Mr. Speaker, which I should like to mention. First of all, I should like to make a few remarks about depreciation. Generally, so far as accountants and businessmen are concerned, the government's move to the reducing balance method of depreciation has been extremely unpopular. This plan involved the division of depreciable assets into classes which were sometimes poorly defined, and also provided for the recapture of depreciation at the end of the period of ownership of the various classes of fixed assets. The scheme was supposed to save much work, but it has not been practical and to most taxpayers it has meant more work instead of less work, as well as considerable confusion. Furthermore it violates accepted business principles in providing for excessive depreciation rates in certain years, and in not permitting full depreciation until disposal of all assets in a class, requiring that depreciation be set out on the books of the taxpayer before being allowed, and so on. Moreover, it has actually placed a tax on capital appreciation and capital gains arising from the recent inflationary price rise. I think that is a very important matter, and one which should be considered, because it has been the government's avowed intention not to tax capital gains. When new fixed assets are being acquired, the higher prices of today must be paid and yet the taxpayer is required to pay a tax on recaptured depreciation which he badly needs to help him finance the new asset.
I should like to speak also about what is deemed to be dividends. In the case of a company which elected to pay a tax on its undistributed income on hand in accordance with section 95A 2(b) of the Income Tax Act, and has declared a dividend to permit it to do so, there is a necessity to first calculate the undistributed income on hand itself. It would be some time before the government assessors would check this calculation and
The Budget-Mrs. Fairclough verify or amend it. It is a fact that a number of companies have calculated a larger figure than was subsequently determined as acceptable to the assessors-sometimes quite a bit more. If the estimate of the corporation turned out to be in excess of the amount assessed by the government auditors, then a dividend had been deemed to have been paid beyond that envisaged by the section. Nevertheless, having been obliged to leap before it could look clearly, a company should have been in a position to make this situation right by having the dividend paid recognized as similar to what was later approved as the correct amount, so that the excess dividend paid could be used up in a way available to the company on earnings after the 1949 fiscal period. The wording of the act and the attitude of the government auditors is that any excessive amounts so paid in unavoidable error is deemed to be regular dividends and the full amount of the tax must be paid upon them by the shareholders with no counterbalancing allowance for a distribution of income at a cost of 15 per cent. No recourse will be allowed by the payment of a 15 per cent tax on an equal amount. This places the shareholders in a position which has cost them considerably more tax beyond that which would have been payable by taxpayers who were able to calculate the payment of a dividend which agreed with the interpretation of government assessors at a later date. Undoubtedly, Mr. Speaker, the companies should be equipped with crystal balls or some such devices for trying to ascertain at just what point the government assessors and auditors will agree with their own calculations. Some provision should be introduced into the act, or probably recognized in the regulations, to remove the inequity in cases of this sort.
There is also the matter of the tax on certain stock redemptions. There have been some serious cases of impropriety in the taxing of stock redemptions when a part of the redemption price represented an excess over the original paid-in value of the stock. I should like to cite a couple of cases, Mr. Speaker. There is the case of the St. Lawrence corporation which was well publicized in the Financial Post of November last. Many persons who purchased shares of that company on the open market before they were to be redeemed found themselves taxed on the premium even though they realized only a small part of it personally or perhaps none at all. They had no knowledge when they purchased the shares of the vending party that there could be a very substantial tax to pay as a result of the purchase. If they
2646	HOUSE OF
The Budget-Mrs. Fairclough were found liable for the tax, it was determined at a later date and they were assessed without recourse. Another example could be the case of Loblaw "A" shares which are redeemable at $50 per share, although the paid-in value is about $3 or $4 each. A holder at the present time who has held the stock from its early days can cash in on the substantial premium now by selling the stock on the open market, and a purchaser at the present time may find that he will have a substantial loss on the stock if the company decides to redeem it at the $50 price with the resulting heavy tax liability which will then accrue to the holder. Some scheme should be worked out to mitigate this trouble. Possibly the government could see its way clear to allow a capitalization of this premium and a payment of a 15 per cent tax thereon as the only tax, the same as is done now under section 95A of the Income Tax Act.
There is also the matter of the receipt of bond interest. After I had made a few notes on this matter, I was interested in noticing, in the expressions of opinion given by leading businessmen of Canada, that one of them had remarked on this very matter of the taxation of bond interest in the hands of those persons who receive bond coupons on the full amount of the interest income that the coupon represents, even though the present owner may have paid a substantial part of the value of that interest coupon to the vendor at the time he bought the bond. Nevertheless, he is assessed on the total amount. The vendor receives his interest tax free if he does not wish to report it as income, whereas the purchaser pays income tax on more revenue than he actually earned. If, however, the vendor is fair about his earnings and reports accrued interest, calls it income in his own hands, nevertheless the purchaser is still taxed and the government collects tax twice on the same bond interest: once on the vendor because of his own declaration of income and again on the purchaser when he cashes his coupons. It would seem to me that this is another matter that should be corrected in the act and in the regulations, and in government policy.
I know several representations have been made to the department on behalf of selfemployed persons and those people in the professions who wish to provide for their own retirement by purchase of pensions or purchase of annuities of some sort or another. This is another matter which came to my mind with regard to omissions in the budget. There is quite a need for the government to give to self-employed persons the same beneficial tax treatment which it accords to those 

people who participate in pension and retirement plans through their employers, frequently large corporations. I do not think it should be a difficult thing to work out some equitable arrangement within the framework of the Income Tax Act, but no indication has been given that the government intends even to consider this matter. I think it is an inequity. It is a matter which should be taken under serious consideration by the government. It is a situation which should be corrected.
I should like to say a few words with regard to sales tax, quite apart from those remarks which I made about sales tax now paid by municipalities. It is, of course, a hidden tax, Mr. Speaker, and it tends to pyramid in the price of goods, often several times, before they reach the ultimate consumer. I know this matter has been discussed in this house on other occasions. I know that this same remark has been made before. But we should realize that the sales tax affects the man in the lower income tax bracket or the man who pays no income tax at all much more than it affects any other class of taxpayer. A reduction in the sales tax might, I think, have been considered when the government was considering where it should distribute its favours. I also think that if and when a reduction in sales tax is made, it should be accompanied by pointed government comment that it be passed on to a reasonable extent at least to the consumer. If this were done, the result would be to make the job of balancing the family budget a little bit easier at the very time when it seems to be almost impossible to make a family's expenditures keep down to the level of the family income.
There are other matters of tax inequalities which I should like to mention. One in particular is with regard to succession duty. The government has been told frequently about the inequity which exists in the Dominion Succession Duty Act respecting duties levied thereunder on estates which have a total value slightly in excess of $50,000. No tax is charged up to $50,000 but rates start above that amount; and there is in the act a provision which states that if any duty would reduce the estate below $50,000, then only the excess over $50,000 will represent the amount of tax owing. This means, Mr. Speaker, that an estate of $50,000, $51,000 or $52,000, and sometimes more, will still net only $50,000 to the beneficiaries. This means that there is in reality a tax of 100 per cent on a certain bracket of estate valuation which ordinarily would be subject to a

very small rate, and there is a distinct inequity to taxpayers whose estates have totals in this area.
Mr. Speaker, I admit that these remarks have been rambling but 1 am sure the house will realize that these are specific items which I wish to draw to its attention. In closing I should like to say this. There is little logical reason in support of the government's schemes in the last few years of using the income tax as a tool to achieve certain economic results. In particular, they have used the regulations on accelerated depreciation and deferred depreciation for this effect. The regulations create concealed subsidies in the case of accelerated depreciation, or concealed penalties in the case of deferred depreciation; and in either case, they are of uncertain amount and of rather uncertain effect upon the populace. The benefits and penalties fall unevenly on the taxpayers who, across the country, are taxed at widely divergent rates. Certain persons who are meant to be encouraged by accelerated depreciation allowances may not find that the monetary results are worth while; whereas other persons for whom the benefit is not meant may take advantage of it. Conversely, the penalties of deferred depreciation are unequal and do not always fall upon the persons most requiring them. The effect upon the government revenue is also concealed and actually unknown. It would be better for the government, if it meant to encourage business and capital expenditures, to pay a more direct form of subsidy or to give a definite dollar credit against taxes; or, in the case of deferred depreciation, to penalize or discourage the proper taxpayers with a definite ascertainable dollar value of penalty.
The government might claim that the regulations did not force an individual to take depreciation on his books on the same basis as he is claiming for tax purposes. I know that has been said before. But this ignores the fact that most small businesses wish to keep their books in line with the depreciation reserves which are set up by the income tax department, so as not to confuse matters by having two schedules, one for the books and another for the government.
I repeat, Mr. Speaker, that for too long a time the government has used income tax as a tool, to achieve certain economic results, which has not proved at all to the satisfaction of the taxpayer.


Mr. J. H. Dickey (Parliamentary Assistant to the Minister of Defence Production):: Mr. Speaker, in entering this debate I should like first of all to congratulate the Minister of
The Budget-Mr. Dickey Finance (Mr. Abbott) not only on the excellent budget which he presented to the house in moving this motion, but also on the truly exceptional manner of its presentation. If it is true that practice makes perfect, the experience the minister has had in delivering the seven budget speeches which preceded this one has certainly done its work. His presentation on this occasion was as close to perfection as anything that could have been wished. I may say, Mr. Speaker, that this occasioned us no surprise. The reaction of the official opposition to the budget has, however, given rise to some real surprise. The attitude taken by the hon. member for Greenwood (Mr. Macdonnell), the chief financial critic, amazed us for two reasons. I may say that his attitude has been followed by other members of his party who have participated in this debate.
The first cause for amazement was the fact that the hon. member for Greenwood chose virtually to ignore the budget and its provisions. Strange as it may seem, this is undoubtedly a compliment. The hon. member's purpose in discussing the budget would be only to find fault with it; and the meagre amount of time that he devoted to it indicates his inability to discover substantial grounds for criticism.
The other surprising facet of his position is the fact that the burdens of his small criticisms of the budget are that it is a rich man's budget. The incongruity of the financial critic of the Tory party taking a position of this kind has been drawn to attention by a number of speakers who have preceded me in this debate. There is one aspect of this situation, however, with which I feel I might deal very briefly. In order to recognize the shallowness and insincerity of the arguments that have been presented to try to label this budget a rich man's budget we have only to look at the record.
This argument is of course based on the budget's proposals in connection with the personal income tax. All hon. members will recall that as a result of a series of downward changes completed in 1948 and 1949, the rates of personal income tax in Canada were reduced to a point far below their wartime peaks. We had achieved at that time what the Minister of Finance (Mr. Abbott) described as a tax structure which was a well balanced blend designed to be simple and flexible, and one that could be readily adapted by moderate changes in rates to meet any reasonable scale of peacetime requirements.
Hon. members will also recall the cries of anguish with which the Minister of Finance's budget proposals were greeted by the official

The Budget-Mr. Dickey opposition in March, 1949. The cry was at that time that the rates of personal income tax which were being adopted amounted to a bribe to the electorate. The hon. member for Muskoka-Ontario, as the chief financial critic then was before he became a displaced person, only to return to us as the member for Greenwood, cried out to the minister admonishing him at page 1810 of Hansard for March 22, 1949, not to imagine that:
. . . we are so stupid as not to realize the trick which you have tried to play on us.
He said further, at page 1808 of Hansard:
I hope you will let me know, Mr. Speaker, whether the word I intend to use is parliamentary, and if it is I would think that we are not wrong in calling this a bribery budget.
These charges of pandering to public demand for lower and more reasonable taxes and bribing the people with their own money were applied by the hon. member and the other members of his party to the income tax rates established for Canadians by the Minister of Finance in 1949.
As hon. members will recall, in June, 1950, the Korean war broke out. Parliament met in early autumn of that year and again in regular session during the winter of 1951. In two successive budgets the Minister of Finance found it necessary to impose sharply increased rates of taxation on the Canadian people to meet the extraordinary and rising costs of defence. One of the most unpleasant parts of this program of increased taxation .was the imposition of a 20 per cent surcharge across the board on personal income tax. This was a blow to the people of Canada, but one to which they responded loyally and in a most responsible manner. The opposition cry now was overtaxation, and we were accused of bleeding the Canadian nation. In spite of these prophets of doom the Canadian economy prospered and waxed strong, and by the time the Minister of Finance rose in his place in this house on April 8, 1952, to deliver his seventh budget speech he was able to say at page 1253 of Hansard:
In the personal income tax field a new rate schedule will be introduced. Into this new schedule I propose to incorporate most of the weight of the present 20 per cent surcharge. There will be some over-all abatement, although I should remind the house that the 2 per cent income tax imposed by parliament last session under the Old Age Security Act will be coming into force on July 1 of this year.
In so far as the rates of personal income tax are concerned the Minister of Finance at that time was able to remove one-third of the impact of the 20 per cent surcharge levied after the outbreak of the Korean war. This year a continued improvement in Canada's prosperity has permitted a further


reduction in taxation. The Minister of Finance has taken advantage of this opportunity completely to remove the remainder of the 20 per cent surcharge imposed in 1951 and has recommended the re-enactment of the identical rates of personal income tax which were in effect as a result of his budget proposals in 1949. In other words, Mr. Speaker, the very scale of personal income tax which in 1949 was described as a bribe to the Canadian people, and was derided by my hon. friends opposite as a trick to win an election, is now by those same hon. members being labelled as a rich man's budget. Incongruous? Obviously! Inconsistent? Definitely! Once again, Mr. Speaker, they want it both ways. They wish to represent the government at one time as bribing the people with their own money, and yet when the identical rates of taxation are again re-enacted they claim it is a rich man's budget.
I now wish to turn, Mr. Speaker, to. another matter of importance. In view of the fact that there has been a considerable amount of rather vague and general criticism of the construction work which is being performed for the Department of National Defence on what is broadly termed a cost-plus basis, it might be well for me to deal with this particular aspect of our construction program in some detail at the present time. This will of course be in addition to any consideration that the committee on defence expenditure may care to give to the subject when the committee reaches the general subject of construction. Perhaps I should say first of all that construction to meet the needs of the Department of National Defence and certain other defence agencies is the direct and full responsibility of the Minister of Defence Production (Mr. Howe), the sole exception being married quarters provided for military personnel.
A crown corporation known as Defence Construction Limited has been set up to oversee this program, and the corporation reports to and is responsible to the Minister of Defence Production. Central Mortgage and Housing Corporation acts as agent for Defence Construction Limited in carrying out certain of the supervisory and overseeing functions required for the construction program, but in a general way it is correct to say that the execution of the construction program-including the letting of contracts, inspection and overseeing-is performed by agencies reporting in this respect to the Minister of Defence Production.
In the placing of contracts for all construction required for defence, the general and almost universally adopted principle is to invite competitive tenders by public

advertisement and to award a fixed price contract to the lowest tender received. This basic principle is adhered to with the greatest possible strictness and in every case where this proves to be possible. The policy of calling competitive public tenders is I think recognized in most cases as one of the most effective ways to ensure that work is done at the lowest possible cost. There are, both in civilian and defence construction, instances where the policy of a firm price contract resulting from a public call for tenders simply cannot be followed. In the inflationary period following the end of world war II it became very difficult for construction contractors to estimate the cost of labour and materials for projects requiring a year or more to complete. It therefore became 'common practice in industry for construction work to be carried out either on a "cost-plus" or "escalator" basis with "cost-plus" being most common in the case of large projects involving an expenditure of a million dollars or more. At a time when the trend seemed to be going back to keener competition and firm prices, the war in Korea broke out, heralding a new period of uncertainty accompanied by shortages of construction materials, particularly those having large steel content, and *"cost-plus" and "escalator" types of contracts again came to the fore in private industry.
In spite of this condition in civilian construction, the stand was taken by the Minister of Defence Production and the department at the beginning of the defence production program that the work would be carried out on the basis of public competition firm prices contracts; that no escalator proposals would be accepted, and that work would be carried out on a cost plus fixed-fee basis only in those cases where security, military urgency and lack of plans and specifications, or the remoteness of the work, left no alternative.
Thus, at a time when a large volume of civilian construction was being carried out on a cost-plus basis the defence construction program, with the basic exception of projects of a strict security nature, was on a firm price competitive basis. You will appreciate that this placed contractors operating on firm prices for defence construction in an unenviable position in competing for labour and materials against the many large industrial projects being carried out on cost-plus or similar negotiated terms. Immediately come to mind the large industrial projects in Quebec and Ontario, the oil and chemical developments in Alberta, the Kitimat project in British Columbia, all involving hundreds of millions of dollars in construction expenditures.
The Budget-Mr. Dickey
At this point it should be emphasized that in connection with the construction projects of a strict security nature, and a few other instances, there has been no alternative but to let the work on a cost plus fixed-fee basis. The terms of these contracts in regard to cost control are much stricter than those normal in private industry. Fees are not the contractors' profit. Head office expenses for managerial, engineering and purchasing personnel are not allowed as an item of cost against the contract, but must be recovered by the contractor from the fee. The fees paid are fixed fees based upon a standard scale. The scale is based upon 5 per cent up to $2 million, reducing to 4 per cent for a project costing between $2 million and $3 million and reducing again to 3 per cent for any excess of the projected cost over $3 million. Since the fee, while based upon a percentage, is converted to a fixed fee on the execution of the contract, no advantage accrues to the contractor from increasing the cost of the work.
In so far as our defence construction program is concerned, the only exceptions are on the following bases:
First, jobs which for normal commercial reasons, or other causes, contain no element of profit; for example, the provision of power facilities and the building of railroad sidings and similar services;
Second, jobs of a strict security, nature. Jobs of this nature cannot be let out to tender, first of all for the normal reasons of security which extend over the entire performance of the contract from the beginning to the completion of the work and, second, because of the inappropriateness of sending out detailed plans and specifications of secret projects to anyone requesting and making the requisite deposit for them.
The third main reason which may dictate variance from the normal procedure of calling tenders can be the urgency of the need of the Department of National Defence for the particular facility required.
The fourth may be the necessity of commencing construction of a project while plans and specifications for later stages of the same project are being developed.
A fifth reason is the impossibility, in certain circumstances, of construction firms being able closely to estimate the cost of doing the work in extremely inaccessible locations, which would have the possible effect of all tenderers including an unjustified element of insurance against unforeseen developments.
I would like now to describe the various classes of contracts which come under the
2650	HOUSE OF
The Budget-Mr. Dickey general description of cost-plus. The first are the contracts which contain no element of profit, and can be referred to as cost-alone contracts. These are entered into with bodies such as various hydroelectric commissions for the construction of power transmission lines, the Canadian National or the Canadian Pacific railways for the construction of necessary sidings and other railway facilities to serve defence installations. These contracts are subject to strict cost control.
The second class of contracts can be termed cost plus fixed-fee contracts. These contracts are subject to strict cost control, including audit, and other controls with which I shall deal in a moment.
For defence construction work there are no cost-plus contracts, in the sense of contracts for which the terms provide payment of the total cost of the work, plus a percentage of that cost. Any suggestion that there are contracts of this nature in our defence construction program must be based upon misrepresentation or ignorance of the facts.
Another false impression that exists or has been created is that a great deal of work has been or is being done by engineers and architects in connection with the defence construction program on a cost-plus basis. Let me say at once that it is not the practice to engage architects or consultants on a cost-plus basis. The services of architects or consultants are obtained for defence construction-


Mr. Thatcher:: Did I understand the parliamentary assistant to say that it is the present policy of his department to allow no defence contracts on a cost plus percentage basis?


John Horace Dickey: I am sure if the hon. member will read carefully what I have said he will see that I have dealt quite thoroughly with that point. I have given him the cost plus fixed-fee contracts, and the scale of fees, and I repeat that there are no cost-plus contracts, in the sense of contracts for which the terms provide the payment of the total cost of the work, plus a percentage of that cost.


Wilbert Ross Thatcher: Would the parliamentary assistant-


Clarence Decatur Howe: Well, now-


Wilbert Ross Thatcher: Would the parliamentary assistant permit another question? I have the public accounts in front of me, and I notice a number of contracts which, if I read correctly, are on that basis. I wonder if the policy has recently been changed in that respect.


John Horace Dickey: There has been no change in policy. From the beginning of the program there have been a very small number of cost plus fixed-fee contracts, and those are the ones to which my hon. friend refers. And if he will bear with me I am sure the matter will be cleared up.


Wilbert Ross Thatcher: It is a percentage fee, is it not?


John Horace Dickey: I have already dealt with that. The hon. member may read what I have said in Hansard, and if there are any further questions, or if he has any further difficulty in understanding the position, the defence expenditure committee will be dealing with this matter very thoroughly indeed.
Another false impression that exists or has been created is that a great deal of work has been or is being done by engineers and architects in connection with the defence construction program on a cost-plus basis. As I have already said, I wish to repeat that it is not the practice to engage architects or consultants on a cost-plus basis. The services of architects or consultants are obtained for defence construction projects only when the Department of National Defence have advised Defence Construction Limited that they have not within their own organization individuals available for or capable of doing the work required-


Wilbert Ross Thatcher: Has the policy changed also?


Clarence Decatur Howe: Quiet.


An hon. Member:: You have made your speech.


John Horace Dickey: -in which event Defence Construction Limited engage an architect or an engineer to carry out such design in accordance with the physical requirements of the project as laid down by the Department of National Defence.
When the services of a consultant are required, the first step is to select a man or a firm of the highest standing and best technical qualifications obtainable. The contractual arrangements are the normal type of arrangements in connection with professional work of this kind. These arrangements call for the consulting engineer or architect to be paid a percentage of the cost of the work to be designed. Progress payments are made during the design period, and when the project has been built the consultant is paid the agreed percentage of the actual cost of construction. If for any reason the project does not proceed beyond the design stage the consultant is paid an agreed percentage of the estimated cost of the work, such estimate being the subject of mutual agreement between Defence Construction Limited and the consultant.

If the project has been let as a firm price contract, the fee of the consultant is determined as a percentage of that price. If the project has been let as a cost plus fixed-fee contract, the fee is determined on the actual cost of the contract. All consultant contracts are subject to audit by the cost inspection and audit division, which certifies them by examination of the accounts and vouchers of the consultants, and which also checks to make sure that the cost of the work on which the percentage fee is based is the actual cost to the crown.
I should like to emphasize that these arrangements are of the same kind as those entered into by private enterprise when it engages architects and engineers to design and supervise construction projects. Occasionally certain consultant services are paid for at daily rates if the type of service performed does not lend itself to calculation on a percentage of the cost of construction. Again this is the normal type of arrangement with the architectural and engineering professions, and is typical of similar arrangements with consultants when engaged by private industry. Examples of such services are surveys, general site investigations, or modifications of standard plans to suit site conditions. Again such charges are all subject to audit by the cost inspection and audit division of Defence Construction Limited.
I should like now to give some figures relative to the amount and value of construction work in our defence program, indicating the success that has been achieved in so arranging the defence construction program that an overwhelming majority of the contracts, both in number and value, are fixed-price contracts concluded as the result of a publicly advertised call for tenders. I should say immediately that we have embarked on a very important and highly secret program of construction jointly with the United States. We are bound by international undertakings to maintain the strictest possible secrecy in connection with this program. It is the program that was dealt with in the exchange of notes tabled in the house by the Minister of National Defence (Mr. Claxton) on the 25th day of February, 1952, at page 2381 of Hansard.
Because of security restrictions it will not be possible for me to include in the summary I propose to give any of the costs of projects undertaken in connection with this program. The reasons for this were fully stated in the house by the Minister of National Defence on the 29th day of January at pages 1430 and 1431 of Hansard. I might also say that in connection with this program work is being carried out by some of the most
The Budget-Mr. Dickey respected and reliable firms in the Canadian construction industry, and any criticism that is levelled in a general way at this program must naturally be regarded as criticism of these excellent firms who are doing, I believe, a public service.
The figures I wish to put before the house now are as follows. During the period November 22, 1950 to December 31, 1952, Defence Construction Limited awarded 871 construction contracts having a total value of $255,826,000. Both these figures exclude contracts in connection with the program referred to above as excluded by security. Of the 871 contracts 16, with a value of $17,700,000, were contracts coming under the general classification of cost plus fixed-fee contracts. In terms of percentages the 16 cost plus fixed-fee contracts amount to 1-9 per cent of the total contracts awarded and their value to 6 [DOT] 9 per cent of the total value of contracts awarded.
The small percentage deviation from the general policy appears to me to be a significant achievement when one considers the many difficulties which are inherent in construction for defence, almost all of which make it a special problem to follow normal procedures of inviting tenders. Of the considerations I dealt with earlier which dictate the letting of contracts without a public tender call, security is by far the most important. Next in importance is location, which is shown by the fact that the majority of our cost plus fixed-fee contracts are at places such as Goose Bay, Churchill and other similar Arctic or sub-Arctic areas.
Now, Mr. Speaker, admitting the impossibility of completely avoiding cost plus fixed-fee construction contracts in a program of this kind, I should like to deal as completely as I can, but at the same time briefly, with the control procedures which are employed to ensure that these cost plus fixed-fee contracts and other cost contracts are performed in an economical and efficient manner with the maximum elimination of waste or extravagance of any kind whatsoever. This -control is of course a very important part of the responsibility of Defence Construction Limited and the other agencies which are responsible to the Minister of Defence Production (Mr. Howe) for the operations under this program. The public servants- who staff these agencies are, I assure you, Mr. Speaker, thoroughly imbued with the necessity for exercising the strictest possible control over every phase of construction operations, whether under cost plus fixed-fee arrangements or not. These control procedures in their entirety apply to all cost plus fixed-fee
2652	HOUSE OF
The Budget-Mr. Dickey contracts administered by Defence Construction Limited, including all the projects of a strict security nature to which earlier reference has been made.
Before dealing in detail with the various stages at which effective cost control is exercised, I want to refer to page 2566 of Hansard of Tuesday, March 3, and following pages where the hon. member for Nanaimo (Mr. Pearkes) stated in this debate that he had oral complaints and letters from individuals disclosing what he termed "waste and extravagance" and "a flagrant disregard of cost" in connection with secret projects. He said he was thereby bringing these matters to the official attention of the government. I invite the hon. member to make available either here in the house or privately to the minister, or to the R.C.M.P. or such other responsible authorities as he may choose, any information he may have in his possession that would permit an immediate and full investigation of the alleged incidents to which he refers. This invitation of course applies generally to all hon. members. All we ask is co-operation in enabling us to get to the bottom of any charges or allegations of this kind in order to eliminate anything in the nature of waste or extravagance, whatever its cause or origin may be.
I recognize that in matters of this kind standards of conscience and views as to what is in the public interest differ, but in my view I do not feel that anyone in this house or outside of it has fully discharged his public duty until he has made available to an appropriate authority any information in his possession which would permit or facilitate the full investigation of any matter where misuse or waste of public funds is suspected.
Turning now to the detail of controls over expenditures on cost plus fixed-fee contracts, Defence Construction Limited first enters the picture in the selection of a consulting engineer for designing and engineering the project if such services are required. Here every precaution is taken to ensure that only firms or individuals of recognized integrity, experience and ability are chosen. Care is taken to see that design and planning are carried out with careful observance of the standards of construction and accommodation laid down in the standards adopted by the Department of National Defence and approved by treasury board.
After the design phase is completed, the utmost care is taken in the selection of a contractor. In this type of contract it is generally agreed that the type of contractor selected is of even greater importance than is the case in a firm price contract. The available firms are all considered with a view [Mr. Dickey. 1

to selecting only contractors of wide experience in the particular type or class of work to be performed. We are carefuil to ensure that the firm or firms to be selected have fully qualified personnel, and that the equipment which they have available for the project is of the proper type and in first-class condition.
The actual contract entered into is itself carefully designed to protect the crown to the fullest possible degree. I have not time to summarize the contract provisions in any detail, but there are several important features to which I should draw attention. The first is that the prime contractor is required to call competitive tenders for all major items of supply of materials or subcontracts. Second, wherever possible the award of subcontracts or supply contracts is on a firm price basis. Third, these awards are only made with the consent of the supervising authority, that is Defence Construction Limited or Central Mortgage and Housing Corporation. Fourth, salaries payable to the contractor's employees such as engineers, superintendents, draftsmen and foremen shall only be such as shall be approved by the minister. Finally, the entire work in every particular is subject to the control and supervision of the engineer in charge representing Defence Construction Limited who is the sole judge of work and materials and has full power to reject in whole or in part any work which is improper, defective, or insufficiently executed or performed by the contractor. There is, of course, a right under the contract for the work to be taken out of the contractor's hands if it is improperly or unsatisfactorily performed.
An important factor in dealing with contracts of this nature is the definition of items to be included in the cost of the work. This is very carefully and fully provided in the contract by means of a standard schedule which forms part of an agreement between Her Majesty and the contractor. It carefully delineates all items which can be included in the cost of the work; and is, so far as we can possibly ensure, as complete and sufficient as it can be to protect the interests of the public treasury.
Perhaps the most important single item in this whole question of control of costs is the question of careful, efficient and continuous supervision. On projects where a consultant has been employed in connection with design and planning, it has proven most satisfactory to engage the consultant to provide a fully qualified engineer with adequate inspection staff to carry out supervision on the site. This arrangement permits the closest possible

liaison with the design office, facilitating the interpretation of drawings and eliminating unfamiliarity with the type and quality of materials required. It is the duty of the supervising staff to inspect all materials and carefully oversee all workmanship, not only as regards quality but as regards efficiency of performance, to ensure that costs are controlled.
The supervision does not end with the consultant engineer's staff on the work, or other on-site supervision that may be provided. Central Mortgage and Housing Corporation acts as agent for Defence Construction Limited, and Central Mortgage and Housing is fully responsible to Defence Construction Limited for the thorough and economical performance of the work. Both the contractor and the consultant or other on-site supervision report to them. In most cases Central Mortgage and Housing Corporation have an engineer permanently on the site, and in every case the regional office of Central Mortgage and Housing Corporation keeps in close touch with the work by means of periodic visits by their regional construction engineer or his staff.
As a further precaution to guard against waste or inefficiency in carrying out the work, the cost inspection and audit division of Defence Construction Limited maintains a representative on the site. It is his duty to check independently on the receipt of all materials for the work; to check all invoices; and to check all payrolls. These receipts, invoices and payrolls are thus cross-checked by the supervisory engineer on the job, by the cost, inspection and audit division representative, and then they are further scrutinized by the Central Mortgage and Housing regional office before they are finally passed to treasury for payment. Even at this final stage they receive a very thorough examination. The treasury officer is required to keep a close check on the work at all times to ensure that the various controls set up at all intermediate stages have eliminated extravagance or improper use of public funds in so far as it is possible to do so.
As a final and over-all check on our whole construction operation I might well point out that Defence Construction Limited, Central Mortgage and Housing Corporation, and the Department of Defence Production have another department of government-the Department of National Defence-actively and intimately following every stage of the work being performed. It is the Department of National Defence that comes to parliament for the money with which these construction bills are paid, and they, when the work is
The Budget-Mr. Dickey completed, accept the finished building or other project for occupation and use. It is obviously a matter of great concern to them that the money they provide to us for the performance of these services is properly and carefully spent, and that the finished product that they must use in their operations for many years to come is in accordance with specifications and suitable for the very important work they must do. They are naturally most exacting in their requirements of us at every stage, and we are very pleased to have this careful and thoroughly independent and final check on the work we are doing. It is from the point of view of the public good an over-all and most effective check on all our operations, both cost plus fixed-fee and otherwise.
From this summary several points stand out with crystal clarity. First the basic policy in the letting of construction contracts has been that economy is best guaranteed through public competitive firm price tenders. The Canadian construction industry, represented by some of its most reputable and efficient operators, is performing this entire program under both firm price and cost contracts. General allegations of waste and inefficiency unsupported by facts are a reflection not only on public servants but also on a number of loyal Canadians who are just as interested as anyone else in efficiency and economy in the expenditure of public moneys.
As a matter of fact, the achievement and performance of the contractors who are working on defence construction projects and the Canadian construction industry generally have been of the highest order. The quality of the construction is good. The progress of the work is also good, particularly when one takes into consideration the magnitude of the program so quickly launched, the problems of planning, shortages of materials and manpower, and the inevitable difficulty of pyramiding such a large program on a construction industry already struggling with the greatest volume of work in its history. Cost-wise the program has been carried out with the greatest of care. There is no better criterion of true cost than the public competitive tender and this has been the keystone of the program, fully effective in over 98 per cent of the contracts and in over 93 per cent of the value of the work.
In those exceptional cases where it has been necessary to resort to a cost type of contract, every effort has been made to select consulting engineers and architects of the highest calibre, to negotiate the construction work with general contractors of acknowledged capacity and integrity and recognized
2654	HOUSE OF
The Budget-Mr. Dickey as outstanding in their particular fields. The checks and controls which I have outlined on all expenditures for materials, labour and subcontracts, which are maintained throughout by engineering supervisors on the work and the cost inspection and audit division, leave no doubt that every precaution is taken in the public interest. The defence construction program has benefited from the assistance of the engineering and architectural professions and from the support of the manufacturers, suppliers and contractors engaged on the program, who have shown every desire to carry out the program with economy and efficiency.
It is a tribute to those who have participated in the program that it is now over 70 per cent complete, that the quality of the work continues to improve and the rate of takeover of the completed buildings continues to accelerate from month to month. The record is clear, and calls for no apology.
I must apologize, however, to the Minister of Finance (Mr. Abbott) for having dealt in the main with matters not directly connected with his most admirable and constructive budget. However, I trust that he will agree with me that when wild and general charges are made, completely-I use that word "completely" advisedly-unsupported by facts, such charges requires a prompt and adequate reply in this house.


Wilbert Ross Thatcher: I wonder if the parliamentary assistant would permit a question?


John Horace Dickey: Certainly.


Wilbert Ross Thatcher: The parliamentary assistant has told us that it is government policy to let cost-plus contracts, either on a fee basis or percentage basis-I think he used the words "only occasionally and in exceptional cases." The reason, he said, was for security or when the contract was in a distant place. If that is a fact, I would ask him why there were 231 of those contracts let in the last fiscal year, a good many of them for houses and barracks. I have one before me on page N-38 of the public accounts-I shall not bore the house by reading more than the one- cost plus 7 per cent of the actual cost of construction. This was in the maritimes. Has government policy changed, or how does he explain that?


John Horace Dickey: Mr. Speaker, there has been no change in government policy. I judge from what I heard of what the hon. member quoted that he was referring to a design of supervisory contract. In so far as construction is concerned, outside of the strict security program to which I referred there are 16 cost plus fixed-fee contracts and that is all. If 

the hon. member wants any further information the defence expenditure committee expects to get to this very important subject of construction on Tuesday, and the witnesses who will appear before that committee will be delighted to deal with any questions he may have.


Mr. J. H. Blackmore (Lethbridge):: I am
glad, Mr. Speaker, to be able to follow the speaker who has just resumed his seat because his speech has reflected great credit upon the Minister of Trade and Commerce (Mr. Howe). During world war II the minister conducted the affairs of his department in such a way as to merit, I believe, the honour of Canadians for many generations to come. I am glad the Minister of Trade and Commerce is in his seat and was able to hear the speech.
It is my purpose to discuss today another aspect of the Canadian beet sugar industry. That aspect is Cuba and the Canadian beet sugar industry between two world wars. More specifically I propose to deal with salt fish and potatoes in the maritimes, cane sugar in Cuba and the Bennett administration's 1932 minimum price of $2.30 on sugar in the country of origin for purposes of tariff, which was aimed at protecting the beet sugar industry in Canada. I propose to mention how unscrupulous Liberal politicians played politics with them all. My main purpose in this talk will be to seek to determine whether, and to what extent, maritime sales of salt fish and edible potatoes to Cuba depend upon Canadian purchases of sugar from Cuba.
Unfortunately, Mr. Speaker, there is abroad in the land a very serious amount of misconception and prejudice in respect of this important matter. My speech today, like the three speeches I have already given this session, is designed to put the facts before the people of Canada to enable them to judge for themselves the position of the beet sugar industry. Once people know the facts, they can draw their own conclusions.
May I say a word about the story of Cuba's recent sugar experiences. Cuba was hard hit by a depression, just as all other American countries were. Cuba's sales to the United States in the years 1926 to 1929 averaged 3,543,000 tons a year. Under the Hawley-Smoot tariff this dropped to 1,948,000 tons during 1931 to 1933. Now, that fact alone has played a tremendously important part in the maritime provinces and has been utterly disregarded by the reckless speakers who have gone babbling all over this country telling falsehoods and giving false impressions. Partly because of this tremendous falling off in Cuba's sales, Cuba's purchases of maritime salt fish and potatoes fell off greatly, as you would naturally expect.

I should like to say a word or two as to how the Liberal party made political capital of that situation. Before long certain politicians were circulating stories that the mari-times had lost their Cuban market for dried salt fish because of the $2.30 minimum price on sugar imposed in 1932 by the Bennett administration. The many facts bearing upon this whole matter are clearly and scientifically set forth by Ralph P. Bell in a most instructive article in the Halifax Herald of February 8, 1938, pages 7 and 12, under the heading "A reply to Senator William Duff". From this article I draw the major part of the figures I use in this talk. Mr. Bell is exceptionally well informed in respect of all matters pertaining to sugar, and pretty well all matters pertaining to the maritimes.
The reason for the article is pointed out in an editorial in the same issue of the Halifax Herald entitled "The Public Demand". From this editorial I quote:
On Thursday last Ralph P. Bell, Halifax businessman and a director of the Acadia Sugar Refining Company, delivered an address before the board of trade at Lunenburg. On that occasion Mr. Bell-
1.	Argued in justification of the retail price of sugar to consumers in Canada; and
2.	Declared certain West Indian markets for Nova Scotia fish were not adversely affected as a result of the Canadian sugar duties.
Promptly Mr. Bell's statements were challenged by Hon. William Duff, who held in reply that Canadian consumers of sugar were being exploited behind tariff walls, and that maritime markets for products such as fish and potatoes in the southern countries of Cuba and the Dominican Republic had been all but destroyed as a result of the sugar duties situation. Moreover, Senator Duff asserted, Mr. Bell as a director of a sugar refining company, was not entirely unprejudiced in the discussion.
Today Mr. Bell makes his rejoinder which appears in full in these columns . . .
From this editorial one can easily gather the fact that the Liberals did attack the $2.30 minimum, and the nature of that attack. They pointed out, for example, that the maritimes had sold Cuba dried salt fish to the value of 101,000 quintals in 1925, and only
46,000	quintals in 1936. They blamed this loss upon Canada's imposition on January 30, 1932 of the $2.30 minimum price on Cuban raw cane sugar in Cuba. The figures had a spectacular look, especially to people uninformed as to the facts and unable to gain access to them.
These politicians omitted to give their hearers and readers two other important facts. These figures revealed that the maritimes sold Cuba 67,000 quintals in 1930 and 21,600 quintals in 1932, the last two years before the imposition of the $2.30 minimum. If these politicians had given all four of those 68108-169
The Budget-Mr. Blackmore figures, the full set would have looked like this:
Tear	Quintals
1925	  101,000
1930	  67,000
1932	  21,600
1936	  46,000
These figures would have spoiled the fun entirely for the Liberal politicians. These figures show, first, that maritime sales of salt fish to Cuba fell off 34 per cent from 1925 to 1930; second, that such sales of salt fish by the maritimes to Cuba fell off by at least a very considerable part of 45,400 quintals or over 67 per cent between 1930 and 1932, before the $2.30 imposition; that for the four years after 1932, after the application of the $2.30 per hundredweight valuation for duty purposes in the land of origin, maritime salt fish sales to Cuba increased to 46,000 quintals, an increase of 24,400 quintals or over 100 per cent, after the so-called dumping duty which was supposed, in their words to have ruined entirely the market for salt fish and potatoes for the maritimes. These figures, of course, give the absolute lie to the Liberal propaganda concerning the $2.30 minimum price and resultant loss of maritime salt fish sales to Cuba.
But here is another set of figures more damning still to the Liberal position. Cuban purchases of salt fish from all the world between 1932 and 1936 increased from 110,000 quintals to only 160,000 quintals, an increase of less than 50 per cent. Look at those figures again. For the four-year period, 1932 to 1936, Cuban purchases of salt fish from all the rest of the world increased less than 50 per cent. From Canada Cuban purchases of salt fish during the same period increased over 100 per cent. In other words, in terms of percentages Cuban purchases of salt fish from the maritimes of Canada, who bought no Cuban sugar from 1932 to 1936, grew by practically twice as much as did her purchases of salt fish from the rest of the world which presumably had no $2.30 sugar minimum value in the place of origin, and which therefore presumably bought Cuban sugar during that period.
The conclusion to be drawn from these facts must be that Cuban purchases of maritime salt fish do not depend upon Canadian purchases of sugar from Cuba.
Mr. Speaker, it is of the utmost importance that the maritime people and the Canadian people get this fact firmly fixed in mind today. Otherwise terrible mistakes can be made during the next few years. Incidentally, I will stop to say that the fact that these stories have been circulating indicates the

The Budget-Mr. Blackmore industry. And countless Liberals did that very thing all across Canada.
Let the maritimes henceforth be warned; let all Canadians be warned and alerted, that they might be wise to be suspicious of every story the Liberals tell them about Cuba and sugar and maritime salt fish and potato markets.


Mr. Boucher:: That is a small potato.


John Horne Blackmore: There are a lot smaller potatoes that the Liberals have been scattering around all over. They are so small that you can hardly see them without a magnifying glass.


Mr. Balcom:: We will get you one.


Mr. Low:: The big lie.


John Horne Blackmore: It is a scandalous, downright shame. I daresay the hon. member has been telling some of these things out in his province of Saskatchewan.
I have said what I desire to say in respect of the beet sugar industry, Mr. Speaker. One of the great things, as I indicated in my opening remarks, is that the rank and file of the people of Canada do not know the facts at all pertaining to the whole question of beet sugar and cane sugar in Canada. They have to rely upon people in public life to learn 'the truth and to tell them the truth. If they do not receive the truth from men in responsible positions, how can they tell what to think and what to demand?


Mr. Stick:: Tell the truth and shame the devil.


John Horne Blackmore: My whole object in speaking on this subject this afternoon was, as I said, not to be political but to impress upon the people of Canada and upon the members of this house, if I might, that the amount of salt fish and edible potatoes which the maritimes were able to sell to Cuba did not in any way depend upon importations of Cuban sugar into the maritimes, or at least it did not do so in 1938.
I should like to say a word here in respect of the maritimes. I have a very deep sympathy for the maritime provinces. I have given their problems considerable thought now for something like 15 years. There is a problem in the maritimes which must be solved. The hon. member for Saint John-Albert (Mr. Riley) made a speech the other day which I thought very beautiful and very pathetic. Too few people seem to realize that what the hon. member was telling was the truth. The maritime provinces, since they joined confederation, have been bled white. They have had their industries destroyed and


removed. They have had their financial independence destroyed because the headquarters of their banks have been removed to the central provinces. They have had evils inflicted upon them which I confess, Mr. Speaker, are a disgrace to the governments and to the members of the house which permitted these evils to be inflicted.
As the hon. member said the other night in his speech, he hopes he will be able to continue to live in the maritimes; but he is not sure. No wonder he is not sure, when we consider what has been happening in the maritime provinces even since the close of world war II. Something simply must be done with respect to the maritimes if we intend that splendid area to be the great and valuable asset to Canada it is capable of being, not only in the matter of industry but also in that of wealth, of population, of influence and in every other way.
So long as we allow it to continue as it is today, it will be a reflection upon us, and it will be a source of unhappiness to the people who live there. Instead of being a glorious asset it will become more and more a liability, despite the fact that Newfoundland is involved in the maritimes today.


Leonard T. Stick: No.


John Horne Blackmore: It will be understood that I am not reflecting upon Newfoundland.


Leonard T. Stick: It is not "the maritimes".


John Horne Blackmore: It is counted as one of the maritime provinces today, is it not?


Leonard T. Stick: We are not maritimers.


John Horne Blackmore: All right. Newfoundland has been enjoying its improved condition for a little while because it has just come into the confederation. But let Newfoundland go on for a few years, until they realize the full impact of policies adopted in Ottawa by all the governments which have sat here since confederation, and Newfoundland will have a very sad story to tell, too.
The first thing the maritime provinces ought to do is have a beet sugar factory of their own. I know there are two splendid cane sugar refineries in the maritime provinces, and I do not wish any ill toward the cane refineries. But when one considers the value of the beet sugar industry to an area such as Alberta, and realizes its value as an asset to that province, he must grant that one of the finest things that could happen to the maritime provinces would be the establishment of a beet sugar industry there which would enable them to supply all their needs, ultimately permitting the cane sugar

refineries to slip out of existence, even if the people who hold those factories have to be bought out.
From this point on today I am speaking entirely as a member of this parliament, just an ordinary Canadian; I am not speaking for the Social Credit group at all. I am simply putting on record some of the ideas I have had when I have been contemplating the problems of the maritimes, ideas that I humbly submit as being possibly worthy of some consideration.
I believe the time has to come when we shall recognize the four maritime provinces- that is, the three of them, and Newfoundland -as an economic zone. They have to have industries in that area. I believe every hon. member in the house would say he believes in the decentralization of industry. What in the world is the use of decentralizing industry if you deny industry the market it ought to have by permitting powerful concerns from Ontario and Quebec to go down into that area and sell goods in competition with goods being produced there, and operate to an extent that the industry there cannot pay?
That is the situation which faces the maritime provinces. What are we going to do about it? As I suggested, we shall have to give those people permission to have an economic zone of their own. It looks to me as though that is the only way in the world in which we shall have any decentralization of industry, a development of the resources of that area, and a retention of its purchasing power, as well as an increase in its population which, of course, would mean a greater market for the goods produced by their industries.
How would this be worked out? It looks to me as though the four maritime provinces would be wise to consult with each other and formulate an agreement to work together. In such a way they would be more valuable to Canada than they can be separately. Let them meet together and work together, to see if they cannot get agreement from the big concerns in Ontario and Quebec-a gentlemen's agreement, if you like-that those concerns will not send their goods into the maritime provinces, beyond a certain point, unless the maritimes request specifically that those goods be sent there. In this instance a quota would be established voluntarily, by the industries in Ontario and Quebec, realizing that as they sell their goods in the maritimes they will require the proper atmosphere and circumstances for the establishment of industries there. I do not see why that sort of thing should not be done. I do not see why under the protection
The Budget-Mr. Gardiner of such an arrangement the maritimes should not build a powerful industrial unit, with high purchasing power, greatly strengthening themselves in every way, and thereby being enabled to develop their resources.
There is no use having fine resources if an area is unable to develop them. What good would the irrigated area of southern Alberta be if we could not establish the industries with which to use the resources of that area? Give the country conditions under which industries can be established, and then you will have in respect of any area an accumulation of population and an increase in purchasing power. You will have industrial strength; you will have a real asset to the Dominion of Canada, as well as a source of taxation and every other thing we desire.
I have made these few comments with respect to the maritime provinces because, after having studied the matter, I am firmly convinced that we never will solve the problem of the maritimes until we do what I have suggested.
I shall have more to say at a later time in respect of the Canadian beet sugar industry, but for the time being I shall make no further comments about the maritimes. There are other facts concerning the Canadian beet sugar industry as it is affected by Cuba, and in connection with policies prepared in Ottawa, which simply must be made clear to the people of Canada. With the permission of the house I am going to endeavour to set out some of those important facts at some future time in this chamber.


Right Hon. J. G. Gardiner (Minister of Agriculture):: Mr. Speaker, the debate on
the budget has now been going on for some considerable time. I was told by one of the members just a few moments ago that I am the fiftieth to address the house. That is, of course, a fairly high number; but since there are something more than two hundred left I presume the number of speakers could grow.
The amendment moved by the financial critic of the opposition deals with a number of matters, but there is only one part of it I am going to discuss at this time. The part with which I am concerned reads:
That all the words alter "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:"
And then, under that:
-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.
2660	HOUSE OF
The Budget-Mr. Gardiner
It is that part of the amendment to which I wish to address myself in the time at my disposal. I should like first to state to members of the house that a delegation from the Canadian Federation of Agriculture, with representatives from right across Canada, met with us today, and they have left with us a memorandum covering the views of the federation with regard to agricultural policy and the condition of farmers in general throughout the country. I am not going to read that document to the house. I am quite certain that hon. members will be quoting from it from time to time. I am going to suggest, however, that if one reads it carefully, in spite of the fact that there are criticisms of the government, criticisms of the Department of Agriculture and criticisms of general policy, generally speaking the document indicates that those who represent the farmers across this country are fairly well satisfied with the general policy.
They think the floor price on eggs ought to be higher. They think the floor price on hogs ought to be higher. They think the floor prices on some other commodities might be changed to advantage, and that we might have a floor price on poultry products; but they do not suggest that we should change the policy of placing floor prices under farm products as established under the legislation of 1944. In other words they ask us to carry on under the policy which was established in 1944 and to do that, if possible, in a manner which will give a little more support to farmers. But they are not critical of the line of policy, and are not critical of what the government has been doing in general. As a matter of fact, in many sections of their submission to the government they are quite complimentary.
I only say that at this time in order to indicate that the feeling in every part of Canada is not quite the same as it is in the small section of this house represented by the opposition. It may be that there is a group of people in Canada, bearing a comparison reasonably proportionately to those who represent the opposition in the house, who have a feeling somewhat similar to that which has been expressed since the beginning of the budget debate, but I can assure hon. members opposite that view is not held as strongly as they might think, judging from what they have had to say.
For example, it is suggested that we have great quantities of farm products in this country for which farmers are searching for a market. We have some farm products for which a market is being sought, but their proportion compared with the proportion for which farmers have searched for markets in the past is comparatively small. As a matter


of fact we have two surpluses of farm products in Canada at present. One is canned pork products. We canned 98 million pounds of pork as a result of the epidemic of foot-and-mouth disease. We have sold 22 million pounds and we have a balance on hand of 76 million pounds.
That might be considered a surplus of one farm product in a certain form, but I am sure all members realize that we will eventually be able to dispose of that product, largely in Canada. We probably will not find a market for very much of it outside Canada. We will be able to dispose of that product in due course. It is in surplus as a canned product 'largely because of the fact that we took it off the market and put it into a form where it could be preserved and stored for some months and sold finally in markets which we hope will exist for it.
The other product of which we have a surplus on hand for the present is New Zealand beef. We made an arrangement, again associated with the fight that was waged against foot-and-mouth disease, for an exchange of New Zealand beef for Canadian beef in the British market. The New Zealand beef was shipped to the United States and is being sold there. The amount shipped to the United States was 59 million pounds. The amount sold was 48 million pounds and the balance left is something over 11 million pounds. That amount will be sold in due course and will thus be taken off the market. These are the two commodities of which there is a surplus, that we may be said to have some little difficulty in marketing, and that we may have some difficulty in marketing in the months that lie ahead. But apart from that, there is no troublesome surplus of farm products to be found at present.
It is true that we have considerable wheat in Canada, but the Minister of Trade and Commerce (Mr. Howe) has reported to us from time to time that the main difficulty ' in connection with the marketing of wheat is to find ways and means of shipping it. It is not a question of finding a market for it. The problem is one of finding shipping facilities to take the wheat from where it is to where it is required. That again is something which gives employment to a great many people in the country and is not a matter of such great difficulty as might be indicated by the speeches we have heard in the house.
I want first to emphasize the fact that we are not in a position where we are worried greatly at present because of the fact that any markets have been lost. As a matter of fact I have some doubt whether "lost" is the

word to use with respect to our markets. We have not lost markets if we are able to market the greater part of our products that are in surplus in a natural way and without any great difficulty. If any market has disappeared for the time being, we have found other markets to take those products, and our farm products are being marketed at higher prices.
The suggestion has been made in discussing the question that it may be because production has been reduced that we are able, to market our farm products. In order to correct any statement of that kind that might be made, or any idea that might prevail to that effect, I am going to place on Hansard figures from a table having to do with production during the last six years compared with the six years preceding the war.
Some may say well, why not take the war years? I do not think it would be fair to the house, to farmers or to anyone to take the war years. Conditions during wartime are always particular conditions that require particular treatment.
Taking the last six years before the war and the last six years we have just gone through, I want to give these figures by way of comparison between the two periods. I am only going to deal with the five products upon which agriculture generally depends for its prosperity-wheat, hogs, cattle, milk and eggs.
During the six years since the war we have produced on an average 162 million bushels of wheat more per annum than in the six years before the war, which is approximately one-half more. During the six years since the war we have produced on an average 360 million pounds more pork per annum than in the six years before the war, which is approximately one-half more. During the six years since the war we have produced 270 million pounds more beef per annum than in the six years before the war, which is about one-third more. During the six years since the war we have produced 1,600 million pounds more milk per annum than in the six years before the war, which is one-ninth more. During the six years since the war we have produced 110 million dozen more eggs per annum than in the six years before the war, which is 50 per cent more.
Now, I only need to repeat these figures, and if I were to add some of the other products it would be more apparent that agriculture in this country has annually been producing more and more in the way of food products, since the war, than she ever produced before. As a matter of fact, if one were to make comparisons between the years
The Budget-Mr. Gardiner after the war and the years during the war, one would find that we were producing grain from much less acreage during the war than we are now; but if we weighed up the tonnage of food of one kind and another being produced in this country now we would find that it is much greater than it has been at any other time in our history.


An hon. Member:: But what about prices?


James Garfield Gardiner: I am going to deal with
them right away, so don't get in a hurry, because you might be disappointed. Prices on these five products will average at least 65 per cent higher, but the difference is best represented in the gross farm income of the last six-year period compared with the preceding period. The average annual total for the last six years was $2,700 million and for the previous period $780 million, or about four times as much.
Well, that is not a bad situation to be confronted with at present. I quite agree with those who represent farm organizations and who represent rural seats in this house, that it is not as good a condition as we farmers would like to have.


Some hon. Members:: Hear, hear.


James Garfield Gardiner: We are always hopeful of
having better conditions in the future than we have had in the past; but I am sure that farmers in general are satisfied with this statement as a true statement regarding their position: that their position has been improving rapidly from 1945 when the war ended down to 1951; that there was no falling back over the period either in connection with production or in the matter of prices received.
When markets disappeared for one particular product the farmer readily switched over to the production of something else for which there was a ready market. He therefore has been able to market his products over recent years at a very high return.
Coming to that one year, 1951, I wish to point out that it is the highest price year we have ever experienced in agriculture in this country. I think I might say that 1951 produced the highest price levels that have ever been experienced in the history of farming in the United States. So when we make a comparison with 1951-whether we go before that date or whether we follow after that date into 1952 and 1953-it is true that you can show that farm prices were lower in the years prior to 1951. You can also show that farm prices are lower in 1952 and 1953 than they were in 1951; but there is no other year or any other period of years prior to 1951 when you can show higher
2862	HOUSE OF
The Budget-Mr. Gardiner price levels or higher production on our farms than can be shown for 1952 and 1953 up to date.
I am only going to call your attention to one matter which is in this report I referred to a few moments ago. They make reference here to a statement made by the Minister of Finance (Mr. Abbott) in his budget speech, and they say:
The seriousness of the downward trend from 1951 was clearly indicated by the Hon. Mr. Abbott, Minister of Finance, in the presentation of his recent budget, when he reported a preliminary figure for net farm income for 1952 to be $1,861,000, a decrease of 12 per cent from 1951.
Again I repeat that is the only year you can take to make a comparison and say that 1952 may be lower when the final figures are out in connection with returns for last year. A much sounder kind of (Comparison to make is that which is referred to in the last paragraph on this page. The federation says this:
We wish to maintain and improve these features of our present program which have given agriculture some desirable measure of stability . . .
Referring to government policy-
. . . but at the same time we wish to explore and evolve a more complete and co-ordinated national policy for agriculture with longer term security than can be provided under present day programs.
My comment with regard to that, Mr. Speaker, is that in the first paragraph which I read, the findings of the document are based upon a one-year comparison. I suggest that if they take a three-year comparison or a two-year comparison or a four-year comparison, there is no possibility of coming to the same conclusion that they can come to by comparing 1952 with 1951. The year 1951 is the exceptional year.
It is exceptional in another way, Mr. Speaker. I have been examining figures in order to find out just where we stand in connection with the criticisms which are being made in this house and outside. I find it to be a very remarkable thing that the farm implement companies did not change their prices in 1951. I find that the farm implement companies did change their prices in the years preceding 1951 and they changed their prices in the year following 1951. On some of the most important farm implements used on farms in Canada they lowered the prices in 1952 as compared with 1950. On others they increased prices. On one of the important farm implements the price was increased the day after Christmas in 1952, which is not very long ago.
I am going to suggest to you that if we examine the records very carefully we do not find that the situation has been created in just the way some suggest. My mind
fMr. Gardiner.]

goes back to the time when I entered this house first and we demanded that we have a committee of this house set up to examine into the cost and distribution of farm implements. Out of that investigation came the fact that farmers have invested in farm implements, or to put it another way that the farmer's cost of operation is represented by farm implements to the extent of from 3 to 6 per cent annually.


Mr. Quelch:: What year was that?


James Garfield Gardiner: That was in 1936 or 1937.


Victor Quelch: There has been a big change since then.


James Garfield Gardiner: Don't get in a hurry; I am
going to tell you what it is right now. I had an examination made today into the figures; and while they are higher, a>s my hon. friend says, than they were back at that time still they are only from 8 to 9 per cent. When you take the total cost of operations on the farms across Canada at present, the proportion of that cost which is capable of being properly checked off to farm implements is from 8 to 9 per cent. It is quite a bit, but it is not sufficient to permit members to stand up in this house and leave the impression that all the increased cost in connection with farm operations is due to something that has happened in connection with farm implements. I think we ought to give all the facts. We ought to consider the facts, and we ought to base our decision upon the facts, whatever they are. I am giving them, Mr. Speaker, for what they are worth.
There is another matter that I wanted to take up which relates to this same question. Over and over again it has been said that the policy of the government in connection with prices and in connection with encouraging production is pretty well based upon the Agricultural Prices Support Act of 1944. We have been making comparisons between what that act takes as the basis of its operations, and the position from time to time. In order to do that it is necessary to take not one year but three years. I am, therefore, going to take the three years upon which we based our provisions for support, and then take the last three years for which we have records. This includes 1951 which, as I indicated a moment ago, was the year in which we had the highest prices.
Let us take cheese, which is the first item in the group of commodities I have here. In 1943-45 we had a price of $1.91 per hundredweight at the farm for cheese. The average actual volume of production was 20 million hundredweight and the average annual farm value-I am just going to use the round figures-was $38 million. In

1949-51 the price was $2.46 per hundredweight, the average annual volume of production 11,600,000 hundredweight, and the average annual farm value $28,700,000. You will note that the total return for cheese was less in the last three years than it was in the three years at the end of the war. That is the only commodity on the list I have of which that can be truthfully said, and that list runs right down the page.
Let us take the next one, butterfat. In 1943-45 the average return for butterfat per year was $187 million, and $237 million in 1949-51. Then for hogs: 1943-45, the average farm price was $16.84 per dressed hundredweight, and in 1949-51 the price was $30.11.


Mr. Wright:: What is the total average value?


James Garfield Gardiner: I will get it all out to you
in a moment. What I do not get out to you, if you will give me permission, I shall put on Hansard. For 1943-45 the total value was $225 million; in 1949-51 the total value was $301 million, or $75 million more than it was in the three years at the end of the war. We had a yearly average of 13 million dressed hundredweight in the last three years at the end of the war, and only 10 million hundredweight per year in the last three years. In other words we are getting very much higher returns from the production of hogs in the last three-year period than we did at the end of the war.
In so far as cattle are concerned, that statement is even more applicable. The average annual farm value for the first three-year period was $187 million, and $385 million for the last three-year period. For apples it was $18 million and $20 million; that is one product of which we have had more delivered and have not received very much more for them. We had more apples delivered in the last three-year period than in the first three-year period, but we only received $20 million for them as against $18 million. For eggs the total for the first
The Budget-Mr. Gardiner period is $107 million, and for the last period $136 million; for potatoes, $78 million and $85 million; for wheat, $441 million and $722 million; for oats, $249 million and $317 million; for barley, $131 million and $206 million.
I give those figures in order to emphasize the position I took a few moments ago, namely that there is not a decrease in the quantity of farm products being produced in this country, either in the last three years as compared with the last three years of the war or in the six years since the war as compared with the last six years before the war. Our production is going up, and going up continuously; and while it is going up prices are increasing and therefore the returns to the farmer are increasing from year to year. If we liked to take it over the longer period, as the federation suggests, from the three-year period at the end of the war to the three-year period now, the same picture is presented.
It is now six o'clock, Mr. Speaker.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
James Garfield Gardiner: Mr. Speaker, this afternoon I was using figures which appeared in different tables, and I think I had the consent of the house to have those placed in Hansard, although I did not particularly ask for it. I should like now to ask for the consent of the house.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.


James Garfield Gardiner: The first table is a comparison of the average farm price, the average annual volume of production and the average farm value for the two three-year periods 1943-45 and 1949-51 for selected commodities, and is as follows:
-	Average Farm Price	Average Annual Volume of Production	Average Annual Farm Value
	$		$
Cheese 1943-45		per cwt. 1.91	cwt.	
1949-51				
Butterfat 1943-45		per lb.	lb.	
1949-51				
			
Hogs 1943-45		per dressed cwt.	dressed cwt.	
1949-51		30.11		
			
2664

The Budget-Mr. Gardiner
-	Average Farm Price	Average Annual Volume of Production	Average Annual Farm Value
	$		$
Cattle	per live cwt.	live cwt.	1943-45	9.63	19,437,000	187,100,0001949-51	22.14	17,390,000	385,000,000Apples	per bu.	bu.	1943-45	1.43	12,773,000	18,246,0001949-51	1.28	15,976,000	20,490,000Eggs	per doz.	doz.	1943-45	.31	350,169,000	107,349,0001949-51	.45	306,854,000	136,937,000Potatoes	per bu.	bu.	1943-45	1.09	71,631,000	78,114,0001949-51	1.09	78,199,000	85,434,000Wheat	per bu.	bu.	1943-45	1.30	339,869,000	441,348,0001949-51	1.56	461,909,000	722,277,000Oats	per bu.	bu.	1943-45	.55	454,420,000	249,632,0001949-51	.78	408,679,000	317,119,000Barley	per bu.	bu.	1943-45	.69	189,344,000	131,319,0001949-51	1.16	179,006,000	206,911,000
The second table is a comparison of the base for selected commodities for the years support price, if any; the average market 1949-50 and 1951. It is as follows: price, and the comparative price on a 1943-45
-	Support Price 1949-51	Average Market Price for years 1949-51	Comparative Price 1943-45 base30-28c.	32.9 lb.	30.758-53-58	61.6 lb.	62.3$26-*27	30.61b.	25.1626.45 lb.	16.83.08 per box 58.1	3.9038-38	62.2

Canadian
Price
Mid-
September
The Budget-Mr. Gardiner
The third table indicates the price of com- from chief suppliers, for a period in 1952, modifies laid down in the United Kingdom and is as follows:
Beef Carcass
Bacon	
Butter	
Eheese	
Eggs	
Mid-September 1952
16'6	cents per lb. Argentina_
31-5	"	"	Denmark_____36-7	"	"	New Zealand21 * 3	"	"	New Zealand
46-4 cents per doz. Denmark..
42-0
28-5


Percy Ellis Wright: Has the minister any tables on farm costs that are comparable?


James Garfield Gardiner: Farm costs are covered by the second table in the fact that there is a comparison between the first three-year period and the second one, and there is an indication there of the relationship of costs to returns.
I should just like to say that that comparison indicates fairly clearly that it is quite fair to take a gross return from farmers right across Canada rather than just to deal with particular products. It indicates that on wheat, cattle and hogs the margin between cost and return is quite wide, but that on some other commodities there is little if any margin between the cost of production and the return which is received.
I think it will be generally agreed by members of the house that on the average farm across, this country, in so far as obtaining returns is concerned, the more important products are cattle, hogs, grain and products of that kind. Products such as eggs, for example, are important to a group of egg producers who are close to cities; and to some of the fluid milk-producing farms, milk may be the important product from their point of view; but when one looks at all the farms of the whole country, I think one will agree that it is important that there be a considerable margin as between the costs and the returns that are received for the staple products, even if some of the products which do not enter largely into gross returns from the farm show on departmental tables little margin between cost and return.
In listening to the speeches which have been delivered over the past few days in connection with the budget, I have been of the opinion that too much consideration was 68108-1704
being given to the idea that our production was down. I have attempted this afternoon to indicate that this is not the case but that our production is up. Then I was concerned about the fact that an attempt was made to show that our returns were down, and I think I was able to demonstrate by these tables, if not by what I said this afternoon, that our returns are also up. The returns being up and the production being up, the farmer is obtaining more for his efforts across the country than at any other time in our history.
The other matter I have been concerned about is the fact that the opposition in general and the official opposition in particular think we have been here too long. I should like to ask them why they think we have been here as long as we have. I have some ideas of my own about it. I remember that many years ago I came to Ottawa to hear a budget speech. It was the first budget speech delivered by the late R. B. Bennett following the election of 1930. He was his own finance minister and delivered his own budget speech. The speech was a typical Conservative one, as was to be expected. We had just had an election. The Liberal party had been in power for some time, and they had been voted out of power. Those of us who came here and who had supported the Liberal policy were a little bit concerned about what we were going to hear and about what we would probably see.
I came here as a farmer from western Canada, dressed as farmers are dressed; and I was a little bit surprised to find that our Conservative friends had gone back to the time of Sir John A. Macdonald even in the matter of dress. They had their canes. Some of them had their silk hats. Practically all

The Budget-Mr. Gardiner of them had their striped trousers and their long-tailed coats. I did not feel at home anywhere else, so I crawled into a seat up behind that post over there in the gallery where you are not able to see the central benches. It was the only seat I could find. The others seemed to be filled by people who wanted to hear the first budget of the Conservative party after they had come into office.
The only way I could see the speaker when he was delivering his budget was to edge around that post up there occasionally, look down here and get a view of him. I want to say that it was a good speech. There are one or two sentences in it that I want to read to you this evening. Here is one of them, delivered by the leader of the Conservative party at that time:
The resolutions that are being submitted to this house are not for the purpose of affording protection in the sense in which that term is usually used: but if that term is used to designate just what we, during the election, indicated that it did mean namely, the giving to Canadians an equality of opportunity with others who are building up their country to enable us to build up our dominion, and to give fair competition to the worker in Canada, be it man or woman, then it is protection that we propose. There can be no doubt, Mr. Speaker, in the mind of any hon. gentleman within sound of my voice that this government at least has a mandate to give effect to that policy. In every part of this dominion I was at great care to make it known to the audiences who listened to what I had to say, so that there could be no mistake as to what I meant, that in the event of their supporting candidates of our party they thereby supported a policy that would ensure fair competition to Canadian workmen and workwomen and equality of opportunity to Canadians to build up their country.
The remainder of the speech is in agreement with that sentiment. That government was in power for five years; and if anyone has any doubt as to why, the Canadian farming population have never forgotten that. I should just like to read a few of the results that were obtained in so far as agriculture was concerned. The export price of wheat during that period averaged 68 cents a bushel; oats averaged 33 cents a bushel, and cattle averaged $61.93 a head. That was not a hundredweight or a pound, although they have been up to about half that per hundredweight recently. It was $61.93 a head. Beef and veal-these are prices at which products that were being exported, not products that were being consumed in Canada-averaged 5 cents a pound; bacon and hams, 14 cents a pound; cheese, 12 cents a pound and so on.
I think that will give the house the best reason that could possibly be found as to why the Canadian people have left us here for 17 years, now going on toward 18 years. It also gives us reason to understand why I think I would be safe in saying more than 60 per

cent of the members who sit on this side of the house were elected as a result of the votes of the rural people in the constituencies which we represent.
That being the case I can quite understand why those who sit on this side of the house are quite ready to accept the challenge of the hon. member for Moose Jaw (Mr. Thatcher). Those of us who represent constituencies all across this country are not at all concerned about when the Prime Minister (Mr. St. Laurent) decides that it is a good time to go to the country. We do know that when my hon. friend goes up to his own constituency he will have his own troubles. He will probably have difficulty in having himself elected, particularly if he speaks the way he spoke during the session preceding this one. Someone suggested the other evening that he had changed his opinions. I think maybe he has.
I doubt very much if he has actually changed the views he holds either with regard to his own business or the methods by which he can make a success of it, but he has probably found it necessary to express some other views in order to appeal to the people he is going to ask to support him.
But in any case, whether the election comes soon or whether it is delayed for some time, I am quite sure that members sitting on this side will feel that they have policies to present to the agricultural population across this country which are acceptable to that population. As I indicated this afternoon, we have had reports to that effect right across the country. When one appears in areas where there is a farm population it is usually quite evident that this government still holds pretty much the same place in their affections that it held when we went to the country the last time. So when we go next time we expect, unless the Conservative party can find a better policy than the one they enunciated in this speech I was reading a few moments ago or, failing that, unless they find themselves in agreement as to what their policy ought to be, they will experience some considerable difficulty in getting support in agricultural areas across the country.
As far as our friends of the C.C.F. are concerned, no doubt we will have some battles with them out in Saskatchewan, and as we have them we will probably enjoy them; but I expect that unless a different attitude is taken toward the establishment and handling and control of farm prices in that area than has been taken until now, our difficulties will not be as great as they have been on some previous occasions. It has been established in the minds of all the people right across Canada that the situation which existed during the ten years of war and the period following the war no longer exists.

This government has no control over the setting of prices of farm commodities within the provinces; the provincial governments have had that control. It is a remarkable thing that the most radical of all governments in Canada has done the least about it while the most conservative of-all governments in Canada, that of Ontario, has done the most about it. That government has set up boards to control the marketing of farm commodities as provided by our constitution, and they have been dealing with the matter.
I would also point out that since we last met the farm organizations of Canada have realized and are now putting forth the contention that the bringing of vegetable oils into this country and converting them into substitutes for dairy products is something to be dealt with by the provinces. I think at the present time seven provinces have legislation before their legislature or are preparing to place it before their legislatures, dealing with that matter.	[DOT]


An hon. Member:: Why?


James Garfield Gardiner: Because under our constitution that is where it ought to be dealt with. The only place it can be dealt with properly is in the provinces. So when we meet the people again our friends in the opposition will not be in a position to go to the farmers and try to represent to them that their difficulties are created in Ottawa. We will be able to demonstrate to them, particularly in the province of Saskatchewan, that most of their difficulties are created by the government which is there at the present time.


Mr. MacDougall:: Would the minister permit a question? In his quotation from the address made by the late Viscount Bennett he gave a figure for a carcass of beef which was so horribly low that I was wondering whether the beef had been horned or de-horned.


Mr. Charlton:: Would the minister permit another question? The minister stated during his speech that there were no other troublesome surpluses except canned pork and some New Zealand beef in the United States. Would he care to comment upon the amount of dried skim milk and cheese?


James Garfield Gardiner: I am quite sure my hon. friend would not like to suggest to this house or to anyone who knows anything about the situation that there is any troublesome surplus of cheese. When Great Britain wanted to buy 5 million pounds of cheese recently we had more trouble getting those 5 million pounds than in finding a market. There is no such thing as a troublesome surplus of cheese at the present time in Canada.
The Budget-Mr. Rohichaud
In so far as dried skim milk is concerned, the government has taken care of the situation which exists in relation to that, just as we have in connection with other matters. We have undertaken to take 10 million pounds off the market at a certain set price provided it can be obtained. This offer has been standing now for some considerable time, and up to the present it has not been accepted. That would seem to suggest that even that market is not so troublesome as we had expected it might be.


Albany M. Robichaud: Mr. Speaker, at the outset of his speech the Minister of Agriculture (Mr. Gardiner) mentioned that he was the fiftieth speaker in this debate. I rather hesitate to come to bat after such a home run king as the minister. I am asking myself whether I can measure up to the task of opening the second half of this game.
It is therefore with a full consciousness of my limitations that I venture to register my disapproval of the 1953 budget as a whole, and my determination to support the amendment thereto so ably presented and moved by the hon. member for Greenwood (Mr. Mac-donnell). My contribution to this debate will not, I hope, prove repetitious, as I will endeavour to limit myself to possible budgetary repercussions on my own constituency.
I have listened with great interest to the masterful expose made by the financial critic of the official opposition. In my submission he has spoken as a philosopher, as a real financier and, most especially, as a true Canadian conscious of the needs of his fellow men, concerned with the profligate and reckless manner in which the present government has been spending the taxpayer's money, and most particularly anxious to proclaim to the Canadian people the government's utter lack of solicitude for the common man, the everyday labourer, the small wage earner, the father of a family.
I have also listened to the leaders of the C.C.F. and Social Credit groups, and I have been impressed by their opposition to this budget, which the Canadian Congress of Labour has very rightly and truly stigmatized as a budget for the greedy, not for the needy.
After the arguments so ably marshalled by these masters, as well as by other opposition speakers, what possible new arguments could a newcomer to this house possibly build up without cribbing from previous speakers? Hence I prefer to let well enough alone, and to confine myself, first, to a reference to some statements made by certain members who rose to speak in defence of the budget and,

The Budget-Mr. Robichaud especially, in laudatory adulation of its creator; and, second, to certain extracts from the budget speech itself which may be of interest to my constituents, with a view to enlarging and commenting thereupon.
In his opening remarks last Wednesday the hon. member for Montmagny-L'Islet (Mr. Lesage), after referring to an article in the New York Times, had this to say, as reported at page 2388 of Hansard:
If the writer of that article had been sitting in my seat last Thursday evening, he would have seen across the alley nothing but green, pale, grey faces, gloomy with envy and jealousy, and of course with disappointment.
This was my hon. friend's observation from his point of vantage. As could be expected, the hon. member for Saint John-Albert (Mr. Riley) had to parrot this reference in his speech last Friday. What did we see and observe from this side of the house on budget night on the faces of government members? We saw their faces getting longer and longer.


Some hon. Members:: Oh, oh.


Albany M. Robichaud: That is right-longer and longer, as the expected major cuts in taxes were not included in the minister's litany. We saw the faces of government supporters getting redder and redder, suffused with blood as a result of their increasing emotions and feelings of anger, shame and frustration.


Some hon. Members:: Oh, oh.


Albany M. Robichaud: It was then that I fully realized the truth of Milton's verse:
Mine enemies shall then grow red with shame.
Yes, the government supporters were truly red as turkey cocks, more especially the parliamentary assistant to the Minister of Finance who, acting as their cheer leader, was attempting to encourage by word and gesture his impatient, growling neighbours. Mr. Speaker, that was the picture from this side of the house.
Again, at page 2388 of Hansard the hon. member for Montmagny-L'Islet quoting from the New York Daily News crowned the Minister of Finance with a new title, "The wizard of Ottawa." I am wondering if the hon. member has done any research work about the term "wizard".


An hon. Member:: He meant lizard.


Albany M. Robichaud: I doubt it. If he had referred to Webster's dictionary he would have found the following definition of "wizard":
One devoted to the black art: a magician: a sorcerer.
[Mr. Robichaud.)
Winston's Universal dictionary goes further and defines "wizard" as follows:
A person supposed to possess magical or supernatural power derived from alliance with the devil, or with evil spirits.
An English author and journalist Henry Mayhew published a work entitled "London Labour and London Poor" in 1851. Therein I find the following fitting quotation:
I call myself a wizard as well; but that is only the polite term for conjurer; in fact, I should think that wizard meant an astrologer, and more of a fortune teller.
Is this what hon. gentlemen opposite have in mind in calling the Minister of Finance a wizard? And may I be permitted to refer my hon. friends to a citation from Sir Leslie Stephen in his book "Hours in a Library", where he says:
There is some reason for suspecting that the great "wizard" has lost some of his magic power.
This seems to be exactly the consensus now prevailing among the majority of taxpayers in Canada about the so-called "wizard of Ottawa". Or should I rather leave my hon. friends with this thought from Dryden?
The wily wizard must be caught.
The Canadian taxpayers are anxiously awaiting the first opportunity to do that, too.


Stuart Sinclair Garson: Whom are you quoting from now?


Mr. Riley:: They are waiting for you in Gloucester, too.


Albany M. Robichaud: I now turn to the hon. member for Saint John-Albert, whose mastery of language is excelled only by the superfluity of his words in a desert of ideas, who has not restricted his cynical remarks to the hon. member for Greenwood, but has extended them to the provincial government of New Brunswick. He is quoted as saying at page 2476 of Hansard, after referring to the cut in the cigarette tax-


Daniel Aloysius Riley: A great deal of mutual respect between you and the new government in New Brunswick.


Albany M. Robichaud: The hon. member for Saint John-Albert, with his nasal-toned interruptions, reminds me of the fog horn in Saint John harbour. This is what the hon. member said as reported at page 2476 of Hansard-


Daniel Aloysius Riley: You are like a ship in distress, too.


Albany M. Robichaud: I did not interrupt you the other night when you were in worse distress.


Daniel Aloysius Riley: He just goes on and on, like the babbling brook.


Albany M. Robichaud: The hon. member said:
However, a couple of days later the new Progressive Conservative government in New Brunswick decided in their budget that they were going to place more taxes on cigarettes.
The true facts are that an amendment has been announced to the New Brunswick tobacco tax, one of the many taxes which the late McNair government left us as a legacy. Before the 1953 federal budget and the 2-cent reduction by the cigarette manufacturers, a package of 20 cigarettes cost us 43 cents in New Brunswick. The provincial government, under the former McNair law, was getting 4 cents out of every package. As a result of the federal budget reduction, and the 2-cent cut by the manufacturers, the New Brunswick taxpayer will now pay, including the revised tax of one-fifth of a cent for each cigarette now imposed by the New Brunswick government in lieu of the former McNair tax, 37 cents per package of 20.


Daniel Aloysius Riley: You are a good reader.


Albany M. Robichaud: He will now have to pay 37 cents for a pack of 20.


Daniel Aloysius Riley: You are a good reader.


Mr. Speaker:: Order. There must not be so many interruptions.


Mr. Harkness:: Particularly such stupid
interruptions.


An hon. Member:: That is not parliamentary.


Albany M. Robichaud: He is giving 4 cents per pack of 20 cigarettes to the New Brunswick treasury, exactly the same as he paid under the McNair government. This is the true picture. I wish my hon. friend, who likes to interrupt me so much, would take a few moments of his time to read a very intelligible -otherwise I would not refer him to it- schedule published in L'Evangeline of the 25th of February. He would profit greatly by reading it. My hon. friend also said at page 2476 of Hansard that the Conservative government was going to take off the sales tax but they have not done it yet. Again, this calls for correction. What we said was that we would devote all our efforts to doing away with this unpopular tax, and not that we would or could do it at once.


Some hon. Members:: Oh, oh.


Albany M. Robichaud: My hon. friend has forgotten to give credit to the new Flemming government, which has hardly been five months in office, for making a start on chipping away the vexatious and iniquitous McNair 4 per cent provincial sales tax by exempting therefrom all medicines and drugs. This will save New Brunswick taxpayers, Saint John
The Budget-Mr. Robichaud included, at least a quarter of a million dollars a year. Let not my hon. friend be overanxious and overimpatient. The Liberal government had been in office in New Brunswick, like its counterpart at Ottawa, since 1935. It left its successors in a morass of financial difficulties which will necessarily take the businesslike government of Hon. Hugh John Flemming considerably more than five months to clear up and clean up.
Before passing to something more important than the unwarranted utterances of the hon. member for Saint John-Albert (Mr. Riley), I should like to quote what two of our New Brunswick daily papers have to say about the Flemming government's first budget. The Telegraph-Journal, published in my hon. friend's own city and well known to him, had an editorial,on the 25th of February on the New Brunswick budget which reads in part as follows:
The intended plan of the government as outlined by the budget speech is to proceed along businesslike lines shunning avoidable expenditures but at the same time rejecting any idea of plunging into a strict "austerity program" which might defeat its own purpose by slowing up the progress of New Brunswick's economy ... It was a confident speech, one which reflected much optimism for the future of New Brunswick, and it was noteworthy also for the evident care which was taken to express its reasoning in non-technical terms so that it would be clearly understood by the citizens.
The Moncton Times of the 26th of February calls the Patterson budget "A Build Up New Brunswick Budget" and reads in part as follows:
The first budget of the new Progressive Conservative government, as presented to the legislature this week by Hon. Donald D. Patterson, provincial secretary-treasurer, gives the people of New Brunswick a clear-cut yet comprehensive outline of the financial position of their province. To many, that picture will be a surprise because a sequence of reported annual surpluses over several years had tended to convey the impression of a more sound state of the province's fiscal structure than actually prevailed.
After referring to the aims of the present Flemming government, the editorial concludes as follows:
These three aims and the adoption of a cautious thrifty policy could mean a great deal in bringing a prosperous economy to this province.
Now let us consider certain aspects of the budget of the Minister of Finance (Mr. Abbott) so far as they reflect on the economy of my own constituency of Gloucester. The minister, dealing with the customs tariff, said at page 2132 of Hansard:
Reductions are proposed on two important categories of equipment used in the fishing industry, namely gasoline engines and wire rope. In the case of the mining industry the proposals include reductions on certain specialized equipment.
2670	HOUSE OF
The Budget-Mr. Robichaud
The minister will permit me to suggest that he could not have intended to restrict these reductions to gasoline engines only, as a reference to tariff item No. 440k, at page 2143 of Hansard, indicates that it undoubtedly includes all type of engines. Under tariff item 403 the duties on wire rope or cable, for use exclusively in commercial fishing, have been reduced from 25 per cent to 10 per cent under the most-favoured-nation tariff, which would include imports from the United States, while imports from the United Kingdom are now duty free. There has been a straight reduction of 15 per cent on steel rope or cable, the general tariff of 25 per cent remaining unchanged.
May I observe, however, that this reduction would have been doubly welcomed by the fishermen who must purchase this very expensive steel rope if it had been accompanied by the elimination of the 10 per cent sales tax which they will still be called upon to pay. Then there would have been real, appreciable and substantial benefits accruing from this budget to those fishermen. The dragger type vessel owners are the ones mostly interested in steel rope, while the great bulk of our fishermen use, and use plenty, ordinary rope of hemp or manila fibre. The budget is silent on this most important commodity to the greatest number of our fishermen. There is no reduction whatsoever in existing duties and sales tax levies on ordinary rope. In my submission this is where substantial cuts should have been made.
Under tariff item No. 682, which has been left untouched by the present budget, the only rope which is duty free is rope not exceeding 1J inches in circumference. This same rope, "not exceeding 1J inches in circumference for the fisheries", quoting from schedule III of the Excise Tax Act, is also exempt from the sales tax. But you will realize, Mr. Speaker, that this is indeed a very small rope. It is only a cord about the size of my little finger, roughly half an inch in diameter, almost a clothesline. Our fishermen have little practical use for that very small rope. It is much bigger and stronger rope that they would mostly need and use. Yet all this rope exceeding 1J inches in circumference falls under tariff item 575 and it becomes subject to the following ad valorem duties: Under the British preferential tariff, 20 per cent; under the most favoured nation tariff, 22 per cent, and under the general tariff 25 per cent.
I am informed that there has been no modification in the above rates since 1925. Hence our fishermen are really hard hit by the duty-axe on the rope which they need

The Budget-Mr. Robichaud (Translation) :
A mineral deposit which could be the most promising ever discovered in New Brunswick.
Since the ore comes from an almost solid vein of pyrite, it is natural to believe that there will be required a sulphur or acid development in connection with any smelting process. From the point of view of tonnage, there are indications of high possibilities. If we go by test drillings 200 feet in depth, it is estimated that the production will be 28,813 tons of lead-zinc ore per vertical foot. Down to a depth of 1,000 feet, this would mean a production of 28,813,000 tons. The deepest drill-hole, so far, goes down to 500 feet.
(Text):
I stated that the response to what the Northern Miner of February 12 referred to as "the exciting new Bathurst field" was also generous. Cash has been pouring in for the development of this most promising find since its discovery.
It should be said that this strike did not mushroom overnight. During the last two or three years pioneer prospectors and mining engineers had been working hard and with commendable perseverance in our district. Gloucester county, the province of New Brunswick, and Canada ias a whole owe these pioneers an eternal debt of gratitude.
May I be permitted to make special mention of two of these precursors of our new era of prosperity. First there is our own "Pat" Meahan, a Bathurst-born mining engineer with a great faith in his native county. For several years past he has been exploring our back country. He had confidence in our mining potentialities; he never got discouraged; he kept on "plugging". Truly, the name of Pat Meahan deserves special mention in the mining annals of New Brunswick. Then we have Mr. M. J. Boylen of Toronto, whose courage, perseverance and confidence in our mineral deposits have finally enabled him to reap a richly deserved reward. The editor of the Northern Miner rightly remarked:
With this discovery, Mr. M. J. Boylen is assured a place in the mining hall of fame . . . But now while still a young man he has reached a pinnacle that is attained by few.
Publicly sponsored companies, with over seven millions in their treasuries, are already working on their holdings. This estimate, of course, does not include operating companies such as Mining Corporation, Noranda, Anacon and others, which have already fortified themselves with extensive property holdings in our new base metal field. An important United States group has lately entered our mining picture. Strategic Materials Corporation, headed by an important group of prominent United States industrialists and financiers, are now interested in vast staked holdings. In his first official declaration after


the strike, Hon. Hugh John Flemming, our new premier, was quick to assure all mining interests of the full co-operation of our provincial government.
On the 24th of February our New Brunswick provincial secretary-treasurer, Hon. D. D. Patterson, in his first budget speech, after referring to the various phases of the general economy of our province said:
My main emphasis is to refer to the announcement last month of what is reputed to be a new important mining discovery located in northern New Brunswick, in the Bathurst area. There would seem little doubt that this development may be the spark to usher in a new era for New Brunswick.
As for the federal Department of Mines and Technical Surveys, I am already assured of their co-operation. It is our hope, in Bathurst, that we may soon have the honour of receiving in our midst the minister of that department. I have no doubt that his visit, on the spot, will convince him of our vast mining potentialities and will confirm our confidence in the survey, assaying and other laboratory tests of his department.
May I suggest that it is the hope of my constituents that through his department further aeromagnetic surveys will be conducted in the county of Gloucester. I am informed that it is possible that more ore bodies may be detected should, such a survey be made from the old Bathurst mines through Allardville, Paquetville, St. Isidore to Caraquet and along the shores of the bay of Chaleur including, of course, Shippigan, the Islands, Inkerman and Tracadie.
We would also welcome, and we solicit, the assistance of both the federal and provincial departments of mines to make surveys and assist in the exploration and possible development of the coal deposits which we know to exist at Maltampec, extending as far as the shore of Pokesudi. In other words, Gloucester county has now been proved to be an important base metal territory, and we feel that our governments should spare no effort in assisting in its development to the fullest possible extent.
Likewise may I make an appeal to the Minister of Transport (Mr. Chevrier). There is at present a 16-mile dilapidated railroad running from the main Canadian National Railways line, at or near Gloucester Junction, to Bathurst Mines. At present it is only used by a motorized trolley car. I understand that work is already proceeding on rehabilitation of this line. This practically abandoned spur line has now become a vitally important link between the new mine field and the town of Bathurst; it should be properly rebuilt at once, and put in shape for the heavy loads that will result when the mines are in production.

A good new highway is also urgently needed to link the mines with Bathurst. We already have the assurance that our provincial government will soon undertake this important construction.
I know that the genial Minister of Public Works (Mr. Fournier) would certainly feel surprised, if not offended, were I to forget his department in my plea for governmental assistance in the wake of the major developments that are in store for Gloucester county as a result of our gigantic mining expansion. I am informed that by the middle of April the size of the mill to be erected in the vicinity of Bathurst will be decided. At present a mill with a minimum capacity of 5,000 tons of ore daily is contemplated, but new discoveries with consequent increased profit potentials could possibly raise this objective. This necessarily predicates harbour facilities for exporting our mining products. Major developments will naturally be needed in the Bathurst harbour. Deep-sea, year-round navigable harbours are available in Gloucester county. May I just mention two which could be easily developed, the Pointe Marcel harbour, in the parish of Caraquet, and the Ship-pigan harbour. I therefore strongly urge the immediate necessity of thorough surveys into the possibilities and adaptability of these two natural harbours.
This is, in short, the present situation on the mining front in Gloucester county. But what rosy horizons are we not justified in envisaging as the result of these discoveries, in the whole economic future of the province of New Brunswick? All our available hydro power resources will have to be developed for the new industries for which we have been long clamouring, and that will henceforth come to our province. At this stage I wish to thank the hon. member for Lethbridge (Mr. Blackmore), who spoke so highly this afternoon of the maritime provinces. No longer shall our young men have to desert our county and province to seek employment elsewhere.
One newspaper predicts that the town of Bathurst can set its sights on a population of
40,000	within a few years. In the last paragraph of a recent editorial "Une ere de grande prosperite s'annonce au Nouveau Brunswick", Le Droit says:
(Translation):
The province of New Brunswick, generally considered up to now as a poor province, is now entering upon an era of great prosperity. Canadians have greeted this news with much enthusiasm.
(Text):
While I am the first to realize with the French poet that all the future is in God's hands only, l'avenir est a Dieu, yet the prospects of my county and province never looked
The Budget-Mr. Sinnott so bright and promising as they do now. Our people who have valiantly stood adversity and laboured under hard conditions have all that it takes to make full use of the prosperity which the future holds in store for them. Let us hope that our governments will also accept the challenge. The hardy people of Gloucester county may well today borrow these lines from Alfred Lord Tennyson:
We sailed wherever ships could sail,
We founded many a mighty state,
Pray God our greatness may not fail Through craven fears of being great!


John Sylvester Aloysius Sinnott: Mr. Speaker, I do not know whether or not I shall be worthy of that ovation, but I shall do the best I can for the constituency I represent. I am sure we were all glad to hear the parliamentary assistant to the Minister of Defence Production (Mr. Dickey) this afternoon give a full, detailed-


Mr. Fraser:: Fairy story.


John Sylvester Aloysius Sinnott: -explanation of defence construction, cost-plus construction and so on. While he was giving a thorough analysis of what was going on, I noticed that the hon. member for Victoria, Ont. (Mr. Hodgson), the hon. member for St. John's West (Mr. Browne), the hon. member for Gloucester (Mr. Robiehaudi), the hon. member for Brant-Wentworth (Mr. Charlton), the hon. member for Peterborough West (Mr. Fraser), the hon. member for Eglinton (Mr. Fleming) and the hon. member for Lanark (Mr. Blair), were the only Conservative members in the house.


Mr. Fleming:: And there were about six Liberals.


An hon. Member:: Name the Liberals.


John Sylvester Aloysius Sinnott: I am sure that will illustrate how much interest they took in what was going on.


Gordon Knapman Fraser: You could not name the Liberals.


John Sylvester Aloysius Sinnott: I am about the fifty-third speaker in this debate on the budget. I do not want to be repetitious, so I shall endeavour to confine my remarks to matters which have not been mentioned.
I am sure that the Liberal party, and the people of Canada as a whole, are more than enthused with the recent budget.


Mr. Ross (Souris):: Why?


John Sylvester Aloysius Sinnott: I am sure they will all give credit to the Minister of Finance (Mr. Abbott), in bringing down his eighth budget, for having offered his services to the people of Canada for eight years in that capacity. I am sure there is no other finance minister in the world who has the record of Hon. D. C.

The Budget-Mr. Sinnott Abbott. He has been rendering service to Canada for which all Canadians will be thankful for some time to come. His name will stand as that of one of the most able finance ministers Canada has ever had.
I now turn my remarks to a reference to the financial critic of the Conservative party, the hon. member for Greenwood (Mr. Macdon-nell). I am sure those who were here that night when he first got to his feet will be more or less at a loss to understand him. The hon. member for Greenwood was without words as far as criticism of the budget was concerned.


Gordon Knapman Fraser: He was dumbfounded that the Grits would bring down such a budget.


John Sylvester Aloysius Sinnott: He had not spoken about the budget for more than four or five minutes when he turned to the Currie report. It must have been of more interest to him than criticism of the budget.


Mr. Hodgson:: Horses.


John Sylvester Aloysius Sinnott: I will tell you some more about that subject later on. I also heard him over the radio. As a result of hearing the questions asked Hon. D. C. Abbott and the way they were answered, and the questions asked the same man who would have liked to fill this portfolio which Hon. D. C. Abbott is at present filling, the only conclusion one can come to is that Canada would have been in a terrible mess if he had had his wish.
He then turned to a remark that was made by the hon. member for Ontario (Mr. Starr) about Pickering. In other words Pickering was more in his line of criticism than was discussion about the budget. May I say that in the riding of Springfield we have some towns which have just as much trouble getting water as has Pickering. I refer to the little town of Lac du Bonnet. They did not bother the provincial government, and they did not bother the dominion government. They went in and formed their own co-operative, and they are supplying water to the people in the town at a dollar a month. If some of these towns would themselves show a little bit of initiative instead of trying to lean on others, they would get farther ahead.
I am not going to defend the budget. I am going to let the Ottawa Journal, a Conservative paper, defend it. This is what they bad to say:
The change in the corporation tax with respect to small business is this: For the present rate of tax of 20 per cent, on the first $10,000 of taxable income there is substituted the rate of 18 per cent, on the first $20,000 of taxable income. This is a substantial change, should mean much to those small industries which are the backbone of so many communities, and mean much also for the industry which, with great possibilities before it, is just getting under way and needs money for capital extensions.


That is the Conservative paper, backing up just exactly what this government did.
So much reference has been made to horses that I thought possibly it might be a good thing for me to mention them again. I believe the military critic of the official opposition, the hon. member for Nanaimo (Mr. Pearkes), was on a radio forum some time ago; that he was asked this question: "Were horses on the payroll in the first war?" and that his answer was: "I would rather not answer that question."
I think anyone knows that in the first war horses were used to draw heavy artillery. Horses were used for cavalry in the first war. Any man who has anything to do with a municipality knows that thousands of teams are hired, and they are referred to as man and team. It is therefore nothing new to municipal men. But to a man by the name of Mr. Currie who is in Montreal investigating this matter, it might have been new. It also might have been new to newspapermen. But I am sure it was a disgrace to the affairs of Canada that such cartoons as appeared were carried in the papers. They did not add at all to the prestige of the country. I am sure that the money involved in hiring a few horses from the farmers there to do work that tractors could not do did not mean anything more than $75 in all. But the criticism went out over the length and breadth of this country and throughout the United States, and it had a bad influence and constituted a black mark on our military forces.
I am now going to refer for a moment to the hon. member for Broadview (Mr. Hees). He speaks in the house on practically every subject that comes before us, and he criticizes practically every measure that is brought forward because we are not doing enough. This time he was complaining that we were spending too much money. I am sure he cannot have his cake and eat it too. If he expects social services, I am sure that money has to be raised somehow to pay for them.
I wish to refer to an article by Mr. John Fisher, who was on the radio the other night. He was referring to press reports. He had been taking a trip down through the United States, and he said that in almost every paper he found reports of Canada that were all to the good, that Canada was making great, progress. But in this country he said he saw only three reports of how Canada was making progress. If our newspapers in this country gave a true picture of how Canada is forging ahead, I am sure it would be far better for everyone concerned.
I will turn now to-


Clayton Wesley Hodgson: Page 6.


John Sylvester Aloysius Sinnott: -some of the taxes about which hon. members opposite are complaining. Possibly they would say that the $955 million that was made available to Central Mortgage and Housing Corporation was not a good thing for the country; and they claim that not enough houses are being built. I say that it has been a good thing, but the government has had to fight financial corporations, insurance corporations and banks because the rate of interest has been low.
If they want to have a large number of houses built, I think money should be made available for those projects at 3 or 3i per cent.
Possibly they would not say that the money which has been made available for building hospitals throughout Canada was a bad thing.
I will refer to my remarks on July 15, 1946. At that time-rthat was before this program was in effect-I said that every small community throughout Canada was in dire need of a hospital. The town in which I resided at that time had been trying to get a hospital for 20 years. Now we come to 1953, and we find that the constituency has 2 large hospitals for which $100,000 was made available by the provincial and dominion governments before the people themselves spent a dime. So I am sure that what the government has done in that line has helped considerably. Almost 45,000 hospital beds are available at the present time over and above 1946.
Almost $81 million has been made available for industrial development at interest rates ranging from 4-J to 6 per cent. I am sure everyone knows how industry has progressed in Canada.
I think I should read a few quotations from what the hon. member for Greenwood (Mr. Macdonnell) said back in 1948. When I think of the hon. member for Greenwood I cannot help but think of these large financial institutions. I believe he used to be president of the national insurance company or some such company, and a director of several other large companies. When you are a director of large financial institutions you are out to get all the interest you can. Here is what he said, and I quote from page 1383 of Hansard for February 19, 1948:
Let us now deal with the question of low interest. Some people seem to think that if you talk about interest you are touching some sacred thing and that you will arouse every person in this country against you. X am not afraid of that. What is interest? What does artificially low interest mean? It is interest which is kept down by artificial means. It gives us easy money. What do you mean by easy money? Just what we say-lots of money, money easy to get, money
The Budget-Mr. Sinnott
easy to spend, encouraging people to borrow whether it is wise for them to borrow or not, so that the money can be spent.
Then in the next column:
The government, by its credit policy, should not be making it easy for these people to go on expanding.
Here is what I said in reply, and I quote from page 1614 of Hansard of February 25, 1948:
I always thought that the hon. gentleman, in his pleading for the poor man was conscientious in his views, but it is easy to see just whom he represents in advocating higher rates of interest.
Does the hon. gentleman say that the policy of the industrial bank was wrong?
Does he say that the loans to corporations and individuals amounting to $13 million was wrong at low rates of interest?
Does he think that the moneys lent to the provincial governments, cities, towns, and school districts, amounting to $78 million was wrong at low interest rates?
Would he say that the $104-9 million lent by the chartered banks for stocks and debentures was not high enough? Would the hon. gentleman say that the current commercial loans of $1,921 million are not drawing enough interest? Would he say that the loans made to thousands of returned veterans to establish their homes or start in business was wrong?
Would he say that the $31,500,000 lent to farmers under the Farm Improvement Loans Act was wrong because it was issued at a low rate of interest?
It is wrong, in my opinion, Mr. Speaker, for anyone to advocate high rates of interest when he will not take the risk and responsibility of investing his money himself.
And then I went on to say:
I claim, Mr. Speaker, that high interest is the cancer of civilization, and until a remedy is found to take its place the strong and the wealthy are always bound to swallow the weak.
Are we going to adopt the policy of high interest rates which was advocated at that time by the financial critic of the opposition, who speaks for the whole Conservative party? I should like to read a few quotations from the Monetary Times annual national review, 1953. When I heard the hon. member for Hamilton West (Mrs. Fairclough) say this afternoon that the municipalities were in dire circumstances, I could not help but think of an article I saw in a paper the other day which referred to the millions of dollars of assistance that had been granted to them by the provinces, and the provinces got a large share of that money from the dominion government. My speech of December 2 refers to what has happened in the province of Ontario, and that province got from the dominion government $123,327,363. That should go a long way toward helping these poor municipalities. Hon. Leslie M. Frost, Q.C., premier of Ontario, states as follows:
New investment in manufacturing is estimated at $507-5 million for this year;

The Budget-Mr. Sinnott That was referring to 1952. He said:
In the national picture, gauged to the high proportions in every province based particularly on their individual economies, Ontario continues as the industrial heartland, the chief fabricator for the nation. This and other factors have in turn reflected to the benefit of our people, resulting in better and improved living, in obtaining the finest and most from life, in building toward sound economy and the best and most prudent means of using our God-given natural resources for the advancement of all of us.
I go now to Manitoba. In five years Manitoba had an influx of over 225 new industries. This is what Hon. Douglas L. Campbell had to say:
Unprecedented industrial expansion has taken place in the last few years. Manufacturing production in 1951 broke previous records and totalled an estimated $596 million. This represents over a 180 per cent increase over the 1941 total of $211,534,751. New records were also achieved in the number of employees which reached an estimated 44,700 with corresponding payrolls totalling an all-time high of over 100 million dollars.
Then I go on to another article dealing with immigration, which states that some
760,000	immigrants have come to Canada since the end of world war II. I cannot help but pay my compliments to the minister of immigration for making it possible for some of those people who have been flooded out in Holland to come to Canada with the least possible delay. I understand that already a few of them have landed on our shores. That fact will give great comfort to the many Dutch people who live in my district.
I come now to an article in this Monetary Times by Carl O. Nickle, the member for Calgary West, headed, "Oil Industry sets new records. $250 million spent in exploration." You will all recall how this hon. member fought the pipe line that was going to come to Winnipeg last year.


An hon. Member:: Who?


John Sylvester Aloysius Sinnott: He kept that pipe line back all one session.


Clayton Wesley Hodgson: On a question of privilege- Mr. Sinnott: I will say the whole Conservative party fought it, along with the hon. member for Fraser Valley (Mr. Cruick-shank). And he had this to say:
Over the next few months it is hoped that plans will jell for a proposed major gas pipe line eastward from Alberta-a huge system reaching to Ontario and Quebec provided the economics are proved to be sound, or reaching to Winnipeg and then south into the U.S. mid-west should an allCanadian line not be feasible.
Well, he argued here for weeks that the route east would be feasible. At the present time the line has not been built as far as Winnipeg.
The British American Oil Company has this to say, that the operations of 1952 are much 
larger than ever before. Then Trans-Canada Air Lines reports a record for 1952 in the movement of passengers. Is that a sign of depression? I would not say so.	With
respect to chemical expansion we find this heading:	"Range of Chemical Production
Widens with Plant Expansions." Surely that shows that Canada is forging ahead.
Then we come to the Toronto stock exchange and the statement that the share volume approaches the 597 million mark, a record higher than ever before. A year ago, when all these stock exchanges could not handle the business, a new one was opened in Edmonton. And here is something to prove that the opposition is wrong: "Steady Increase in Deposits Banking Feature for 1952". The article following this heading states that while the deposits in 1951 reached the $9,000 million mark, in 1952 they reached $9,334 million.


Wilbert Ross Thatcher: What is the point?


John Sylvester Aloysius Sinnott: The point is that the people still had more money to put into the banks last year than they had in the year before, despite what the hardware merchant has been soaking them. Then an article by H. S. Backus, president of the investment dealers' association of Canada has this heading: "Huge Capital Investment sparks Economic Expansion". The last article to which I shall refer bears this heading: "Life Insurance now in force Close to $19 Billion".
I suggest that these few phrases I have quoted from the businessmen of this country surely indicate the trend is for the better, not for the worse. Then, so far as our trade is concerned, all hon. members heard the report made to the house by the Minister of Trade and Commerce (Mr. Howe) upon his return from Latin America.


Clayton Wesley Hodgson: No; what did he say?


John Sylvester Aloysius Sinnott: He said that the prospects for the future are very good, in the sense that our trade with Latin America has increased by 180 per cent since the war. He reported that there is also a great possibility of making sales of western wheat to Latin America.
Hon. members will recall the discussion that took place in the house last year with respect to what I described as the nuisance tax on radios. Speaking from this side of the house I pleaded with the government to repeal that tax.


Wilbert Ross Thatcher: And now we know why it was repealed.


John Sylvester Aloysius Sinnott: And I want to thank the government at this time for meeting that request.


James Arthur Ross: Now we know why it was done.


Mr. Gibson:: What do you want done next year, John?


John Sylvester Aloysius Sinnott: Now I come to a sore subject, the matter of railway wages and farm product prices.


Clayton Wesley Hodgson: What magazine is that in?


John Sylvester Aloysius Sinnott: If you will come over here you can see my notes. But I don't suppose you could read them if you came over.


John Lambert Gibson: Your slip is showing, John. That's knocking them off.


John Sylvester Aloysius Sinnott: The farmers in this country have borne the reduction in the cost of living, a cost that has been declining continuously for some time. No one can say that any other basic industry has borne one cent of that cost. It has been on the backs of the farmers, and the farmers alone. Yesterday's edition of the Ottawa Citizen contains this:
Farm wages were up about $1 a month on the average, and wages in other industry were up about $2.50 a week.
In non-farm industry, the average wage was $53.96 a week in early January, an increase from $50.42 a year earlier but down from $56.12 in December because of seasonally-lower employment.
On farms the average monthly wage was $87 with board and $122 without board, up $1 in each case from a year previously.
And this was in today's Journal:
Living costs as reflected by the new consumer price index dropped one-fifth of a point during January to 115-5 from 115.7, the bureau of statistics reported today. It was the third monthly decline in a row.
The January drop, propelled mostly by lower food prices, followed a decline of three-tenths of a point last November and one-tenth of a point in December.
That is with respect to food prices. I wonder who produces the food?


Clayton Wesley Hodgson: Oh, go back to your magazine.


John Sylvester Aloysius Sinnott: I say the farmers produce the food. Then the article continues:
Under the new index, the food group dropped four-fifths of a point in January to 112.7 from 113-5.
I will not read further, because we all know that the cost of living index has been coming down for the last seven or eight months, and I must repeat that this burden has been borne by the farmers of Canada, and by them alone.
Hon. members will find on the order paper this resolution standing in my name:
That, in the opinion of this house, in view of the emergency now existing and the urgency of a program of war preparedness, the government should take into early consideration the advisability of introducing legislation to make strikes illegal for a period of two years, providing, at
The Budget-Mr. Sinnott the same time, for the settlement of labour disputes by arbitration between labour and management.
Today the hon. member for Vancouver South (Mr. Laing) asked whether the government would appoint a mediator to settle the strike at the Vancouver terminal. I think that would be a good move, and that the companies involved, the employees and the government should each appoint a man. If this were done the dispute could be settled very quickly, and at the same time it would keep the grain moving from western Canada.
I put this resolution on the order paper despite the fact-


James Arthur Ross: With the full support of the government?


John Sylvester Aloysius Sinnott: We have heard a lot of bellowing from Souris tonight. I put it on the order paper because in spite of the fact that farm commodity prices were going down, railway employees were asking for a 35 per cent increase in wages, and I could not see any justification for it. And I have not heard the hon. member for Souris going to battle on behalf of the farmers because of the high freight rates they are charged.


James Arthur Ross: You could find it in Hansard if you looked.


John Sylvester Aloysius Sinnott: If we are to have a continuous spiral of wages we will have increased costs and the railways will have to ask for higher freight rates. The result will be that the consumers and farmers of Canada will have to pay for those higher costs through increased freight rates.
So I say the time has come when the upward spiral should cease, when wage earners should look at the picture with realism and understand that the farmers have taken a beating lately on account of the dropping prices. The wage earners should understand that they should accept some of that burden.
I do not like to burden the house with long tables, but I have a table here of railway wages and I have a table with respect to how many hours of work it took to buy certain articles in the years 1914 and 1952, and if I could have the consent of the house I should like to have them placed on Hansard.


Some hon. Members:: Read it.


An hon. Member:: You read well, John.


Clayton Wesley Hodgson: I object.


Mr. Deputy Speaker:: Is it agreed that the hon. member should have leave to put these tables on Hansard?


Some hon. Members:: Agreed.


Some hon. Members:: Read it.
2678	HOUSE OF
The Budget-Mr. Sinnott


John Sylvester Aloysius Sinnott: If I read it, it will just kill a lot of time.


Alfred Johnson Brooks: That is all you are doing anyway.


Clayton Wesley Hodgson: That is all he has been doing for the last 30 minutes, so he might as well read the rest of it.


Alfred Johnson Brooks: Talk it out for good now.


John Sylvester Aloysius Sinnott: I will remember the hon. member for Victoria, Ont. (Mr. Hodgson) the next time.


John Lambert Gibson: File him away.


John Sylvester Aloysius Sinnott: The first one is taken from the Financial Post of February 7, 1953. It is to be found in the column "The Nation's Business". The heading is, "Not Exactly Paupers These Railwaymen". It reads as follows:
Last week Canadian railwaymen got a 12 per cent boost in wages. That is the price the country had to pay to avoid a complete tie-up of the nation's main transportation lines. Even before that boost the people who operate our trains were hardly in the pauper class. Here are average
annual earnings:
Passenger engineers	$6,335
Freight engineers	 5,485
Passenger firemen	 4,860
Freight firemen	 3,670
Passenger conductors	 5,545
Freight conductors	 5,615
Baggagemen	 4,285
Passenger trainmen	 4,285
Freight trainmen	 3,790
Yardmen	 3,165
Sleeping car conductors	 3,780
Sleeping car porters	 2,940
Station agents	 3,710
Telephone operators	 2,725
Messengers, office boys, etc	2,300
And those, it should be remembered, are average wages. Men with more seniority and who, because of that seniority get the choicest runs, would do very much better. Some engineers on the passenger runs, for example, make as high as $8,000 a year, freight engineers $7,000 and conductors almost as much. The best trainmen's jobs will pay at least $1,800 a year above the average rate.
The national industrial conference board in the United States has calculated how much work it takes to buy food today compared with 1914. This is how it looks:
			1914	1952
hr.	min.	min.1	doz. eggs 	26	221	lb. bread 	17	61	qt. milk 	24	81	lb. coffee 	20	311	lb. round steak 	.... 1	2	40
As I have said, railway wages are high. Railway employees have asked for an increase in spite of the fact that farm prices have gone down. Some commodities have fallen as much as 30 per cent in the last two years. The reason I referred to the table of wages was for the purpose of disclosing and proving 

beyond a shadow of a doubt that there was no justification for a strike a short time ago. Costs of transportation, due largely to labour demands, have risen to the point where it is unbearable to think of further increases. In fact if labour were fair to their farmer friends they would take a hand in accepting a lower wage formula which would be in line with what farmers are being subjected to at the present time.


Wilbert Ross Thatcher: Is that Liberal policy?


John Sylvester Aloysius Sinnott: The real farmer who produces butter, cheese, milk, eggs and all the primary products does not work an eight hour day or a forty hour week. Neither does he get three weeks' holidays with pay, a free pass on the railway, a free trip to the United States once a year, and he is not paid every two weeks. He gets paid for what he produces on a competitive market.
The hon. member for Rosetown-Biggar (Mr. Coldwell), or rather the member who lives in Ottawa and represents that constituency, has pretty well supported railway unions, as have the hon. member for Vancouver East (Mr. Maclnnis), the hon. member for Winnipeg North Centre (Mr. Knowles), and also the hon. member for Moose Jaw (Mr. Thatcher). The hon. member for Vancouver East, who made the statement some years ago that he had never hired a man and never would, has also been a great labour union man. They, in supporting labour unions and their consistent demands for higher wages-


Mr. Hees:: Are you against unions?


John Sylvester Aloysius Sinnott: -have in turn done a great disservice to the farmers of western Canada, as freight rates have had to be raised as much as 35 per cent to meet these added costs. I would therefore say that the policy of the C.C.F. party is more or less in favour of labour representation rather than the broad national aspect for all Canadians.


Wilbert Ross Thatcher: How are you voting, John?


James Arthur Ross: He has not decided yet.


Mr.   Sinr.oit@: The other night the hon. member for Dufferin-Simcoe (Mr. Rowe) compared costs of government in 1939 with present day costs.


Clayton Wesley Hodgson: May I ask the hon. member a question?


John Sylvester Aloysius Sinnott: 


Some hon. Members:: Question, John.


John Sylvester Aloysius Sinnott: I would say-


Mr. Depuly Speaker:: Order. If the hon. member for Springfield does not resume his seat it is obvious that he does not want to give consent.


John Sylvester Aloysius Sinnott: Mr. Speaker, in view of all these interruptions I hope that you will give me three or four minutes more. The hon. member for Dufferin-Simcoe compared costs of 1939 with those of the present day. Anyone knows that with the expansion of trade in Canada expenses of government consequently would be much higher. If the hon. member were here tonight I would ask him this question: Would the Great Lakes Paper Company that he represents have the same number of telephone calls today that they had in 1939? Is their production as high today as it was in 1939, or is it ten times as great? The comparison he was making was very much in line with what the government has to contend with at the present time.
I should like to say a few brief words about oil.


George Harris Hees: Keep passing that stuff, George.


James Arthur Ross: Pass him a new book, George.


George Harris Hees: You have a parliamentary
assistant.


John Sylvester Aloysius Sinnott: Oh, we have heard a lot of bellowing from Broadview too.


George Harris Hees: Keep passing the stuff, George, or he will have to stop.


John Sylvester Aloysius Sinnott: In my riding, Mr. Speaker-


George Harris Hees: You have not got a riding any more. Where is your riding?


Mr. Deputy Speaker:: Order. I would ask hon. members to give the member who has the floor a chance to make his speech. I should point out that certain interruptions are permitted, but perhaps the manner in which they are being made should be avoided.


Clayton Wesley Hodgson: May I ask the hon. member a question?


An hon. Member:: Time is up.


John Sylvester Aloysius Sinnott: Mr. Speaker, I remember that a few years ago Broadview was represented by a gentleman.


George Harris Hees: Are you voting for the Liberal candidate in Springfield next time? For whom are you voting in Springfield, John?


John Sylvester Aloysius Sinnott: I suppose this is hurting them over there and it is sinking in. I want to refer to a large oil refinery which is in my riding.


Clayton Wesley Hodgson: Gas.


John Sylvester Aloysius Sinnott: It cost in the neighbourhood of $15 million to build. I understand that 175 tank cars of oil are going out from there every day. The oil is piped from Edmonton
The Budget-Mr. Sinnott to Gretna and then from Gretna to Winnipeg. Before the refinery was built the oil company said it would enable them to reduce the prices of gasoline, oil, and farm fuels by from 4 to 5 cents a gallon. I want to remind them at this time that up until now the farmers of that district have not got the reduction they were promised. The oil is delivered in the country by tank truck and the overhead is not nearly as high; and a measure of reduction could be given to the farmers in the Springfield district.


George Harris Hees: You will do better with apples.


John Sylvester Aloysius Sinnott: Here is a clipping datelined Toronto, with the heading "Imperial net earnings higher". It says:
Consolidated net earnings of Imperial Oil, Limited for 1952, after provision for income tax, are estimated at $41,100,000, or approximately $1.36 a share.
The figures compare with 1951 earnings of $35,951,153 or $1.20 a share.
I am sure, in view of what I said-


Some hon. Members:: Time.


John Sylvester Aloysius Sinnott: -that there is a further reduction coming to the users of gasoline and oil in the Springfield constituency.
Mr. Speaker, I will just be about two minutes more, and the agony of those who are making catcalls from across the floor will be relieved considerably.


George Harris Hees: Never saw a better show.


John Sylvester Aloysius Sinnott: In spite of the wails of woe by the opposition, we are living in a period of high employment and high wages.


George Harris Hees: Who said vaudeville was dead?


John Sylvester Aloysius Sinnott: If you want to see contented and happy people, walk by any restaurant as late as 11.30 at night and you will see people indulging in their fourth meal of the day. When our Tory friends were in office-when the hon. member for Broadview (Mr. Hees) was wearing short pants-it was soup kitchens and two meals a day, and small ones at that. Employees were going to work for small wages with a half-filled dinner pail.
Yes, Mr. Speaker, what a difference today. The theme of our Tory friends opposite is "time for a change". Time for what? Is it time for a change because the country is prosperous? Is it time for a change because Canada's dollar is at a premium? Is it time for a change when investment in Canada never brought better returns? Is it time for a change when employment is at an all-time high? Is it time for a change when Canadians are enjoying prosperity, more so than any other country in the world? Will the people of Canada say "it's time for a change" when millions of people are clamouring to

The Budget-Mr. Argue land on our shores to enjoy the prosperity that Canadians are having today?
Mr. Speaker, these questions will all be answered by our sane and sound thinking Canadian people. They will refuse to swallow the bait of the other parties. They will wish to continue to enjoy the present prosperity. They will continue to support the Liberal party. They will continue to follow our leader, the Right Hon. Louis St. Laurent, one of the greatest leaders of our time.


Mr. Cruickshank:: On a matter of privilege, Mr. Speaker, I have just had a parcel handed to me, I presume through the good offices of one of your staff, with the compliments of the mayor of Ottawa-a beautiful British Columbia apple.


Mr. H. R. Argue (Assiniboia):: I am sure we have all listened with some amusement-


George Alexander Cruickshank: What do you mean,
amusement?


Hazen Robert Argue: to the hon. member for Springfield (Mr. Sinnott). I notice that in the speech he just made he and the Minister of Agriculture (Mr. Gardiner) are poles apart. The hon. member for Springfield is wrong in most instances, but tonight he was right when he said that in the last two years many agricultural prices had fallen by some 30 per cent. The Minister of Agriculture this afternoon, and again this evening, attempted to prove that the farmer now is in a better position than ever before in the history of Canada. Well, Mr. Speaker, I do not think that statement by the minister can be borne out by the facts.


An hon. Member:: He did not try to do anything of the kind.


Hazen Robert Argue: What has actually happened is that during the war, since the war, and after Korea farm prices rose; but during the last year or two many farm prices have been falling rapidly and drastically. The minister was able to put on the record figures showing high cash farm income, not because farm prices have not gone down but merely because western Canada, during these two years, has had record crops by way of volume. Apparently the Minister of Agriculture is attempting to take credit even for the good rains, and the good crops we have had because of weather conditions.
The Minister of Agriculture spoke for over 40 minutes, his full time, but it was a different speech than he usually makes. I have not heard many full dress speeches by the Minister of Agriculture in which he has not pointed out the many advantages that would follow from the building of the South Saskatchewan river dam, but I notice the


minister stayed a long way away from that subject when he spoke this evening. It was the one thing he did not mention, but he has a new project now that he has been turned down on the South Saskatchewan dam. He brought this to light in a recent speech in Saskatchewan. He is now going to build a railroad, I believe from Churchill to Prince Rupert, right across the northern part of Canada where very few people live. It is not even going to skirt the mountains, as someone said. It is going to go right through. It is a very grand scheme, all in the mind of the Minister of Agriculture, as was the South Saskatchewan river dam about which he has spoken now for some 18 years.
I notice that he is attempting to turn the responsibility of the federal government for the prices of farm products going into interprovincial and export trade back to the various provincial governments. I notice that he pointed out that the Liberal provincial governments in Canada have pretty well failed to support farm prices, because he said that the province of Ontario had the best price support legislation.
I wonder why the party to which the minister belongs, after it replaced the Anderson government back in 1934 in the province of Saskatchewan, did not do something there, if that was the place to do it, in order to put floors under farm products prices in those days. Of course it would be just as nonsensical for me to say that the Liberal party in Saskatchewan in 1935 or 1936 should have placed floors under farm prices as it was for the minister this evening to say that it is a responsibility of the provincial governments.
The Minister of Agriculture might well take a lesson from the Minister of Trade and Commerce (Mr. Howe), who has in his department the handling and marketing of grain; and the Minister of Trade and Commerce has in his department the wheat board. The wheat board establishes initial prices, and it controls the marketing of grain. The Minister of Trade and Commerce does not say that is the responsibility of the provinces. On behalf of the government he has accepted his responsibility, and that legislation is good. The legislation of the Minister of Agriculture, when it comes to the handling of farm products prices and setting adequate floor prices, has been a near total failure.
I notice that one thing the Minister of Agriculture did not talk about tonight was the situation in regard to the floor price under eggs. We have had floor prices of one kind or another before, but the floor price under beef has gone. This government is

expecting the United States government to establish floor prices for beef. However, the minister did not mention the floor price for eggs. The floor price is 38 cents for grade A large going into storage, with 5 cents per dozen being paid to the packers. That legislation, judging from the results, is wholly worthless. I have been receiving letters in the last few days and the last few weeks from farm women and people in my constituency, pointing out that they are now receiving for good, sound fresh eggs in the province of Saskatchewan the magnificent sum of 18 cents a dozen. That is the kind of floor price we have received from this Liberal government.
That is the way the Minister of Agriculture has dealt with floor prices on farm products. Those floor prices, as I have said, have been almost a total flop.
The Minister of Agriculture started out by saying that we have to compare the post-war years with years before the war; we cannot compare wartime years because things are abnormal. Then when he came to take two periods for comparison he took 1943-45 and 1949-51. In other words the minister will take the war years when those statistics suit his purpose, but when those statistics do not suit his purpose he says those are abnormal times. Then, to prove that this government is not too bad after all, he has to go back to the early thirties under a Conservative government. The thing that amazed me in the statistics he gave about prices was that during the Conservative regime the prices were so much better than prices during part of the time after the Liberal government took office.


An hon. Member:: Do you want to go back there?


Hazen Robert Argue: I do not want to go back to either period. The minister said that under the Bennett government cattle were selling for $69 a head. That was not a very good price, but $69 would probably buy as much in 1932 as the money the farmer gets today for a great many of his cattle, because today some cows are selling for less than $100.


Mr. Ferrie:: Not very many.


Hazen Robert Argue: At any rate, $69 was the price under the Bennett government. The present Minister of Agriculture and this government came to power in 1935. There was a Liberal government in Saskatchewan and the present deputy minister of agriculture was the then provincial minister of agriculture in Saskatchewan. What happened to cattle prices in 1937? The members from Saskatchewan know very well that under a Liberal government in Saskatchewan and a Liberal government at
The Budget-Mr. Argue Ottawa, with the present Minister of Agriculture as the minister of agriculture, the farmers in Saskatchewan were forced to sell many cattle for a cent a pound, $10 a head.


Gladstone Mansfield Ferrie: May I ask the hon. member a question?


Hazen Robert Argue: Certainly.


Gladstone Mansfield Ferrie: How much was paid by this government to the people of western Canada when buying cattle in 1937? In Kindersley I paid as high as 9J cents a pound.


Hazen Robert Argue: I will answer that. The government here paid a cent a pound; that is what it paid. I know of one farmer who sold two head of cattle for $21 and trucked a ton of hay for 50 miles after paying $21 for the ton of hay. Yes; two good milk cows equalled the price of a ton of hay under a Liberal government in Saskatchewan and a Liberal government at Ottawa, with the same Minister of Agriculture we have now.


Gladstone Mansfield Ferrie: Mr. Speaker, on a point of privilege, I do not want to interfere with the hon. member, but let him stay within the bounds of what he knows, for the simple reason that in 1937-


George Harris Hees: What is the point of order?


Donald Methuen Fleming: That is not a question.


Mr. Deputy Speaker:: Order. I must advise the hon. member for Mackenzie (Mr. Ferrie) that the question he has stated is not one of privilege.


Hazen Robert Argue: If the hon. member for Mackenzie wants to reply to any of the points I am making, he can take his 40 minutes and we will all listen.
Then the minister said that the price of wheat under the Bennett government was terrible. Well, it was terrible. The minister said it averaged 60 cents a bushel. The price of wheat went up under the Liberal government to over a dollar a bushel. After the Minister of Agriculture had been here about three years the price went up to $1.45 right in Saskatchewan. However, the farmer was not selling the wheat; he was buying seed and he was charged $1.45 or $1.50 per bushel. Then he was asked to pay that money back the next fall, or any part of it that he could, when under this benevolent Liberal government the price of wheat to the farmer had fallen to 50 cents a bushel.


Some hon. Members:: Shame, shame.


Hazen Robert Argue: Under this Liberal government which has always been good to agriculture- so it says-if you got a bushel of seed wheat from them you had the privilege of paying it

The Budget-Mr. Argue back and of paying three bushels for every one you put in the ground.
Had the Minister of Agriculture been fair he would have pointed out that the statistical index covering costs and prices shows that the farm position today is worse than it has been at any time in the past ten years. The farmer's cost of production is going up and up, and the farmer's prices are going down and down. For the last year the minister has been telling the farmer to hold his cattle and feed them grain, that everything would be all right just as soon as the United States market was opened.
Well, the United States market is open, and I have not seen much improvement in cattle prices. The minister has been able to remove the floor from cattle prices, and he has gotten out of all responsibility. The best information we get from the men in his own depart-

ment is that cattle prices in the United States will go down by 20 per cent in the next four years. Under this government, of course, when United States cattle prices go down so do Canadian cattle prices. They have taken off the. floor, but even if they had a floor they would not pay the farmer. They would pay their friends in the packing industry, and then the farmer would have to try to get his money from that industry.
On motion of Mr. Argue the debate was adjourned.



BUSINESS OF THE HOUSE

Mr. Fournier (Hull):: Tomorrow we shall continue this debate, and hope we can have a vote on the subamendment.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Friday, March 6, 1953