1953-03-03

[Stage Direction]
Third report of the standing committee on standing orders.-Mr. MacLean (Cape Breton North and Victoria).


[Stage Direction]
Bill No. 206, for the relief of Jessie Hazel Kerr Coolon.-Mr. Winkler.
Bill No. 207, for the relief of Laurence Christopher Bell.-Mr. Winkler.
Bill No. 208, for the relief of Valorie Leslie Hylda Carson Wallis.-Mr. Winkler.
Bill No. 209, for the relief of Jessie Allan Purdie McCulloch.-Mr. Winkler.
Bill No. 210, for the relief of Alice Mary Barakett Zion.-Mr. Winkler.
Bill No. 211, for the relief of Marcel Clark.-Mr. Winkler.
Bill No. 212, for the relief of Sender Mines.-Mr. Winkler.
Bill No. 213, for the relief of Robert Joseph Albert Pratte.-Mr. Winkler.
Bill No. 214, for the relief of Leonard James Chadwick.-Mr. Winkler.
Bill No. 215, for the relief of Merle Minnie Esther Hoffman Nevard.-Mr. Winkler.
Bill No. 216, for the relief of Doris Ethel Taylor.-Mr. Winkler.
Bill No. 217, for the relief of Gordon Earl Page.-Mr. Winkler.
Bill No. 218, for the relief of Yaroslava Glucka Levandosky.-Mr. Winkler.
Bill No. 219, for the relief of Adelard Gilbert.-Mr. Winkler.
Bill No. 220, for the relief of Celia Tarnofsky Edgar.-Mr. Winkler.
Bill No. 221, for the relief of William Flookes.-Mr. Winkler.
Bill No. 222, for the relief of Kathleen Ada Styles Labonte.-Mr. Winkler.


[Stage Direction]
On the orders of the day:
Mr.  A. J. Baier@The Battlefords: Mr. Speaker, I should like to ask a question of the Minister of Finance. In view" of the confusion that has developed since the budget 68108-163
speech announcement about the application of the 15 per cent tax on replacement tires and tubes, could the Minister of Finance say whether the proposed changes to the Excise Tax Act will affect farmers?


Hon. Douglas Abbott (Minister of Finance):: I thank the hon. member for having given me notice of his question. A number of other members have spoken to me about this, and there does appear to be some confusion arising out of the general terms in which the resolution is phrased. The change proposed by the amendment to the 15 per cent tax on replacement tires and tubes will not impose any new tax on farmers. Tires and tubes when purchased for replacements for farm machinery, including tractors, for use on farms for farm purposes, will not be subject to the 15 per cent tax.

On the orders of the day:


Mr. J. A. Charlton (Branl-Wentworlh):: should like to ask the minister a supplementary question. In view of the fact that I was most careful to get from the deputy minister the exact amendment to this section, may I ask when the change was made?


Douglas Charles Abbott: No change has been made. I pointed out that as usual the terms of the resolution are rather general, and when the bill is brought in it will be more specific. The proposed amendment is to cover a technical difficulty in the Excise Tax Act in connection with attachments to self-propelled vehicles to correct an oversight in the amendment of last year. It was not the intention when the resolution was proposed, nor is it intended, to impose a tax on replacements for attachments to these farm self-propelled vehicles. I am sure my hon. friend will be only too delighted to learn that.


Mr. Fair:: Will farm trucks and trailers be exempted along with those the minister has mentioned?


Douglas Charles Abbott: The answer is no.


Mr. Macdonnell (Greenwood):: Are there any other changes in the budget to be announced?
2560	HOUSE OF
Inquiries of the Ministry VETERANS LAND ACT



PROPOSAL TO REDUCE HOLDINGS WITHIN URBAN AREAS

[Stage Direction]
On the orders of the day:
Mr. C. W. Hodgson (Victoria, Ont.):: Mr. Speaker, I should like to ask a question of the Minister of Veterans Affairs, of which I have given his parliamentary assistant notice. Has the government considered reducing the acreage under the Veterans Land Act from three acres to one-half or one-quarter acre lots within urban areas in order to assist veterans wishing to build their own homes?


Hon. Hugues Lapointe (Minister of Veterans Affairs):: The subject of acreage of small
holdings under the Veterans Land Act has been considered, but up to this time the department has not thought it advisable to reduce the acreage within urban areas.



CAN ADAIR


[Stage Direction]
On the orders of the day:
Mr. Alan Macnaughlon (Mount Royal):: I
should like to ask the Minister of Defence Production if he is aware of the flood of protests from citizens in the Cartierville, St. Laurent and Mount Royal areas of Montreal over the noise resulting from the testing of jet engines at Canadair?


Right Hon. C. D. Howe (Minister of Defence Production):: The problem of jet engine
noise at major airports has received attention. We have approved the installation of apparatus for silencing engine run-up cells at Canadair, and these should be in operation by the summer. An expenditure of $225,000 is required. Similar apparatus is installed at A. V. Roe plant, Malton.


Mr. Fulton:: Move the plants out to British Columbia; we will not mind.


Clarence Decatur Howe: It is also desirable to provide
equipment for silencing-perhaps we could bring it here-engines when these are given test runs on the ground after installation in the aircraft. We are in process of giving approval to Canadair and Avro to proceed with this kind of installation. In each case expenditures of the order of $300,000 will be required.



IRRIGATION


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: I
should like to direct a question to the Prime
[Mr. Macdonnell (Greenwood) .1

Minister. Has a brief been filed by the government of Saskatchewan in connection with the South Saskatchewan river project?


Right Hon. L. S. St. Laurent (Prime Minister):: The answer is no.



THE BUDGET


[Stage Direction]
The house resumed, from Monday, March 2, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Greenwood), and the amendment to the amendment of Mr. Coldwell.
Mr. Lucien Cardin (Richelieu-Vercheres):: Mr. Speaker, it will be recalled that last night the general theme of my remarks was an accusation levelled at the opposition, for leaving out of its criticism and discussion of government policy the actual problems and difficulties which must necessarily be considered if a practical legislative measure is to be adopted. I referred to the tactics employed by the opposition and the criticism they had levelled at the government with regard to the 1953 budget. Looking over the speeches of members of the opposition it will be seen that there has been a variety of criticism. Some have claimed that this was a good budget as it was intended to be used as an election budget. To others it was a thoroughly bad budget. But no one considered for a moment that it was an absolutely necessary budget based upon the requirements of the Canadian, people.
In order to recall to the house the different problems that had arisen since the end of the last war, I had referred to the speech which was to be delivered by the late Dr. Clark in December, 1952. Dr. Clark had intended to deal with the situation immediately after the last war and had indicated the aims of this government. He had outlined the methods that would have to be employed if we were going to keep a stable economy.
There were many problems that had to be dealt with at that time by this government. There has been a rapid expansion in our economy and it was necessary to maintain a policy that would maintain the economic equilibrium of our country. One part of that economic policy had to do with taxation, which plays a most important part in the economy of this country. The program that was carried out has had nothing but the loudest praise from leading economists of the world.

It will be recalled that from 1946 to 1949 taxes had been gradually decreased until they were back to what they had been previous to the war. The opposition has claimed that the government reduced taxes in 1949 because it was an election year and then as evidence of bad faith they increased taxes in 1950. The opposition has forgotten to mention that the Korean crisis broke out in 1950 and the opposition were the first to urge a huge national defence program.
There is not one member in this house, either on this or on the opposite side, who cannot see a direct relationship between our huge national defence program and increased taxation. As I say, the Korean war broke out in 1950 and brought with it a series of new problems. It was not the type of war that could be finished in a few years. It has turned out to be a long drawn-out war which may last possibly ten, fifteen or twenty years, and the government's taxation policy must be adapted to those particular circumstances. That was the type of war that had to be waged.
National defence had to be organized and at the same time it was necessary that business should carry on as usual so that free enterprise would not have to reduce its productive capacity. So the government changed its tactics. It was decided that price controls were no longer applicable because the maintenance of such controls over a long period of time would of necessity impair the productive capacity of the country. On the other hand, it would be practically impossible to maintain those price controls over a long period of time from the administrative point of view. Finally, price controls would not have hit at the root causes of the inflation which we all wanted to avoid at that time. Therefore the government did what it could do. It relied on direct methods through its fiscal, monetary and credit policies and supplemented them with a few practical direct controls. In that way it solved the problem facing the country at that time. In 1950 there was an increase in taxes of 20 per cent and no one could possibly expect otherwise in view of the organization of the national defence program. In 1951 there was another effective increase of 10 per cent. In 1952, which I should like to remind the house was not an election year, taxes were reduced by 9 per cent, and in 1953 they were reduced by 11 per cent. We have completed the cycle. Once again we are back to pre-Korea and pre-wartime tax rates. But the government is still carrying on its war effort in Korea and maintaining its forces in Europe. It is still working on its national defence program, and there is still prosperity in Canada.
68108-163i
The Budget-Mr. Cardin
A great part of the opposition's criticism is directed at the reduction in corporate income taxes. There are two excellent reasons why corporate income taxes were reduced. The first was to encourage corporations and industries to continue and to increase, if possible, their productive capacity. There is not one member of this house or one Canadian taxpayer who does not realize that an increase in the productive capacity of industry means that the workman is assured of a job, of higher wages and continued prosperity. The second reason why corporate taxes were reduced was to encourage all Canadian citizens to invest, no matter in how small a measure, in sound Canadian corporations and thereby profit from the extraordinary economic development that is taking place in Canada today. Thus all the benefits to be derived from our natural resources will not be left to foreign capital.
I feel that the criticism of the opposition is entirely unjustifiable because it does not consider the problems or the purposes of the over-all Canadian economic policy. I would invite any member of the house or any person outside of the house to go over the speeches of members of the opposition for the past ten, fifteen or twenty years and try to piece together, if they can, anything that remotely resembles a sound financial policy. I would also invite the Canadian public to consider seriously what would have happened to our economic equilibrium if the government had put into effect the most eloquent but very contradictory suggestions that have been offered by the opposition to the government. The government may not be as oratorical as the Progressive Conservative party, nor is it as sensational as the C.C.F. party, nor as miraculous as the Social Credit party, but it is by far more practical than any of these. It is a sound, serious and logical government that reflects the sincerity, integrity and competence of the Prime Minister (Mr. St. Laurent), who to my mind is the personification of the ideal Canadian.


Mr. G. R. Pearkes (Nanaimo):: Mr. Speaker, it is one of the pleasantries connected with the House of Commons that an hon. member may, though he disagrees with the material contained in a speech, congratulate a new member upon his maiden effort in the house.
I should like to take the opportunity this afternoon to congratulate the hon. member who has just resumed his seat on having overcome the first hurdle of what I am sure will be a long and distinguished career in the life of Canada. I hope that the occasion will arise before the end of the session when he will be able to make a further contribution. I should like to take the opportunity

The Budget-Mr. Pearkes to congratulate him upon his obvious sincerity and the excellence of his delivery.
Sometimes we are apt to lose sight of the very intimate connection between local problems and decisions which are arrived at by the House of Commons. Therefore I propose to devote some portion of my remarks to affairs connected with my own part of Canada and to endeavour to show how the problems which are facing the far west of this country are intimately related to the decisions made by the federal government. During the past ten years there has been a tremendous growth in the population of the southwestern corner of British Columbia, particularly on Vancouver island where there has been a great influx of people from other parts of Canada and from other countries in the world.
They have taken up residence in the vicinity of Victoria, in the municipalities of Esquimalt and Saanich and up the east coast of the island along the fertile valleys which lie between the central mountain range of the island and the sea dividing Vancouver island from the mainland. As indicative of the numbers that have come, since the last census was taken it has been necessary to divide my own constituency of Nanaimo into two constituencies without adding any appreciable territory to either one. Naturally it is with a somewhat heavy heart that I realize that, no matter what happens when another election is called, my intimate association with at least half of the constituency of Nanaimo will have to be severed.
That is an indication of the large number of people moving into the area and the increase in the population. People moving to Vancouver island have had to be housed, and that has constituted a grave problem in the neighbourhood of Victoria. Although there has been much building activity the amount of serviceable land which is available on which to construct new homes has been extremely limited, with the result that the municipalities have had to develop new areas and to provide those new areas with all necessary municipal servicing such as roads, drainage, sewers, water supplies and so forth. That has placed on the municipal governments a very severe burden.
The burden has been enhanced by the encroachments which are being made continually by federal and provincial governments on what used to be the sphere of municipal taxation. The main problem or the dilemma in which municipal councils find themselves is that of providing the necessary services, maintaining their schools, their roads, their social welfare services, etc., and also keeping the cost of taxation down


within limits so that there is not fear of householders losing their property through oppressive property taxation.
The problem in regard to social services, I think, applies particularly to the municipalities on Vancouver island because, with the moderate climate we enjoy there, a great many elderly people from other parts of Canada move to Vancouver island. Therefore, municipalities are faced with the need of providing more social services than are perhaps provided in other municipalities across Canada.
The problems I am referring to however are not confined purely to Vancouver island. The Canadian Chamber of Commerce at its twenty-third annual meeting, in general session at Toronto in October of last year, had this to say:
Municipalities have been subject to heavy increases in expenditure for both municipal education and welfare services. These increased costs, despite some alleviation by way of grants and other assistance from provincial governments, have borne heavily on the real property tax base. As a result, present and prospective high levels of property taxation are one of the major deterrents to vigorous building programs and the provision of adequate housing and municipal services.
So, this question of providing adequate housing for the residents of Vancouver island is by no means unique. It applies to every municipality which has a growing population, across the whole of Canada. Attention has been drawn to it by the chamber of commerce in their general session. The financial position of these Canadian municipalities is obviously of national concern. It is not merely an immediate local problem. Because of high taxation on much of the property, we find that today even many industries are being forced to relocate their plants.
To find out how federal and provincial governments have been invading or encroaching upon municipalities it is interesting to note that before the war the dominion government took 51 cents out of every tax dollar, thereby leaving 49 cents to be divided between the provincial and municipal authorities. In the most recent figures that I have available the federal government now taxes 77 cents out of the tax dollar, leaving only 23 cents to be divided between the various provincial and municipal authorities. Since pre-war days the Canadian tax bill on all three levels, that is federal, provincial and municipal, has increased from $894 million in 1938 to approximately $6 billion in 1952. In the former year taxes took 18 per cent of the national total production; in the latter 26 per cent. Now, on a per

capita basis the average Canadian in 1938 paid $80 in the year, whereas in 1952 he paid close to $430.
In a report published in the Toronto Globe and Mail of February 15, they attributed this difficulty being placed upon the municipality largely to a vast increase in the spending by the dominion government. The report pointed out that last year, that would be 1952, the municipalities have spent just over twice what they spent in 1938- $600 million as against $273 million.
Making all due allowances for inflation municipalities are spending a fraction more than they did during the war, if you assume that the Canadian dollar, as is frequently stated, is worth about 50 cents today on the basis of what the Canadian dollar was worth before the war. The provinces spent $1 billion in 1952 as against $186 million in 1938. Allowing for a similar rate of inflation their spending has gone up almost three times. But the federal government spending has gone up close to ten times in dollar value and close to five times when allowance is made for dollar deterioration. In 1938 the dominion government spent $436 million. Last year its spending amounted to $4,653 million according to the table given in the recent budget speech. Furthermore, there is no attempt this year to ease the federal tax burden. This budget increases rather than decreases the tax load of the Canadian people.
The forecast of all revenue for the fiscal year 1953-54 indicates a' total budgetary revenue of $4,473 million as compared with $4,374 million collected in the fiscal year 1952-53. With old age security taxes running over $278 million, as compared with $224 million in 1952-53, one notices that there is a general increase in the tax burden of $100 million, which I think is a record for all time, in peace, in respect of the taxation load which the people of Canada are asked to carry. Such reductions in taxation as are being made are being drawn from the anticipated surplus rather than from any cutting down of expenditures.
Now, there are two main causes contributing to the financial plight of the municipalities across this country. The first is undoubtedly the policy followed by the federal government of extracting higher and higher taxation at the federal level; the second that of tax-free federal property within municipal boundaries. In respect of the former policy of requiring municipalities to pay a sales tax on equipment and other articles for municipal purposes, a burden is placed upon municipal bodies from which the provincial governments are relieved.
The Budget-Mr. Pearkes
In his report to the annual meeting of the Canadian Federation of Mayors and Municipalities, held in Calgary last July, Professor D. C. Corbett, director of public administration at McGill university, recommended both the removal of the federal sales tax on goods purchased by municipalities and the exemption from municipal taxation of crown property. I understand that for years the Canadian municipalities have sought, through the medium of the federation of mayors and municipalities, to have supplies and materials, purchased solely for municipal purposes, exempted from the federal 10 per cent sales tax in exactly the same way as the exemption is now granted to provincial governments, their boards, commissions, hospitals and so forth. The municipalities, which are now carrying a financial burden of a remarkable nature, would find some relief at a comparatively small cost to the federal government if the minister could see his way clear to making another correction in the budget by granting this exemption.
There has been widespread disappointment expressed all across the country that no action was taken to exempt municipalities from the sales tax in this year's budget. A few days ago I received the following telegram from the mayor of Victoria:
It is with deep consternation that no provision for exemption of municipal purchases from federal ten per cent sales tax despite earnest effort made by municipal governments. Why should senior levels of government he granted this exemption when local governments avenues of income are being progressively reduced. The continued imposition of the federal sales tax on municipalities is duplicate taxation. Local governments cannot be rated with commerce and industry as our operations are non-profit and have no other recourse but to pass this tax to local taxpayers. Request that government review and extend exemption of federal ten per cent sales tax to municipalities.
I just hope that the minister will find the opportunity, even at this eleventh hour, to reconsider the position with regard to the removal of this exemption from sales tax.
Now, a particularly vicious form of the application of that sales tax was aired at a recent meeting of the Victoria city council's finance committee, when protests were made against the 10 per cent federal sales tax being levied upon articles which the city itself manufactured for its own use. The city controller reported an assessment of $3,928 of arrears, plus $350 by way of penalty and interest that had been made on unpaid sales tax. The items upon which this payment was demanded were such everyday, matter-of-fact things as garbage cans, street signs and mimeographing, which had been made by the city for its own use and not for sale. Street signs, home-made tin cans and mimeographed pieces of paper are surely

The Budget-Mr. Pearkes not articles which have been manufactured within the ordinary meaning of that word. Surely this sales tax was not meant to apply to items which were not manufactured for sale. It was intended, I should think, for articles which were to be sold.
One wonders how a sales tax can be imposed on an article which has not been sold, but which is merely an essential article for city services. It is no wonder that one of the aldermen at this meeting is reported to have referred to the federal government as having neither conscience nor ethics, and that it was motivated solely by a policy of grab, grab, grab. These signs were not made for sale or resale. This was in no way a commercial venture. The only object of the corporation was to save its ratepayers a little money. These signs were not sold; they were not made for sale. They passed through no other hands than through the employees of the city street department, which employees are public servants and paid out of public funds. The garbage cans were made solely for public use. I cannot believe that this parliament ever intended that the sales tax should be applied in such a ruthless manner.
It is almost dictatorship running wild when the central government penalizes a municipal government that is endeavouring to save its taxpayers a little money by making its own road signs, while at the same time the federal government takes unto itself the right to exempt crown property from municipal taxation. I think it is no wonder that the city council rose in anger.
During that discussion, attention was drawn to the fact that the Belmont building, upon which this government pays no taxes to the city, is partially rented by the government. This brings me to Professor Corbett's recommendation and the second of the causes I stated as contributing to the financial plight of municipalities today, namely the tax-free federal property. The payment of municipal taxes on government property, or even an adequate grant in lieu of taxes, would be a means of relieving the burden on municipalities all across Canada. I said a few years ago in this house, and I repeat it now, that the municipality of Esquimalt is a horrible example of the crippling effect on development of a municipality having large areas of federal government tax-free property within its boundaries. Approximately 30 per cent of the total area of Esquimalt is now owned by the federal government. These properties are located, in the main, in three large blocks, namely, the army area having a frontage on Victoria harbour; the navy and dockyard area which

has a frontage on Esquimalt harbour; and the naval area east of Admiral's road. These three areas take up many of the choicest industrial and residential sites in the municipality. Though they are three separate areas, they are all interdependent because they are all connected with the same Department of National Defence. Communications between these three great blocks must be over municipal roads; and the nature of the activities carried out on these various blocks requires the movement of many heavy vehicles passing from one to the other. Yet the federal government contributes little to the maintenance of the roads in that municipality because, under the Municipal Grants Act, a grant is payable only to what is referred to as class A federal property for which material services are provided.
The provision and maintenance of public roads and sidewalks are specifically excluded in the act from the term "service". The roads which were constructed by this municipality were never in the first instance designed for the heavy vehicles which are now used by the Department of National Defence. The roads and streets are visibly deteriorating as a result of the extensive and continually increasing use by these vehicles.
There is a great deal of construction work now going on at H.M.C.S. Naden. New barracks are being constructed and these heavy vehicles are plowing up and down the roads immediately opposite, making them practically impassable for the residents in the area. Such grants as this municipality of Esquimalt has received in the past-and last year they amounted to in the neighbourhood of $25,000 to cover almost 500 acres of tax-free property within the municipal boundaries-are totally inadequate to maintain the services which the municipality is called upon to provide. On account of the fact that much of this property is waterfront property-and if this property were privately owned it would have been developed for high-class residential areas or for industrial areas because of the vicinity of water transport and also of the railway which runs close to that area-fair value to be placed on this government property would be approximately $2,500 an acre. Shipyard property adjacent to the dockyard property has been assessed at a value of $3,000 an acre.
Hence if the grant were based even on the assessed value of the federal property, without any consideration being given to such improvements as have been constructed on the property-and if it was in private use, of course, the improvements would have been taken into consideration-the municipality

would receive much fairer treatment. The present year's mill rate is 52. If that rate was applied to federal property on a valuation of $2,500 per acre, then again a more reasonable formula would have been arrived at for calculating the basis of the grant.
Another feature which is unique so far as Esquimalt is concerned is the fact that it is in close proximity to the city of Victoria, with the result that the commercial concerns in Victoria supply the needs of those who are employed on the federal and service properties. It is for these reasons-and others which I could mention if there were sufficient time in which to do so-that I feel that Esquimau is entitled to special consideration which would result in a far more substantial grant being allocated to that municipahty than is being made at the present time.
Esquimau, however, is only an outstanding example-and perhaps a pronounced one-of the intolerable burden which is being placed on all small municipalities owing to the extent of government-owned, non-taxable property within their boundaries. The position of Esquimalt may be unique in some respects. I do not believe it could be duplicated anywhere else across Canada. Other municipalities, however, are affected and suffer in varying degrees. There is much government-owned property, for instance, in Victoria and some in the adjacent municipality of Saanich. It would therefore seem that if much-needed assistance is to be brought to all municipalities in order to enable them to meet their obligations, the principle of tax-free property needs a thorough review in order that a practice workable a century ago may be adapted to modern conditions.
Another problem I just referred to, which is closely associated with Vancouver island and for which no provision has been made in this budget, is the problem of the pensioner and the veteran. We have heard it stated by hon. members on this side of the house that little has been done for the little man. There is no indication whatever of any consideration being given to the possibility of increasing the war veterans allowance, for instance, which is the only income that many old soldiers have. I believe the municipalities could have had relief shown to them and I believe that the pensioners and the ex-soldiers

the little man-could also have been looked after if a firm effort had been made to eliminate waste, extravagance and inefficiency to which reference has been made.
A few years ago the Minister of Finance (Mr. Abbott) made the proud boast that there
The Budget-Mr. Pearkes was no waste, duplication or extravagance in any of the departments. I believe that he was perfectly sincere when he made that boast. I am pleased that his sense of decency has made him refrain from repeating it this year, because the reports of the Auditor General, reports of the public accounts committee, the Currie report and so forth have shown quite obviously that there has been waste and extravagance. I am afraid that the same spirit still exists and is shown in this budget because, as I have already said, the reductions which are to take place appear to come from the surplus rather than from cutting out expenditures.
The Department of National Defence and the Department of Defence Production have come under a good deal of criticism in connection with this budget and other matters which have been before the house. It seems to me that the main criticism can be directed against the non-defence expenditures in both the Department of National Defence and the Department of Defence Production. I did claim not very long ago that the Department of Defence Production might well be called the department of defence construction. It seems to me that advantage is being taken of the sympathetic attitude of the Canadian people towards national security by allowing the defence departments to develop permanent improvements which will be of advantage, perhaps, to the services at some future date, rather than an immediate contribution to the defence of this country or to the obligations we have to meet in the international field.
Recently attention was called to the fact that we are spending millions on the construction of permanent camps, also on the establishment of defence communities in which large numbers of residences have been built. I do suggest that they have been built without due consideration for economy. The various houses themselves are widely separated, requiring very extensive landscaping programs. And we have been acquiring a great deal of land.
I need only refer to the question of the new training area which has been purchased in New Brunswick, and which may run up to $35 million or more. And already there are training areas in that province and in other parts of Canada. Then, there is the construction of many permanent buildings. These are mostly being built on the cost-plus basis, which everyone admits is about as extravagant a way of building as it is possible to have.
All these examples, and very many others, can be found in the report of the public accounts. But there are other expenditures

The Budget-Mr. Pearkes about which it is impossible to obtain any information. And if we ask questions about some of these other expenditures we are told that this is breaking security. I asked questions the other day regarding an operation referred to as Pine Tree, which I did not know very much about. I wanted to get some information. Obviously it has to do with the provision of electronics and that sort of thing in the northern part of our country. My question was not an idle one; it did not arise from my brain, but was based on letters I had received from irate taxpayers who were complaining about waste and extravagance. Whether their complaints were made justly or not I cannot tell, until I have made inquiries.
I think the government should recognize the fact that when questions are asked in the house or put on the order paper they have been prompted by taxpayers who want to know the answers. It is rather disconcerting when, having tried to find out certain information about the provision of electronics and being told that this is a security matter and must not be asked, one finds that a circular letter has been sent around shortly before, of which some 110,000 copies have been issued to people in and out of the services, and in which the gentleman who just resigned as chief of the air staff said that some $150 million had been spent on electronics, and that this did not include those electronics intimately implicated with armament projects. Obviously the total must run into hundreds of millions.
These questions which I and other members have asked are, as I said before, based on reports and letters we have received. And I have received ugly stories which have been coming out from the north. Because of the degree of security that is necessary I cannot and will not mention the locations of the projects to which I now refer. But my information has come from reliable sources. I have seen some of the people; and those I have not been able to see, myself, I have had my solicitor call upon.
These are just a few quotations which, I suggest, will bear out the justification of the inquiries we have been making. One taxpayer writes to me that the-
-over-all opinion of the administration of his portion of the job was that there was a flagrant disregard of cost.
And another:
In one instance, particularly, material was shipped and followed very shortly afterwards by an identical shipment which had not been requested, and which was useless to them. This obviously is just plain bad management.
And another:
$14,000 worth of tools and parts, ordered and shipped; of these only one carton arrived and when 

opened it contained two wrenches and a large amount of useless scrap metal. The rest of the shipment, though dispatched, has never arrived.
And then again:
Actual technical equipment installed on the job was purchased at a price four or five times in excess of the normal cost thereof.


Douglas Charles Abbott: Would my hon. friend allow a question?


George Randolph Pearkes: Yes.


Douglas Charles Abbott: Has he brought these complaints to the attention of the Department of National Defence?


George Randolph Pearkes: I am bringing them to the attention of the government now.


Douglas Charles Abbott: But he has not done it before, and asked to have them investigated?


George Randolph Pearkes: I have tried to do it, but our
committee has not been allowed to-the committee on expenditures.


Douglas Charles Abbott: He knows a good many people in _ the Department of National Defence. I thought he might have sent these complaints, and asked to have them investigated.


George Randolph Pearkes: It is quite possible that I have talked privately to certain of those persons to whom the minister refers. But I am bringing it officially now to the attention of the government.


Douglas Charles Abbott: And will, of course, give names and dates?


George Randolph Pearkes: I can give names and dates.


Douglas Charles Abbott: That is what we want to have.


Mr. Speaker:: Order. There is a question as to whether or not the hon. member should quote letters, especially when he is making charges, without giving the names of the persons who have written the letters. The rule is that he must be prepared to give the names.


Douglas Charles Abbott: Personally, I pay little attention to anonymous letters.


Mr. Drew:: They are not anonymous letters.


Edmund Davie Fulton: On the point of order; this matter has been discussed a number of times. And while I have not had the opportunity of looking up the rule, my recollection is that it states that if a minister reads from a document he must be prepared to table it; but if a member reads from a letter it is at his option whether or not he tables the letter, or discloses the contents of it.


Some hon. Members:: No.


Douglas Charles Abbott: It is just the opposite.


Edmund Davie Fulton: No; I think you will And that that is the rule-that it is at the member's option whether he will table it or disclose the name of the person who wrote it to him. The member may say, "I have this letter; I have had the contents investigated and the bona fides of the people investigated, and I am prepared to back up, as a member of the house, the contents of the letter". I believe Your Honour will find that that is within the rules.


Mr. Speaker:: The rule is that if a minister quotes an official document he must table the document, but not a private communication. If the hon. member wishes to make these charges upon his own responsibility then that is a different matter. But, as I understand it, he is not making the charges his own; he is telling what he has heard or read. He is giving information he has received. If the hon. member is giving information which he has received from a letter he must give its source.


Douglas Charles Abbott: The purpose of my question was to indicate the difficulty of investigating an allegation of this kind if one does not know names, places and dates. That was why I asked my hon. friend if he had communicated this to the department so that it could be looked into. I know that if I were the minister I would want information so that I could look into the matter. But when the hon. member makes them in the house for the first time without giving names and dates, I can only conclude that he prefers to do that for reasons of his own.


George Randolph Pearkes: I am merely giving samples of a large number of instances which have been raised, not only to me but to a great many other members. I did state that I had seen some people personally who had spoken to me about this. They are taxpayers and are much concerned about this matter.


Douglas Charles Abbott: I am just as much concerned as the taxpayers and I would like to know who it is.


George Randolph Pearkes: Some people have not been able to see me personally because they are not in this immediate vicinity. As for carrying out a personal investigation, it is utterly impossible for a private member to go touring around the north country to inspect these various projects. I have tried to get information. I have gained the impression that there is a great deal of waste and extravagance in connection with the development of our system of defence in the north. I am inclined to believe, partly as a result of numerous conversations that I have had, that much of the waste and extravagance is due almost entirely to the fact that great haste has been 68108-164
The Budget-Mr. J. J. Smith used in connection with the establishment of some of these posts in the northern part of our country.
I am not going to pursue the question any further. I am simply pointing out that this is the sort of thing which is being brought to our attention. I can give the minister dates connected with certain equipment, when it was sent, but I cannot give him locations because those who have spoken to me have respected security and did not even tell me the location of these various projects.
I do feel that there should be an examination into these expenditures. Had a real and earnest effort been made to cut down this waste and extravagance, I believe the Minister of Finance would have found his task much easier and have been able to give relief to the municipalities to which I referred in the earlier part of my address and to those groups of citizens who find the burden of the present cost of living most excessive.
* Mr. J. J. Smith (Moose Mountain): Mr. Speaker, in taking part in this debate I do not intend to deal in great detail with the budget itself, as it seems to me that practically everything that can be said has been said and I do not care to make a speech of repetition. I do not intend to bring the problems of my constituency before the house, as the hon. member who has just spoken has done. I have another way of doing that. There are plenty of problems in my constituency. When I am told of a problem I go to the minister who has to do with that matter and I have been fairly successful in recent years. It may have been imagination, but when I came here first I felt that some of the minister's offices were a little hard to get into. I felt that I was getting more excuses than reasons. But that has been all cleared up, and now I am told why a thing is done when I go to a minister. That is all I ask. As I say, I have been fairly successful. When I am not successful I realize that it is either because I have a poor case or because I have presented it badly.
There is one problem that has arisen in my constituency which has to do with the Minister of National Revenue (Mr. McCann). I refer to the method of making income tax collections as practised by a few of the officials of that department who have been operating in my province and in my constituency.


Mr. Ross (Souris):: Have you fixed that with the minister?


Mr. Smiih (Moose Mountain):: I have not been able to yet. I have been asked that question and so far I cannot answer it. I
2568	HOUSE OF
The Budget-Mr. J. J. Smith never leave at the end of a session to go back to my constituency without being able to answer practically all the questions that I assume might be asked as to why the government does this or does that.
I have been asked why a few jokers-I underline the few-in the collection department should think that because they have a brief-case and a government job they can push everyone around. You might almost think that they owned the country. I shall come back to that later. Before I go on I do want to say that we are most fortunate in having a Minister of National Revenue who treats all people alike. It is just too bad when we have such an efficient department with so many officials doing a good job that a few should be spoiling the whole thing. I shall come back to this point later.
I said that I was not going to deal with the budget at any great length, but I do want to refer to the speech made by the leader of the C.C.F. party. I realize immediately that in trying to deal with the speech delivered by the hon. member for Rosetown-Biggar (Mr. Coldwell) he has it all over me in being a most able speaker with long experience and, in addition, a good artist.
I heard the hon. member for Rosetown-Biggar make that speech twenty years ago in Saskatchewan, or one just like it. I would not suggest that he is not sincere in his remarks, because after anyone tells a story for twenty years he is bound to believe it himself. I am not going to suggest that he should not continue telling it because he has had such good results in Saskatchewan from telling that same story.
I am not going to suggest that he should not use it in the next federal election. Corporations are something that we know very little about in Saskatchewan. I give the hon. member full credit for being a great artist in drawing the picture he did. There is only one greater artist that I know of, the premier of Saskatchewan. He is much better. I can just picture those two hon. gentlemen going around Saskatchewan during the next campaign making practically the same speech that was made by the hon. member for Rosetown-Biggar. It would possibly be unparliamentary if I said that they will be telling just half the truth, but anyway they will be giving just half the facts and telling only part of the story.
Furthermore, Mr. Speaker, coming to this house and knowing little about finance, and I admit at once knowing little about corporations, 1 found myself in quite an awkward position in dealing with the situation. I am sure that the Minister of Finance (Mr. Abbott) or his parliamentary assistant, yes,
[Mr. Smith (Moose Mountain) .1

even the Minister of Fisheries (Mr. Sinclair), could have done it much better. However, when the campaign starts we in the province of Saskatchewan-I have said this before and I repeat it whether or not hon. members agree with me-have what is in my opinion the most effective political, and I underline the word "political," opposition to the government. Possibly that should be a compliment to the members of the opposition from our province. When the campaign gets under way, however, we pretty well have to deal with the situation ourselves. If the Minister of Finance were in my constituency and had explained to the people just what corporations are, then I would not have to do it. I do not expect he will be there so therefore I am going to attempt to put the whole story on Hansard.
I hold no brief for any corporation whatsoever. I might mention in passing that I have a brother in the city of Winnipeg who was at one time a farmer. He went to the city of Winnipeg and is now in a partnership business. He tells me he is paying double taxation. Each time I pass through Winnipeg, both coming and going, he complains that it is an unjust tax. As a matter of fact I have another brother in the province of Saskatchewan who thinks that corporations should be soaked more heavily. I tell this to the Minister of Finance in order to show him that it is not possible to please everybody. I do not think it would make any difference what tax cuts were made. My C.C.F. brother in Saskatchewan would still not be in favour of the budget. That brother is well known to the hon. member for Rosetown-Biggar (Mr. Coldwell). He knows him personally, and so far as their views on corporations are concerned they are as much alike as two peas. I mention that in passing to indicate to the Minister of Finance that so far as my family is concerned he could not produce a budget which would please us all. One is a socialist, another was a Conservative in the last election, and I stand in the middle.
The hon. member for Rosetown-Biggar tried to picture the budget as a rich man's budget. I repeat that I hold no brief for corporations. If it is a rich man's budget, if I thought for a moment that the present government is legislating for the rich man, then I would have to say that I am in the wrong camp.


James Arthur Ross: You are more welcome over here anyway.


Mr. Rowe:: You should join your brother in Winnipeg.


John James Smith: Naturally I was somewhat concerned whether it was a

rich man's budget so I conducted some research. I may say I have no ghost writers. I do not speak with notes although my speech would possibly read much better if I did. But that does not make a great deal of difference because I do not send my speeches to my constituents. I do not suppose anyone else reads them so it does not make any difference how they read. In any event, I was quite concerned. As a matter of fact, as I said, I heard the hon. member for Rosetown-Biggar make the same speech 20 years ago at a place 20 miles from our farm. Although at that time he told us what the socialists would do if they were in power, he neglected to do so in his speech on the budget. At that time he convinced me. Of course I was good bait in the thirties. I remember well that on that day in 1932 when we went to hear the hon. gentleman we had been threshing a crop of wheat on our farm. It was my father's farm and my two brothers and I were still at home. We had 12,000 bushels of wheat. That was in the drought year of 1932 and we sold the first part of it for 32 cents a bushel and the balance for 19 cents. Naturally I was fairly good bait for that kind of speech.
That was before I had the right to exercise my franchise and I suppose I am not so flexible now, but at the same time the hon. member almost convinced me the other day that the Minister of Finance had produced a rich man's budget. I examined the speech of the hon. member for Rosetown-Biggar after listening to his address in the house. I do not want to take anything from it. I could quote what he said but I will not do that. What he did say dealt with corporations. In my opinion he tried to paint a picture of corporations and large companies as being a group of millionaires. The hon. member for Rosetown-Biggar took an income tax form, put in some imaginary figures and worked out the answer. I presume that his figures were correct.
But when he was putting that picture before the house the Minister of Finance suggested that corporations had already paid 49 per cent or 50 per cent on the dividends that were paid to their shareholders. The leader of the C.C.F. did not want to hear that at all. He could not go along with that kind of argument. Perhaps I might quote a short passage from the discussion that took place. At page 2351 of Hansard for February 24 there is the following:


Douglas Charles Abbott: It is paid at the rate of 50 per cent as the result of his interest in the companies.


Mr. Coldwell:: Just a minute. Is the hon. gentleman going to argue that he has paid something? He has paid nothing, and so far as the companies in which he is interested are concerned they pass on any tax assessed against them to the general
The Budget-Mr. J. J. Smith public. The general public pays that tax which this gentleman escapes in his personal income tax. I think that is a fairly complete answer to the minister's suggestion.
If, that is the case, if the hon. member for Rosetown-Biggar wants it that way, then while I am not an expert on finance and I do not know whether or not that is correct we will go along with him for a little while. I have a question to ask the C.C.F. party, whose leader spoke for them, I suppose. If it is the case that corporations pass on the taxes to the general public, then why does the C.C.F. ask the Minister of Finance to maintain, or even to raise, the taxes on corporations when the C.C.F. party says that those taxes are passed on to the general public? For whom are they speaking? Are they speaking for the general public? Of course we know they are not interested in corporations-at least they claim they are not. Possibly the C.C.F. member who is going to follow me shortly will give the house and myself the benefit of an answer to my question as to why they suggest that the Minister of Finance should maintain a high corporation tax that is passed on to the general public.
I went to the trouble of hunting up a few facts and figures on corporations. I choose first the Massey-Harris Company. I do not have the companies the hon. member for Rosetown-Biggar used. They are in eastern Canada and we in western Canada know nothing about them. I have taken companies that will be a little closer to his door, indeed, in the constituency he represents. There are the Massey-Harris dealers. I might ask, possibly for the third time, why the hon. member asks the Minister of Finance (Mr. Abbott) to maintain a corporation tax on the Massey-Harris Company when he himself says that the Massey-Harris people and other corporations will pass the taxes on to the consumer. I think in the constituency of Rosetown-Biggar farmers buy about as much machinery as they do in any other constituency. Possibly we could have an explanation of it all from the hon. member for Assiniboia (Mr. Argue), as he is a farmer and understands all aspects of farming, and he is an eloquent speaker with much more experience than I have. Possibly he could give us an answer. If he does not see fit to give an answer to the house, as we have almost daily conversations, although sometimes we see who can tell the other the biggest lie, possibly he will give me a reason for his leader making such a statement.
Now, Mr. Speaker, what about the Massey-Harris Company? They have 16,717 shareholders. I do not suppose they are all millionaires, and when we track down the
2570	HOUSE OF
The Budget-Mr. J. J. Smith dividends it would not appear that way. According to the company's annual report for 1952 the Minister of Finance got $12,550,000 from Massey-Harris. The dividends to the 16,717 shareholders, according to this report, were $4,617,205. My arithmetic is not too good but it is better than my spelling, and if you divide that total dividend by the number of shareholders, by simple arithmetic it gives each shareholder $276.10. The C.C.F. would not say that would indicate that the shareholders were millionaires nor that they should not have that dividend. There is another surprising figure here. The number of shareholders is, as I say, 16,717, while the number of employees-world wide-is 18,930. They have almost as many shareholders as they have people working for the company throughout the world.
Those were interesting figures to me and I thought possibly it might be well if I gave them to the house, and more particularly to my colleagues from the province of Saskatchewan. We will have to fight the battle out there and, if they have not done any homework on the budget address, they can take what I have given and go on from there.


Mr. Argue:: What did Massey-Harris pay in patronage dividends?


John James Smith: Maybe you can find it here in this annual report. I will send it over to you in a few minutes and you can look at it when I am through.
I think possibly I will now go on to another company, the Bell Telephone Company. That company is pretty close to us in Saskatchewan although I do not suppose there are a lot of shareholders out there. Strangely enough, the other day in the coffee shop I heard a conversation when my hon. friend from Swift Current (Mr. Whiteside) was sitting with me. I am going to tell this story just to show the house how vulnerable the people of Saskatchewan are to this kind of C.C.F., socialistic propaganda talk.
We had been seated at the table and were having coffee. There was a gentleman with us whose name I do not know, and there were two ladies at the next table. They were talking about shares in a company. One young and rather attractive lady started talking about her shares in this company and asked the gentleman at our table whether he thought she should sell her shares or not. I immediately thought to myself: Well, if I were single and fifteen years younger there would be a rich young lady for me. Of course, Mr. Speaker, I am married and I did not entertain that idea long. I am happily married too-and I say that because it is a


fact and I am not too sure but what my wife might be in the gallery.
Anyway, I listened to the conversation about shares. The gentleman said he did not like to advise the lady as to whether she should sell her shares but he suggested that she might sell half of them. I thought that this young lady must be quite rich. Finally the gentleman asked her how many shares she had. She gave a cute little smile, blushed and said she had $160 worth. Now, that just goes to show you that not only the rich have company shares.
Anyway, I happened to hear her say that the shares were in the Bell Telephone Company. This morning, at a quarter after four and from then on, I was thinking about the speech I was going to make, and I remembered the young lady speaking about her shares and I decided I would find out something about the Bell Telephone Company and who owned its shares. This morning I telephoned the company and a lady answered. I told her exactly what I wanted, and that, being a dumb individual from Saskatchewan, I did not know too much about the corporation. She was glad to give me what I needed. I first asked her how many shareholders there were in the Bell Telephone Company. She said that roughly there were 100,000 shareholders. I asked if many of the employees bought shares in the company and she said yes, that she put all her savings in the Bell Telephone Company. She said she did not own anything except her clothes and her shares in the company. She said they had a very nice system of payroll deductions which made it convenient for employees of the company to invest in its shares.
I began to ask her more questions and at that point she put me in touch with someone who could give me all the information. I then spoke to a Mr. Dockstader, assistant to the president of the company, and told him exactly what I wanted. He was very glad to help and he provided me with this report for which I sent a messenger. The matter gets closer to Saskatchewan because I notice that Mr. C. A. Dunning, P.C., of Montreal, happens to be one of the directors. This report which I have here indicates that there are 100,890 shareholders and the dividends are a little in excess of $22,570,000. The Minister of Finance received a little more than $23 million from the Bell Telephone Company.


Mr. Graydon:: He is a big shareholder.


John James Smith: Yes, he is a big shareholder. However, this is a company on which the C.C.F. thinks the Minister of Finance should pile more corporation

taxes. These figures, and what I have mentioned, indicate that there are a lot of people in the Bell Telephone Company and it does not look a bit as if there are only a few millionaires. I do not think the C.C.F. should suggest that the 100,000 shareholders of the Bell Telephone Company are a select group of millionaires.
Now I am going to deal with the Canadian Pacific Railway and that company gets still closer to home. I hope the leader of the C.C.F. has no objection to my taking companies so close to home. I did not have a report on the Canadian Pacific, other than a report on the number of shareholders. I had to telephone to Montreal to get this. The number of shareholders in the Canadian Pacific totals 63,751. I have not been able to get in touch with anyone in Ottawa who has shares in the Canadian Pacific, but I happen to know two individuals close to where 1 live. Both of them are widows at the moment. One is related to me by marriage, and her husband died two years ago the day after New Year's. As a matter of fact, I had New Year's supper with him. The next morning his "ticker" quit, and he went out like a light. This woman had her husband's life savings invested in shares in the Canadian Pacific.
I do not know just how many shares she had. I know of another individual, who is also a widow in my constituency, and whose husband died a few years ago. I know a little about this case because I happened to be an executor of the estate. Anyone who has had anything to do with estates would know about this. There were three executors, and I was appointed to cash the cheques which she received from the Canadian Pacific. I do know her financial position. She is the wife of a former section foreman who died shortly before he was to be superannuated. I know that she was left with one crippled child, and all she had when he died was the furniture in that section house and $10,000 in Canadian Pacific shares. I do not think the leader of the C.C.F. group would suggest that women in this category should have any further taxation imposed upon them. I do not think he would deprive them of these dividends. That is all I am going to say about that.
At the beginning of my speech, Mr. Speaker, I said that I knew I was taking on a pretty big job in attempting to answer a man like the member for Rosetown-Biggar. He is a former school teacher, and has always earned his living by talking. I have only earned part of my living during the last four years by talking, so naturally I am not as experienced as he is.
The Budget-Mr. J. J. Smith
I see the Minister of National Revenue is now in the house, so I am going to go back and refer, in as kindly a way as I can, to the tax collectors in his department. I believe the minister was in the house when I said that it was too bad, when we had such a fine minister and such an efficient group of officials doing a job which is not a nice job, that we had to have a few "jokers", as I called them, who spoil everything. These people, when given a government brief-case, go out into the country and do a great deal of damage. There have been a few of them in my constituency, and they can make more socialists in a month than I could make Liberals during three months of hard driving. I am now referring to the political aspect of the question.
I do say what I think we need is better public relations in the income tax department. Possibly there are many places where the department has good public relations, but in other places they have not. I do not see the Minister of Justice (Mr. Garson) in his seat, but I can tell him that all is not well in his province, either.
I believe I will cite two cases. I do not like to get up and make general statements without citing specific instances. I know that this is not government policy, and I am not quarrelling with government policy in any way, shape or form. I can debate that even with the hon. member for Rosetown-Biggar on any platform, but some of these individuals to whom I refer are not carrying out government policy. When I first came to Ottawa one of the first problems I had -I have had lots of them since-was in connection with an income tax case. The Minister of National Revenue never heard about it. He happened to be in Newfoundland at the time, but we got it fixed up. I did not know the minister at the time I was trying to get in touch with him. This case concerns another widow. It seems to me I hear of the troubles of a lot of widows.
This particular widow was to be fined $10 for not filling out a succession duty form. The income tax division in Regina, I suppose it was, wanted this $10 fine. A friend of mine wrote to me about it. By the way, I knew this lady very well. She was not a supporter of mine, but was a C.C.F.'er. However, that makes no difference to me. When I am in Ottawa I work just as hard as I can for anyone in my constituency, and I do not care what their politics is-except on election day. This lady was to be fined $10 because she had not filled out this succession duty form. Her husband had been receiving old age pension under the means test, so when I could not get in touch with the Minister of National Revenue or his
2572	HOUSE OF
The Budget-Mr. J. J. Smith deputy I went over to Sussex street to that building in which the wartime prices and trade board was housed. When I got in there I got lost. I do not recall the name of the person to whom I was speaking, but in any event I asked him to check on this matter. I said that I knew it was the law, but surely you are not going to fine this woman $10. She did not know when you sent this form she had to fill it in. She did fill it in later, but it was too late. The chap to whom I was speaking said he could not do anything about it without the minister. I said that I was sure the minister had not told anyone in the department to just give her so long to pay the $10 or she was going to be brought before a court. This chap assured me that something would be done.
I went home in December, but before that I wrote to my friend and told him that it was fixed up. When I went home my friend told me that this lady was going to be brought before a police magistrate on Saturday and fined if she did not have the amount paid by the Monday. I immediately telephoned to Regina and asked to speak to some official. I think perhaps the first fellow with whom I was speaking was one of those "jokers" I mentioned. I told him that I did not think they had to get $10 from this woman to balance the budget. I said, "If you have to get $10 to balance the budget, you will get a personal cheque from the member for Moose Mountain1 to settle it, but you will not get anything from this woman". I asked to speak to another gentleman, and I told him about it. He said that if that was the case I did not need to send the $10, and he would review the case. I told him I would send it and he could do what he liked with it. I would say that was an example of fairly good public relations, although rather slow.
I wish the Minister of Justice were in his seat, because things are not too good in his province either. I know of a neighbour of mine who went to live in Winnipeg in 1946. He was a fairly successful farmer, and he moved to Winnipeg. He did not fill in an income tax form in Saskatchewan, and I hold no brief for him for not doing so. He claimed that he did not know he had to do so. A brother of mine who lives in Winnipeg told him that I was going through, and to see me. He was having trouble down at the revenue building at the comer of Portage and Main. I went up to the revenue department with him, marched in, and did I get in touch with a "dilly" of a lad. I think his name was McBride. He had been dealing with this neighbour of mine.
I told my friend before we went in that I was not going to mention that I was a
[Mr. Smith (Moose Mountain).!

member of parliament. I do not like people to know that I am a member of parliament when I am away from home. I told him that I would go with him as the reeve of the municipality from which he had come, and try to have the thing straightened out. They got us into a little room and we sat around a table. It was not long until this fellow had the old farmer sweating blood. He was really pouring the questions at him, and I was getting a little warmer all the time. He wanted to know a lot of things, and was in my opinion insulting. Finally, I said to the lad with whom I went, "You gather up your papers and let us get out of here."
This little joker looked at me-I remember him well-and he said: "Who in h- do you think you are?" I said, "That makes no difference. This man is not under arrest. I brought him in here and he is going out with me." I said, "You are making a lot of bother for this man for nothing", and I told him, "I will tell you who I happen to be. I am a member of parliament, although that makes no difference." I said, "You are putting that man to a lot of trouble for nothing. I know he should have been paying his income tax. He is willing to pay it. But you are trying to send him out into Saskatchewan and you are asking him a lot of questions that it is hard for him to get answers for; and anyway, you have them right here. Why don't you assess him? You won't take his answers when and if he can get them." He looked up at me and said, "These farmers are all good poker players. Why should I pull my tricks out of my pocket?"
I do not know of any time in my life that I wanted so badly to slap a man in the mouth and did not do it. I said, "All right. That finishes it. I will go to Ottawa and see the minister, and the Minister of Justice (Mr. Garson), and the Minister of National Revenue (Mr. McCann)." I went back down to my brother's office. He said, "Oh, no. You don't have to do that." He told me to phone somebody, and he told me whom in the department to telephone. He said, "There are plenty in there who do not think they know everything. Most of them are pretty good." I telephoned the man and told him what I wanted. I said, "I don't want this man to have this trouble and pushing around." I said that he was a good honest chap and that I just wanted him to be treated like any other good Canadian. I said, "I am quite satisfied you will get your money." That was done. The Minister of National Revenue never heard about that case because it was all fixed up. Again I say it is fairly good public relations, but again a little bit clumsy.

Possibly I should say a little bit more about this matter. I had a letter; and talking about letters, I hope the Minister of National Revenue (Mr. McCann) will not think I am exaggerating. I am only trying to put the facts before him as they are. I have a letter from one who I think is as good a citizen as there is in the Dominion of Canada-yes, and if you like, as good a Liberal as there is, and that takes in a lot of ground. He said to me in the letter: "Smitty, in your constituency the Currie report will cut no ice in the next election." He said, "The South Saskatchewan dam will cut some ice if we don't get it. But none of them has anything to do with what you are going to have to face in what comes in from a few hounds that come into this constituency when you are down there, and are just running after everybody."
I find that what the C.C.F. organizer in the constituency is doing is this. I may be asked by somebody if I can prove it and if I have to, I can; they are running a very technical set-up out there. They send in letters to the income tax department that so and so has not paid his income tax, and if so, not enough. Then what happens? A hound comes out. Maybe he is a socialist, and I would not be surprised if this is the case. The minister's officials are possibly appointed-well, in fact I am quite sure that their appointments are made by the civil service, and you get all kinds of people. But if you get a C.C.F. organizer working with a few income tax collectors who are C.C.F.'ers, you can make it pretty rough. I want to say that we have had a great many income tax collectors in our constituency and they were very good fellows. They would come in and assist the farmers, help the farmers out, and they did a good job.


Mr. Thatcher:: Send them down to Quebec, Smitty!


John James Smith: I am glad the hon. member asked me that question. His roommate tried to rub more salt into the wounds a short time ago by raising a smokescreen in this house and trying to suggest that the Minister of National Revenue was playing politics, not having as many tax collectors and not collecting as much in taxes in Ontario and in Quebec as they were in Saskatchewan.


Hazen Robert Argue: He had no hounds there.


John James Smith: The minister replied and made a good job of it. The hon. member for Assiniboia (Mr. Argue) got fairly good publicity in many western papers for that speech, but the Minister of National
The Budget-Mr. J. J. Smith Revenue, in his reply to it, got just as good publicity. Otherwise he only added salt to the wound by the speech.
We in western Canada do not know too much about corporations. I admit that. But many of the people in western Canada-in my constituency, anyway-came from Ontario and Quebec, or the great percentage of them, and they know perfectly well why the western farmer-that is the large wheat farmer- would be paying more income tax than would the eastern small farmer. For instance, I understand that in the province of Ontario the average farm is 65 acres. I should like to know how many farmers in the province of Saskatchewan or in Manitoba either are paying income tax on a 65-acre farm. There is no such thing at all. It is more socialist propaganda.


Hazen Robert Argue: You do not pay your income tax on your acreage. It is on your net income.


John James Smith: I think I might add that I have here an affidavit about -I suppose I could tell about it or I could read it-a sheriff. It is really rough, I want to tell the minister. Of course he does not appoint sheriffs. The sheriff in Estevan is Mr. Cuming. He is known to my C.C.F. friends. He was a casualty of the provincial government and he was appointed sheriff. He is no more qualified to be sheriff than I am qualified to be queen of England. He is there because he was defeated in the election. I do not know whether the minister can do anything about it or not.
What happened was this. I have here a copy of an affidavit. I am not going to mention the name. It is to the effect that an individual was pulled up for income tax. He had a writ of execution against him, and that served him right because he should have been paying his income tax. I do not hold any brief for any man who does not pay his income tax. I think everybody should pay income tax. If they did so, possibly I would pay a little bit less. Anyway, he had a writ of execution against him and a letter from this sheriff to come to the courthouse. He gave particulars on the affidavit, that he went down and after he had paid the sheriff, Mr. Cuming, $500, the sheriff said to him, "That is what you get for voting Liberal."
The gentleman who went in was told that by the sheriff. I have the signed affidavit here that it is a fact. It is not just a letter without a name; it is an affidavit. That is the kind of thing that is going on. I think surely something should be done about it. What drives the farmer against democracy is that kind of thing, in my opinion. That is why the

The Budget-Mr. J. J. Smith people in Russia jumped out of the frying pan into the fire. I would hope that there will be something done to rectify this situation.
I suppose my time is about gone. I am getting to be quite a politician. I used to have a hard time to speak for ten or fifteen minutes. Now I can go on forever, seemingly. In any event, I think possibly I should not sit down before I refer at least a little bit to things having to do with farm problems, although again there is not much need for my talking farm problems on the floor of this house. As I say, I do not send my speeches out to my constituents, and I do not suppose anybody reads them anyway.
I have the privilege of attending the provincial caucus with the minister about once a week. I was in conversation with him yesterday about farm problems. I see the Minister of Trade and Commerce (Mr. Howe) practically every day. I do not speak to him every day but do so at least once a week. We are quite concerned about farm problems. Therefore anything I say here today would not add anything to what I do for my constituency. I can do that without making a speech on the floor of the house. But I have here an editorial. It comes from the Estevan Mercury, and it is one with which I wholly agree. I do not as a rule read editorials but I think that possibly this is one that I should read. I am not going to read it all but it is headed "Out of the Market" and reads in part as follows:
The Mercury has in the past often pointed out that we in Canada have been gradually pricing ourselves out of foreign markets because of rising costs with no effort being made to "hold the line".
There has been altogether too much following of the lead set by the United States in all matters creating inflationary conditions which have brought about high costs of labour, raw materials, services and administration.
Farther down it goes on to say as follows:
The inevitable results are beginning to come home to roost. Canadian farm products are produced at high cost-so high that the foreign export market is not going to buy them until other sources are drained.
It goes on here:
For example Britain is buying Argentina dressed beef at 16-6 cents, the Canadian price in Montreal last year was 44 cents. Denmark is supplying bacon at 31-5 cents per pound; Canadian price 42 cents. New Zealand butter is sold to Britain for 36-7 cents; Canadian price 58-8 cents.
We hear it said in the house that the government is responsible for losing the British market. This is all nonsense. I am no more in favour of subsidizing the farmer than I am of protecting industry by tariffs. Therefore let me say that I am not in favour of either of those procedures. I read the comments because I am interested in what

they say, and because I believe they spell out the situation.
The editorial goes on in this way:
Only on wheat has Canada been able to hold its own and that position has been held solely because of quality and an assured supply.
Even the wheat market is altering its complexion. There is yet no certainty that the international wheat agreement will be carried on. National buying of wheat has been discontinued in Britain bringing the individual dealer back into the picture. This just about means the end to international government deals and barter and leaves the individual grain buyer to purchase where he can get the best deal. No one as yet knows what effect this is going to have on the Canadian grain board handling of wheat.
I think it would not toe wise at this time to talk about the international wheat agreement in detail. Then the editorial goes on:
It is unfortunate that the farmer is the one that will get the first knock in this readjustment process, particularly as he was not responsible in any way for the kite-flying. While generally speaking the western farmer has had a few quite prosperous years, these cannot be expected to continue because of high production of wheat particularly and any marked falling in prices that he receives can quite easily wipe out his margin of profit.
The question then arises in his mind as to whether or not he can expect any assistance towards reducing his costs to the point of once again being able to compete on world markets.
That is the question he wants to put to the industrial areas where in a good many cases high wages and short working hours have raised prices on machinery and other things he has to buy thereby increasing his production costs to the point that has priced him out of the world markets.
Well, that is the question, and it is a good question. I am not too greatly worried about what is in store for us. We will work something out, but I cannot see any honeymoon for western agriculture.
That is all I wish to say at this time. I am sorry I have taken up so much time of the house in dealing with corporations about which I knew very little until ten days ago. But I would hope that, for a fellow who knew nothing about corporations, I did not make too bad a job of it.


Mr. R. R. Knight (Saskatoon):: Mr. Speaker, I enjoyed listening to the speech immediately preceding mine, with its breezy reminiscences, mixed up with stories about the hon. member's family, C.C.F. widows, and the like. There was one thing his speech did prove, and that is' that the old adage that people habitually vote as their fathers voted before them is wrong. That was proved by the record of his family. He tells us that in it there are people holding three different political opinions.
Then it was refreshing to hear a Saskatchewan farmer take up the cudgels on behalf of the machine companies.


John James Smith: That is mere propaganda. Peddle that somewhere else.


Robert Ross (Roy) Knight: I do not wish to argue the point. I would have pointed out, however, that instead of referring to the Bell Telephone Company enjoyed-perhaps I should not say enjoyed; perhaps I should say suffered-by the people of Ontario, we have a telephone company in Saskatchewan that has a great many shareholders. It has 750,000 shareholders; it is the Saskatchewan government telephone system, and provides the cheapest service in Canada.


Mr. Sluder:: You did not build it.


Robert Ross (Roy) Knight: I am not attempting to reply to my hon. friend's speech. I noticed that he made reference to the arguments offered by my leader. I shall not attempt to defend my leader because, as the hon. member for Moose Mountain has pointed out, the hon. member for Rosetown-Biggar is quite able to defend himself.
Before turning to my particular criticism of the budget, I should like to discuss a matter which has already been brought to the attention of the government by the hon. member for Nanaimo (Mr. Pearkes). I refer to a matter of taxation. The mayor of my city has wired to me and, I believe, to the Minister of Agriculture (Mr. Gardiner) as well as to the Minister of Finance (Mr. Abbott), pointing out that municipalities, as such, should not be asked to pay the sales tax in respect of equipment they purchase which, under no circumstances, is resold. They suggest that Canadian municipalities should be exempted from this measure of application of the sales tax. I understand that on several occasions the Canadian federation of mayors has endorsed this idea, passed resolutions in regard to it, and forwarded them to the government, but that up to the present time there have been no results.
In the wire I received from the mayor of Saskatoon the municipalities are described as creatures of the provincial government, and it is stated that the provincial governments do not pay the sales tax in this matter. Our city council thinks that cities and other municipalities should not pay such taxes. Surely there is a strong argument for its removal or revocation, particularly in respect of equipment the cities manufacture for themselves, for their own use.
In reference to Saskatoon particularly, there is the matter of prefabricated sidewalk curbs, which are manufactured by the city itself, and upon which it has to pay sales tax. I take this opportunity to bring the
The Budget-Mr. Knight matter to the attention of the house. I have here an editorial from the Star-Phoenix of February 26 which states:
The Canadian federation of mayors and municipalities has repeatedly urged the federal government to extend the exemption-
That is to say, the exemption from the sales tax.
-to the municipalities. The request is eminently reasonable. It strikes us as unfair to the municipalities that they should tax their residents in order to pay a tax to the federal government. The municipal tax base is restricted in all parts of Canada. Their taxes fall upon a limited section of the community. Yet the sales tax provision requires them to help support a government that has many sources of revenue. This seems unfair and out of keeping with the general purpose of the sales tax.
Unlike the hon. member who has just resumed his seat, it has never been my habit to interject personal matters into my speeches, but that same copy of the Saskatoon Star-Phoenix from which I have just quoted tells me that its editor now lies dead.
I refer to Clifford Sifton. He was my friend. He was a young man in the prime of life, just 34 years of age. He leaves behind him a widow and four little children. Clifford Sifton was a good newspaper man. He wrote with depth, with feeling and with lightness in his touch. He possessed intellectual honesty to a high degree. He was gentle. He loved the things of nature and the out-of-doors, and was an admirer of good horseflesh. He was a patron of the arts; he loved music and painting and the drama. He raised the cultural level of the community in which he lived, and he will be missed. Now that he has gone our hearts go out in sympathy to those who have most reason to mourn his going.
Now a word or two about the budget itself. The reaction of the public to the budget is proving to be one of disappointment. The first headlines featured a reduction of 11 per cent in the income tax all across the board, but that is now being assessed at its real value. In the first place, the proper figure for the current year is not 11 per cent; it is 5-5 per cent or less. Even that figure sounds impressive until one begins to examine what the reduction means to him personally or on a family basis.
The minister will know the exact figure, but I believe 60 or 70 per cent of our working force pay no income tax at all. They do not earn enough to bring them within the income taxpaying brackets. For those people there is no relief in this budget. Unfortunately there is little relief for those people in the low income bracket by reason of other provisions in the budget.

The Budget-Mr. Knight
These are the men who spend all their income on food, clothing and shelter. We feel that these people should have had some share in the relief from taxation by means of a reduction in the sales tax. The sales tax is a hidden tax and for that reason is all the more insidious. It is a general tax because everybody pays it. It is upon this low income group that the sales tax and special excise taxes bear most heavily, and the government has granted no relief in this connection.
Those in the lower income brackets who Eire well enough off to pay some income tax are in very little better position. We have heard a lot about the married taxpayer with two children, earning $3,000 a year. This year of 1953 that taxpayer will pay just $4 less to the government than he did last year. So far as he is concerned, that is a reduction of 33 cents per month.
I see the hon. member for Montmagny-L'lslet (Mr. Lesage) is paying attention to what I am saying. I must be fair and say that government speakers have reminded us that the people in the low income groups to which I have just referred who pay no income tax cannot expect any reduction in income tax. Those speakers have pointed out also that these people received benefits in the way of the 4-cent reduction on a package of cigarettes and the abolition of the radio licence fee which cost them $2.50 a year, if they paid it at all.


Mr. Lesage:: And family allowances.


Robert Ross (Roy) Knight: The family allowance payments do not buy as much as they used to. It is true that in the two cases I have mentioned there is some relief to many people in the low income group, but there is no relief for the man who makes his own cigarettes or who is a pipe smoker or, I am reminded by the hon. member for Kootenay West (Mr. Herridge), for the non-smoker. These people get no benefit at all.
As to the radio licence fee, that was a nuisance. It was too hard to collect and administer. We are glad to be rid of it. Of course we will still have to pay the special excise tax on the radio in respect of which we used to pay this licence fee. But the nonsmoker receives nothing in this budget for himself or his family. We still have taxes on household goods; we still have excise taxes on refrigerators and kitchen equipment, and there is still the sales tax on candy bars for the children. They all remain the same. What sunshine there is in this budget I submit is not for the workingman.
Of course we are accustomed to that attitude on the part of the Minister of Finance (Mr. Abbott). We remember his refusal in


the face of a vote in this house to abolish or lower substantially the deductions for income tax purposes in connection with medical expenses. We remember the ceiling that was placed on contributions for old age security. People with small incomes must pay an extra 2 per cent on their taxable income. But there is a limit of $60 on that 2 per cent tax. A man with taxable income of $3,000 pays 2 per cent or $60. If his taxable income is over $4,000, he still pays $60. If he has a taxable income of $30,000, he still pays only $60 in respect of the old age security tax. That does not seem a fair arrangement to those who believe in the philosophy in which we in this group believe.
People with moderate incomes have been in the habit of putting, and up to now have been encouraged to put, their savings in government bonds. A man with a moderate income may be able to save a few dollars and he does not want to invest it as risk capital. He has been encouraged by this same Minister of Finance to put his money into government bonds. The government has spent a good deal of money in advertising these bonds and telling people that it is a patriotic duty to invest their money in government bonds. But by one stroke in this budget the minister destroys any advantage that there was in that practice. There is a complete change in policy. A man with a few hundred or few thousand dollars invested in government bonds must pay income tax upon the interest received from those bonds. But if he is receiving dividends from Canadian corporations he has been allowed to deduct 10 per cent of those dividends, not from his gross income for taxation purposes but from the amount of tax he is liable to pay. By this budget that exemption is raised from 10 to 20 per cent.
Is it any wonder that people are not buying bonds any more? It will be no wonder if they buy less in the future. The minister is discouraging investment in his own government bonds and encouraging risk capital speculation. The examples given by the hon. member for Rosetown-Biggar (Mr. Coldwell), as reported on page 2350 of Hansard of February 24, as to how holders of corporation stock are being favoured are almost incredible. He gave an example of two men, one who earned his income by working, by his effort, perhaps by the practise of his profession, and the other who received income in dividends from his holdings in corporations. Each man is married and has two children. The man whose income consists purely of corporation dividends can have an income as high as $10,000 without having to pay one cent of

*taxes, and that to me is the most remarkable feature about the budget. He pays absolutely nothing.


Jean Lesage: The tax has been paid.


Robert Ross (Roy) Knight: Private Bills
The minister could have raised the income tax exemptions for the lower income groups but, as I said, we would hardly expect that from a minister who refused to abolish the 4 per cent floor on medical expenses for the purpose of income tax deduction. With the $250 million we have heard so much about the government could have made a nice start on a national health plan.
I am well aware that I am pouring all this into unsympathetic ears. I am well aware that what I am advocating has to do with humanity and social security, and that the government has made a distinct turn-away from these things in the present budget. Bloated with its self-assurance, with its length of time in office, with the inflation of a war economy, it has declared itself for risk capital, capital gains, monopoly capital. If there are those who get in the path of this juggernaut, that is their misfortune.


Mr. Deputy Speaker:: As it is five o'clock, the house will devote the next hour to private and public bills.



PRIVATE BILLS


Mr. H. P. Cavers (Lincoln) moved: the second reading of Bill No. 187, respecting a certain patent and patent application of Florence F. Loudon.


Mr. Deputy Speaker:: Is it the pleasure of the house to adopt the motion?


Gordon Graydon: It may be the pleasure of the house to adopt it later, but we would like to know the reasons why we should.


Mr. Weir:: My hon. friend will be glad to accommodate you.


Harry Peter Cavers: Mr. Speaker, as the title of the bill indicates, the subject matter has to do with the restoration of an application for a patent. In May of 1945 the applicant, Mrs. Florence F. Loudon, conceived the idea of an arrangement for hanging overcurtains in such a way that they could be released from the valance without having to go to the great trouble of removing the hooks. She and her husband decided to make a model of this appliance, and they consulted a patent attorney in the city of Toronto. He suggested that it would be advisable for them to submit an application to both the Canadian patent office and the United States patent office. The application was drafted in November, 1945, and submitted to the Canadian patent office. After two or three months Mrs. Loudon consulted the patent attorney, who advised her that it took between two and four years to acquire a patent of this kind.

She was a lady without business experience of any kind, and her husband had little business experience.
The matter went on until 1949 before she received any definite report from her attorney. In July of that year he reported to her and advised that the United States patent office had refused her application. She was somewhat alarmed about the evasive answers which she had received from her patent attorney so she wrote a letter direct to the patent office and was advised by them that the patent office had objected to the application but that the objection had been made on April 17, 1947; that no reply had been received to the report made by the patent office, and consequently her application had been abandoned.
She consulted another patent attorney asking him what course she should follow. He looked over her material and advised her that, as there was some difference between the invention and the material which had been placed on file, she should submit another application to the United States patent office.
About the same time that she consulted her second patent attorney she asked him to inquire about the status of her Canadian patent. He advised her that the report from the Canadian patent office had not been replied to and, consequently, the application for Canadian patent had also been abandoned. However, he advised her to go ahead with a subsequent application. At that time he did not find it advisable to inform her that if she had manufactured and sold a certain number of these appliances it would prejudice her position with respect to her patent application. Finally, it was necessary for her to consult another solicitor. He informed her that the proper way by which to straighten out the predicament in which she found herself was to ask for a private bill permitting her to proceed with her original application.
Mrs. Loudon now takes that position, which is considered by her solicitors to be the only possible course open to her to retrieve her original position, placing herself in the same position as if she had originally started and made application for patent of her invention. The effect of this bill if passed will simply be to put Mrs. Loudon in the position in which she would have been had her original patent attorney not been derelict in his duty and failed to answer the report made by the Canadian examiner in the first place. The bill provides that she should surrender any existing patent and authorize the commissioner, on such surrender and upon the making of a reply within two months of the passing of the

act, to proceed with the original application as if it had not been abandoned.
If the bill is passed Mrs. Loudon will acquire no greater rights with respect to her application than if she had been applying in due time on the original report of July 8, 1947. In view of the difficulties with which this lady has been confronted on two previous occasions, it is my submission that she should be relieved of the situation in which she finds herself by the passing of this private bill, in order that she might patent her invention in the hope that it may be a worth-while scheme to carry out the manufacture of this product.


Mr. J. T. Richard (Ottawa East):: Mr. Speaker, I do not want to say very much on this bill except that there is no suggestion, in this house anyway, that any delays or hardships suffered were due to inefficiency or conditions in the patent office.


Gordon Graydon: Is everything all right there?


Jean-Thomas Richard: I have had the opportunity of practising before the patent office for-and I hate to say it-24 years. I must admit that at present the conditions of work and the results achieved by the patent office are much better than they have ever been in the past 24 or 25 years. That is due to the fact that the staff has been increased; there are more technical men on the staff; and I think it is due also to the fact that there are more capable patent attorneys practising before the patent office today. At one time anybody was an attorney before the patent office who chose to practice there.
I understand that the gentleman who acted as attorney in the first case was a little bit derelict, and it is unfortunate for the inventor that she should have suffered so. I would only point out one thing, however, Mr. Speaker, in connection with this bill, and it is that there are a great many cases where attorneys or inventors themselves have not replied to reports of the patent office within six months and their cases have been abandoned. They might now plead ignorance, and that they did not have advice regarding a delay of only six months. We might have a great number of these bills coming before us from people who have the money to pay for a private bill. That is not the reason I object to this particular case which has its merits, but I wish to make it clear in this case that there is no attack justified on the staff of the patent office. They are efficient, they are doing a good honest job, and I wish to pay them that tribute as it is deserved.


Harry Peter Cavers: I have no intention of making an attack on the Canadian patent office.
Private Bills


Jean-Thomas Richard: I am not saying that. I am not speaking about this house but what happened in the other place a few days ago.
I suggest also that if the patent office practice was amended a little, what has happened in this case would not happen so often. I think the patent office could well send a duplicate of these notices-as they do in the trade mark office-to the inventor as well as to the attorney . If the inventor were to receive a duplicate of the notice and report sent to the attorney, then the inventor would not have any reason to complain later that he had not been advised of the proceedings before the patent office. It would mean very little work on the part of the patent office, and it is general practice in connection with trade marks. I think we would avoid the reception of such bills as this if the patent office were to take notice of the suggestion I am making now.
There is another point I would make. I understand that the rights of manufacturers who have been manufacturing the article will be protected should a patent issue; but I would also like to see that clause widened, when it is discussed, so that it will include also buyers and users of the articles made by those manufacturers or who will be making it after the patent is issued. That is a suggestion for the members of the committee, and it is only made to make the case a little tighter and surer for everyone concerned since, under this bill, this house is granting an extra privilege to an inventor, something not ordinarily contemplated under the Patent Act.


Gordon Graydon: Mr. Speaker, I know there will not be an opportunity to debate this bill in committee of the whole, or to ask questions. I am very interested in what the hon. member for Ottawa East (Mr. Richard) has said, because I suppose he is the one person amongst the members who has had a wide experience in .connection with patents. I fancy that most hon. members feel as I do, and bow to his superior experience in connection with a matter so technical as this.
I was particularly interested in what the hon. member said about the precedent that might be set by a bill of this kind. I have no doubt that the hon. member for Lincoln (Mr. Cavers), who is also a very distinguished advocate before the courts of Ontario, would be interested in that point as well. He did not comment upon that particular aspect of the subject. I suppose I am not in a position to make an inquiry, except to ask the member who sponsored the bill to answer when he closes the debate, but I should like to know how many of these people who might

Private Bills
be in a position similar to that of Mrs. Loudon may be expected to avail themselves of the door this bill now opens with respect to the curing of defects of notice and the like which have barred them from proceeding with their patent applications.
It struck me that the hon. member for Ottawa East had made a rather important contribution to this debate. Conceivably this matter could be quite a problem for the patent office, and perhaps might be something to which we would have to give serious consideration. I should like to have the hon. member deal with that when he replies.
My second question is this. How will this reversal to the original position of the application in the Canadian patent office affect the applicant's position with respect to her patent rights in Washington? Perhaps the hon. member might indicate that when he replies. I imagine most members in the house will feel as I do, and that is that we have a deep sympathy for someone who, apparently through no fault of her own, has found herself denied her legal rights in the patent office. I should like to see if we could not find some way to help her out of her difficulty, and that is my frame of mind as 1 approach the subject. I am concerned, however, that in so doing the broad public interest will not suffer by virtue of having opened the floodgates for many applications which are perhaps not as deserving as Mrs. Loudon's application today. I certainly have no desire to prevent the bill from passing. I should like to support it, but I should like to have these matters explained. No doubt the committee will deal with them more fully when they have an opportunity of dealing with the bill.
From time to time situations do arise whereby people are legally blocked from doing something. I suppose it is not an unusual thing for a bill of this kind to be passed in order to jump those legal hurdles that have been put in the way of a person's rights, through no fault of their own. Assuming that, I am sure the house would like to go along with the hon. member for Lincoln by supporting this legislation.
I was interested in another aspect of the matter. I read in the Senate Hansard and in the press about matters raised in the other place concerning the Canadian patent office. There was some criticism levelled at the patent office, as the hon. member for Ottawa East indicated. I was interested in hearing his reply concerning the progress that had been made in that office. However, to contrast the conditions today in the patent office with what it was 25 years ago would not seem to me to be a very good yardstick by 
which to measure the present condition of that office. It could hardly go back, because it did not have much room to go that way. During these years I have been one of those -along with some others who know a great deal more about it than I do-who have raised their voices in trying to have the time taken to deal with these applications shortened.
If one goes back into the debates of the last ten years he will find a rather shocking story of delays in the patent office, almost approaching a scandalous condition. I have no doubt that the hon. member for Ottawa East is as anxious, perhaps more anxious, than anyone else to see that condition remedied. I am glad indeed to know that some reasonable progress has been made. I would hope, however, when the estimates of the department are brought down this year, we shall have an opportunity of dealing in greater detail with what that office is doing and the backlog of applications with which the office is faced.
While the hon. member for Ottawa East puts the very best face he can on the patent office-and I am sure it will be appreciated down there, and that his reputation as a practising patent attorney will not suffer-I do not think his answer will satisfy those who know something about the history of the patent office and the horrible condition in which it has been. The hon. member's reputation will certainly not suffer when the patent commissioner reads Hansard, and I am not suggesting that he had that in his mind. Just in case the commissioner does, by accident, pick up Hansard, I am sure he would be fairly pleased by the remarks of the hon. member for Ottawa East. The fact that conditions in the patent office today are better than they were before might indicate that they are far from good enough now.
I hope the hon. member for Ottawa East will join me and the others who will seek to have some further details given by the minister in connection with the patent office when those estimates are being considered.
I hope that after 10 years of prodding and pushing, and sometimes almost violent encouragement to do something down there, the commissioner will be able to tell the house that some worth-while progress has been made, and that we are not still in a position where applicants are being denied their legal rights by virtue of the fact that the staff is unable to cope with the volume of business which it has before it.


Mr. J. L. Gibson (Comox-Alberni):: I have not had very much experience with the patent office, so I cannot make any useful comment about that. One point has been

brought out in this debate today, and that is that the legal profession does not seem to have stood up very well in this case. I believe the hon. member for Lincoln (Mr. Cavers) said that the first attorney had been derelict in his duty, and that the second attorney had not been much better. I am just wondering if the law society has taken any steps to discipline these men.


Clayton Wesley Hodgson: I should like to say a word on this subject, because a few years ago I had an experience with patent attorneys. I know there are a multitude of lawyers in the Liberal party, but I do not think there are too many patent attorneys. I do not think the trouble is altogether in the patent office. I think the trouble is with the patent attorneys.


An hon. Member:: With the legal profession.


Clayton Wesley Hodgson: Yes, with the legal profession, if you want to call them such. A few years ago one of my friends applied for a patent, through a patent attorney. The friends of the hon. member for Lincoln (Mr Cavers) who have presented this bill may have run up against the same situation. This fellow was patenting a wrench, and he sent a patent attorney in Ottawa $300. After he monkeyed with the thing for some two or three years, he died and the patent died with him. The $300 also died with him because the fellow who was applying for the patent never got it back and never got any patent. I do not think you can blame that altogether on the patent office. I think this matter is mixed up amongst the patent attorneys. Probably the hon. member who is asking that this bill pass in the house has got into difficulties in that way and he, being a lawyer himself, probably can also straighten this out. So far as my vote is concerned, I would be much in favour of this bill passing if it will help the person who has got into difficulties with the patent office.


Harry Peter Cavers: Mr. Speaker-


Mr. Deputy Speaker:: If the hon. member speaks now, he will close the debate.


Harry Peter Cavers: -first I should like to say a word with regard to the remarks made by the hon. member for Comox-Alberni (Mr. Gibson). I must inform him that these people who have been involved here are patent attorneys and not solicitors practising before any of the courts of the various provinces in Canada. They are not members of the Law Society of Upper Canada. Consequently the powers of the discipline committee of that society are ineffective so far as the patent attorneys are concerned.
Private Bills
I am anxious to be helpful to the hon. member for Peel (Mr. Graydon) with regard to the number of applications that would be affected. However, I am not able to say to him how many applications there are of similar status. I doubt that there are many in the same position that	this	application	isin. It seems	to me that	this	lady is in	adifferent position from those persons who present their	own claims	and	then fail	tofollow them	up. This	lady	consulted	a
patent attorney and, in doing that, she placed great reliance in the assumption that he would carry out the duties which she was entrusting to him. He having failed to do that, she found herself in this awkward position.
At the present time she has consulted a solicitor of the supreme court of Ontario. I will mention his name. He is Mr. Christopher Robinson, Q.C., who is a well-known member of the Ontario bar and who has an extensive patent practice. He is endeavouring to place her rights properly before the patent office. I might say that the hon. member for Ottawa East (Mr. Richard) has explained here today that attorneys who are now practising before the patent office are carrying on their duties in a much more efficient manner than they have done in the past. It would therefore seem to me that the number of inventors who might find themselves in the position in which Mrs. Loudon finds herself today would be small and that by exercising the right to grant some relief to her, we would not be opening the floodgates for any similar applications.
The hon. member for Ottawa East has mentioned that prior users of the article should be included in paragraph 2 of the bill. I think Mrs. Loudon had no intention of bringing action against any persons who might find themselves in that position.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on miscellaneous private bills.

Mr. F. H. Larson (Kindersley) moved: the second reading of Bill No. 189, to incorporate Mid-Continent Pipelines Limited.


Mr. Green:: Will the sponsor explain the bill?


Frederick Hugo Larson: Mr. Speaker, this bill, letter D-5 of the Senate, is a standard pipe-line bill. The incorporators are set out in clause 1 of the bill. The intention of the sponsors of this bill is to construct a gas pipe line from Alberta along the general route of the C.P.R., through Swift Current, Saskatchewan,
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Mid-Continent Pipelines Limited Moose Jaw, Regina, Brandon, Winnipeg and thence to eastern Canada. I do not feel capable of carrying on any technical discussion as to the feasibility and the financial arrangements and what-not of this company. I feel that that matter should go to the committee.
There is little else that I can say on the bill other than to move that it be sent to the standing committee on railways, canals and telegraph lines, at which time all the expert witnesses will be available and can be questioned.


Wilbert Ross Thatcher: Will the hon. member permit a question?


Mr. Deputy Speaker:: Order. We are not
in committee. If the hon. member who is sponsoring the bill replies now, he closes the debate.


Wilbert Ross Thatcher: Can I not ask him a question, Mr. Speaker?


Mr. Deputy Speaker:: Perhaps the hon. member could ask the question now and the hon. member, when he closes the debate, can answer it.


Wilbert Ross Thatcher: All right. The hon. member said that this pipe line from Regina was going thence on to eastern Canada. I think those were his words. I should like to know whether the route will be through Canada or whether it will go down through the United States and back up.


Frederick Hugo Larson: May I answer that question, Mr. Speaker?


Mr. Deputy Speaker:: The hon. member may answer when he closes the debate, and when he replies to the various speeches which will be made on this motion for second reading of the bill.


Howard Charles Green: Mr. Speaker, the hon. member for Kinders-ley (Mr. Larson) who is sponsoring this bill has not given the house a complete explanation of the purpose of the parties who are applying for this charter. In effect, the only thing he has said is that if they get the charter they intend to build a gas pipe line from Alberta through different Saskatchewan centres to Manitoba; and then he said something to the effect that they intend to go on to eastern Canada. I must admit at the commencement of my remarks that if I really believed that was the intention of the applicants, I would have little objection to this bill. But because I do not think that is as yet their real intention, I propose to make a few remarks with regard to the bill.
This bill is almost identical with one which was introduced by the same hon. member in the session of 1952. That bill sought the


incorporation of a company to be known as Boundary Pipeline Corporation. As hon. members know, it did not pass the house, and died with the ending of the session.
It is true there are some changes in the present bill, one of which is the name. The company it was hoped to incorporate last year was to be known as the Boundary Pipeline Corporation. This year when the applicants for incorporation went before the other place they asked for the incorporation of a company to be known as Canadian Pipelines Limited. However, in the other place that name was changed to MidContinent Pipelines Limited; and we now have this latter name in the bill we are considering.
The second change is that whereas in the bill last year power was sought to construct pipe lines within the provinces of Alberta, Saskatchewan and Manitoba, or outside Canada, this year the bill contains the words "within or outside Canada". There is no reference to the three provinces of Alberta, Saskatchewan and Manitoba.
There is one other change in that in the present bill we find a provision to the effect that the main line shall be constructed entirely within Canada. A similar provision was written into last year's bill, in committee; but unfortunately that provision does not mean very much, if anything, where a pipe line company proposes to run its line down to the United States boundary, and then sell the gas to an associate company incorporated under the laws of the United States.
The provision is of some effect in the cases we dealt with in the house in 1949 and 1950, where it was intended to run a pipe line west from Alberta down into the United States at the nearest convenient point, through the states and then back into Canada. There, a provision to the effect that the main line was to be entirely within Canada did meet our objection, which was that we wanted the line to be built in Canada. In a plan such as I believe that of the sponsors of the present bill to be, namely getting their gas into the United States south of Winnipeg, such a provision is of no value.
During the sittings of the committee last year I asked counsel appearing for the applicants, Mr. Duncan K. MacTavish, Q.C., a question to be found at page 8 of the proceedings of the committee. I said:
Of course by saying that the main line would be in Canada; in saying that you are going on the basis that that would not prevent them making a deal with an American company to export gas?
And he answered:
Yes, I think that would be a fair thing to say, Mr. Green.

But while there are these differences in the bill as presented this year the applicants are the same individuals who applied last year. Furthermore I believe that the people who are behind these applicants are the same people who were behind the bill presented in 1952. They were listed in the other place, and one of them was stated to be the Fish Engineering Corporation of Houston, Texas. In effect that company was the main applicant for a charter last year, and I believe is the main applicant behind this present bill.
It is worth noting that this same corporation, the Fish Engineering Corporation of Houston, Texas, is today putting up a very bitter battle before the United States federal power commission to prevent the Westcoast Transmission Company Limited from taking Peace river gas into the northwest states.
The very company which comes here now asking for this charter is trying to prevent Peace river gas going into the states of Washington and Oregon. It is doing so through another subsidiary, known as the Pacific Northwest Pipe Line Corporation.
These hearings have been going on before the federal power commission, and may very well end in preventing Canadian gas from going into the northwest states.


Frederick Hugo Larson: On a point of order, I am
sure this is not a subsidiary of the Fish Engineering Corporation.


Howard Charles Green: Well, I have here a report of the speech in the other place, where the sponsor said, as reported at page 249 of the official report of debates of the Senate:
In addition to the men named in the petition, others interested in the company will be-
And then, following other names we find this:
-and Fish Engineering Company, Houston, Texas, who will be in charge of technical development.
This is the same corporation that was behind the bill last year. And I believe that, just as last year, the main purpose of this group is to take Canadian gas from the prairies down into the United States, and particularly to the state of Minnesota.
I have here a copy of the petition they presented to the House of Commons in seeking this charter. It sets out the powers and objects they request, one of which is to purchase, distribute and sell natural and artificial gas and oil within Canada and, if required, to export the same to the United States. The very fact that the name has been changed to Mid-Continent Pipelines Limited indicates that that is where they really intend to do business.
Mid-Continent Pipelines Limited
Last year there were several grounds for opposition to the granting of the charter. One was that the applicants proposed to build an extremely small pipe line, only 16 inches in diameter. The sponsor of this bill has not mentioned the size proposed in 1953. There were objections to such a plan because it was pointed out that so small a pipe line could not possibly operate on an economic basis. As a result there would have to be a second pipe line laid down beside the first, thereby running up the cost to the consumer and probably cutting down the price received by the supplier.
Another objection last year to the incorporation was that the applicants had no gas whatever on the prairie. Unlike other pipeline companies, these applicants had no gas of their own. Furthermore, they had done nothing or very little by way of survey. It was admitted before the house committee that they had spent only $25,000 in making preparations, whereas other applicants for pipe-line charters had spent into the hundreds of thousands of dollars in nearly every case.
I believe it was felt last year by many members of the house that these applicants were merely trying to get a charter for its nuisance value. If they could get a charter and then by hook or crook get permission to export gas from Alberta ahead of other pipe-line companies, they would be in position to call the tune. There would be no doubt that they would have a most valuable asset. I believe the same position exists today with these applicants applying again for a charter. Another ground on which we opposed the application last year was that the gas was to be taken to the United States.
These grounds of opposition are equally valid at the present time, particularly the last objection that the applicants intend to take the gas to the United States. I say that is a valid ground of opposition on the broad basis of national policy. The year 1953 is crucial in so far as the exportation of gas from Alberta to the east is concerned. This is the year when we all expect that a decision will be made by the Alberta petroleum and natural gas conservation board and subsequently by the Alberta government to the effect that gas can be exported east from that province.
For some years Alberta was unwilling to allow any gas to be exported, but just about a year ago the conservation board gave permission for the export of gas to the west coast from the Peace river field. Apparently that was done on the basis that gas from the field would not be available for export to the east; that this field could not be used

Mid-Continent Pipelines Limited conveniently as a source of gas for the east. In the hope of developing the Peace river country and selling gas down the west coast, the conservation board and the provincial government of Alberta consented to the export of gas from the Peace river area.
The government of British Columbia has been in favour of such export throughout. Actually at the present time there are greater gas reserves in the British Columbia portion of the Peace river country than there are in the Alberta portion. Hon. members will be interested to know that Dr. George
S.	Hume, the Canadian expert on oil and natural gas, and a very highly respected civil servant, pointed out last summer that in his opinion there was a greater supply of gas in the Fort St. John district than there appeared to be in any other western field, including Pincher Creek.
After the Alberta conservation board and the Alberta government had consented to the export of gas to the west coast, the board of transport commissioners here in Ottawa gave their consent and the Minister of Trade and Commerce (Mr. Howe) issued a permit to the Westcoast Transmission Company Limited for the export of gas to Washington and Oregon, or in any event his department gave a clear indication that such a permit would be available. So the export of Alberta gas to the west coast was decided last year.
It seems clear now in 1953 that there is sufficient gas in southern Alberta for export to the east, but the difficulty is that there is not sufficient to supply Ontario, Montreal and possibly Quebec city and at the same time supply Minnesota. It may be interesting to hon. members to know that Minnesota already is receiving some Texas gas, but apparently they would also like to get gas from Alberta.


Mr. Blackmore:: Has the hon. member
figures to show that Alberta has not sufficient to supply these markets?


Howard Charles Green: I do not have the figures and the decision has not yet been given by the Alberta conservation board. But I understand it is generally believed that sufficient reserves have been developed in Alberta to justify the export of gas to the east. I hope I am not wrong in that belief.


John Horne Blackmore: I think the hon. member might probably expect to find that the next decision of the conservation board will be more optimistic than the one given previously due to the fact that such tremendous discoveries of oil have been made.


Howard Charles Green: There have been many large discoveries, both in southern Alberta and in the Peace river district. To come back to

my point, if Alberta gas is to go to Minnesota then it is clear that none will come east of Winnipeg for a long time. Therefore we find that the question at the present time is whether Alberta gas is to go to central Canada or to Minnesota. Nineteen hundred and fifty-three is the year of decision. That is why this application now before us is of such importance, for it raises the whole question.
As the house knows, I am strongly in favour of gas going to Ontario and Quebec by an all-Canadian route. I do not care what company puts in the line. One company, Trans-Canada Pipe Lines Limited, offers to do so, and if that company can construct a line there is no reason why others could not do it. It should be pointed out that no matter what company constructs the line, it will be done by private enterprise. These pipe-line builders are prepared to find the money and carry through the work.
If gas were brought east to Ontario and Quebec by an all-Canadian route it would serve Kenora, the cities of Fort William and Port Arthur and the north shore of lake Superior where new industries are being established each year and where natural gas would be of great benefit. It would also serve the city of Sudbury where we have the district that provides most of the nickel produced in the world. It would probably also serve northern Ontario. Then there would be storage in the old wells of southwestern Ontario and dozens of centres in southern Ontario, and Montreal and possibly the city of Quebec would be served by this all-Canadian pipe line.
The benefits from such a plan can only be described as stupendous. In the first place the cost would be from $270 to $300 million, which would mean hundreds and perhaps thousands of jobs for Canadians. There would be no question of control of any part of the gas line by the United States. Alberta would have a pipe line of adequate size to ensure the taking away of available gas, and would have a steady market in central Canada. Saskatchewan and Manitoba would be helped in similar fashion. Another result would be the opening of new gas and oil wells in those two prairie provinces, both of which have great prospects for such development.
In Ontario there would be great benefits. Take,	for example, northwestern and
northern Ontario. There is the possibility of gas being used for smelting purposes at Sudbury. It is to be used at Fort Saskatchewan in Alberta to smelt nickel ore from the Lynn Lake mine in northern Manitoba. A smelter is being built there of a value of

over $17 million, and I suggest there are great possibilities for a similar use for natural gas in the Sudbury area. Dr. Hume, to whom I referred a few minutes ago, delivered a speech on May 9, 1951 before the engineering institute of Canada on the subject "The Utilization of Natural Gas in Canada". He had this to say with regard to the benefits to northern Ontario to be derived from an all-Canadian pipe line:
There is no doubt that the bringing of natural gas across the pre-Cambrian shield of northern Ontario could provide immense benefit to our paper, and more particularly to our mining communities such as Sudbury, Steep Rock and to Fort William, Port Arthur, and perhaps to Sault Ste. Marie, although this is, as far as known, outside the present plans and would have to be considered in relation to the size of the market for the length of pipe line needed to supply it. Northern Ontario, except for wood, is entirely deficient in fuel and the use of natural gas at a moderate price such as a pipe line could supply would be a boon of inestimable value in its development.
In southern Ontario and in the Montreal and Quebec areas natural gas would mean a cheaper, more dependable and cleaner fuel than coal which has to be imported from the United States. It means additional power for industry which will be so badly needed for many years in southern Ontario and the Montreal area if they are to continue their development of recent times. Dr. Hume had something to say ip the same speech concerning the use of natural gas. He said:
Natural gas for heating has a number of advantages over fuel oil, and indeed of all fuels in common use today, it most nearly approaches the ideal. Its high heat value, about double that of manufactured gas made from coal, gives it a great advantage where a supply is available and whereas for domestic use the burning of fuel oil is dependent upon electricity for blower operation, the use of natural gas is dependent alone upon the maintenance of a small pressure in the distribution mains.
He goes on to say:
To many people vaguely familiar with the use of natural gas its advantages are little appreciated, but to engineers who understand the efficient consumption of fuels no exhaustive statements of its comparative values are needed. It can be taken for granted that, given a selection at comparable prices, the public would choose natural gas above all other forms of fuel, especially for the heating of dwellings, and where natural gas was available in quantity it would be the choice also for many commercial and industrial purposes.
One of the great weaknesses in the Canadian economy, Mr. Speaker, has been the dependence of Ontario and Quebec on United States coal. The other day figures were brought down in the house which are to be found at page 2384 of Hansard for February 25. They show that the tonnage of coal brought into Canada from the United States last year amounted to 24,576,821 tons.
The Budget-Mr. Knight On motion of Mr. Green the debate was adjourned.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.


[Stage Direction]
The house resumed consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Greenwood), and the amendment to the amendment of Mr. Coldwell.
Robert Ross (Roy) Knight: Mr. Speaker, the things I was advocating before the dinner recess would involve the expenditure of some money. We are potentially the richest country in the world judging by the ratio that exists between our population, which is small, and our natural resources, which are great. It is true that we have squandered many of our natural resources up to the moment, but we are merely embarking upon the exploitation of many of them; and that bodes well for the future.
Our gross national production is increasing, we are told, by approximately 5 per cent per annum. This government through its Department of National Defence alone is spending $2 billion a year-two thousand million dollars odd in one department alone

and, if certain assertions are true, and if conditions in other branches of the Department of National Defence are as bad as in the one that was investigated, it may well be that waste, extravagance and the alleged maladministration have accounted for the loss of more money than would have paid for the things which I have proposed.
Sir, you will have gathered that I have not a high opinion of this budget. Before it was brought down it was referred to as the sunshine budget, but since then the word "sunshine" seems to have disappeared in relation to it and the Canadian people are beginning to recognize the budget for what it is. Thus, we think, there will be a good deal of support for the C.C.F. subamendment, if not in this house at least in the country. That subamendment was put forward by my leader, the hon. member for Rosetown-Biggar (Mr. Coldwell), and to conclude these remarks I wish to put it once more upon the record:
That the amendment be amended by adding thereto the following words:

The Budget-Mr. Graydon
"This house further regrets that the present budget is a rich man's budget which:
(1)	makes tax cuts retroactive to January 1 for corporations but not for individual Canadians;
(2)	doubles the exemption levels for the full corporation tax rate while leaving exemption levels for individual Canadians unchanged; and
(3)	doubles the credits allowed to shareholders for dividends, but gives no comparable credits to those who do the work that produces the dividends."


Gordon Graydon: Mr. Speaker, I rise to participate in this debate for the purpose of bringing to the attention of parliament a matter which may not have national characteristics to some of those who may be listening, but it very definitely is a national issue to the people of Clarkson, Lome Park, Port Credit, Dixie and Lakeview. For those whose geography has failed them for the moment, I refer to the vicinity of south Peel. In bringing the problems of the railway commuters to parliament I think I ought to mention that it is not the first time these problems have been before parliament.


An hon. Member:: Hear, hear.


Gordon Graydon: Nor is it the first time they have been discussed both in a general and a particular way in other circles as well.
I might point out first of all that this problem of railway commuter service has been a vexing problem for many years not only in the Toronto area but in other metropolitan areas as well. However, it is only the metropolitan area of Toronto and its adjoining sections that I desire to cover in my arguments tonight. Also I think I ought to point out to the membership of the house that the south end of the county of Peel has trebled in population in the period which began in the 1940's. That growth has continued rapidly since that time. We have there now a city of 30,000 people and an area that is growing day by day in a most spectacular fashion.
Many of the people who have come to south Peel came from the city of Toronto. Many of them are still working in the city of Toronto, but they have their homes in the new residential sections which have been developed in our county. We welcome those people, of course, and some of the finest citizens have come to reside there. Many people have just set up their homes and are engaged in business or other work in the city or its environs.
This has, of course, provided some problems in traffic and transportation that did not exist before. Despite wide highways, like the Queen Elizabeth highway and others that traverse the area, the eight o'clock to nine-thirty bottleneck in the mornings for those

coming into Toronto from the west is only too familiar to those who know the locality well for me to enlarge upon it on an occasion such as this; but the motor traffic bottleneck at the Humber bridge at the west entrance to Toronto is very little short of a scandal so far as general traffic is concerned. In connection with that bottleneck, may I say that that situation is not confined entirely to the entrance to Toronto or to the entrance to any particular city. All these bottlenecks with respect to motor traffic, of course, result from the fact that a good many people have moved into the suburbs and now use automobiles to get to their work in Toronto, Montreal or elsewhere. That being the case, of course, it is understandable that even with wide, modern highways such as the Queen Elizabeth and others, traffic into the cities is greatly congested.
It is at this point, of course, that the importance of the railway commuter service becomes evident. I think it may be said that this part of the county of Peel has developed to a point where I think it is abreast or perhaps ahead of most similar sections of the country which are close to metropolitan cities. I believe it may be said that we are abreast of all the developments that are occurring, but we are very sadly behind when it comes to the question of commutation railway services, and those necessities which are now showing themselves in the transportation field. Of course the commuters' service has increased in importance because of the conditions I have mentioned, and which are so prevalent in the general suburban scheme of things.
In the midst of this congested traffic picture one finds traversing that area to which I have just drawn attention two main trunk lines of railway. One is the Canadian National from Toronto to Hamilton and the other is the Canadian Pacific Railway, which has running rights over these tracks. The Canadian Pacific trains do not stop at intermediate points, but only stop at Toronto and Hamilton and then go on to Buffalo. This line is known as the Toronto, Hamilton and Buffalo line. The Canadian National Railways from Toronto to Hamilton largely handles the commutation traffic; in fact this line handles all the commuters between Toronto and Oakville.
I might point out that there is a commutation rate structure which covers tickets from Toronto to Oakville, a distance of about 21 miles, and the intervening points. This rate structure covers Clarkson, Lome Park, Port Credit, Dixie, Lakeview and places closer to Toronto. The Canadian National daily takes care of about 1,000 passengers who are travelling on that commutation scale. There should

be a lot more people travelling under that commutation arrangement, and if we had the kind of service we should have I am quite certain that the highway traffic, which is so congested as I have explained before, would be greatly relieved by this railway transportation.
It is hard to believe that the type of equipment used on that road would be used on a line which is perhaps the most heavily travelled railway trackage in the whole Dominion of Canada. Those of you who have attempted to cross this railway line will have found that every few minutes a heavy train goes by in one direction or the other. In the midst of this heavy railway traffic through Toronto on the Canadian National line, I think it ought to be pointed out that on these commuter trains we have twelve wooden coaches. These twelve wooden coaches were built about the time when the Yukon gold rush was at its height. This gives one some idea of the antiquated equipment that is employed in that service. As was pointed out in debates in this house some years ago, these coaches are good material for match boxes and kindling, in the event of even a minor accident. It is easy to understand that, even with the electrically controlled block system, there is the danger of an accident in the midst of this heavy traffic.
At the same time one finds in these cars a lighting arrangement which I fancy is the most antiquated in Canada. It is gas lighting, with all the attendant fire hazards. It is dangerous to health because every so often the light goes out and the gas escapes. The result is that not only is there low candle-power for the people who are using the lights, but there is a danger to health as well. In addition to that there is poor ventilation, probably as poor as there is in the whole country. The trains are crowded and there is every possible kind of inconvenience from that source. Perhaps I need not mention it, but in addition to that there are no adequate heat controls.
This whole situation makes for a lack of accommodation and convenience which can hardly be imagined for that type of service. I am told by a reliable source-this has not been contradicted by the railway-that between 10 and 15 people have to stand in [DOT]every coach going in and out every day. This means that something like between 100 and 150 people never get a seat from the time they get on the train until they get into Toronto.
Added to all this is the fact that the train schedules have never been changed during all these years, while the working hours of many people in the metropolitan centre of Toronto
The Budget-Mr. Graydon have been changed. One realizes that when a train comes in at eight-thirty in the morning, as No. 79 does, it means that there are some people who do not arrive in time for work. For that reason it is an inconvenient hour for some people. I suppose, however, that for a good many it is still as good an hour as they can ask for under the circumstances.
One of the troubles is that the train does not always arrive on time. There is a disposition from time to time on the part of these trains not to keep to the timetable too closely. I think one ought to mention also that when the train arrives at Union station there is a clutter of express, baggage and congestion from other trains, and this constitutes one of the main sources of complaints that the commuters have.
One of the problems, of course, is this. In addition to all the inconveniences that are suffered there and the fact that many of these people have come out from the city expecting at least to have some semblance of accommodation for their commuting into Toronto, I think the situation now constitutes a more intense problem than it has ever constituted at any time in the past.
These matters have been raised time and again by interested parties. I was at a meeting of railway officials and many of the commuters on January 5 of this year in the offices of the Canadian National Railways in Toronto. There the matter was gone over carefully and some promises were made to the effect that in 1954 we were going to get some relief with respect to the type of trains, or the type of coaches; that we were going to get a better lighting system and a better ventilating system; and that, in addition, they would look over the question of the timetables.
One of the things that struck me in connection with the matter-and it was one of the reasons I wanted to raise the matter in the house-was that the Canadian National Railways seem to be extremely diffident about dealing with this matter until they are pressed into some kind of action. I do not mind saying to you, Mr. Speaker, that I am satisfied that one of the reasons the Canadian National Railways finally moved part way toward a settlement of this matter was that in the local newspapers, in the metropolitan newspapers of Toronto and in one of the United States news magazines, these matters began to take form and began to roll up into a heavy snowball of criticism against the railway. It was only when that criticism reached its height that the commuters began to be recognized at all in that area. They had written letters; representations had been made, but it was not until the
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The Budget-Mr. Graydon spotlight of publicity was turned on the railway that any action came at all. I think it is unfortunate that the commuters should have had to depend upon the fact that certain other people had raised voices on their behalf. I think it is unfortunate that the railways did not long ago recognize their plight and do something about it before they were forced, by public opinion, into the position of doing something in connection with the matter.
I might mention one or two of these matters so far as the local newspapers are concerned. In the largely circulated Port Credit Weekly, which is published in that area, reference is made to the matter in an editorial of November 6, 1952. In an open letter to the Minister of Transport (Mr. Chevrier) the editorial goes on to say:
We've got two things to "beef" about. One is the quality of equipment used on commuter trains between this area and Toronto, and the other is the whistle-blowing locomotives that speed through this area every fifteen minutes or so.
And it goes on to say:
Reading accounts of a recent Ontario train wreck, we noticed that one train had two express cars as a "buffer" between the passenger coaches and the engine, while the other had three "buffer" cars. Had it not been for this cushion, the wreck would have been much more serious and the death toll tremendous.
Regular travellers on commuter runs between south Peel communities and Toronto tell us that these trains have only one "buffer" car between the locomotive and the 12 passenger coaches. Since these trains are nearly always jammed to capacity, it is quite obvious that each train is carrying 800 to 1,000 people each trip.
If two or three "buffer" cars are deemed necessary on a regular passenger train with modern steel cars, we would think many more "buffers" would be required on commuter trains with their antiquated wooden coaches.
I want also to read into the record, if I may, one or two excerpts which I think have been well chosen in their language and which perhaps might assist us in recognizing the problem. One is from the Globe and Mail of November 26, 1952, from an article written by Lex Schrag entitled "Growing Pains

See Trains Solution for Suburbs". This is what Mr. Schrag says:
While the Ontario municipal board is still diagnosing greater Toronto's growing pains on the basis of the city's application for amalgamation nearly three years ago, new symptoms of transportation ailments are becoming manifest.
The railways have been cool towards suggestions of commuter services. Such services are operated from Oakville and Weston into city stations. Now, with development of the big Ford plant at Oakville, two-way commuter service will be needed.
Admittedly, the Ford factory will have ample employee parking space. But whether the Queen Elizabeth way will carry the load of two-way traffic that can develop from further industrial expansion in the lakeshore area remains to be seen . . .


While suburban residents have more influence with local councils than with the T.T.C. in obtaining such services, neither council nor the commission is going to underwrite the type of service which would lure prospective customers away from the use of their own autos. Therefore, car transportation continues to be worth its greater cost to the suburbanite.
Since public transportation is inextricably mixed with private means of locomotion-at least until the subway begins to operate-the motor car will continue to carry an uneconomic proportion of suburban traffic.
Finally, however, motor traffic will strangle itself and the existing forms of public transport at the same time. Then, the railways would have to come to the rescue, for the construction of multimillion-dollar highways is slow as well as costly, and would be useless without the equally costly provision of parking facilities.
I want to go further, if I may, and mention also this other matter which I think ought to be stressed. This is from a commuter himself who has taken an active part in the campaign to get better service for those who travel on trains from south Peel to Toronto. This is what is said by Mr. W. Leslie Todd in a letter to the Minister of Transport dated November 27, 1952:
The mass movement of working people to and from their places of business, particularly in the larger centres of population, has become an increasingly difficult problem. Automobile and bus highways are rapidly becoming totally inadequate for the task. It is, therefore, in the nation's interests that adequate commuter service be supplied by the one vehicle that can properly move large groups of people-the railroads.
The answer may well be found through the operation of smaller and more frequent commuter trains on the established rail lines leading in and out of densely populated areas. The Montreal picture, possibly because of competing lines, seems to have been given adequate attention already.
Now I should like to add, if I may, to those matters I have already mentioned, a reference made by Mr. Ken W. MacTaggart of the Globe and Mail, who has taken a keen and active interest in this question. I believe he lives at Oakville himself and is a regular commuter to Toronto. As I said, he has taken a keen interest in this matter. Some of his articles which appeared in connection with the commuters' problem in the early part of this last year have done a great deal to help. In one of his articles in the Globe and Mail, on December 5, 1952, he had this to say:
Inauguration of an adequate rail commuter service between Hamilton and Toronto is held by transportation officials as a logical solution of the traffic problems of the lakeshore district west of Toronto, where population has expanded at a rate far in excess of the rest of the metropolitan area.
During a period when Oakville, Port Credit, Clarkson, Lome Park and the townships of Trafalgar and Toronto have doubled and trebled their populations of Toronto commuters, railway transportation has not improved. In some ways it has declined. Recently, however, commuters have been given hopes than an improvement might come, with announcement by the C.N.R. that new de luxe

equipment was being acquired for Montreal's commuter trains . . . Ontario's highways officials would be happy to see commuter trains helping to take part of the load that is now jamming the westerly routes into the city every day. The trams would also, in the opinion of city officials, help keep cars out of the city, thus easing the strain on parking facilities.
Added to that, of course, have been from time to time the very strenuous campaigns waged by the Oakville-Trafalgar Journal, which has taken a special interest in seeing that the problems of the commuters are solved in some way. Their editorials and news articles have been most effective during the time this campaign has been at its height.
The present position is that we have received some promises that something will be done at some time in 1954. But the one feature that is still confusing the people in the south Peel area is that even though some of these improvements have been promised by the railways, and may be carried out, the fact still remains that we have a commuters' service inferior to comparable areas outside the city of Montreal.
I am not for one moment suggesting that the suburban areas of Montreal should not have the kind of service they do have. Indeed, I should like to see them have even better service, if possible. I refer to Montreal only to show the contrast. I would mention particularly, for instance, the railway passenger train service from Ste. Annes into Montreal, where there are no less than two railways competing, both the C.P.R. and the C.N.R. While there are six commuters' trains available for people travelling from Ste. Annes to Montreal each morning, there are only two trains serving the area between Oakville, Port Credit and points in south Peel and Toronto.


Mr. Fournier (Maisonneuve-Rosemoni):: But
the conditions are not the same.


Gordon Graydon: No, I should think they are not. When you realize that there are six trains going from Ste. Annes and only two from Oakville, there can be no doubt that what my hon. friend says is perfectly right.
It seems to me that, despite the fact that the head office of the Canadian National Railways happens to be in Montreal, the railway management should not lose sight of the fact that there is a rapidly growing community in the south Peel and lakeshore areas outside Toronto. I suggest they are not receiving the kind of railway transportation service they ought to have. They want a faster, more commodious and more frequent service.
We must approach the problem always having in mind the new directions in which these suburbs are developing. There is no doubt in my mind that the easiest way to bring those
The Budget-Mr. Graydon people to the very heart and core of the business centres of metropolitan areas is, so far as possible, to bring them by train. This does not pose a parking problem, nor does it bring about bottlenecks at the entrance to the western, eastern or northern city gates. It brings the people to work comfortably, if the railway cars are brought up to date.
I believe this problem has never been properly tackled, and it is one that every metropolitan area in Canada will have to tackle at some time. I suggest it should be done now. The need is great, and the railways should work out some system whereby, in great measure, they will be able to relieve the monstrous traffic jams in which the motorists now find themselves night and morning travelling to and from their work.
I remember discussing this matter about two years ago with several people, as to the relative values of taking one's car to work or going by train. At that time, having canvassed the subject through discussions with half a dozen people who travel back and forth constantly, I found that nearly all of them said they would prefer to go by motorcar because, in so doing, they could park their cars near their work, could carry some friends to and from work, and thereby reduce the cost. After two years, however, with traffic becoming so congested, each of those persons has said he would prefer to get on a commuter train and be taken to work by the railways. It must be kept in mind that this congestion has developed to a greater extent in the last couple of years than it had in the preceding ten years.
I think it will be found that in metropolitan areas throughout Canada the move is afoot to bring commuters by the railways, thus benefiting both the suburban areas and the cities. I believe the railways regard the commuter service as a nuisance, and they are convinced that they lose money on it. They feel that if there is some way whereby they could get out of the business altogether they would be greatly pleased. The result is that they are doing as little as possible for this service, commensurate with keeping behind them a certain amount of public opinion. Their hope is, no doubt, that in the end they will freeze out the commuter service and mark it off their books.
In my view that is a shortsighted way of dealing with it. A new deal for commuters in metropolitan areas is long overdue. I should like to see the matter tackled on a common-sense basis whereby the railway commuter service would be worked in with the general plan of growth and development of our suburban and metropolitan areas.

The Budget-Mr. Parent
Tomorrow in the Ontario legislature a major development for the Toronto area is to be discussed. While this is a move toward a certain goal, I think it would be a great shame if the question of railway transportation service were not coupled with the other factors which go to make up a great metropolitan area and its adjacent areas. I plead with the railways, the government and all who may be interested in this subject to try to work out some system whereby there may be easier access by railway than by motorcar, realizing that by using the railways we will be helping to relieve a present difficulty.
Before taking my seat may I suggest that a survey should be made touching other points connected with this commuter service. It is a patchwork, jigsaw puzzle plan at the present time. Oakville, which is about a tenth of a mile farther away from Toronto than Brampton, has commutation rates while Brampton has not. Malton, which has become one of the great industrial centres, has no commutation rates although it is much closer to Toronto than Oakville. I am not quite so familiar with the municipalities east of Toronto, but the same situation prevails there.
It seems to me that these municipalities should not have to go to the expense of appearing before the railway board to fight their cases simply because the railway companies are reluctant to provide the service. The railway companies always have high-powered legal men to plead their cases. Brampton has appeared before the board on one or two occasions, and I would not be surprised if it appears again in the immediate future. A survey of the whole area is essential. Commutation rates should be set for places like Streetsville, Brampton, Malton and other municipalities east of Toronto so they can get the service they deserve.
I know that to many members who come from other parts of Canada these problems may seem far away from their own problems, but all of us have our particular problems in our particular parts of Canada. It would be a great shame if we were not able to localize these issues which actually are national to the people at home and which should receive national attention in this national parliament.


Mr. Charles Parent (Quebec West):: Mr. Speaker, first I want to thank the hon. member for Peel (Mr. Graydon) for having taken us for such a ride without anybody getting hurt. He has presented a transportation problem to this house, and as he is a very popular member I am sure his remarks will receive the best possible consideration.
I do not intend to take up very much time, and I will limit my remarks to that part of

the budget address of the Minister of Finance (Mr. Abbott) in which he invited a greater participation in equity ownership in order to have the Canadian people participate in the industrial wealth of this country. That was wise advice and worthy of our great Minister of Finance. I had the privilege of coming to this house at the same time he did. Although I have grown older it seems that the more the minister works, the younger he gets. I am sure everyone will agree that he is one of the great ministers of finance Canada has had.
Undoubtedly it is to the benefit of all to participate in one way or another in building up our country. For some years I have been bringing to the attention of the authorities the lack of information given to shareholders by various companies. I believe the time has come to look into this matter. Because of the wealth of our country and the expansion that has taken place, in my opinion this is a major issue.
The value of the stocks listed on the Toronto stock exchange is $15 billion, while those listed on the Montreal stock exchange have a total valuation of $13 billion. The federal Companies Act has become outmoded. To use an expression used by the hon. member for Peel, it belongs in the days of the Yukon, in the days of the horse and buggy.
The investment dealers' association, the Canadian institute of chartered accountants and the association of Canadian advertisers investigated 700 companies in Canada and found that less than one-quarter went to the trouble of providing sufficient information to their shareholders in order that they might know if their money was being handled in a fair and equitable way.
I should like to give a few examples of what is going on in this country. The Minister of Finance has made an appeal to the public to invest money in Canadian enterprises, but I do not think one should do so unless he is sure that his money is being properly managed. I should like to quote an article which appeared in the Financial Post of January 6, 1951, as follows:
Why Should Companies Report on Subsidiaries?
Why should all companies issue a consolidated annual report or else separate annual reports for each of their subsidiaries? A good reason is seen in financial circles this week.
In the prospectus covering the offering of 319,548 common shares of Canada Iron Foundries Ltd., a consolidated balance sheet at Sept. 30, 1950 and a consolidated statement of the earnings of the company and its subsidiaries for the 10 years and nine months ended Sept. 30, 1950 are shown. These present a much better and more complete picture of the financial position of the company than the shareholders-the owners of the business-have

heretofore been able to obtain from the annual reports, which have been on a parent company only basis.
For example, total assets at Sept. 30, 1950 are shown at $21,597,192 on a consolidated basis as compared with $11,413,896 at Dec. 31, 1949 in the company's annual report, which carried shares in and amounts owing by subsidiary companies at $3,299,254. Further, the net profit for 1949 (which included dividends from subsidiary companies totalling $445,000) amounted to $728,286 according to the annual report but, according to the prospectus, on a consolidated amount basis amounted to $1,546,384 or over double the figure given to the shareholders previously.
The same applies also to one of the largest and most prosperous companies, which includes on its board of directors leaders of the financial world in Canada. For the first time in the history of that company, when they wanted people to put money into the company and were issuing convertible bonds, they came out with a consolidated balance sheet increasing their assets from $71 million to over $100 million and showing a surplus of nearly $23 million over what was given on the unconsolidated balance sheet. They showed earnings per share of $3.05 on the consolidated basis compared with $1.94 on an unconsolidated basis.
How can you expect people to invest money in companies if they are going to be at the mercy of the few who do not want to give them any information when they attend annual meetings? Most of the time the old answer that has been used for over 50 years is given, that it is not in the interests of the company that it should be divulged. In the United States you at least have consolidated balance sheets and quarterly statements because it is recognized that investing money is a science, and that you cannot invest money properly unless you have the facts.
I believe there should be some such provision in the Companies Act. Last October I had the pleasure of attending a conference of representatives of all provinces except Quebec who came here to discuss amendments to the Companies Act. Briefs were submitted by the Canadian Bar Association and the chartered accountants of Canada. They were unanimous in stating that our Companies Act is outmoded and does not give enough protection to the investor.
When we are just starting to scratch the wealth of this country, when we are opening up the oil fields of the west, when we are opening up the north, the Yukon, Labrador and Newfoundland, when these developments are going to bring money into Canada from the United States, why should we not as Canadians be given an opportunity to participate in these developments and at least let the one who wants to risk his money have the certainty that there is a law upon which $8108-165
The Budget-Mr. Parent he can rely in claiming his right to be told what is being done with his money? I know companies that have six or seven subsidiaries and the main companies, which are listed on the stock exchange, are practically showing deficits while the subsidiaries are making hundreds of thousands of dollars.
I have no hesitation in mentioning in the house the great Algoma Steel Company which issues an unconsolidated balance sheet from which you cannot get any information about its subsidiaries. Whether Sir James Dunn likes it or not, there are some subsidiaries of Algoma Steel which are making as much money as Algoma Steel itself. Yet this company has not paid any dividends to its shareholders for over 20 years, and I do not believe I am wrong in stating that on the basis of a consolidated balance sheet they would probably show earnings of $10 to $12 per share.
This is the state of affairs in this country. How can you expect people to participate in our industries unless there is a law to protect the investments of our people? Last night William H. Phillips, district superintendent of the Bank of Montreal, in speaking to the Canadian industrial editors' association, said that confusing terms and lack of information in companies' reports should be done away with, and that the people should be brought into the secrets of the companies in order to know how their money is being spent. I have been asking for a change for a long time. I have always thought this was a matter that might not be of interest to the people, but the Minister of Finance (Mr. Abbott) has brought the problem before the house and I congratulate him for doing so because it is absolutely sound that we should own our country before others own us. He should be congratulated on having made such a statement. I believe we should get all the information that is necessary to make sound investments.
As to the budget itself, I remember we were told once that the best way to judge the affairs of the country is to read the financial reports of all the big banking institutions in Canada. We were told they were honestly run and that their boards were composed of prominent Conservatives. If you read the annual reports of the banks this year you will see that they are practically unanimous in certifying that this country is well run and prosperous, that it is run on a sound basis, and that Canada has many great years of prosperity ahead.
To sum up what I have been saying I should like to quote something I read lately. It is as follows:
Consider this: Alone, among the major nations, your country has shown government surpluses for
2592	HOUSE OF
The Budget-Mr. Johnston the last seven years. Your national debt has been reduced substantially since 1946, and now stands at one of the lowest per capita rates of any country on earth. Your national income leaped ahead by $1 billion last year to make it the highest in history. Your gross national product increased 7 per cent to a record high of $23 billion, and wages and salaries advanced 12 per cent. And now, for 1953, your government has reduced your income taxes, your corporation and other taxes, and yet has budgeted for a record revenue and yet another surplus.
I recall the whispers of death of 1930 to 1935. Sometimes I do not like to hear those criticisms because I do not believe some of these people believe them to be so. In a young country such as ours, just starting on a major expansion, let us be inspired by these words of 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!
Indeed Canada is the champion country of the world.


Mr. C. E. Johnston (Bow River):: Mr. Speaker, the other day when the Minister of Finance (Mr. Abbott) introduced his budget it was hailed with great acclaim by all the newspapers, particularly those which support the Liberal party. It probably was intended to be that way because the government no doubt intends this to be the very last budget before the coming election. One of my friends says "the last budget-stop".	It
probably will be.
The government is making every effort to see that they win the confidence of the people by this budget, but I am afraid they are going to be doomed to disappointment.
Yet it is a sad thing, Mr. Speaker, when we have a political party in this country that takes advantages of a coming election to try to deceive the public. Whether it is intentional or unintentional, the results could well be the same.
When the minister was introducing his budget he stated that the income tax reduction for the full year would be 11 per cent. Well, technically that may be correct; but as a matter of fact, Mr. Speaker, this budget- and the minister knew it quite well-will not extend over a full year. It will be divided on the 1st of July and for the following six months the reduction will be 11 per cent. It will not be for the whole fiscal year; it could not possibly be. Every year we have a new budget introduced, and every time there is a budget there is a tax change. Now, Mr. Speaker, I say that is deliberate deceit and it cannot be classed as anything else-trickery and foolery, in an endeavour to deceive the voting public.


Mr. Speaker, more taxes will be taken from the people of Canada this year than ever before. According to the budgetary estimate the figure is $4,473 million and, when you add the old age security tax which everyone must pay amounting to $280 million, it makes the colossal sum of $4,753 million. That is the largest budget in the history of Canada.
So next year the people face this problem of having to dig down in their pockets and shell out more taxes under this Liberal administration than have ever been taken in any single year from the people of Canada in all its history. Definitely there was a reduction in taxation of 5J per cent, and that reduction was spread over a great number of items, very trivial in some cases but still it was spread over them, giving a false impression to the people of Canada that they were receiving a great tax reduction. As a matter of fact our total tax reduction this year does not amount to any more than the surplus the government had last year.
In the first nine months of last year there was a surplus of $721 million and then, when the Minister of Finance had spent everything that he could spend, he still had $250 million left over that he did not know what to do with, so he applied it to the national debt. When we talk about the great splash in tax reduction it does no more than equal the excess taxation of last year. So we must realize that there are going to be more taxes, and not less.
The hon. member for Battle River (Mr. Fair) in speaking the other day pointed out that he had done some calculating in this regard, and had calculated that the per capita tax this coming year would be $340 for every man, woman and child in Canada. For a family of five it would be $1,700. That is the average tax per family and I am telling you, Mr. Speaker, that it is more than the average earnings of the greatest percentage of people in this country. It is estimated that 75 per cent of the people of Canada earn less than $3,000 per year. Therefore it will take the average family a whole year to pay that amount of tax.
When we talk of the great reduction that was made in these taxes it pays us to have a look at the tables and just see whether the people of Canada are receiving such a great reduction in taxation, particularly when we have to remind ourselves that Canada is more prosperous now than it has ever been. The minister has said on many occasions that the only possible way you can reduce taxes is by working longer hours, working harder and producing more. Last year we achieved a record. We produced more than we had ever produced in the history of this

country; and yet we had a tax reduction this year only equal to the surplus of last year.
At page 2125 of Hansard for February 19 we have the tax tables, and on an income of $1,500 a single taxpayer will have a tax reduction of the magnificent amount of $3. On $2,000 he will have saved $5. On $2,500 he will have saved $9; and on $3,000 he will have saved the magnificent sum of $12.


An hon. Member:: Well-


Charles Edward Johnston: If you are lucky enough, and maybe my hon. friend is in this group, to have earned $400,000 then you would have saved $26,811. Then some of my friends across the way try to tell us that this is not a rich man's budget. It is going to be a pretty difficult thing to prove to the people of Canada that they have had very much in the way of relief in this budget.
According to the tables a married man earning $2,500 will have a reduction of $3. If he earns $3,000-and remember that 75 per cent of the people of Canada earn $3,000 or less-a married man with no dependents will save exactly $5. That is a magnificent saving. If you were a married man in the $400,000 class, without dependents, you would save $26,736. Do you know that the saving on that one individual's taxes amounts to more than the entire earnings of eight ordinary families? It pays to be in the rich brackets if you want to get some relief from this government.
It is true, and I would not want to try to deny it for a moment, that the reduction was spread over quite a few articles, and that is a big boasting point of those on the government side of the house when they try to fool the public into believing that great tax relief was given to everyone. For instance, there is the stamp tax. One of the members of the Social Credit party was pointing out the other day that it has taken the minister ten or fifteen years to come to the conclusion that this stamp tax was a nuisance tax. So, just before the election, lo and behold he decides that he should drop the nuisance tax. Now, I ask you how many people are going to receive any benefit from the removal of the stamp tax. I am probably an average wage earner in the country, Mr. Speaker, but I venture to say that I do not write a dozen cheques in a whole year, because I have not that kind of money. If I were like some of my hon. friends across the aisle, who figure their income tax in three, four, five and six figures, then I might write a lot of cheques; but I think I am quite safe in saying that 75 per cent of the people in Canada never write a dozen cheques in a whole year. What good is the repeal of the stamp tax C8108-1651
The Budget-Mr. Johnston going to do them? True, it is a nuisance tax and it should have been taken off long ago.
Then the farmers got some assistance. Yes, sir, they got the excise tax removed from plow bolts. That was quite a concession; and there are a few similar items. But plows in western Canada are becoming obsolete. They are not being used to a great extent any more. More modern machinery is taking their place, for instance the one-way disc. So they take the excise duty off plow bolts. Well, that is all there is to help agriculture. Again that is an effort to give a false impression that the farmers of the country are getting some tax relief.
The radio licences have been abolished. For some years now we in this party have contended that the radio licence fee was another tax that could be classed as a nuisance tax. According to the Minister of Finance (Mr. Abbott) it cost us over $700,000 to collect. The cost of collecting was out of all proportion to the benefits received. Now the minister, just before an election, decides to remove this radio licence fee. It could have been removed just as easily a year ago, and we would probably have saved this country a lot of money. It is not such a benevolent thing to have removed the radio licence fee because the government knows, just as well as every member in this house, that just as fast as television comes in, just so fast is radio going to go out. It is only going to be a matter of a few years until radio licences would not be sold anyway because the people would not be buying radios. I do not mean to say, Mr. Speaker, that we will not be paying for the operations of the C.B.C. The revenue from this licence fee used to be turned over to the C.B.C., but now they are going to receive the 15 per cent excise tax on television and radio sets.
It is true that there is going to be no television licence fee, but there is going to be a great deal more revenue brought in by the 15 per cent excise tax than there was before. Now no one will be permitted to bring television sets from the United States under the $100 exemption. What does that mean? It means that we are creating a monopoly in this country for television. Most of these television sets are going to be shipped in from the United States, in exactly the same way that radios were. Over in the United States you can buy a television set for half the price you pay in Canada. Had the minister decided to reduce the customs duty on television sets, there would have been some sense to that. I say that advisedly, Mr. Speaker, because the minister did reduce the tax on cigarettes by 4 cents a package or $2 a thousand, and at the same time he reduced the tax he did reduce the customs duty.

The Budget-Mr. Johnston
What was the result of that? The people of Canada who smoke cigarettes received some material benefits because not only was the amount of the tax cut removed from the price of the cigarettes, but the companies themselves lowered the price. I have always maintained, Mr. Speaker, and I still say, that one of the best ways for the government to control prices in this country, or to bring prices down, is not necessarily the lowering of the tax rate only, but they should also lower the tariff. In the case of cigarettes that is exactly what happened. When the excise tax was reduced on cigarettes a year ago, the tobacco companies were hollering to blue heaven that they were not making enough profit. The minute the customs tariff was reduced, the companies brought down the price of their cigarettes.
Had that been done for television sets there would have been some sense to it. Now the people have to pay a 15 per cent excise tax and also the 10 per cent sales tax, and in addition to that the people of Canada are going to be paying twice the amount for television sets that the people of the United States have to pay. We cannot even bring them in from the United States under the $100 exemption.
Then, Mr. Speaker, I should mention that 1 per cent reduction in the medical expense allowance. It seems to me that when a government is endeavouring to bring down a budget it should take into consideration very seriously those people who are most affected. I cannot think of any class that could be relieved more than those people who are continually suffering from illness, particularly those in the low income brackets. I repeat that 75 per cent of the people in Canada are earning less than $3,000 a year. I believe the Minister of Finance should have found it possible to completely eliminate that 4 per cent floor on medical expenses. It would not have meant a great loss of revenue to the government, but it would have meant a great deal to those people who are so hard pressed.
I do not think it should make much difference who makes a suggestion. In this case it was the hon. member for Winnipeg North Centre (Mr. Knowles). If the suggestion is a good one, a good government should take advantage of it. The only relief we got in this case was a reduction of 1 per cent.
Some of the members on the opposite side have taken objection to this being called a rich man's budget. The other day when the leader of the Social Credit party, the hon. member for Peace River (Mr. Low), was speaking he put on the record some figures in relation to corporations. At the outset I want to say that I, like the leader of this party,


believe that our corporations should be in a good, sound financial position. I think they have been. The prosperity within Canada indicates that our corporations are in a sound position. When speaking on Tuesday, February 24, the leader of this party pointed out that in the ten-year period between 1940 and 1950 the accumulated undistributed profits were $4,952 million, after paying costs as well as dividends of $4,276 million, and also after setting aside depreciation of $6,338 million. That is certainly evidence that our industries, large and small, have been doing fairly well. In fact, the hon. member went on to point out that in the two years 1951 and 1952 it is estimated that corporation profits were greater than in the ten-year period, which would mean over $6 billion. Therefore I do not think our big industries are too badly off.
Then we heard the Minister of Trade and Commerce (Mr. Howe) refer to the sugar industry and say that they have made sufficient profits so they could well afford to pay the beet growers a little more for the work they were doing. He certainly indicated that the sugar industry of this country was in a sound, healthy position, and that it was making such large profits that it could well afford to pay the beet growers a little bit more. The other night the Minister of Fisheries (Mr. Sinclair), when speaking to the hon. member for Moose Jaw (Mr. Thatcher), pointed out that some of our small industries had done extremely well and had been able to expand their capital investment quite substantially.
When we have statements like those coming from two responsible ministers-one of the senior ministers of the government and one who I have no hesitation in saying is the best and most capable minister in the government-nobody in this house will dare to say that we had to give greater concessions to industry at the expense of these people in the lower income brackets. I am quite sure there is no member on the government side of the house who would contradict what has been said by these two ministers.
Let me say just a word about the national debt. Some of the government members have gone to a great deal of pains to say what has been done in regard to the national debt. This complete story was put on the record by other members of this party, but I just want to review it for a moment. In the table which was put on Hansard by the minister, he referred to the net debt. It seems to me that when speaking of debt it is much sounder to refer to the funded debt, which at the end of March 31 was $14,837,630,000. The interest

charge alone on that debt was $409,456,495. The odd thing about this matter, Mr. Speaker, is that when the government are saying what they have done for this country by reducing the national debt and how much they have reduced the interest rates, thereby saving the people a great amount of interest each year, it is well to remember also that it was this party who built up that debt.


An hon. Member:: It was the Liberal party.


Charles Edward Johnston: I did not say it was the Social Credit party that built up this debt. Of course it was the Liberal party. Any intelligent Liberal would know that because in the province of Alberta the government have got rid of their debt, or nearly so.
But let us look at the table which the Minister of Finance put on Hansard at page 2122. In 1939, according to him, our net debt stood at $3,153 million. By 1946 this Liberal government has raised that debt to $13,421 million. That was all under a Liberal administration. In 1952 they had reduced it some, down to $11,185 million. But between 1939 and 1952 this Liberal government had increased our debt by over $8 billion. Then they say, "Well, we have reduced your total debt. Haven't we done wonders?"


Clayton Wesley Hodgson: And a surplus every year.


Charles Edward Johnston: And a surplus every year which was obtained by overtaxation. Then the minister goes on in the same table and points out that our per capita debt in 1939 was $280, and that at the end of 1952 that per capita debt stood at $775. Then they say, "See what we have done." The interest charges alone on that debt are almost twice as much as the tax reductions this year.
Hon. members in this house will recall that when the Social Credit government went into power in Alberta in 1935 they had to pay 51 cents out of every dollar of tax money for interest on the debt. They have now reduced that debt down to a point where they pay only 5 cents out of their tax dollar; and that 5 cents pays not only the interest but will reduce the entire capital debt in a matter of a few years. If this government wanted to do something, and if they really wanted to do away with the national debt, they would take their pattern from the government of the province of Alberta. They could not get better teachers.


Edmund Davie Fulton: Find some oil.


Robert Fair: There is no oil in Ottawa.


Charles Edward Johnston: They do a lot of greasing of the wheels, though.
The Budget-Mr. Johnston


An hon. Member:: Everything is too well oiled here.


Charles Edward Johnston: For a few minutes I want to speak about agriculture in relation to the farmers' problems. I was greatly interested the other day when the Minister of Trade and Commerce (Mr. Howe) was telling us how prosperous Canada was. This is a prosperous country. Everyone will agree with that statement. But that prosperity has been the result of the efforts of the provinces, not of the federal government. If you like, we can take the province of Alberta as an example. Everybody is using it as an example of thrift and good management. We find that in 1935 the province of Alberta could not even begin to sell a bond issue. Their credit was nil. Now of course its credit rating is one of the highest. But the Minister of Trade and Commerce was talking about the prosperity of Canada, and he gave us a good account of his trip to Latin America. He was telling us how prospects there were for building up trade. I think the minister did a wise thing when he made that trip to Latin America because, as the evidence proves, our trade relations with Latin America in the last year were falling down badly under the administration of this Liberal government. So just before an election he takes a trip to Latin America and comes back here and says, "Everything is fine now. I have just been over there and maybe next year or the year after we shall begin to pick up some of our lost trade."
The other day I was reading an article in the Ottawa Citizen of February 28. It was headed "Reduction in Total Value of Exports" and reads in part as follows:
Canada's exports to Latin America dropped by more than $10 million during January, with the biggest cuts showing in shipments to Brazil and Mexico.
In a report on Canada's exports to all countries during the month, the bureau of statistics yesterday estimated shipments to Latin America slipped to $18,225,000 from $28,764,000 in January 1952.
With export volume up 3 per cent but prices down 5 per cent from a year ago, value of Canada's total shipments during January eased to $321,300,000 from $328,500,500. The monthly report on imports likely will be published in about a week.
The slackening in prices, if it continues, will make it tough for Canada to repeat last year's record exports of $4,400 million.
It is therefore high time the Minister of Trade and Commerce went over to Latin America to see whether he could not bolster up the already crumbling walls of trade.
Mr. Speaker, wherever you look there is evidence that our agricultural industry is heading for bad times. I do not say that in

The Budget-Mr. Johnston order to be a pessimist. I think the thing can be remedied if the government takes the advice that it is given on occasion. In the Ottawa Journal of February 17, 1953 there appeared an article headed "Sees Some Signs Agriculture Prosperity Has Passed Peak" and which reads in part as follows:
There was "some evidence" that the peak of prosperity for agriculture as a whole was passed, L. W. Pearsall, director of the federal Department of Agriculture's marketing service told delegates to the 31st annual meeting of the Canadian horticultural council Monday.
He noted that in recent years there had been a decline in both gross and net farm income and there was ahead the prospect of lower prices for a variety of commodities.
That was the opinion of the director of the federal Department of Agriculture marketing service. He should know something about agricultural prices and prosperity, and his prediction is that the prosperity of agriculture is fast dropping. Then in the Calgary Albertan of December 24, 1952, under the heading "Farmers' Cash Income Shows 9-Month Decrease" we find this:
Ottawa (CP)-Cash income received by Canadian farmers totalled $1,840 million in the first nine months of 1952, the bureau of statistics reported.
This is a decline of more than $35 million from $1,876 million in the same period last year, the bureau said.
The cash comes from the sale of farm products and from payments made by the Canadian wheat board under western grain pool marketing arrangements.
There we have been shown that agriculture has lost $35 million in nine months. That is not a good sign for this country. There has been a 19 per cent drop in agricultural wholesale prices while at the same time there has been a 7 per cent increase in the production costs of the farm. That was given by the bureau of statistics, so I guess it must be right.
A moment ago, while I was speaking, somebody mentioned oil. He said, "What about the oil in Alberta?" May I say that oil production in Alberta has been growing tremendously and that the government has obtained a good deal of money from it. In fact the prospects are that oil will be found in other parts of Canada as well. But the oil production in 1951 was only $120 million. When you compare that with the figure for agricultural production, it will be seen that oil is so far behind that it never will catch up to agriculture. So the thing we must be watching carefully is that we keep agriculture in a sound and healthy position. Unless the policy of this government is changed in such a way that we will be able to recover some of our lost markets, agriculture is heading for a bad time.


We have the wheat board, a most commendable institution, and I would not want to see it dispensed with. I do believe, however, that prices should be higher. I believe the wheat board should be allowed to sell grain at the highest possible price. If the federal government wishes to give wheat to Great Britain or to any other country, then it should buy the wheat from the wheat board at the current price, reserving the right to dispose of it at any price it wishes.
The international wheat agreement is going to be a most important feature in agriculture, but I believe it would be unwise to say at this time what the price should be, at a time when negotiations are taking place. However, those engaged in agriculture across this country are determined that the floor should be raised, as well as the ceiling. Agriculture must have a greater return for the things it produces, particularly when one realizes that those things the farmer has to buy have continually increased in price.
If, by chance, agriculture is ignored, as it has been in this budget, and there is no concerted effort to bring prosperity to the farm, then the farming element in this country will be forced to take the matter into their own hands and adjust production in such a way as to maintain prices. Other industries do that, and agriculture may be forced to do it. I do not suggest that is a proper solution, but it may have to be adopted.
I was interested the other day in reading an article from the Rural Co-operator of Tuesday, January 13, 1953, which states:
A trend toward approval of a policy of planned production has been apparent among farm people for some time. Last week the Ontario federation of agriculture annual meeting, representing some 80,000 Ontario farmers, gave approval to such a policy. They asked the government to supply reliable statistics to enable farmers to plan production of only enough food to supply the home market in order to avoid overproduction and market collapse.
Such planning, perhaps overdue at this time, appears to be the only course open at present to farm people if they are to avoid disaster. Farmers cannot go on producing for a world market if governments cannot solve the monetary difficulties that prevent distribution of food to the areas where it is needed.
Canadians, in general, may be shocked to hear farmers talking about planned production and farm people themselves have been hesitant about adopting such a program but it appears obvious that overproduction and low prices would ultimately limit food production more drastically than the contemplated program for intelligent planning.
That in itself should be sufficient warning to this government to do something about agriculture.
I had intended to say something about housing, but I shall not develop that subject

tonight because of lack of time. I would wish to save the discussion until a time when, having started it, I can finish it. I believe that opportunity will present itself when we have before us the estimates of the Minister of Resources and Development (Mr. Winters).
I should also like to have spoken on coal and the setting up of a national fuel policy for Canada, but time won't permit me to do that.
When referring to the minister under whom this matter comes, however, there is one point I would like to mention. On this occasion I thank him publicly for the very great consideration and co-operation he has shown to the hon. member for Acadia (Mr. Quelch) and myself in regard to the problems we have been facing in Banff national park. We have been endeavouring to open a trout farm at that point. It will be a worth-while asset to the people of Banff and to the tourist business. The minister has been most co-operative in this matter. Then in the last few months other difficulties have arisen in the Banff area, and we have found the minister most considerate. Some of these things have been in the form of nuisances that have caused grief to the people concerned.
For instance, the superintendent of the park recently brought down a regulation under which he charged a licence fee of $5 for each cat. I have never heard of cats being licensed before, and certainly never to the extent of soaking everyone $5 for each cat. This is a sample of the things that have been disturbing the people in that area, and I wish to say again that the Minister of Resources and Development (Mr. Winters) has been exceedingly co-operative in every respect. Banff is a national tourist centre. According to the public account, we spent last year $1,503,197 in advertising to attract tourists to Canada. The tourist business is big business, aggregating last year somewhere around $300 million.
Earlier this evening in the railway committee room we saw a most interesting moving picture depicting some of the value of the tourist business to this country, and we should be encouraging that business. But if we are going to encourage it, then we must make every effort to see to it that our tourist resorts, of which Banff is one of the most outstanding, are developed so that they can accommodate the tourists who come. As I have pointed out, we are spending large sums of money to advertise our national parks. Last year we spent over $30,437 for road maps alone, and $185,359 for a publication called "Vacations Unlimited". Those are just two of the many items set forth in the public accounts.
The Budget-Mr. Montgomery
We are spending millions of dollars to advertise our tourist attractions, and for that reason we should make our tourist resorts among the finest in the world. Banff is an outstanding example of one to which particular attention should be directed. We should make every effort to see that tourists who come to Canada do not leave without first having visited the great Banff national park in the province of Alberta.


Mr. G. W. Montgomery (Victoria-Carleton):: Mr. Speaker, in rising to take part in this budget debate may I say that this is the first one to which I have had the opportunity of listening. I listened with keen interest to the Minister of Finance (Mr. Abbott) and, while I speak only for myself, I am sure other hon. members will agree that one must admire the minister in that he is a good-natured, genial and able speaker. He presented a convincing argument, one that captivated those who listened to him.
I could not help thinking, however, that the personality and the magnetism of the minister far exceeded the statement he was presenting. The budget itself is deserving of a lot of thought and study. I can see some sunshine in it; but, Mr. Speaker, I can also see some gloom.
Coming as I do from an agricultural constituency, I am going to devote most of my time to discussing the problems of a group who, I believe, should receive more consideration. The budget debate gives me an opportunity to voice some of the complaints of this forgotten group, the farmers; those citizens who toil long hours and under great handicaps to produce food, the most vital necessity of civilization. I do not hesitate to speak for farmers generally, because what I intend to say will apply more or less to farmers as a whole across this country.
Where will you find a group in Canada who work longer hours? Where would you find a group where the wives and children are obliged to get out in the fields to assist the heads of the families in order that the products of their labour may be harvested and marketed? Where is there a group that receives such a small net return? I notice that usually when the government gives any figures it indicates gross returns. To me such figures do not give a true picture of the farmer's position.
I do not need to labour the point in order to make out a case for these neglected people. I am not speaking simply to criticize. I think all I have to do is refer the government to the farmers themselves, and their situation will speak for them. The farmer's net income is declining. This group of people have contributed chiefly to the lowered cost
2598	HOUSE OF
The Budget-Mr. Montgomery of living, as is shown by the recent index. That decrease in the index was brought about mainly by lower food prices. If this government is going to take credit for the general growth and prosperity of this country, it must also accept responsibility for the plight of these primary producers.
Instead of placing agriculture at the top or at least giving it high priority in national planning, it would appear from all reports that it is being neglected. In New Brunswick agriculture ranks first as an industry providing livelihood for our people. More than 27,000 people are engaged in agriculture or are dependent upon it, which is approximately 10,000 more than the number depending upon any other single industry. The production of food is important, not only for our own people but for other nations. I do not believe there can be overproduction of food as long as there are hungry people in the world.
It seems to me that our farming industry and the means of distribution of food should be given top priority in national and international planning. Why are so many of our young men leaving their farms to take employment in other industry? Many do not even sell their farms; they just dispose of their stock and equipment and walk off. Why have the sales of farms dropped in the last two years? Why are there so many idle farms? There are a great many idle farms in my province. Invariably these people who are leaving give three reasons: the high cost of equipment needed to run a farm, high taxes, and the low prices received for the products they have to sell.
Even though they work long hours they do not make as good a living or enjoy the same privileges as labour employed in other industries. I was glad to hear the minister state that the 15 per cent excise tax will not apply to tires and tubes purchased by farmers for their machinery. His interpretation was certainly necessary, as some of those who are administering the act felt that it did apply.
I am grateful that this point has been cleaned up and the farmers will not be obliged to pay that tax.
The benefits received by farmers through the abolition of the radio licence, stamps on cheques and the reduction in the income tax are not going to permit them to sell more products or increase their standard of living. In other words these reductions are not going

The Budget-Mr. Montgomery argument that the freight rate structure between the Atlantic provinces and central Canada must be based on the necessity of permitting the products of the provinces by the sea to be landed in central Canada so they may be placed in that market on a competitive basis with the same types of products grown and produced in the central Canadian area. Otherwise freight rates and other charges can be barriers which isolate the maritimes from the rest of Canada and result in nullifying the whole idea of allowing us in
the east to enjoy the fruits of economic union as was the dream of the founders of this country.
On motion of Mr. Montgomery the debate was adjourned.



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow we shall continue this debate, Mr. Speaker.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Wednesday, March 4, 1953