1954-04-13

['Mr. Speaker, this afternoon the hon. member for Rosetown-Biggar (Mr. Coldwell) asked me a question to which I gave an, answer and I should like now, in the interests of greater clarity, to make a correction of that answer to read as follows:\nMr. Speaker, our non-censorship of Mr. Gouzenko is a practice which I think it is fair to say has never yet conflicted; for I should also add that Mr. Gouzenko on every occasion on which he has appeared in court, on television or this examination the proceedings of which I tabled today, has always given a very good account of himself.']
Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, while I appreciate that it is not the practice of the house to pay tribute to the memory of other than members of the current parliament, I hope I may have the indulgence of the house to depart from the strict observance of that practice this afternoon. Exceptions have been made in the past in the case of former members of the house who had distinguished themselves particularly in the house in the service of their fellow Canadians; and I believe that Angus L. Macdonald served this country with such patriotic devotion and such distinction as a member of _ this House of Commons and of the government of Canada during the terrible emergency of the last war that it will be felt fitting that a tribute should be paid to him today.
His sudden death this morning brought to an end an active and particularly brilliant career on the Canadian political scene. We all know that Angus Macdonald won distinction in many fields, notably as a barrister, as a member of the federal government and of this House of Commons during those difficult years of the war, and as premier of his native province of Nova Scotia both before and after the war. Those of us who had the privilege of working with him admired his high qualities, which he placed so unstintingly at the service of his fellow Canadians. And, moreover, we all became deeply attached to him as a dear personal friend.
Angus Macdonald was never a man to spare himself. To the very day of his death he gave all of his great energy to the performance of those duties which have gained for him a permanent place in the history of this country. Canada and Nova Scotia have lost a great public servant, and I am sure members of this house who were his wartime colleagues will join with thousands of Canadians everywhere in sharing in a very personal way the grief of Mrs. Macdonald and their children, and also the government and people of Nova Scotia.


Hon. George A. Drew (Leader of the Opposition):: Mr. Speaker, I know every member in the house will appreciate the fact that the Prime Minister (Mr. St. Laurent) has suggested a departure from custom in this instance, because I feel sure we would have been unhappy in our hearts had there not been an expression of this kind on behalf of the members here and the people of Canada generally in respect to the memory of a very great Canadian.
To many of us Angus Macdonald will be remembered even more for his personal qualities than for the great service that he gave. As the Prime Minister has pointed out, he made a tremendous contribution to the-development of the military services of this, country during the war. His role was that of the navy; and from a few small ships he saw that navy expand to a great fleet which contributed immensely to the cause of freedom for the whole world.
But I think perhaps most of us who have been confronted with this sudden news concerning the loss of a dear friend will remember him most for his admirable Scottish characteristics-industry, honesty, integrity and warm friendship. Political opinions never divided Angus Macdonald from those who held different views. Our friendship and respect for him go out at this time in full measure in memory of a man whom we all loved.
I suppose few Canadians had a deeper and more visible affection for Scotland than had Angus Macdonald. He was deeply proud of Scotland, of his Scottish ancestry and of Scottish traditions. In fact, he was a better Canadian because he sought to implant in his native province through his own activities those fine characteristics we all respect, no matter to what blood stock our race may run.
The story, which I believe is true, that I always liked best of Angus Macdonald was that he decided to welcome Ramsay MacDonald in Gaelic when he visited Canada; and having welcomed him in faultless Gaelic, he discovered that Ramsay MacDonald did not understand that ancient language. But it was symbolic of Angus Macdonald's love of Scotland and Scottish traditions that in the new Scotland in Canada he should seek to preserve them on an occasion of that kind. All of us today pay tribute to a truly great

The late Angus L. Macdonald Canadian. In these troubled days we cannot afford to lose men like him. I know that from everyone here with a full heart there will be extended to his widow and the members of his family, the deep and profound sympathy of all of us.


Mr. M. J. Coldwell (Roselown-Biggar):: Mr. Speaker, it is I think very fitting that the Prime Minister has given us an opportunity of paying our respect to a man with whom many of us were associated in this house during the war years. We remember when he came here. lie came here not because he wished to come, but because he was called by the government of Canada to participate in the deliberations of the government in the conduct of the war during a very critical period. We all remember his charm and his integrity, and it came as quite a shock to those of us who knew him to know that another great-and I use the word advisedly- Canadian figure who had served his country so well in the capacity of minister of defence for naval services during the war had passed to his reward. On behalf of all associated with me, and I know on behalf of everyone else in this house, I join in expressing our appreciation of the life that he led, the service that he gave to our country, and our deep sympathy with his widow and family in their great and sudden sorrow.


Mr. J. H. Blackmore (Lethbridge):: Mr. Speaker, the members of our group deem it .entirely fitting that the Prime Minister (Mr. St. Laurent) should have taken this opportunity to honour Angus Macdonald in the way that he has done today. I had the privilege of sitting in the house when he was here, and while he had the responsibility of being minister of defence for naval services. I always associated with Angus Macdonald three words: stability, strength and serenity. The members of our group are pleased to join with the members of the other parties in paying a last farewell to Angus Macdonald and in expressing the most sincere condolences to those who are bereaved.


Hon. C. G. Power (Quebec South):: Mr. Speaker, for some years I was honoured by being associated with Angus Macdonald in the course of our duties as members of this government. Angus left with those of us who were associated with him a memory of a man of intense patriotism without ostentation, forcible character without violence, of loyalty as a colleague and of the foremost natural friendship as a man. It is with the deepest regret that I note the passing of a man who did honour to the Nova Scotia which he loved, and to the Canada which he represented so ably in this house. To his widow


and family, I think I speak on behalf of all those who were in any degree associated with Angus during the time he was here, I express the deepest and most sincere sympathy. He will go to his last resting place, in the soil of the Nova Scotia which he loved, carrying with him the love, the affection and the admiration of thousands of his fellow citizens, and also the word that will go all over Canada that he was a great Canadian.


Hon. Robert H. Winters (Minister of Public Works):: Mr. Speaker, this is indeed a day of mourning for Nova Scotians everywhere, and I wish on behalf of my province to thank the Prime Minister, the Leader of the Opposition and those other hon. members who have spoken so feelingly on this sad occasion. All Canadians feel that they are losing a great public figure and a staunch friend.
The Hon. Angus Macdonald was long a symbol of Nova Scotia, and most of us saw in him the reflection of what we ourselves might wish to be. He had that warm and strong personality which easily transcends all differences of race, creed or religion. It was Angus Macdonald who did so much to weld together so many different peoples in Nova Scotia and make us a province that has already been proud of its role in confederation.
Farsighted and wise in his advocacy of the role of Nova Scotia in the life of this great country, he was to me a great friend and a wise counsellor in all those matters respecting Nova Scotia and Nova Scotians. Always a great admirer of Joseph Howe, whose statue stands so nearby his own office, Angus Macdonald will today take his place beside that great figure in the hearts and minds of Nova Scotians everywhere.



Hon. Stuart S. Garson (Minister of Justice):: Mr. Speaker, hon. members will recall that on February 16, 1954 my colleague, the parliamentary assistant to the Secretary of State for External Affairs (Mr. Pinard), made a statement concerning the handling of the transcript of the proceedings of the meeting on January 4, 1954, at which Mr. Igor Gouzenko was interviewed by representatives of the United States government. In that statement the parliamentary assistant informed the house that in the latter part of January the Canadian government had notified the United States government that we

were prepared, if that government wished, to make public the transcript, with the exception of a few minor deletions, the reasons for which he outlined.
This month a note was received from the United States government requesting that the full transcript, minus our deletions, be made public by the Canadian government as soon as might be possible. I should therefore now like to table copies of this transcript.
In doing so, I should like to remind the house that prior to this interview Mr. Gouzenko had been interrogated exhaustively by security authorities many times, over a period of several years, since he first made himself available to us in the autumn of 1945. The appropriate security authorities of the United States government at all times had access to all Mr. Gouzenko's information without reservation. Although the transcripts of evidence which Mr. Gouzenko gave to the royal commission in 1946 and the reports of his other interrogations by security officers were not themselves made public, the bulk of the information contained in them was made public in the report of the royal commission published in 1946 and in the numerous articles written by Mr. Gouzenko and in the interviews granted by him to representatives of the Canadian and United States press during recent years.
Therefore, it will not be surprising to members of the house that the transcript of Mr. Gouzenko's evidence at this January 4 meeting discloses very little-if indeed there is any-information not already available to the public. Of course it does not disclose any information of a security type not previously known to the Canadian and United States security authorities.
I should explain that the reason why the transcript was not made public previously in view of the considerable interest shown in this meeting, was that the whole object of this meeting was to provide an opportunity to representatives of the United States government to interview Mr. Gouzenko on matters pertaining to the internal security of the United States. It was therefore not considered appropriate for Canada to make the transcript public unless so requested by the United States government, as it has now done.
As already explained to the house by the parliamentary assistant (Mr. Pinard) in his statement of February 16, 1954, a few minor deletions have been made in this transcript, in order to eliminate references either in the questions or in the answers publication of which in this context might jeopardize Canadian security investigations of individuals or
External Affairs
organizations in Canada, or might be open to question on grounds of international propriety as relating primarily to the interests of a third country. In each case these deletions are marked by square brackets with indication of the number of words omitted.
Finally, I should like to say that Mr. Gouzenko has been good enough to read over the transcript and has testified to its completeness and accuracy.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I would like to direct a question to the Minister of Justice arising out of the statement he made a few moments ago with respect to Igor Gouzenko. In view of the extent to which Mr. Gouzenko has been revealing his identity, in his writings and in interviews, does the government feel there is any useful purpose in continuing to protect his anonymity by means of police protection?


Stuart Sinclair Garson: Mr. Speaker, I think the question which the hon. member has just asked is not one which is appropriate on the orders of the day without notice.


Stanley Howard Knowles: Perhaps the minister would answer it tomorrow?


Mr. E. D. Fulton (Kamloops):: Mr. Speaker, I would like to ask the Minister of Justice a question with respect to the statement regarding the transcript just tabled by the minister with reference to the deletions made for various reasons, including the fact that this might involve a third country. Would the minister say whether more than one such third country was included, or whether only one was included? If so, whether that country was Russia and, if so, why it should be considered necessary to have regard to any feelings in that matter.


Stuart Sinclair Garson: Mr. Speaker, I should think it would be rather obvious to everyone that the reasons for the deletions being made are the same as those which would apply with even greater force in regard to an answer being given to my hon. friend's question.


Major James William Coldwell: Mr. Speaker, I would like to ask a supplementary question in view of the tabling of the transcript of this interview. When Mr. Gouzenko appears on television, as I believe he has done, is any prior, shall I say, censorship exercised over what he says, or may he say what he likes? If so, might not that practice conflict with the kind of precautions which the minister and the government quite properly exercised in regard to interviews?
Mr- Garson: Mr. Speaker, it is a practice which, I think it is fair to say, has never yet

Inquiries of the Ministry conflicted, and I think I should also add that Mr. Gouzenko on every occasion on which he has appeared in court or before this commission, the proceedings of which I tabled today, has always given a very good account of himself as a witness.
ILater: ]


Stuart Sinclair Garson: Mr. Speaker, this afternoon the hon. member for Rosetown-Biggar (Mr. Coldwell) asked me a question to which I gave an, answer and I should like now, in the interests of greater clarity, to make a correction of that answer to read as follows:
Mr. Speaker, our non-censorship of Mr. Gouzenko is a practice which I think it is fair to say has never yet conflicted; for I should also add that Mr. Gouzenko on every occasion on which he has appeared in court, on television or this examination the proceedings of which I tabled today, has always given a very good account of himself.



PRIVILEGE


[Stage Direction]
On the orders of the day:
Mr. G. K. Fraser (Peterborough):: I rise on a question of privilege, Mr. Speaker. In the Montreal Gazette of this morning, page 23, under the heading "Parliamentary News", there is a statement that works minister Winters says either the old customs building or Gordon Fraser, member for Peterborough, may be used as accommodation for a branch of the unemployment insurance commission. I wish to inform the minister that since I have been on a diet I do not think I have the necessary accommodation.



AIRPORTS


[Stage Direction]
On the orders of the day:
Mr. S. R. Balcom (Halifax):: I wish to inquire of the Minister of Transport whether or not he is in a position to make a statement concerning the airport at Halifax, outlining the progress made to date, along with information which might indicate the probable date of starting operations.


Hon. Lionel Chevrier (Minisier of Transport):: I do not know that I can give a complete statement answering the hon. member, Mr. Speaker, but I may say this. We are desirous of building an airport at Halifax. As the hon. member knows, we have made surveys in the Lucasville area which indicated that weather conditions there were not better than those which prevailed at Halifax. Since then we have had a further survey made of the Kelly lake area near
fMr. Garson.]

Halifax. This has been completed and an analysis of that survey indicates the Kelly lake area warrants further investigation on the ground.
To this end the department will send a survey party as soon as it is possible so to do in order to complete that investigation. For that reason it is not possible for me to say at this time when the construction will begin, other than to say that if reports in the Kelly lake area prove satisfactory, and subject to the city of Halifax providing the lands for airport facilities, then we will proceed with the construction of civil aviation facilities at Halifax.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Edmund Davie Fulton: I should like to ask the Minister of National Defence a question about radar installations because it is important for this country to know whether there has been a breakdown of security in his own department. Can the minister tell us how he reconciles his statement of yesterday that the giving of names and locations of government stations is permissible, with the statement made last year that such information would be most valuable to the only potential enemy we have.


Hon. Brooke Claxton (Minisier of National Defence):: I thought I made the position quite clear yesterday that the publication in the Roundel of individual names of men posted to radar stations was made contrary to security provisions laid down by the chief of the air staff and generally in effect throughout the armed forces. This was done through inadvertence of the editor.



INQUIRY AS TO CLEARING OF ELEVATORS AT SEABOARD PORTS

[Stage Direction]
On the orders of the day:
Mr. G. H. Casileden (Yorkion):: I should like to direct a question to the Minister of Trade and Commerce. What progress has been made in the clearing of grain elevators at Montreal and other seaboard ports in readiness for the flow of grain from the head of the lakes when lake shipping opens later this month?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: I would point out to my hon. friend that about a week ago one ship struggled through the ice and reached the port of Montreal. I believe it has since departed, but it took on package cargo more

valuable than wheat. I understand that other boats are on their way there, and as they are able to dock in Montreal and take on cargoes of wheat, space will be provided for western grain. We hope to see a considerable movement under way in about ten days, but unfortunately we have to wait for favourable weather.



WEST INDIES


[Stage Direction]
On the orders of the day:
Mr. J. W. Noseworihy (York South):: May
I direct a question to the Minister of Trade and Commerce? Has his department received any application from Supreme Power Supplies Limited in Toronto for an allotment under the British West Indies trade liberalization plan? If so, was it rejected, and if it was rejected under what conditions may this company expect to secure a future allotment?
Right Hon. C. D. Howe (Minister of Trade
and Commerce): The hon. member was kind enough to give me notice of his intention to ask this question. For the past four years the Department of Trade and Commerce has operated the British West Indies trade liberalization plan, under which Canadian exporters with a history of trade in the British West Indies in the base years 1946, 1947 and 1948 are entitled to quotas based on 40 per cent of their average exports in this three-year period.
In 1952, as a further measure of relaxation, the colonies agreed to the reallocation of unused quotas and we were able to take care of several Canadian manufacturers who had not been exporting in the base period. Unfortunately, the amount available was not sufficient to take care of all Canadian firms interested in the British West Indies market.
On October 17, 1952, Supreme Power Supplies Limited asked for a special allocation of $5,000 to cover the shipment of transformers to Bridgetown, Barbados. We pointed out to them at that time that we did not have sufficient funds, but if further existing quotas were unused we might be able to take care of them later in the year. Unfortunately, this did not prove to be possible. We have had no further request from Supreme Power Supplies Limited since 1952. If this firm is still interested in the British West Indies market we could give them a small quota at this time.
Inquiries of the Ministry ROYAL CANADIAN MOUNTED POLICE



INQUIRY AS TO PURCHASE OF PATROL BOAT

[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinion):: May I
ask the Minister of Justice if it is not the policy of the Royal Canadian Mounted Police to purchase needed equipment in Canada when available from Canadian sources? If so, is that policy now being followed with respect to the purchase of a patrol boat which is to be a prototype of other boats required for R.C.M.P. services?


Stuart Sinclair Garson: My hon. friend has not given me notice of this question but I will be glad to take hi's question as notice and look up the details of the case he mentioned.



CUSTOMS


[Stage Direction]
On the orders of the day:
Miss Sybil Bennett (Halton):: Mr. Speaker,
I would like to direct a question to the Minister of National Revenue. In view of the urgent communications which I received this morning from the town council of Milton, would the minister tell the house when he expects to open a customs office in the town of Milton?


Hon. J. J. McCann (Minister of National Revenue):: Mr. Speaker, the hon. member was good enough to give me notice of this question. Other than as indicated in the question, no recent representations have come to my attention concerning this matter. I shall, however, look into it and report the decision of the department when one is made. We are always willing to service any community where it can be shown that our services are necessary and that there is sufficient business to warrant the opening of an office.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I would like to direct a question to the Minister of Transport. Is it the policy of the Canadian National Railways to permit the sale of the appalling trash sold under the name of literature on the newsstand of the Chateau Laurier hotel? If so, is this "literature" picked out for the hotel by any department, either the Canadian National Railways or the Department of Transport?
4028	HOUSE OF
The Budget-Mr. Drew


Lionel Chevrier: Mr. Speaker, I do not know to what my hon. friend is referring, but if he is referring to what I think he has in mind then it may well be that that is a matter which concerns a concessionaire. If it does concern a concessionaire, and of that I am not too sure, it is a matter over which the Canadian National Railways, and certainly the Department of Transport, would have absolutely no jurisdiction. However, if it is a matter which is under the direct jurisdiction of the Canadian National Railways, then I shall make inquiries and perhaps I can report to the house at a later date.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Hon. W. Earl Rowe (Dufferin-Simcoe):: Mr. Speaker, I would like to ask the Minister of Citizenship and Immigration if he would care to comment on the more or less controversial issue regarding a deportation order against Mr. and Mrs. Henri Zorin? I understand Mr. Zorin is a graduate of McGill University and his wife is a graduate of the Royal Victoria College.


Some hon. Members:: What is the question?


William Earl Rowe: My question is this. Has the Minister of Citizenship and Immigration any comment to make as to the deportation order issued by his department against Mr. and Mrs. Zorin, in view of the fact he was only defending his wife in the streets of the city of Quebec?


Hon. W. E. Harris (Minister of Citizenship and Immigration):: Mr. Speaker, this is the first I have heard of this matter but I shall look into the files and see what the situation is.
(See also page 4066.)



THE BUDGET


[Stage Direction]
The house resumed, from Monday, April 12, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell.
George Alexander Drew: Mr. Speaker, for some years it has been customary for the Leader of the Opposition to wait until the closing stages of this debate to make such remarks as he
[Mr. Nesbitt.)

deems appropriate in regard to the budget. I depart from that practice this afternoon for one reason, and one reason only.
One part of the budget speech, and a substantial part, raised an issue which it would be very unwise for the members of this parliament to ignore, and to which it seems to me we should direct our attention before the unfortunate consequences go beyond anything anticipated in the budget speech itself.
Already, since that budget speech was made in this house, bitter things have been said in different parts of Canada which are not contributing and will not contribute to national unity within this country. I regret that the Minister of Finance (Mr. Abbott) chose to adopt what I believe to have been an unnecessarily provocative manner in presenting a decision which it was entirely within the authority of the government to present to this house.
There is always room for debate on constitutional issues, and if there were not our law books would not be filled with the records of so many appeals to our senior courts to determine what the meaning of our constitution and other constitutions really is. It does not help national unity to seek to make this subject one which appears to be an isolated issue between the government of any one province and the government of Canada. Nor does it help national unity to have any provincial premier attacked in this house, no matter who that premier may be, because an hon. member of this house cannot agree with the point of view that a provincial premier expresses.
Every one of us comes from one of the ten provinces. We are not only citizens of Canada, but we also have a personal and very natural interest in the affairs of our own provinces as well. I do not think any one of us regards it as desirable that attacks on the premiers of those provinces be made in such a way as to appear that the mere mention of the name of a particular premier in itself suggested some improper association. I do not think those who have made such attacks would themselves welcome similar attacks on the premiers of their own provinces. This situation is not improving. It is getting worse day by day, and rapidly. The Minister of Finance (Mr. Abbott) took it upon himself to admonish those who choose press conferences to present constitutional opinions. Then having admonished others, he himself went on a press conference last night on the radio to deal with the very same subject. Evidently what is sauce for the goose is not sauce for the gander. The difference, of course, is that the radio press conference had a much wider audience.

One of the things which must be so noticeable to those who have been following this subject with deep concern-and I believe that most of the members of this house have been doing so-is the change indicated in the attitude of the government in one year. Last year in his budget speech the Minister of Finance said that the arrangements being made by the government for certain tax concessions were, and I quote the words:
... in accordance with the principle that nothing in federal legislation shall in any way discriminate against a province which does not enter into a tax rental agreement. This is in line with the declared intention of the federal government that nothing should be done which could be interpreted as pressure, direct or indirect, on any province to accept or renew a tax rental agreement.
This year the attitude is very different. This year the mere failure to accept such an agreement is in itself justification for dealing at arm's length with those who take that point of view.
Mr. Speaker, this attitude has already produced the inevitable consequences. In different parts of Canada things have been said which are inclined to disturb those deep, strong, warm and friendly feelings of understanding which have been growing, improving and maturing in the years that have passed. I greatly regret some of the statements which have been made in different parts of Canada and which seem completely to ignore the possibility that there is a constitutional issue. At the same time may I say that I greatly regret that there are those who have suggested that the good faith of the English-speaking part of our population may in some way be placed in issue. Mr. Speaker, I hope that comments of that kind in any part of Canada can come to an end and that this issue, like others, can be discussed on the basis of the legal and fundamental points involved.
As an English-speaking Canadian may I say that no one in this house or in Canada has a deeper or firmer belief in the sanctity of the British North America Act than have I. On many occasions I have expressed my belief in the sanctity of that constitution. Others in our party have done so, as have others of the English-speaking members on the other side of the house. Only because I think it is important that no suggestion of this kind should be permitted to becloud the issue now before us, I want to place on record once again what I said in regard to this very subject some considerable time before it was my privilege to sit in the House of Commons. As premier of Ontario I had occasion to discuss this subject on April 1, 1947. I quote from the Hansard of the debates in the Ontario legislature, and I do so simply to show that this subject is not one which impresses the people of this 83276-255
The Budget-Mr. Drew country only on the basis of their racial origin or of the part of the country in which they live. This was what I said on that occasion:
There are good reasons why the province of Quebec attaches special importance to the provisions of the British North America Act and is less likely to accept substantial changes which are made without the consent of that province and without adequate compensating protection, if any of their established rights are to be diminished. With good reason Quebec looks to the British North America Act as their guarantee of their own civil law. of their customs, of their language and their religion.
It would be well for all of us to keep in mind the reasons why those special rights were assured to the province of Quebec in 1867. The provisions of the British North America Act merely carried forward undertakings which were first given at the time of the capture of Quebec in 1759. Those undertakings were given statutory form in the Quebec Act of 1774 and repeated in the Constitutional Act of 1791.
It is not for anyone living in any other part of Canada today to question the wisdom of that decision. There can be little doubt that if those rights had not been granted the people of Quebec would have seen no good reason for not joining the other North American provinces which seceded and formed the United States, under the revolutionary war which began in 1775.
Nor is it likely that the soldiers of Quebec would have fought so gallantly and so successfully in the defence of British North America in the war of 1812-14 if the Constitutional Act had not reassured them of those rights in 1791, and in doing so gave them a good reason for remaining loyal to the British crown. In view of the fact that those rights have been undisturbed for nearly 200 years, there is no reason why the province of Quebec should accept any agreement which would have the effect of weakening their provincial government, and by centralizing financial power in the central government present the very real possibility of the establishment of a unitary government, in fact if not in name. If these deductions are correct, then those provinces which hope to maintain national unity will follow the.course which it is possible for Quebec to follow as well. But, Mr. Speaker-
In that case, Mr. Speaker, I was addressing the Speaker of the Ontario legislature.
-in emphasizing the special reasons why Quebec would resist agreements which would weaken the federal structure and lead to centralization, I wish to leave no impression that it is Quebec alone which would be unwilling to lose control of its own local affairs. The people of Ontario are very properly jealous of their great traditions, and I do not believe that they would be willing to hand over the control within their province of their local customs, their administration of justice and their own long-established educational system.
That is what I said in April of 1947, seven years ago now, and some considerable time before I had any reason to consider the possibility that I might be here in this House of Commons. I hope these words, Mr. Speaker, will remove any possible suggestion that this is a subject which is only of interest to one province of Canada. This is a subject which is of interest to all Canadians, and I am sure the remarks I made about Ontario apply with equal force to other provinces of Canada. Certainly no Canadian expressed in clearer or
4030	HOUSE OF
The Budget-Mr. Drew more emphatic terms his belief in the sanctity of the British North America Act than did that great Canadian whose memory we have respected in the house today.
Those who attended the dominion-provincial conference which met on August 6, 1945, will recall so well the strong, vigorous, clear and emphatic statements of the then premier of Nova Scotia, Angus L. Macdonald, who pointed out that his province dearly cherished those traditions, those customs and those laws which were preserved in that constitution. That was true, I believe, of every premier. This is a subject which is in no way confined to one province alone. This is not a problem which affects merely the government of Canada and the government of the province of Quebec. This is not a problem which can be solved by discussions between the government of Canada and the government of the province of Quebec alone. This is a subject which should be discussed at the earliest possible date so that consideration may be given to those circumstances which are bringing into the open statements which are certainly not helping the solution of this problem.
One point I wish to make with the utmost earnestness, Mr. Speaker, because I propose to present my arguments directly to the Prime Minister (Mr. St. Laurent) is that in many quarters this matter has been discussed as though it were an issue in which the Minister of Finance stood as an individual who challenged the rights of others in Canada. Under our parliamentary system, under our constitution, there is one man who accepts the central, final and supreme responsibility, and that is the prime minister of Canada. There can be no other situation. Under our system the representative of the crown does not appoint the members of the cabinet according to his judgment. The representative of the crown has the responsibility of calling upon an individual to form a government. That individual, if a government is formed, becomes prime minister of Canada.
The members of the government who are later sworn in are nominees of the prime minister. They are his nominees. They continue to hold office at his will and if they depart from the course laid down by common agreement of the government over which he presides it is his duty to ask for their resignation. If anything that has been said in the budget speech is unacceptable to any Canadian, then the person to whom the remarks should be directed is the Prime Minister of Canada. After all, it is the head of the government of Canada who must accept the central and final responsibility for any statements that are made in the budget


or in any other official presentation of the government. In fact the Prime Minister must accept that responsibility more directly in relation to the budget than in relation to any other presentation to parliament. This, after all, is the presentation by all departments of government to this house through which they seek money by means of which, out of revenues from the people of Canada, the government headed by the Prime Minister can carry on its business.
That is the situation. It is, therefore, to the Prime Minister that I direct my remarks, and I do hope that in the discussion of this subject it will be the Prime Minister who will accept the responsibility for dealing with a situation which surely is one that cannot be contemplated with satisfaction by any Canadian today. I do think that before careless remarks are made, such as have already been made, we should remember the genesis of this problem now before us in so far as it relates to the exchange of certain taxing powers in return for certain annual payments. In 1942 it was stated by the government at that time, a government of which the present Prime Minister was a member, that these were only temporary arrangements for the duration of the war. Let me read the opening part of the statute which dealt with the agreements then made. The statute was assented to on the 28th of May, 1942 and is found in 6 George VI, chapter 13 of the statutes of 1942-43. It reads as follows:
Whereas the dominion and the provinces and certain municipalities have been levying taxes upon incomes and upon corporations, and it is expedient during the continuation of the present war and for a certain re-adjustment period thereafter that the dominion only should levy such taxes: Therefore, His Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:-
1.	This act may be cited as The Dominion-Provincial Taxation Agreement Act, 1942.
2.	The Minister of Finance, with the approval of the Governor in Council, may enter into an agreement with the government of any of the provinces of Canada to provide, in accordance with and subject to such terms and conditions as may be set out therein, that the province and its municipalities shall cease to levy personal income and corporation taxes as defined in such agreement and subject to such exceptions as may be set out in such agreement, for the duration of the war and for a certain re-adjustment period thereafter, and to provide for the payment of compensation by the dominion to the province therefor.
The agreements which were signed contained this recital:
Whereas the province shall not, by agreeing, as hereinafter provided, to desist from imposing certain taxes during the term of this agreement, be deemed to have surrendered, abandoned or given over to the dominion any of the powers, rights, privileges or authority vested in the province under the provisions of the British North America Act,

1867, or any subsequent act of the parliament of the United Kingdom, or to have otherwise impaired any of such powers, rights, privileges or authority-
And then the agreement went on to set out the details.
Mr. Speaker, in the face of those statements, it will be seen first of all that these agreements were dealing with the abandonment of income tax and corporation tax, and it was understood that there was to be no diminishing of authority, not only of the provinces but of the municipalities. And it is for that reason that we have included our reference-as we have on earlier occasions- to the provinces and the municipalities, in dealing with this subject.
Certainly there is room for difference of opinion. Certainly there is room for honest conflict of ideas in regard to this subject. Mr. Speaker, there is just one way that the discussions now taking place, and which have aroused already a great deal of feeling, can be terminated, and that is to have the assurance that this subject will be dealt with.
It is not just the province of Quebec; every province has indicated its desire to have this problem dealt with. When the governments of the provinces met the government of Canada in the city of Quebec in 1950, statements were made which indicated a very wide measure of agreement-a wide measure of agreement in regard to this constitution of ours, and the way in which we could solve the problem which had been brought to a head by these agreements entered into because of the dreadful necessities of war.
Mr. Speaker, my views on this subject are well known. My views on this subject have been put on Hansard too extensively on some occasions to meet with the approval of the government. On this occasion I have no thought of dealing with the history of this subject or with the various points of view which have been expressed. I prefer not to add in any way to the things that already have been said which might cause misunderstandings in regard to this extremely important subject.
It is now eighty-seven years since men of great vision, men of great faith, men of deep conviction and of great ability met in the city of Quebec to draft the terms of a constitution which would give corporate entity to the scattered units of population in this northern part of the North American continent. Let us reread the speeches of those men in those days-of Macdonald, Cartier, Galt and all those others who expressed their belief in the tremendous future that was opening up through the terms that had been arranged by agreement and common understanding.
83276-255J
The Budget-Mr. Drew
Mr. Speaker, the time has come when the same kind of statesmanship, the same vision, the same faith and the same good will need to be shown today as was shown at Quebec in 1867. This is not the time to invite the premier of any province to seek consideration here in Ottawa. This is not the time for any premier of any province to be told that he may have the illimitable privilege of an audience with a cabinet minister. No, Mr. Speaker, this is the time for an invitation to be extended by the Prime Minister of Canada to the premiers and the governments of the provinces of Canada to meet and to discuss the way in which they can overcome these problems, and revitalize and bring back into harmony the details of the British North America Act.
There is one man who can do it. There is only one man who can call this conference together-only one. It is not very long ago that members of this House of Commons, without reservation, and with sincerity and warmth, indicated their approval of a trip then contemplated by the Prime Minister. It is not very long ago that all of us expressed our belief that good will between governments is extremely important in these difficult days.
Mr. Speaker, if good will between the government of Canada and the governments of India, of Pakistan and of Ceylon is important, then good will between the government of Canada and the governments of the provinces is infinitely more important. To the extent that we may accord to the Prime Minister of Canada those qualities which have been extolled by the followers who have been putting forward some of the views I have mentioned, may I say those qualities cannot better be used at this time than around a conference table here in Ottawa, where the premiers of the ten provinces and their associates would meet with the Prime Minister of Canada and his associates to discuss the constitution of Canada, and a way in which we may overcome these difficulties and retain that spirit of unity which has been our pride for so many years. Today, Mr. Speaker, has been a dramatic one. From different parts of the world has come disturbing news; from different parts of the world has come news which indicates how important it is that here in Canada we become as strong and united as possible in this great struggle for freedom in which we are engaged. This is a day in which it would be peculiarly fitting for the government to give a statement that I believe could put an end to those long-distance exchanges, either over the radio or through the press, or in any other manner, which can only create
4032	HOUSE OF
The Budget-Mr. Croll accumulating misunderstandings, and during the time that this parliament is recessed could vastly increase the difficulties with which we are confronted.
Therefore, Mr. Speaker, leaving the details for another occasion-and it is certainly my intention to enter this debate and deal with the financial aspects of the budget later in the course of these discussions-leaving the details for the present, simply having sought to place before the house the problems that are before us, without in any way attempting to indicate all the things that have been said, which must have caused concern here in this house, I appeal to the Prime Minister of Canada to say definitely, without any reservation, before we adjourn for the Easter recess, that he will extend an invitation to the premiers of the ten provinces before the end of May to a conference here in Ottawa so that, with that measure of good will which we have been extolling on other occasions in this house, we may seek to rebuild that federal structure of which we are all so proud.


Mr. David A. Croll (Spadina):: Mr. Speaker, I am sure that no one in this house will expect me to follow the main theme of the Leader of the Opposition (Mr. Drew), and I will not disappoint. I intend to discuss some aspects of the budget. I have already heard the budget described by opposition members in many terms. Some have been more colourful than others; but I think it could be most fairly described as one favouring free competition.
The underlying philosophy was reiterated by the Minister of Finance (Mr. Abbott) when he spoke on the Canadian Broadcasting Corporation's weekly press conference. He is reported in the Gazette of April 3 to have said:
In the long pull an industry that cannot meet competition must cease to operate.
It is quite clear now that the budget provided no comfort for the protectionists. The minister repeated in the best Liberal tradition that high tariffs are a luxury that we in Canada cannot afford, and that our prosperity and high standard of living is largely dependent upon a high volume of trade outside our own borders and a large consumer demand at home.
In so far as it was possible under present economic conditions, the budget removed the tax element from competition, and by its underlying philosophy gave hope that in the future more will be done to make our goods more competitive at home and attractive abroad. The combines act, particularly the abolition of retail price maintenance, has


brought about a greater competitive spirit in our economy and a direct benefit to the consumer. Some manufacturers have already started to cut costs, to promote efficiency in distribution and to rely on quality. Others are still not convinced, would rather not go to the trouble to work and hustle, and recently, through their spokesmen and in other ways, they have turned their big guns on combines legislation.
On the one hand, we have the view of a representative section of big business that combines and monopolies are not so bad after all. Indeed, the view is put forward in some sections that the combines investigations are nothing more than a witch hunt. That is the opinion of Mr. R. M. Fowler, president of the Canadian Pulp and Paper Association, as reported in the Toronto Telegram of January 30 last. Mr. Fowler even goes so far as to ask the question:
Do we really want the law of the jungle to govern the business life of Canada?
By this I take it that he is comparing the law of the jungle with free enterprise, and that he is opposed to both of them. That is surely a surprising position for the spokesman of Canadian industry to take. On the other hand, we have the opinion of Mr. Justice Schroeder, of the Supreme Court of Ontario, in the recent rubber combines prosecution to this effect:
By their plea of guilty, the accused have admitted that they were parties to an arrangement, the proper object of which was to impose improper, inordinate, excessive or oppressive restrictions upon that free competition, to the benefit of which the people of this country were entitled. Inherent in these illegal agreements of the accused companies are features so obnoxious to the welfare of the community that, if extended, the effect upon the public might become disastrous.
Faced with two such conflicting views, the man in the street may be forgiven if he is confused and uncertain as to the meaning and the purpose of combines legislation, and he asks himself, whether the combines legislation is a boon or a bane. Is the combines branch engaged in a witch hunt? That is one of the matters I intend to discuss this afternoon.
We have had anti-combines legislation in Canada since 1923. The act was amended in 1951 to forbid the practice of resale price maintenance. Then it was very carefully overhauled in 1952. Many hon. members who are here now will recall that. Since the Combines Investigation Act was passed in 1923, reports of 35 investigations have been published. Nineteen of these investigations have taken place since 1945, and a large number of prosecutions under the act have been conducted over the years. There is no question that the act has been vigorously

and intelligently administered. Indeed, that is one of the main objections to the act. They would prefer not to be investigated and prosecuted, and their objection, of course, is quite understandable.
The two points of view as to the current administration of the act are rather neatly summed up by two recent newspaper articles. The first is from the Winnipeg Free Press, and I quote:
These latest decisions-
The rubber decisions.
-will certainly be welcomed as further evidence, if any were needed, that the Canadian anti-trust legislation is now being administered with a vigour and success unprecedented in the history of this country.
The next quotation comes from a different source, the Financial Times of Montreal, and it confirms the efficiency of the combines branch but in language that is not so complimentary. I quote:
. . . the combines investigation crowd are working with assembly-line efficiency exhuming scandals in private enterprise. The scandal consists mainly in taking a profit; something that did not use to be a sin.
Well, there you have it. There is no need to stress the efficiency and vigour with which the combines act is being administered. But there is a need to clarify our thinking on two other matters. The first one is whether enforcement is effective, and the second that the principle and methods of the present legislation are not the best that could presently be devised. As to the effectiveness of the combines legislation as it is now administered, there can be no question. The effect is both positive and deterrent, as one gathers from the loud squeals of big business.
There is, however, a constant tendency to take every success that the combines branch achieves and twist it into an argument which goes something like this. If the conditions disclosed in the report on the prosecution could exist, then it is an indication that the legislation is not effective. Instead of giving credit for the prosecution of the offences that are disclosed, and recognizing their deterrent effect upon others, the stand is taken that the disclosures are proof of the ineffectiveness of the measures designed to maintain competition. This is, of course, the attitude of persons who welcome any material that they can mould into the semblance of an argument to support their political and economic philosophies. It is important that the public should not reach the conclusion that the Canadian economy is combine-ridden.
The fact that the combines branch is successful in disclosing, and the justice department in prosecuting, combines should be
The Budget-Mr. Croll taken only as evidence of effective enforcement. There are very definite indications that the work of the combines branch is having a very real and widespread effect upon manufacturers and distributors. Each such case, and there have been many, is like a pebble dropped into a pond where the ripples extend far beyond the area immediately affected. So long as the enforcement of the act is vigorous and continuous, satisfactory results will be achieved. If its enforcement should be periodically relaxed, what has been gained will, of course, be lost. The businessman himself would suffer because he would be lulled into a false sense of security and the next period of activity by the department would catch him with his combines down.
There is very much evidence of competition throughout business. The electrical appliances field, the automobile field and the food field are examples of trades in which competition is very real and virile. Both the rubber fields and the optical fields are ones; in which competition appears to have been restored following combines investigations into those industries.
Now, for a few moments I should like to consider the second question, that the principle and methods of the present legislation are not the best that could be devised. Here we are faced with a tendency in certain quarters to propagate the view that business is being unnecessarily harassed by the anticombines legislation, and that the courts should not condemn combines just because they eliminate competition but only where positive evidence can be produced by the crown to demonstrate specific and undue price increases or other abuses. They go even farther and advocate that the legislation should be changed to require the courts to review each case to see whether the parties who have gained control over the markets have used that control to advance their own interests to the detriment of the public or whether they have exercised it in moderation for the benefit of the industry and the public.
I particularly want to take issue with this tendency which is aimed at undermining the whole anti-combine structure as it has been built up over the years. As an example of the view expressed by the opponents of the legislation, I should like to refer to a speech made by J. D. Ferguson, president of the Canadian Manufacturers Association, at Granby on November 26 last. The view expressed by the president of the Canadian Manufacturers Association is that whenever a combine charge is brought the courts should not concern themselves with the

The Budget-Mr. Croll elimination of competition but should examine the arrangements in detail to see if the prices and other terms that have been fixed by the parties are reasonable. If they do not take that approach, then the courts are shirking their responsibilities.
It is interesting in this respect to place beside each other some of the statements of Mr. Ferguson, as spokesman of the Canadian Manufacturers Association, and those of the judge in the last two rubber cases. I quote from Mr. Ferguson:
. . . when the groups of businessmen pleaded guilty, it did not mean for a moment that they were admitting they had done anything detrimental to the public.
Mr. Justice Schroeder says:
... by their plea of guilty the accused have admitted that they were parties to an arrangement, the direct object of which was to impose improper, inordinate, excessive or oppressive restrictions upon that free competition to the benefit of which the people of this country were entitled.
Mr. Ferguson says:
It is perfectly possible that the public has been unaffected. It might even have benefited.
Mr. Justice Schroeder says:
Inherent in these illegal agreements of the accused companies are features so obnoxious to the welfare of the community that, if extended, the effect upon the public might become disastrous.
Mr. Ferguson says:
All they admitted was that they had committed a technical breach of the law . . .
Mr. Justice Schroeder says:
In determining the punishment . . . the court must have regard to the magnitude of the aggregate business involved and the far-reaching evil conse-<quences likely to flow from allowing such schemes to operate unchecked or to go lightly punished.
You can readily see these utterances of the judge leave no doubt that the court considered the elimination of competition not to be merely a technical otfence, but to hold a really serious and sinister implication for the public. The court's interpretation of the combines legislation is worth looking at. As early as 1905 the court said, and I quote:
The right of competition is the right of every one, and parliament has now shown that its intention is to prevent oppressive and unreasonable restrictions upon the exercise of this right.
In 1940 the Chief Justice of Canada said, and I quote:
The enactment before us, I have no doubt, was passed for the protection of the specific public interest in free competition . . . and, as the enactment is aimed at protecting the public interest in free competition, it is from that point of view that the question must be considered whether or not the prevention or lessening agreed upon will be undue.
In the recent Calgary bread case the judge said this had been the law for 62 years. In 1952 parliament reviewed the legislation and


strengthened it in certain important particulars following the recommendation of the MacQuarrie committee, which confirmed the principles of the legislation as interpreted by the courts. To say that the courts are shirking their responsibilities in not interpreting legislation properly is therefore unfair to the courts and contrary to the record.
Of course, Mr. Ferguson is not only dissatisfied with the ability of the courts to interpret the legislation; he is also critical of the ability of parliament to understand and enact such legislation, because parliament is not composed largely of businessmen. The Winnipeg Free Press recently pointed out that the logical extension of this view would mean that in considering the Bank Act the house should largely be made up of bankers; and in considering the wheat agreement it should be made up largely of farmers.
Let us further examine the point on competition which has given the North American continent the highest standard of living today that has been enjoyed in the history of any nation at any time.
Those who would run after new gods have a very heavy responsibility. Competition is concerned, not only with the reasonableness of today's prices on the basis of today's costs, but also with the improvements in efficiency, and with innovations which make for lower costs and lower prices tomorrow. The public has the right to ask that business hustle, cut costs, and expand markets.
It is a fact that in some combine cases it is very difficult to prove that prices have been unduly increased, but it must be remembered that without today's competition tomorrow's costs and tomorrow's prices may be entirely different from what they will be if competition is maintained.
The present prosperity of Canada, and this is also true of the United States, is not the result of the theory that prices are reasonable, but rather due to the fact that they are the best prices that an active competition can produce. It is a fact that nearly all of the combines reported upon up to the present time are entirely or substantially price fixing combines. In all such cases the agreements in whatever form had this in common that the participants would not sell below the common prices that had been agreed upon. It would be naive indeed to believe that the effect and the purposes of such agreements were not to raise prices, and in many cases, of course, there was direct evidence of substantial increases as a result of agreements.
One wonders whether the opponents of the present legislation really believe the public

would be satisfied with a system under which trade and industry were permitted the privilege of setting prices upon their own views as to what was best for the public. It seems to me that the public would have little confidence in such a system. They would soon demand that if prices were to be fixed by other than the free market they should be fixed by some government body upon which the consumer would have representation.
Are we to assume that business, big or little, welcomes consumer participation in price fixing? I doubt that very much.
Mr. Justice Schroeder, in delivering his reasons for judgment in the recent rubber case, gave a broad hint of what would be involved if the courts undertook to examine the "reasonableness" of prices, instead of restricting themselves to the question of the elimination of competition which is detrimental to the public. Mr. Justice Schroeder pointed out that if he were to discuss prices from this standpoint, and now I quote:
. . . there should be satisfactory information as to the capital structure of the company and accurate information as to executive salaries, extraordinary expenses, advertising costs and like matters.
I think it is quite obvious that if the courts were to take the responsibility for saying that prices were reasonable, the courts would also have to take the responsibility of saying that executive salaries, dividends, reserves, expenditures including the very much cherished expense accounts, and so forth, were not unreasonable.
Would the opponents of the combines legislation really prefer this to a free enterprise system? It may serve their purpose in argument to call free enterprise "the law of the jungle", as the president of the Canadian Pulp and Paper Association did recently; but are they prepared to exchange free enterprise for unfree enterprise? I am sure they are not, and I find it difficult to understand what these persons who wish combines to be tolerated expect to gain, and particularly is it hard to understand what they expect to gain as against what they would throw away. They say they are not looking for the privilege of raising or fixing prices. They are only asking for the privilege of making some moderate rules on the stabilization of trade. Yet other industries have been able to carry on successfully on the basis of purely competitive practice and without any attempts at collusion. The persons to whom I have referred have never demonstrated why, in their particular industries, this cannot be done in the same manner. Are we to assume' that, for this extremely doubtful privilege, they are willing to throw away the rule of law,
The Budget-Mr. Croll whereby parliament lays down prohibitions against certain types of bad business behaviour in favour of a system that would, of necessity, involve a far-reaching interference of government in their businesses?
Despite vigorous denials, it cannot be too strongly emphasized that an invitation to pass upon the reasonableness of prices is an invitation to regulate. The opponents of the present legislation vigorously deny this and say that all they ask is the privilege of fixing by agreement certain conditions of trade, so long as they exercise that privilege in a moderate and reasonable fashion. How is the public going to be informed as to the moderation or the reasonableness of manufacturers or distributors on whose councils it has no representation? The public surely are not so gullible. They would demand and would be entitled to a measure of government regulation which could not and should not be denied to them.
The public have had their eyes opened recently. Their confidence in certain business leaders must have been severely shaken by the results of the rubber investigation and the electrical wire and cable investigation. It would seem to me that they would be much more reassured if men in the position of the president of the Canadian Manufacturers Association and others were to advise the members of the association that the Combines Investigation Act and related sections of the Criminal Code are the law of the land and are to be obeyed and that infringements of them are not merely technical offences.
It seems to me that men in the position of Mr. Ferguson are doing no service either to the public or to the people for whom they pretend to speak when they attempt to whitewash such offences and to lead the persons concerned to believe that they are being dealt with unjustly and that it may be only a matter of time until the legislation is changed. I am firmly of the view that Mr. Ferguson's and Mr. Fowler's associates should condition themselves for a long life with this act and its rigid enforcement.
Like many others, I am amazed at what has happened in the economic development of Canada during my lifetime. We have come a long, long way from the predominantly agrarian economy of fifty years ago. It is as though Canada had been almost standing still since the days of Cartier and Champlain and then, suddenly, in little more than half a century, had blossomed into a great industrial nation, second to none in productivity and prosperity. There is no magic formula for our growth. It was accomplished by the union of two great forces: hard work and

The Budget-Mr. Argue freedom. Without both of those forces we would not be where we are today; and without both of them we shall not continue to thrive and prosper.
This country is founded on the bedrock of free enterprise. The president of the Canadian Pulp and Paper Association may choose to call this "the law of the jungle". But does he really believe that it would be an improvement to permit the lions and the tigers to form a combine? I am certain that the other inhabitants of the jungle would not agree with him.
The aim of the combines legislation is to protect the public interest in free competition. Those who are trying shortcuts have no licence to exploit or to profiteer, nor will they be granted one. They are jeopardizing free enterprise from within by their greed and lack of initiative. Combines, if allowed a free hand, can become a new form of government at a different level. This result we cannot permit.
The Minister of Justice (Mr. Garson), in carrying out the wishes of parliament under the combines act, has shown high political courage. His outlook has been oriented to the present and the future, and he has not failed to understand the political climate of the day. His industry, sincerity and devotion to the public interest is demonstrated by his insistence that business relearn and apply the fundamental principles of competition to the home market and to the highly competitive foreign market. For that insistence he has earned the commendation of this house.
If we are not timid tomorrow and do not waver in applying this philosophy, the future will reward us by providing for this country greater markets and a yet higher standard of living for our people.


Mr. H. R. Argue (Assiniboia):: Mr. Speaker, in the speech he delivered this afternoon the Leader of the Opposition (Mr. Drew) called on the Prime Minister (Mr. St. Laurent) and the federal government to have another conference with the ten premiers of the provinces of Canada. From the remarks of the Leader of the Opposition it was not clear just what purpose such a conference might serve. Surely it would be a waste of time for the premiers from nine of the provinces to sit in on a conference that was discussing the "beefs" of Premier Duplessis of Quebec.
I therefore do not understand what was in the mind of the Leader of the Opposition, as to just what kind of conference it would be or what would be discussed. I think the most significant aspect of this discussion on dominion-provincial relations, particularly the action of Premier Duplessis in Quebec, is 

the silence of the Prime Minister. The Prime Minister has not yet, to my knowledge, made any public statement on this controversial matter. Because he is the Prime Minister and also because he is from the province of Quebec, I believe he owes it to the country to discuss this question on the floor of the house.
I am not opposed to the calling of a dominion-provincial conference; in fact I think a great deal of good might come from such a conference. But I believe its discussions should centre around problems that must be solved and solved soon. I think such a conference should consider what is to be done about the half a million unemployed in Canada. The federal government might tell such a conference what plans, if any, it has with respect to a shelf of public works. Such a conference might usefully spend its time discussing what is to be done with the huge surplus of grain and the crisis that now faces agricultural producers. I say that if such a conference takes place it should consider solutions to the very great economic problems facing the country at this time and should not merely consider the "beefs" of one particular provincial premier.
As time has passed during this session, the Minister of Trade and Commerce (Mr. Howe) has made it more clear all the time to anyone who knows anything about conditions in western Canada that agriculture there faces very serious difficulties indeed. He announced that a seven bushel per acre quota was the most that farmers could hope to deliver and, as a matter of fact, he said it was something that should make everybody happy. But it was the worst news that western Canada has had in many years. This is a return to the situation in 1929 when huge surpluses of grain were going unwanted. Our farmers have been good producers. Nature has been kind. They have produced good crops, but because of policies followed by the government they now find it impossible to market their crops.
The Minister of Trade and Commerce rises in his seat periodically and says that everything is fine, that farmers are earning large incomes and that sales are good, but these statements are not borne out by the facts. The wheat economy in Canada is in a crisis right now, and that crisis is spilling over into other fields. If you want to correct unemployment in Canada, put some purchasing power in the pockets of western farmers. Take steps to buy their grain, and in my opinion there will be no unemployment in a matter of a few short months.
Letters coming to western members of parliament in increasing numbers now show

just how bad the situation is. It is true that so far in this crop year a substantial quantity of grain has been marketed, but the great bulk of that grain was marketed in the early part of the year and as the months have gone by less and less grain has been sold. I wonder what the members of the cabinet would think if they were faced with the situation pointed out to me by the secretary of a farmers' union lodge in my constituency, Mr. T. W. Bennett of Willow Bunch. He points out that at a recent meeting of the Willow Bunch lodge the cash position of the farmers of that district was surveyed and the farmers were found to be so short of cash that it was decided to send a delegation to the rural municipality to see if the municipal council would provide the farmers with relief fuel so that they could sow their crops this spring. I wonder what members of the cabinet would think if they were farmers, had 5,000 bushels of wheat in their granaries and had to go and beg two or three barrels of gasoline from somebody in order to sow their 1954 crop.
If the farmers can only deliver seven bushels per acre farmers will suffer and the merchants in the small communities will suffer with them. Sales are getting smaller as the months and weeks go by. Two years ago, according to the Wheat Review of March, 1952, importing countries had bought 213 million bushels of wheat out of a total of 233 million bushels fixed as Canada's quota under the international wheat agreement. Over 90 per cent of all the grain contracted for had been sold by March 18. One year ago sales had fallen off considerably. Out of a quota of 235 million bushels 159 million had been purchased as of March 24, or approximately two-thirds of the quota under the agreement. The latest figures for this year, which are up to March 30, show that of Canada's quota of 163 million bushels under the international wheat agreement only 71 million bushels have been sold. In other words, even though there are only four months left in the present crop year Canada has supplied only 44 per cent of its quota under the agreement.
Sales are falling off week by week, but what does the government do about it? Literally nothing. It has been announced that the United States government has made gifts of wheat to Japan in conjunction with purchases by Japan of United States military equipment. On March 11 I asked the Minister of Trade and Commerce a question in that regard and in reply to my question whether such a gift was being made the minister said, as found at page 2883 of Hansard:
In the first place, Mr. Speaker, I am not aware that it is intended to give 500,000 tons of wheat to
-The Budget-Mr. Argue Japan. In the second place, that would seem to be the business of the United States government regarding which that government would not welcome protests from other countries.
The minister had no knowledge of such a gift and said that no protests would be made. But, lo and behold, eight days later, in answer to a further question of mine on the same subject, he made this reply, as found at page 3148 of Hansard. Listen to this:
The United States informed Canada some weeks ago that they considered the food situation in Japan would warrant a gift of wheat and barley under section 550, and asked if we had objections.
Eight days before the minister said that he had no knowledge, and on March 19 he said that they knew about this transaction weeks before. The minister cannot be right both times, and certainly on one occasion he was misleading the house and misleading the country.


Mr. Martin:: I am sure the hon. gentleman does not want to say that the Minister of Trade and Commerce was misleading the house. That is not parliamentary, and I am sure my hon. friend does not mean to leave that impression.


Hazen Robert Argue: I meant exactly what I said. If I had meant to say anything else I would have said it. The minister has raised a point of order, Mr. Speaker, with respect to whether or not my statement that the Minister of Trade and Commerce was misleading the house is parliamentary. I submit to you that it is. It is my understanding of the rules that if I had said that the minister was deliberately attempting to mislead the house such a statement would not be in order. I leave the matter in the hands of the Speaker. I have no intention of withdrawing my remark unless the Speaker rules it unparliamentary, which I submit it is not.


Mr. Deputy Speaker:: Order. The hon. member must know that he cannot impute motives to another member of the house. When lie says another member is misleading the house, he is imputing motives and I feel the hon. member should withdraw.


Hazen Robert Argue: If my language was not strictly parliamentary, I withdraw that part of it that may be offensive to the rules of the house. And I leave those two statements side by side on the record, and say that the Minister of Trade and Commerce (Mr. Howe) was wholly wrong on one occasion, and I also say that the Minister of Trade and Commerce is a sufficiently able man that he is not wrong very often without knowing it. Here are two statements that are completely opposite. Then he goes on to say:
We said that we were negotiating with Japan and we had objections at that time.
4038	HOUSE OF
The Budget-Mr. Argue
Eight days before, no objection was to be made to the United States because, according to the minister, it would not be the right thing to do. Yet, eight days later he referred to objections made, and the sentence before that says "some weeks ago". I will ask the Minister of National Health and Welfare (Mr. Martin) which is correct. Did the government know that Japan and the United States were undertaking such an arrangement weeks before March 19, or did the government know nothing about it, as was stated on March 11? In any case, a delegation went from Canada to the United States, and a very impressive delegation it was. There was the Secretary of State for External Affairs (Mr. Pearson), the Minister of Finance (Mr. Abbott), the Minister of Trade and Commerce, and the Minister of Agriculture (Mr. Gardiner). They went to Washington to meet their counterparts in the United States government to discuss, I expect, the very important trade problems facing Canada and the United States, including the matter of surpluses. Then they came back to Canada and a statement was made concerning the results of that conference. That statement gave us absolutely no information. It was just words and said nothing from which anyone could derive any hope.
I should like to quote from an editorial appearing in the Western Producer of April 1 in which an excellent comment is made on the statement to which I have referred. I think this editorial states very well indeed the real facts regarding the statement made by the Minister of Trade and Commerce.


Mr. Abbott:: Mr. Speaker, I think the hon. member for Greenwood (Mr. Macdonnell) was stopped yesterday from reading editorials. He was asked to express his own opinions. Of course I am always very interested in my hon. friend's opinions-more than I am in the opinions of the editorial writer in the Western Producer.


Mr. Deputy Speaker:: The hon. member understands, of course, that he cannot read from a newspaper or other article commenting upon action taking place in the house.


Hazen Robert Argue: Well, I shall not quarrel with Your Honour's ruling or with the objection taken by the Minister of Finance. I know of course that he does not like the editorial comment.


Douglas Charles Abbott: I would rather have your comment.


Hazen Robert Argue: So I shall paraphrase what the editorial says.


Douglas Charles Abbott: Can you not speak for yourself?


Hazen Robert Argue: Well, if I could not, I judge I would be in about the same position as was the minister on the night he delivered his budget.
Now, the editorial states that after making due allowance for the vagueness-


Douglas Charles Abbott: Are we obeying the rules, Mr. Speaker, by paraphrasing?


Mr. Deputy Speaker:: In the interval I have found the citation to which I shall direct the attention of hon. members. Citation 306 in Beauchesne's second edition is as follows:
It is not in order to read articles in newspapers, letters or communications emanating from persons outside the house and referring to, or commenting on, or denying anything said by a member or expressing any opinion reflecting on proceedings within the house.
I hope the hon. member will abide by the rules.


Hazen Robert Argue: I think I shall, Mr. Speaker. I should point out, however, that the statement was not made in this debate by the Minister of Trade and Commerce. I submit that to quote from an editorial which comments on a statement made by a minister when the orders of the day are called is scarcely something that reflects on proceedings in the house. But if the reading of an editorial of this kind is offensive to the Minister of Finance, and if he is such a tender person that the reading of an editorial would bother him-


Douglas Charles Abbott: No, not tender.


Hazen Robert Argue: -then I shall not read the editorial. I shall refer however to some of the things the editorial says.


Douglas Charles Abbott: Make the statements your own.


Hazen Robert Argue: The editor says, in so many words: Here were four big guns of the Canadian cabinet who went to Washington. They laboured hard and long and they brought forth a small and puny mouse.


Douglas Charles Abbott: Very original, that!


Hazen Robert Argue: Well, perhaps it may not be very original, particularly when one has been a member in the house for some years, with the government opposite in power. That government is most prolific in having given birth to innumerable mice over the years. And this is certainly one of them. However I wish to thank the Minister of Finance for the help he is giving me in making my comments.


Douglas Charles Abbott: Always willing to oblige.


Hazen Robert Argue: The editorial says that the whole statement is reminiscent of the thirties, and that the government here is just as

unable now to cope with surpluses as was the government in the thirties. The editorial goes on to say that-


Douglas Charles Abbott: Oh, oh-the editorial again.


Hazen Robert Argue: Does the minister want to object? I am paraphrasing it.


Douglas Charles Abbott: Oh, I see.


Hazen Robert Argue: I am not quoting it. The editor goes on to say that surely this is something that should be corrected, and that it is a reflection upon Canada and the government when the government cannot solve the problem of the huge surpluses of food in a world that is hungry.
Anyway, we saw the four cabinet ministers going to Washington. And when the Minister of Trade and Commerce made his statement one of the phrases he used-and I am paraphrasing again, so that it will not offend the minister-


Douglas Charles Abbott: You do not have to paraphrase that.


Hazen Robert Argue: Anyway they said that they were advancing on a bold front.


Douglas Charles Abbott: A wide front.


Hazen Robert Argue: I would like to know what was accomplished in Washington, because if anything was accomplished we were not told about it. And how would the government expect to accomplish very much in going to Washington? The Minister of Trade and Commerce gets up day after day in the house and says that everything is fine, that markets are good, that the economy is buoyant, that farm income is at the highest peak and that the outlook is bright. Then he goes down to Washington and says, "We are having all kinds of trouble; would you help us out?" I can just imagine someone quoting some of the statements of the Minister of Trade and Commerce back to him. Then the ministers decide that in order that they might come back with at least a mouse they should decide on agreeing to issue a most innocuous press release that says absolutely nothing.
Here is a situation fraught with great danger for Canada. The over-all surplus of wheat on February 1 in the four major exporting countries was 1,907 million bushels. The Minister of Agriculture says: "Well, the thing to do with this big surplus-and of course the farmers will do it-is to turn some of it into meat." Every economist in the Department of Agriculture right now is advising the minister that the price of hogs is going to go down very drastically this fall, with the larger number of hogs coming on the market.
The Budget-Mr. Argue
Would the Minister of Agriculture suggest that the farmers feed more cattle? In 1951 Canada's cattle population was 8,400,000. Last year it was up to 9,800,000. The cattle population of this continent has increased from 90-4 million to a present 105 million head, the largest number of cattle in the history of North America. Cattle numbers have gone up tremendously in the last two years, and the price of cattle has fallen. What is going to happen? What would happen if farmers fed increased quantities of grain to livestock? I know what would happen, and the Minister of Agriculture must realize what would happen. There would be another further drastic drop in cattle and hog prices.
The debates centring around the export of wheat today remind me of the debates that took place in this house in 1946, 1947 and 1948, when C.C.F. members were warning the government that they were losing the British market for Canadian bacon, cheese and other farm products. What were we told? We were told that it was nonsense; that we were not losing the British market. Well, history now shows that the members of the C.C.F. were right. The British market has been lost as a direct result of the economic policies of the Minister of Finance of this country. And markets will continue to be lost so long as we demand hard currency dollars that our customers have not got.
The Minister of Finance has his ideas of finance and trade. I have different ideas. My ideas are just simple ones. I believe that when one nation has huge surplus quantities of food and people in other nations are hungry and suffering from malnutrition, it is our duty and their duty to take whatever financial and other steps that may be necessary to move our surplus food to feed people who need it. The people in the United Kingdom could use Canadian food.
Two-thirds of the people of the world are hungry. We have so much food on this continent that farmers are fearful of the future, and yet this government does not make a single, financial move to get rid of any real part of those burdensome surpluses. Oh, they went to the United States and held a big conference and came back. They say they are advancing on a bold front, but we are not told where they are going. The Minister of Finance I suppose gave part of the broad advance in his budget the other night, and that was a depression budget if I ever read one because in it was one very
4040	HOUSE OF
The Budget-Mr. Argue significant statement. The minister said: "I am basing my budget on the same gross national product this year as last year." The year before 1953 Canada's real production went up 4 per cent. The year before that Canada's real production-


Douglas Charles Abbott: It was 5 per cent.


Hazen Robert Argue: -went up 5 per cent.


Douglas Charles Abbott: It was 5 per cent last year.


Hazen Robert Argue: All right, 5 per cent last year. The minister's statement makes the position even worse than I was going to paint it. The Canadian people are capable-and I put this to the minister-once again in 1954 of increasing the real production by 5 per cent, but the government will do nothing to lay plans for such an increase in production. And therefore the 5 per cent increase in income that should result from an increase in our population and improvement in technology is being denied the people of Canada because steps are not taken to put 500,000 people back to work. Steps are not being taken to put money into the pockets of agricultural producers. This government apparently has learned nothing in the last twenty years.
Farm income went down 11 per cent in 1952, went down 14 per cent in 1953 and it is going to go down a further large percentage this year. That drop in farm income, unless it is arrested, is going to spill over into the rest of the economy and is going to have very serious economic repercussions.
The minister, in his budget-part of his great advance on a broad economic front-* made some changes; he took off some taxes. The minister can say that half a million unemployed as a result of tax reduction on furs can now buy their wives mink coats a little cheaper. I suppose the unemployed can now buy a bag of golf sticks just a little bit cheaper. They have lots of time to play golf. They can go and get fishing equipment a little cheaper. They are not making any money but they may be able to get the equipment on credit. They will not be charged quite so much, and they can go fishing, too. This is a black budget; it is a depression budget, and in parts of Canada, particularly western Canada, the farmers are not waiting for a recession. They are not hoping against a recession or a depression; for them it is right here. They have no cash. True, they have all kinds of wheat and still their families must go without many of the necessities of life.
Then the government has another plan on this bold, broad economic advance. They have a Colombo plan to help feed the people of


underdeveloped countries. It is part of a program to raise living standards in southeast Asia. Canada's contribution under this government to feed people in southeast Asia, to lift their living standards, is the magnificent one of less than the cost of a postage stamp for each person living in southeast Asia. That is not a contribution that is worthy of the generosity of the Canadian people. The only reason Canadians are not contributing more to help underdeveloped countries is the lack of imagination, lack of leadership on the part of this Liberal government. People in the world are starving and the Canadian farmer has so much wheat he does not know what to do with it. He cannot get any money and the Minister of Finance rises in his place and says: Well, the real production is going to stay the same; I am going to make a few insignificant changes in income tax; that is all. He should have reissued the budget of a year ago. There would not be too much difference between then and now.
Unless something is done soon we are not only going to have a reduction in the standard of living for large sections of the Canadian economy, but we are likely to lose some of the friends that we have in countries of the world if we do not come to their assistance. I believe we should make a real contribution, not a trifling, stingy, insignificant one of $25 million. Resolutions come to my desk from church organizations, from clubs of all kinds. I believe the Canadian people almost unanimously would support a very much larger contribution to underdeveloped countries. There is a place where we could get a lot of money to provide food, technical personnel and capital equipment to help underdeveloped countries.


Mr. Crestohl:: Will the hon. member permit a question? In what way would the hon. member suggest that the people of Canada should be taxed in order to be able to make a more generous contribution to the Colombo plan?


Hazen Robert Argue: That is a very important question! It shows the mentality of the Liberal party. It is no different from the party that was in power from 1930 to 1935. We have unemployed, and there is too much food in the country, and when some reforms or some expenditures are suggested they say: Well, who are you going to tax? All right; who are you going to tax? You can tax big business and raise the tax on corporation profits.


Douglas Charles Abbott: Put a special tax on members of parliament.


Hazen Robert Argue: Hear, hear; and raise succession duties. Then, if there is not-


An hon. Member:: Time.


Hazen Robert Argue: I am replying to a question, now. If there is not sufficient from that source the government might use the policy it used in the early years of the war and put our unemployed resources to work, namely by an expansion of the money supply. That is not going to hurt anybody of whom I am aware. I am willing to make a little wager with the Minister of Finance that the result of his budget this year will be a deficit, unless of course he does a lot of manipulation with the budget figures.


Douglas Charles Abbott: You had better cover up there.


Hazen Robert Argue: Then I shall suggest another place from which the money might come, and once again you would not have to dig into the pockets of the little taxpayer. I suggest the time has now arrived when the government should consider a substantial scaling down in its estimates for the Department of National Defence. I feel that one hydrogen bomb probably has as much offensive power in it as a billion dollars in the Department of National Defence. I do not know, because I am not a military expert. I believe, however, that Canada should take $500 million of the amount in its defence department now and spend that money on raising the living standards of the people in Asia, South America and Africa. We would then be making our greatest contribution towards peace.


John Horne Blackmore: It is my purpose today, Mr. Speaker, to discuss the need for a Canadian royal commission on communism. Some hon. members will have noted that on February 11,	1954, there
appeared upon the order paper a resolution in my name calling for the immediate appointment of such a royal commission. This resolution came upon the order paper so late in the year it has been impossible for me, under the rules, to discuss it until the coming of the budget debate. In order to clear the way for me to debate the resolution I asked on April 9 that it be withdrawn from the order paper. This was done.
As the resolution stood as No. 18 upon the order paper of April 9, it read as follows:
Mr. Blackmore-The following proposed resolution:-That, in the opinion of this house, the government should give consideration to the immediate appointment of a royal commission to study and report upon the whole matter of communism as it affects Canada, to determine and make known:
1.	What is the basic origin of communism?
2.	What are the techniques communism has employed?
3.	What is the degree of success communism has attained in Canada?
4.	What are the possible means available to Canada of combating communism in Canada?
The Budget-Mr. Blackmore
As I suggested that resolution on February 10, clause 1 read as follows:
Whether, and to what extent, communism is basically an imperialist conspiracy of eastern European reds of an ethnic grouping possessed of Mongol and Turkic affinities-a Mongolian-Turkic-Red conspiracy that has, from its beginning, aimed aggressively at actual physical invasion, conquest and enslavement of America; a conspiracy that has employed and still employs the various brands of socialistic and communistic ideology merely as a sort of sheep's-clothing disguise to conceal the real facts beneath communism.
The appropriate parliamentary officials, in the interests of our rules, advised me to modify my clause 1 to render it more nearly in order, and the result was the form clause 1 has taken on the order paper. This clause 1, as originally suggested in my resolution, constituted one of my main reasons for placing my resolution on the order paper. I am firmly of the belief that if the Canadian people had any idea just who originated communism, and where it came from and how it was the first agents were able to go to Russia and begin the job in Petrograd, they would make short work of all communists and communist sympathizers in Canada.
One of the two main matters I desire to consider today is the suggestion that communism is basically an imperialist conspiracy of Turko-Mongolian-Red plotters seeking to rule the world. The evidence at my disposal leads me to believe that it is just that, and all of that. If I have time today I shall go into the matter in some detail. The other of the two matters I wish to consider today has to do with clause 2 of my resolution, namely the techniques communism has employed. The illustration of communist techniques to which I aim to call attention is that of Generalissimo Chiang Kai-shek, and how communism has endeavoured to destroy that great leader, not only at home but abroad. Communism is endeavouring right now to do that in Canada.
I propose to ask three questions concerning Chiang Kai-shek which are briefly as follows: First, did Chiang Kai-shek throughout world war II hold two million Japanese soldiers against the eastern China coast? Second, did he during the same period successfully hold the Chinese communists in check? Third, was Chiang Kai-shek driven from the Chinese mainland through communist spy activities within the American administration? The answer to each of those three questions is an emphatic yes. It can be proven beyond the shadow of a doubt, and has already been proven by the great committees investigating in the United States.
The communist organizations of America have dinned into Canadian ears the propaganda that Chiang Kai-shek was corrupt,
4042	HOUSE OF
The Budget-Mr. Blackmore ineffectual and a totalitarian. To help Canadians begin an appropriate review of their ideas as regards Chiang, I propose to ask the following three questions in respect of Chiang Kai-shek's world war II activities, and I propose to answer each question as I ask it.


Mr. Deputy Speaker:: Order. I am sorry to interrupt the hon. member, but it being five o'clock the house will proceed to the discussion of private and public bills.



PRIVATE BILL


[Stage Direction]
The house in committee on Bill No. 394, respecting Eastern Telephone and Telegraph Company-Mr. Balcom-Mr. Applewhaite in the chair.
On clause 1-Capital stock.
Stanley Howard Knowles: May I ask whether any
changes were made in this bill when it was before the committee on railways, canals and telegraph lines?


Samuel Rosborough Balcom: There was no change made, Mr. Chairman.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
Preamble agreed to.
Title agreed to.
Bill reported, read the third time and passed.
Mr. Deputy Speaker:: The items under private and public bills having been exhausted the house will proceed with the business interrupted at five o'clock.



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell.
John Horne Blackmore: Question No. 1. Is it not a fact that throughout world war II Chiang Kai-shek held a powerful Japanese army of two million men engaged along the eastern coast of China, thereby enormously contributing to our victory? The answer, emphatically, is yes. Chiang did hold two million Japanese engaged along the eastern coast of China throughout world war II. Proof of that is to be found in abundance in Admiral William D. Leahy's book "I Was There", New York, 1950, at page 202.


This is cited by John T. Flynn in his book "While You Slept", New York, 1952, page 188. Flynn cites this fact in order to substantiate the statement he had made at page 36 of "While You Slept" in the following words: Chiang's country was invaded by the Japanese. He did, as Admiral Leahy pointed out. hold a huge army of two million Japanese soldiers in China while we fought in the Pacific.
I think, Mr. Speaker, that that evidence pretty well disposes of that question.
Now, question No. 2. Is it not equally a fact that Chiang successfully held at bay the Russian Chinese communist fifth column armies right up to the close of world war II? The answer, once more, is emphatically yes. Chiang held the communists off all during world war II. What is the proof? There is pretty strong evidence in the dispatches of United States Ambassador Leighton Stuart. Dr. Stuart's dispatch of July 1, 1947, warned the United States government that the Chinese nationalist troops lacked arms and ammunition, the arms and ammunition, by the way, it was the business of the United States to supply to Chiang Kai-shek under the arrangement they had with him. Dr. Stuart's dispatch of September 20,	1947,
warned again of the ill effects upon Chiang's forces resulting from the failure of United States financial and military assistance.
In his dispatch of February 5, 1948, he warned again of the dangerous lack of American aid resulting in disaffection among Chiang's forces.
All three dispatches were sent after the end of world war II and after the United States had undertaken to give assistance to Chiang Kai-shek. Ambassador Stuart's dispatch of March 17, 1948 reads as follows, and I am reading from page 39 of Freda Utley's "The China Story". Freda Utley is one of the best authorities on China that can be found anywhere. Everything she says is thoroughly documented. But here is the quotation from page 39:
In their despair all groups blame America-
Ambassador Stuart is speaking of the Chinese.
-for urging structural changes ... or reforms which they feel they themselves would carry out if their immediate internal problems were not so acute, while America still delays the long promised aid upon which the survival of democratic institutions depends.
Again on March 31, 1948, two years after the end of world war II, he sent this dispatch:
The Chinese people do not want to become communists, yet they see the tide of communism running irresistibly onward. In the midst of this chaos and inaction the Generalissimo stands out as the only moral force capable of action.

I believe that will effectively substantiate the fact that Chiang held the Chinese communists at bay all during world war II. Anyone who required more proof than that would be most unusual.
Question No. 3. Is it not further a fact that Chiang was driven from the Chinese mainland largely if not entirely through the meddling and treasonable manoeuvring of a conspiracy of communist spies operating in the United States through agents infiltrated into the United States administration?
I spoke about this the other night and I pointed out how Lauchlin Currie, for example, countermanded the order by General Eisenhower that certain supplies should be sent to Chiang Kai-shek. I would emphasize that the answer to this third question I have posed is again positively yes.
The United States caused the fall of Chiang Kai-shek. In this connection at least five considerations require to be taken into account, all of which serve to show the truth of this declaration. The first one is the evidence of witnesses who have testified to this. May I read again from "While You Slept" at page 15. Some may wonder why I quote John T. Flynn's "While You Slept". It is because it is a perfectly documented book. The truth of everything it says has been established over and over again in committees of the very highest degree of integrity and reliability. But this is what Flynn states at page 15:
The only difference between Russia's war on China and her war on Korea was that in Korea we aided and armed the South Koreans to fight communism, while in China, incredible as it may seem, we actually told the Chinese government to do what Russia wanted-unite with the communists. When Chiang Kai-shek refused, we disarmed him.
Again, at page 185 of his masterful book he states:
The dark curtain that, with our consent, was rung down over our luckless allies in Europe-Poland and Czechoslovakia and other little countries-has now fallen on China. And this was made possible wholly because of Russia's allies-conscious and unconscious-in America, in our government and even in our state department.
There were traitors in the state department and in posts of power in many departments of the government. Many of the men who are now being hustled off to jail were exercising a controlling influence at those key positions where decisions are made.
There can be hardly any doubt after considering these assertions. The other night I quoted to some extent from a letter by Walter S. Robertson dated October 8, 1949 and addressed to the Hon. Philip Jessup. After Hon. Walter S. Robertson had been eighteen
The Budget-Mr. Blackmore months in the finest position that one could imagine in China to learn the truth, these are his words:
. . . in my opinion at least, it can be fairly demonstrated that the confused and confusing inconsistencies of our own vacillating policy, however well meaning it might have been, contributed directly and indirectly to the debacle which engulfed him and his government, our ally, and brought to power the communists, our long avowed enemies.
I come now to the second consideration. Roosevelt's behaviour at Yalta shows completely how the United States wrecked Chiang Kai-shek. Although Japan previously had already offered to surrender before Yalta, and although Roosevelt knew this, yet at Yalta Roosevelt, advised by the communist spy Alger Hiss, signed an agreement with Stalin and without the knowledge of Chiang Kai-shek. Pertinent portions from this agreement are as follows. I quote from page 37 of a document which I have in my hand called "China in Stalin's Grand Strategy". It is a document reprinted from Foreign Affairs, an American quarterly review, October, 1950. It is a document by Hu Shih, who was the Chinese ambassador to the United States in 1939 and certainly a man whose word we would not question, I fancy. Here are the quotations from the Yalta agreement:
The leaders of the three great powers-the Soviet union, the United States of America and Great Britain-have agreed that in two or three months after Germany has surrendered and the war in Europe has terminated, the Soviet union shall enter into the war against Japan on the side of the allies on condition that:
I skip paragraphs (1), (2) and (2)(a), and quote subparagraphs (b) and (c) of (2):
(b)	The commercial port of Dairen shall be internationalized, the pre-eminent interests of the Soviet union in the port being safeguarded and the lease of Port Arthur as a naval base of the U.S.S.R. restored.
(c)	The Chinese Eastern Railroad and the South-Manchurian Railroad which provides an outlet to Dairen shall be jointly operated by the establishment of a joint Soviet-Chinese company, it being understood that the pre-eminent interests of the Soviet union shall be safeguarded and that China shall retain full sovereignty in Manchuria.
Then paragraph (3) is as follows:
(3) The Kurile islands shall be handed over to the Soviet union.
It is understood that the agreement concerning Outer-Mongolia and the ports and railroads referred to above will require concurrence of Generalissimo Chiang Kai-shek. The president will take measures in order to obtain this concurrence on advice from Marshal Stalin.
The heads of the three great powers have agreed that these claims of the Soviet union shall be unquestionably fulfilled after Japan has been defeated.
For its part the Soviet union expresses its readiness to conclude with the national government of

The Budget-Mr. Blackmore China a pact of friendship and alliance between the U.S.S.R. and China in order to render assistance to China with its armed forces for the purpose of liberating China from the Japanese yoke.
Anyone who studies those words and remembers that Chiang Kai-shek knew nothing about it will stand astounded and horrified. The results flowing from that agreement are dreadful to think about as far as China is concerned.
This agreement cleared the way for Russia to take over Manchuria, which she later did by the most reprehensible kind of treachery based upon this Yalta agreement. This agreement also cleared the way for Russia, by similar treachery, to deliver Manchuria into the hands of the Chinese communist Red army so that it might serve that same Chinese Red army first as a secure retreat in which to recuperate and to accumulate numbers; second, as a source of supplies from Russia and from Manchuria itself which has thirty-three million people; and third, as a base from which to attack Chiang.
This agreement at the same time directly deprived Chiang Kai-shek of the resources and industrial potential of Manchuria which would have come to him automatically upon the surrender of Japan. This agreement in time resulted in the Chinese communist army being able to overcome North China proper where lay China's only considerable industrial strength, thereby depriving Chiang Kai-shek of that important asset.
I now come to the third main consideration. Roosevelt at Yalta further stacked the cards against Chiang Kai-shek by promising Stalin to provide him with fuel, transport and equipment for 1,250,000 men, 3,000 tanks, and
5.000	planes, thus giving Stalin an army of
1.250.000	men right on the borders of Manchuria, just exactly where he wanted them, thereby enabling him to seize Manchuria just as soon as Japan went out. This is clearly established in "While You Slept" at page 149. For a full account of the conference-and I am saying this for those out in the country who may wish to go into this matter in a scholarly manner-see "The Roosevelt Myth" by John T. Flynn, New York, 1948.
I come now to the fourth consideration. The United States further hurt Chiang through the mischief wrought by General George Marshall. Freda Utley's "The China Story", page 9 down to page 12, shows this in great detail. I do not propose to quote it. I merely am telling where it is to be found so that anyone who wishes to look up the matter can satisfy himself completely.


The fifth consideration is this:	Finally
the United States wrecked the hopes of Chiang through the havoc wrought by United States failure to deliver military supplies to China. The whole of this story in enough detail is to be found in "The China Story" by Freda Utley, pages 34 to 41.
In my opinion, what everybody should bear in mind in this connection is that, as I pointed out, Japan had offered to surrender before the three powers ever went to Yalta, and Roosevelt knew this. Yet he signed this outrageous agreement turning over China to Russia. There will be those who will wonder how it can be proved that Roosevelt knew that Japan had offered to surrender. The evidence can be found in "The China Story" by Freda Utley, at page 263, wherein she tells in a note of the testimony of General Bonner Fellers, which is corroborated by Rear Admiral Ellis M. Zacharias in "Behind Closed Doors"-New York, 1950-page 63.
So much for Chiang Kai-shek and whether or not he was worthy of all the opprobrium against him which has been scattered so liberally throughout this nation and throughout the United States only by the communists and communist sympathizers.
I turn now to the other matter which I wish to discuss, namely the suggestion that communism is basically a Turko-Mongolian-Red imperialist conspiracy determined to enslave the whole world. The communist organization has cleverly contrived to delude people into believing the tragic fallacy that communism in Russia or elsewhere was and is a revolution, a successful popular uprising to throw down tyranny, oppression and reaction; a revolt of the so-called proletariat against the bourgeoisie, against capitalism and special privilege as such. All men who are adequately informed know that communism began through a cunningly-conceived, deeply-rooted, widely-ramifying conspiracy of certain top-ranking people of the world; a diabolical plot aimed at physical or political conquest of the world and the abject subjugation of all mankind except a small specially privileged class.


Mr. Philpoii:: Why bring the Turks into it? They have got nothing to do with it.


John Horne Blackmore: If we could get a royal commission established we could bring a good deal of evidence to show that Turkic people do have a lot to do with it-or did have. This is one reason why we need a royal commission. It would be impossible to present all the pertinent evidence in any number of speeches on the floor of the house. That evidence has to be produced, before a judicious adequately qualified commission.


Elmore Philpott: Surely my hon. friend knows that the Turks and the Mongols were the bitterest enemies down through history. No two peoples ever fought each other like the Turks and the Mongols.


John Horne Blackmore: I have never said for a minute that it is the Turks. I have said it is the Turko-Mongols, and in fact the very words in the resolution show that there is a people having Turkic affinities and Mongol affinities, a red people. Who these red people are, how they come to have Turkic affinities, how they come to have Mongol affinities, can be shown before a royal commission if we have a chance.


Mr. Ellis:: Tell us now.


John Horne Blackmore: Now, the suggestion
couched in those words differs fantastically from what Canadians have been led to believe, differs so fantastically that hundreds of thousands of Canadians will condemn my suggestion without even stopping to listen or even think-there is evidence of that right in the house-much less to study and ponder. The great problem then is: Where shall we turn for authorities? Whom shall we believe? May we reason upon this matter briefly?
Lenin said:
We must be ready to employ trickery, deceit, law-breaking, withholding and concealing truth.
This quotation is taken from Lenin's "The Infantile Disease of Leftism". The translation is found in Sir Norman Angell's "The Steep Places", published by Harper in 1948, at page 73. I am quoting from "China in Stalin's Grand Strategy", page 13 of the pamphlet published from the article in Foreign Affairs. That would pretty well tie it down, I think. In the light of that statement of Lenin, I ask every Canadian: Can you possibly believe any account coming from any communist or communist controlled or influenced medium of information? Certainly no Canadian safely can, and no patriotic Canadian will.
As recently as 1952 the story has been told and flawlessly proven, an utterly dreadful and amazing story, step by step and person by person, of how the American communist organization took over America's most influential information media, the radio, movies, magazines and books, and through them persuaded United States leaders to support the communist plan to turn over China, Formosa and Korea to the Soviets of Russia. That sounds almost impossible to believe, but I hold in my hand a book, "While You Slept" by John T. Flynn, and I invite any member of the house or any person in the country to read that book through carefully page by
The Budget-Mr. Blackmore page right to the end and then question its authenticity. It establishes beyond question the truth of what I have just said.
Obviously the tremendous fact established in "While You Slept" is that communist organization agents or dupes in the United States were able to use the radio, movies, magazines and books to establish in American minds any idea or prejudice they chose to establish. This, as everyone must recognize, is an utterly appalling fact; and when you remember that it applies also to Canada it is for us even a more appalling fact. This book most clearly warns us what we must not believe.
Bearing all this in mind, let us turn again to seek for authorities. Located in the Empire State building, New York, is an organization called the national economic council. This council is a non-profit, non-partisan, membership corporation organized in 1930 under New York state law. Twice a month the economic council issues what it calls the "Economic Council Letter". These letters are generally accepted as being highly reliable.
Council letter No. 332, dated April 1, 1954, which I hold in my hand, tells us definitely the following facts:
1.	The Soviet government is nothing else than a gang of plotters that succeeded in making itself master of Petrograd in 1917. I quote briefly from the publication:
The U.S.S.R. is not a world power in the sense we have always thought-a government naturally looking out for its own interests but maintaining certain general standards of honour and integrity in international dealings. Rather, this Soviet government is nothing else than a gang of plotters who succeeded in the confused days of 1917 in making itself master of Petrograd . . . and extending that mastery to all Russia.
2.	This gang of plotters, with the astounding help of the United States, has made itself master of most of the Eurasian continent and threatens so to spread until it *will subjugate the whole world. Here is a brief quotation:
There is not a country in the world, including the United States, that is not threatened with subjugation.
I call on the people of this nation to contemplate with the greatest of soberness that statement coming from such a source.
3.	This gang of plotters down to and through their successors today have said consistently that they will not stop until they have subjugated the whole world. May I quote briefly from the publication again?
They have said that communism and capitalism cannot live side by side on the same planet.
What does that mean? That means that Canada must come under them; it can have no other meaning at all.

The Budget-Mr. Blackmore
4.	Communism is against all religion, especially Christianity. I quote briefly again:
Communism is against all religion, especially Christianity. If Soviet Russia is successful, in the end Christianity will be largely wiped out. . .
5.	The Lusk committee of the New York state legislature in 1919 made an investigation of communism and, reading again from the economic council letter, "its four-volume report has long been a classic". If this organization knows about that report it probably knows a good deal.
6.	Soviet Russia has been at war with us ever since 1919 and is today. I quote again:
Soviet Russia is at war with us today. She has been ideologically at war with us ever since 1919. She was secretly our enemy even between 1941 and 1945, when we considered her ''our ally". During that time she was taking advantage of our generosity, or stupidity-*
Just as she is today.
-and was including in her requisitions for aid, designs and materials which she intended to use in building up her post-war military potential to destroy us later.
This letter supports every suggestion I have made as to the basic nature of communism, as to its being an imperialistic plot of eastern Europeans, of Turko-Mongolian reds, except that it has not mentioned the ethnic characteristics of the original plotters.
May I read a very short quotation from the introduction to a recent book published in 1952 and written by a man named Prychodko. It is entitled, "One of the Fifteen Million". The introduction is written by Dr. Watson Kirkconnell, president of Acadia University. This is what Dr. Kirkconnell says:
This is a terrible book, but it is the truth that is terrible and it must be faced, for the martyrdom of human freedom in the U.S.S.R. is a martyrdom that the geopolitical planners in the Kremlin intend for us as well. Russian slave camps for Canadians in Canada, manned by Russian police, are the objective of Stalin and his power-hungry agents among us. Every horror described in this book will be duplicated on Canadian soil if communist plans prevail.
That was the president of Acadia University. I do not see how we can lightly disregard such solemn statements.
What evidence can be adduced to indicate that those original communist plotters were Turko-Mongolian reds?
Fortunately for us there was also held in 1919 by the United States a rather thorough investigation into the basic origin of communism. The evidence that was accumulated from the many sources considered would, I feel certain, satisfy any body of judicious men and women, sitting as a royal commission investigating the facts, that the gang of plotters who succeeded in the confused days of 1917 in making itself master of Petrograd


(1) was of eastern European origin; (2) left the United States of America and went directly to Petrograd, evidently financed by a powerful organization of individuals, many of whom were in the United States; (3) conquered Petrograd by sordid strategy. That evidence would, moreover, show that those eastern Europeans were reds having Turkic and Mongol ethnic affinities.
Mr. Speaker, I think there is no need to say anything more concerning this matter. Surely this evidence ought to be sufficient to convince anyone who is at all interested in the welfare of this nation that we should have set up the most capable commission possible to determine all the facts of every kind concerning communism, to learn all that is being done in Canada, how it is being done and by whom.
We know virtually nothing about all this. We are the victims of skilful propaganda originated by men around us who pretend to be the very best kind of Canadians-just as did those men in the United States such as Owen Lattimore, who travelled about in morning clothes, if you please, and I suppose with monocles. Because they were such nice men no one would have suspected that they were plotting to turn the United States into the hands of those who control Russia! But that is what they were doing. There were Alger Hiss, John Stewart Service, John Carter Vincent-many of them, whose records are now established beyond question.
How do we know what is going on in Canada? I think the evidence that things are going wrong in Canada is practically overwhelming. And I submit, with all the earnestness of which my being is capable, that the sooner we can establish a royal commission on communism in Canada to sit day in and day out, for months and months, to get at the facts, the sooner we shall discharge our responsibility as members of parliament representing the people of Canada in these most trying times.


Mr. Daniel Mclvor (Fort William):: Mr. Speaker, I have something to say at this time, because I feel the house has been honoured by the Minister of Finance (Mr. Abbott) in the presentation of his budget. I think it is a good after-election budget. It is a good budget for the present time, and for at least two reasons: First, the minister follows in the footsteps of the Prime Minister (Mr. St. Laurent) when he fights and struggles for a united Canada. There can be no doubt about that. His plan is that he will stick to the constitution of Canada, no matter what anyone says, and will say to any province: Thus far shalt thou go, and no farther.

I had an interview with a successful businessman of Ottawa and, after reading the budget, his conception of it, in the words of Agrippa, was: Almost thou persuadest me to be a Liberal. Of course the word used originally was not "Liberal".
When the Leader of the Opposition (Mr. Drew) was speaking this afternoon I was intensely interested when he referred to the late Angus L. Macdonald who, as was well said this afternoon, was a great Canadian. I would say further that he was a great Christian Canadian. But I was disappointed when the Leader of the Opposition said that Quebec does not stand alone in this respect. Then he proceeded to read what he had said in the legislature in Toronto, and I think he convinced us that Ontario stood with Quebec in this issue.
I will say for the late Angus L. Macdonald that he agreed with the Minister of Finance and was premier in one of the nine provinces that co-operated. I believe that showed the wisdom of this former member of the house.
While it may be true that at one time Ontario stood with Quebec in this issue, it does not stand in that position today because the government of that province has entered into a co-operative agreement with the dominion. Quebec stands alone. I did admire the Leader of the Opposition when he stood in the house and championed the cause of his friend. I do not know whether I am safe in saying that they are kindred spirits.
The fact is, however, that Quebec now stands alone, and I am sorry that it does, because I think the citizens of that province compare favourably with those of any other part of Canada.


Mr. Dufresne:: That is the best part of your speech.


Daniel (Dan) McIvor: However they do not all agree with the premier of that province.
Another feature of the budget I like is that, notwithstanding the fact that we are likely to have a new pension scheme for the handicapped, there was no increase in taxation.


Gordon Knapman Fraser: That is only a promise.


Daniel (Dan) McIvor: There was no increase in taxation, notwithstanding the increase in the indemnities of the members of both houses of parliament, and in the salaries of civil servants. There was no increase in taxation despite the fact that the St. Lawrence seaway has been promised, and the work is likely to begin this year. Not only that, but there is a decrease in taxation to the extent of about $30 million.
I know there are hon. members in the house-and I agree to some extent with what
The Budget-Mr. Mclvor they say-who say that we should be giving, giving, giving. But we cannot keep on giving without getting. We must have taxation, and I must congratulate the minister upon not having increased taxation at this time.
The hon. member for Spadina (Mr. Croll) spoke about combines; the hon. member for Lethbridge (Mr. Blackmore) spoke about communism and the need for a royal commission. I, too, have a pet subject, and I should like for a few moments to place before the house a cure for strikes. I agree with the Ottawa Journal when it says this:
The right to strike is a vital right; one of the democratic freedoms. If there be those to argue otherwise they are but blind reactionaries, people who would repeal the twentieth century.
The outstanding right of labour is the right to strike, just as industry has the right to shut down. My first cure or suggestion comes from a friend in Fort William, Edgar Rutledge. His suggestion is that a committee be chosen like a jury, with rights of a jury. If the number of people affected is small, the committee might be smaller, but he suggests that a committee be formed, four from the dominion government, four from industry and four from labour. These people would elect their own chairmen and their judgment would be final, but they should not be tied in to any particular political party. They should be free. I notice that in the British house a formula to settle British industrial disputes without recourse to strikes is the aim of Sir Walter Monckton. I hold in my hand a long article which I shall not read. They emphasize the same thing, that it is possible to set up a committee to settle industrial disputes. My friend, Mr. Rutledge, says that they should have the right of a jury. Human beings are human beings, and I do not know how this would work.
My second cure for strikes is the right to share in the profits. This summer I received from the Minister of Labour (Mr. Gregg)- and I was grateful to him for giving me the finding of his research workers-a letter, as follows:
I promised to write you further on the subject of profit sharing plans in Canada.
Although at present there is not much statistical data on the extent of such plans in Canada today, our economics and research branch is planning to include a question on the subject in its annual survey of working conditions this coming April.
There is an organization known as the council of profit sharing industries, Akron, Ohio, which has been active in encouraging the formation of profit sharing plans both in Canada and the United States. Information from this group on plans affecting Canada was published several months ago and indicated that 50 Canadian firms were members of the organization and that they employed 30,000 workers.

The Budget-Mr. Mclvor
There are two of them in Fort William. I continue:
In the United States, there are reported to be over 3,000 plans in operation.
Another group which had done considerable work in this field is the profit sharing foundation, Long Island city, New York. This group has carried out several studies lately to indicate the soundness of plans now in effect in the United States. It has studied plans which have been discontinued, as well as those which have been successful. In the former case, they have come up with the conclusion that in 40 per cent of the cases there were no profits to share and a further 30 per cent were the result of changes in company policy resulting from new ownership. In other words, the foundation's studies would seem to indicate that the numerous instances of discontinuance of plans do not reflect on the essential soundness of the profit-sharing principle.
Generally speaking, there is considerable difference of opinion as to the value of profit sharing. It has been stated that labour organizations have opposed such plans. However, many of the successful plans now in effect involve unions and probably reflect an improved confidence in management policy by the unions involved. It is perhaps true that profit sharing has succeeded most often where the over-all labour policy of the company has been reasonably good. Where good relations do not exist, profit sharing is fairly generally looked upon as a doubtful means of encouraging employee loyalty and higher productivity. For example, an international labour organization study has advocated that profit sharing plans should be the last rather than the first step in any program aimed at improving labour relations.
In recent years, the emphasis has probably changed a bit from strict profit sharing to the other area you have mentioned in your letter, of allowing workers to have a greater participation in management. This concept is that worker participation may bring profits to their greatest possible level with worker distribution either through a profit sharing plan or a fairly generous wage policy. For example, labour-management production committees are one means of encouraging discussion of problems in an effort to reach solutions which will be of mutual benefit. The Department of Labour has been active in encouraging the formation of these committees. Today there are over 975 such committees in Canada, of which the department has a record.
I appreciate the Minister of Labour's co-operation. I am convinced, Mr. Speaker, that this plan may work with single industries, but a case was brought to my notice where one industry took this plan up and it worked. Production increased. More money came in, but because they had to share with the other parts of the industry scattered all over the country there was no profit.
My third cure for strikes is Christian brotherhood. The churches throughout Canada in all their branches will back me up in this, that the cure for strikes is Christian brotherhood. Moral rearmament says absolute honesty, absolute unselfishness, absolute purity and absolute love will work. I do not mean partial Christianity; I mean the real, genuine practice of Christian brotherhood will be the cure for strikes, and until we get that I do not think any other plan will really

work. We do find human beings are willing to co-operate in a lot of things. This last year a strike was under discussion that pretty nearly took place but did not. Some of the workers, young married men, were anxious. They did not want to strike. The strike did not take place and they were happy.
I know there are labour leaders who are not in favour of this plan at all, and some of them have so declared. Notwithstanding some of those labour leaders, a cure can be found. If hon. members take it to heart and think it through and through, we shall find a way.
I must say that I enjoyed the speech of the minister when he delivered his budget. I congratulate him on being honest and sincere, because the budget has in it just the thing that we need for Canada today. Thank you.


Mr. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I did not intend to make any reference at all to the constitutional problem that has been raised as a result of the discussion of dominion-provincial financial agreements, but the suggestion that has just been put forward by the genial hon. member for Fort William (Mr. Mclvor) prompts me to make a brief observation as I commence my remarks.
The suggestion has been put forward that this is a problem existing only between one province and the federal government. I must admit that I am not an authority on constitutional matters, but so far as I can see, from the attention I have given to the subject, this difficulty relates itself not only to Quebec and the federal government but to all provincial governments and the dominion government.
I base that observation on the importance of the subject of dominion-provincial financial relations on conclusions from the book "The Government of Canada", by Dr. MacGregor Dawson. I would recommend the reading of chapter 6 of this book to any members interested in this subject. On page 135, Dr. Dawson has this to say in regard to the provincial agreements:
These agreements-even if it be assumed that Ontario and Quebec become parties to them- certainly do not settle the financial difficulties between the dominion and the provinces, although they may be adequate to bridge the next five years.
That was the first term of the agreements. He says further:
For it is impossible to perceive how any permanent solution can be found except by the acceptance of the following three fundamental propositions, all of which are implicit in the problem and are clearly indicated by past experience . . .

These are the three propositions, and I will just outline them briefly. The first is as follows:
The dominion must be expected to take the lead in devising and implementing policies designed to prevent future economic depression and establish measures of general social welfare.
The second is:
The provinces must not be allowed to lose in the process their individuality, power, and prestige as autonomous authorities and essential parts of the federation.
The third is:
No system of per capita grants to the provinces will be able to displace entirely payments made on a basis of fiscal need, and any permanent settlement will be compelled to adopt some variant of the Rowell-Sirois recommendations as a supplement to the present proposals. To ignore this fact is to ignore the whole history of dominion-provincial financial relations.
I merely put that on the record as a reply to the statement made by the hon. member for Fort William, that this is merely a problem between one province and the federal government. It is a far-reaching problem and goes right to the heart of confederation.
Leaving that subject to those who are more competent than myself, I want to return to the budget. As I listened to the budget speech just a week ago tonight I came to the conclusion it was a very intriguing budget speech from the standpoint of the opposition. The previous budget speeches to which I have listened since coming to the house were full of soaring optimism with respect to Canada's buoyant economy. This was far from being the case in the budget under consideration at the moment. Instead I found that the minister's remarks were full of cautious, carefully-chosen phrases, many of which reechoed opposition criticism that has been heard in the chamber during the budget debates of recent years.
He used such phrases, for example, as "there is a temporary slow-down" due to an "unproved supply position", and "there is a necessary cost and price adjustment." This was most unusual as we contrasted it with the buoyant optimism of recent years. One may also recall some of the slogans heard last summer during the election campaign. There were slogans to the effect that if a Liberal government is returned to office Canada will have prosperity, but if any other group is returned to office there will be depression and chaos.
I recall also, just two weeks before August 10, travelling through the rural area of my constituency. The grain was rolling into the elevators and all the farmers were rejoicing because apparently there was an inexhaustible market for the bumper crop they were harvesting. I remember the queues lined up
The Budget-Mr. Dinsdale before the elevators after the restrictions we re entirely removed. It was not long, of course, until the elevators became completely plugged. From the remarks made by the Minister of Trade and Commerce (Mr. Howe) in this chamber this afternoon the elevators apparently still remain in that position.
I could go on to the throne speech debate and recall the Conservative amendment introduced at that time to the effect that the prosperity and security of all Canadians would be advanced by government policies which would restore markets for primary products and generally promote a high volume of trade. In this regard the Minister of Justice (Mr. Garson) and myself sometimes write for weekly papers. The editors are very fair-minded, I believe, since they publish our columns side by side from time to time, thus giving our respective viewpoints from this chamber. I feel that is an excellent idea. I recall the comments made by the Minister of Justice after our amendment was moved. He said he felt reluctant to vote against that amendment because that is exactly what the Liberal government had been doing, that is restoring markets or promoting markets for primary products and generally promoting a high volume of trade.
Now, just a few months later we are confronted with a budget that is extremely cautious and manages to muster only a slight feeling of optimism. On the whole, it is a stand-pat budget. When the Minister of Finance (Mr. Abbott), as he did last Tuesday evening, speaks of a slow-down or a four per cent decline in exports and an unpleasant unemployment situation, it would indicate there has been a rather rapid change in the economic climate of this country.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
Walter Gilbert Dinsdale: Mr. Speaker, when the house rose at six o'clock I was referring to the rather unique position in which the opposition finds itself in relation to this budget, particularly with reference to the cautious approach of the Minister of Finance in his budget statement a week ago tonight.
The minister did not say so in so many words, but there is implied in some of the statements he made the view that the situation is perhaps more serious than appears on the surface, and his careful use of what we might call "Ottawa semantics" was designed to camouflage the situation to a certain extent. We know that semantics is

The Budget-Mr. Dinsdale the science of meaning, and deals with the real meaning of verbal symbols. I believe when the minister referred to the temporary slowing down of the economy, what he actually meant was that we have over 500,000 unemployed.
In addition to that there is a sharp drop in the farmers' income, and I have before me some statistics which demonstrate that point. With reference to the price situation as regards our farmers we should take into consideration the net income which depends not on farming prices alone, but also on farm prices in relation to farm costs. In 1951 we find that the index for farm prices stood at 296-8 and in 1952 the index stood at 272-6, and there is every indication to suggest that the figures for 1953 will indicate a further drop of from 5 to 10 per cent. At the same time the cost of the things the farmer was buying in 1951 stood at an index of 230 and in 1952 at 243-1, according to the Farm Forum Guide of January 11, 1954. That index is rising in proportion to the price he receives for his goods so that the farmer is caught in a price squeeze.
I also believe that this "temporary slowing down" refers to the decline in the sale of automobiles, and farm machinery as well. If we get behind the meaning of this phrase it would appear it also includes the loss of the United Kingdom markets for our agricultural products.
So far as the use of the phrase "cost and price adjustment" is concerned, I believe here, if we again get behind the Ottawa semantics, the minister was thinking of the increase in the failure rate among small businesses, the increase in loss-leader selling and, on the prairies, the situation where we find the retail stores working on a cash basis because of the inability of the farm customers to pay on the line due to the shortage of cash. All these things are, I believe, behind the phrase "cost and price adjustment."
Then there is the other phrase to which I have already referred, namely "improved supply position." Obviously in behind that bit of semantics we have an increase in the process of dumping as is evidenced by the passage of Bill No. 29 in this house earlier in the session, and again with reference to the lost markets, the decrease in purchasing power due to the wheat glut and the resulting unemployment.
It seems to me, Mr. Speaker, that these phrases are typical of Liberal vagueness which has been exemplified by the much vaunted middle of the road policy initiated at the onset of the depression by the man Mr. Bruce Hutchison called "The Blondin of
[Mr. Dinsdale.1

Politics", the late Right Hon. Mr. Mackenzie King. The Liberal party took to political tightrope walking during the depression, and indeed it had to because it was the only way by which Liberalism could survive under rapidly changing world conditions.
It is a well-known fact that Liberalism has virtually disappeared in Britain and in other European countries. In this connection I was very interested to read, a short time ago, excerpts from a dissertation written by the present Secretary of State (Mr. Pickersgill) when he was a professor of history in the province of Manitoba. Under the heading of "The Failure of Liberalism" he had this to say:
It is not remotely likely that the decay of orthodox liberalism can be arrested for very long ... It is small wonder that economic liberalism is discredited . . . Classical liberalism is dead. As a political creed it is bankrupt.
I believe that is an excellent summation of the situation which prevailed during the twenties and in the early thirties. Another political commentator, the late Mr. Harold Laski, of the London school of economics, wrote in similar vein under the heading "The Decline of Liberalism".
However, in this country Liberalism has survived by means of very clever political tightrope walking which has resulted in a great deal of uncertainty so far as the stand of the Liberal party is concerned. I think that was precisely illustrated in the rather humorous situation which occurred in this house during the debate on the throne speech last fall. We had the Conservatives describing the throne speech as an example of "socialism in a silk hat" on the one hand, and on the other we had the C.C.F. party describing the policies of the Liberal government as "reactionary capitalism". There seemed to be a very wide diversity in the interpretation of the same throne speech, which I feel resulted from the studied vagueness adopted by the Liberal party in order to survive under rapidly changing world conditions.
I would like to sum up this point by stating that the success of the Liberal party as a political chameleon is demonstrated by the different approaches adopted by the party in various parts of Canada. In Quebec the party is conservative; in Ontario it is protectionist, witness Bill No. 29; and in the west, and also in the maritimes, it is free trade.
I was very much interested in the remarks of the hon. member for Spadina (Mr. Croll) this afternoon in regard to the basic liberalism of his party. Perhaps his views on the

Liberal party are not akin to mine but to me the budget speech suggests that the Liberal party is coming back to a more orthodox Liberal position, and is seeking a base upon which to make a stand.
The Ottawa Journal, in summing up the budget speech in a phrase, used significant words when it described it as a "Lead, Kindly Light" budget. In other words, it exemplified faith without works. This suggests strongly a return to discredited classical orthodox Liberalism, and the laissez-faire theory based on the natural law.
I think I can best sum it up by one or two quotations from outstanding authorities in this particular field. It is the idea that if we leave things alone long enough they will gradually work out for the best by the process of natural law; or again, if I may quote Voltaire, the great French liberal, one of the early leaders of liberal thought, through the mouth of Candide, one of his brain children, he used the phrase that "all is for the best in this best of all possible worlds". The hon. member for Greenwood, speaking the other night, used the Coue summation of Liberalism: Every day in every way we are getting better and better.
The belief in inevitable progress towards inevitable perfection, of course, is a byproduct of the materialism of the nineteenth century. Other political theories that were spawned in that same era were socialism and Marxism. I think the budget speech indicates a return to this more orthodox Liberal position. Certainly in 1929, when the economic deluge descended upon the western world, the Liberal party at that time was strongly motivated by the classical theory because it did nothing except to wait for things to get better in the United States. The throne speech in the session of 1929 indicated that it was just a temporary set-back and that before the year was out things would be much better indeed. In fact, there was in some of the sentiments expressed by the minister the other night, with regard to Canada's tie-up with the United States economy, a striking resemblance to the sentiments expressed and the remarks made during the 1929 throne speech.
As is well known, as a result of the onset of the depression a Conservative government was elected in 1930. It was left to wrestle with lost markets, surplus agricultural products, the Hawley-Smoot tariffs and a general breakdown in international trade combined with the tragedies of nature in the form of drought, dust and grasshoppers; and, along with it all, the general backwash of the first
The Budget-Mr. Dinsdale stages of the industrial revolution in Canada. The first stages of any major social change are always marked by a high degree of social disorganization. On top of all these problems it was confronted with an apathetic opposition. I do not think the government of today can come to the conclusion that they are confronted with an apathetic opposition. Perhaps they sometimes feel that we are much too critical. Perhaps they feel that we talk far too much.
I do not want to stretch too far the parallel between 1929 and today because conditions in Canada have changed tremendously since then. When I hear members talk in this house as if we stand, financially and economically, back at 1929 or 1930, I disagree with them most heartily. Canada has passed through an economic revolution. The world has changed and has passed through an economic revolution. The centres of influence in the world have moved from the continent of Europe to the North American continent. Again, as I think my friend the hon. member for Inverness-Richmond (Mr. MacEachen) would say, we have passed, in economic terms, through the Keynesian revolution.
There was the new deal in the United States. We did not have a new deal, in so many words, in Canada although the late R. B. Bennett tried to introduce a new deal forced by the impact of these changing conditions. There is no doubt that we have been influenced by the changed circumstances all around us. There is, for example, the fact that the late Dr. Clark was brought in from Queen's University in 1932 in order to give his expert assistance in wrestling with the problems of the depression. The success he had in this regard is indicated by the fact that he remained in the post of deputy minister of finance up until his unfortunate and untimely death last year. I was quite impressed by the tribute paid to the late Dr. Clark by the Minister of Finance in his budget speech last year when he gave outstanding credit to Dr. Clark for the contribution he had made in bringing about economic and financial stability in Canada.
Very often we in this house hear discussions that arise from time to time as to who did what and when with regard to the new look in our economy. For example, we hear members laying claim to paternity of family allowances. There was, a short time ago in this house, no less than three members laying claim to having initiated the idea of family allowances. The same thing applies to other social security measures. However, Mr. Speaker, I am going to suggest that these

The Budget-Mr. Dinsdale things came in response to the social facts that existed during those difficult days of change. They did not occur only in Canada. Canada is not the only country with a social security and social welfare program. I am sure that no hon. member in this chamber can lay claim to credit for what took place in the United States, in the United Kingdom or in other European countries. They came about as a result of social pressures coming in the wake of the emergence of the western world into an urban, industrial civilization. Therefore I say that we cannot draw the parallel too closely between conditions today and those that existed in 1929. Yet the distress signals are out.
The government has been strangely apathetic and nonchalant in the face of the storm signals. Certainly the opposition has given the warning repeatedly during the past few years. I have sat in this house since 1951. In my first session the budget debate was largely around the theme of inflation resulting from a soft-money policy; and inflation is still with us despite the juggling of the price index. It is obvious that it is still with us because we repeatedly receive representations from pensioners of all kinds and those who are forced to live on lower incomes. In addition to the soft-money policy, we have criticized the philosophy of softness that has been propagated by the government, the idea that the great white father at Ottawa will look after you. As an example of that sort of propaganda we have it suggested from time to time that any other group in office at Ottawa would take away all these nice things that come from the hands of an allbenevolent and beneficent government.
Then we have mentioned the lost United Kingdom markets, a subject that has been discussed off and on in Canada for the past three or four years. I remember taking part in 1950 in a citizens' forum discussion which dealt with the difficulties arising from the loss of our United Kingdom markets. The subject of convertibility has also appeared repeatedly, and I am delighted to see that the Minister of Finance is taking a more positive interest in this problem. It is basic of course to the stability of our Canadian economy which depends for its lifeblood upon a healthy export trade.
It could be that the reason for the seeming nonchalance and apathy on the part of the government is that it has grown soft, flabby and complacent from old age and too much royal jelly. It is said that with old age comes hardening of the arteries. One of the characteristics of hardening of the arteries is the failure to remember recent events but an ability to go away back to the beginning


of things with a very clear insight into earlier events. Perhaps the return of a more orthodox Liberalism is another evidence of the tendency towards senility and the resulting hardening of the arteries.
On the other hand, the apathy and nonchalance might merely be a very carefully thought out policy, the desire to play possum in order to stave off the psychological impact of depression thinking. The preamble of the United Nations charter says:
Since war begins in the minds of men it is in the minds of men that the bulwarks of peace must be built.
I believe that statement is just as true of depression as it is of war. To a large extent depressions begin in the minds of men. Going back to the 1930's, as a result of the depression psychology then prevalent there was retrenchment just at the time when confidence and expansion were needed. At that time the Liberals, as can be seen from reading the debates of those days, were at the wailing wall preaching blue ruin, as seems to be characteristic of oppositions. There is a psychological impact that affects the economic trend in a country.
I have introduced this point because members of this house from the west are sometimes accused of crying perpetual blue ruin. I suggest that is not true because the west has learned to take adversity during its relatively short history. The west has largely been in a pioneer era during that whole period. Westerners sometimes quote a poem that illustrates this position and it is to this effect:
Out where the world is in the making.
Out where fewer hearts in despair are breaking.
That's where the west begins.
Where there's more of giving and less of buying, Where there's more of living and less of dying.
Where a man makes friends without half trying. That's where the west begins.
I think that is a very excellent expression of the spirit of the west, but I want to point out that just a few weeks ago the Minister of Trade and Commerce, when speaking to the chamber of commerce in the city of Winnipeg, accused western members of crying wolf, and implied that western members were poor public relations representatives for their constituencies. This of course is not very flattering to those of us from the west. I think he also included Liberal members as well as those on the opposition side of the house. Certainly their recurring election theme, do you want to go back to the dirty thirties, is conducive to this depression psychology. This unfortunately is the sort of thing that encourages the splintering on the prairies which is plaguing our federal system today.

I suggest, Mr. Speaker, that there is a basis in fact for the continuing western agrarian protest. The western voice is weak politically with the result that the party in power, particularly if it is in power for a long period of time, always tends to become the prisoner of the two central provinces. In terms of representation you find the bulk of support of Ontario and Quebec going to the party in power. If I have time I should also like to deal with industrial development. If you compare the interest in the St. Lawrence seaway with the lack of interest in the Saskatchewan dam there is quite a difference, and there is also the fact of the continuing loss of population from the west. When the Minister of Trade and Commerce made that statement in Winnipeg I believe it showed that he has been taken in by the popular legend and myth of current Canadian development which suggests that the west is very rapidly catching up with the east. This might be true from the standpoint of the prophetic future but it certainly is not true at the present time. I want to present certain statistics to illustrate that point. I have before me some statistics dealing with the jobs that have been created in manufacturing industries since 1945. Forty-four per cent of these jobs have been created in Ontario, in Quebec 35 per cent, British Columbia 7 per cent, Manitoba 4 per cent, Nova Scotia 3 per cent, Alberta 3 per cent, and all others 4 per cent.
The amount of investment in manufacturing follows a similar pattern. Out of a total of S3,400 million, Ontario has $1,655 million or 48-7 per cent; Quebec has $880 million or 25-9 per cent; British Columbia $306 million or 9 per cent; Alberta $153 million or 4-5 per cent, and all other Canadian provinces $406 million or 11-9 per cent. If we look at the situation from a slightly different standpoint, that of the establishment of new plants, we find that up to 1952 there have been 1,500. Forty per cent, or 626, have been established in Quebec, 60 per cent of which are in and around Montreal. One-third have been established in Ontario, namely 504, 40 per cent of which are in the Toronto area. That of course emphasizes that the west is still far behind so far as the establishment of new industries is concerned. Ontario and Quebec still have just about the same share of the country's manufacturing production as they did in 1931. They have about 80 per cent; British Columbia has 8 per cent; the prairies 8 per cent and the maritimes about 4 per cent. There was a significant change during the war which brought the prairies up to nearly 10 per cent of the total in 1946, but central Canada has since re-established its position as the producer of four-fifths of the country's manufactured goods.
The Budget-Mr. Dinsdale
There are actually fewer jobs in Prince Edward Island, New Brunswick, Manitoba and Saskatchewan than there were in 1946. I think these figures demonstrate that what we call the agrarian protest is quite justified. Nevertheless the west is progressing. The names of Lynn Lake in Manitoba, Uranium City in Saskatchewan, Leduc in Alberta and Kitimat in British Columbia are well known in Canada and other parts of the world.
I want to emphasize that this progress is largely due to the activities of private corporations in the western area. If I had time I could point to some developments in my own city which are all promoted by private companies and that have had very little encouragement, actually, from, for example, the Department of Defence Production. I merely mention that when the small defence industries branch was set up Brandon organized a Brandon pool and hoped to receive stimulus to its industrial development from participation in defence production. Because of the concentration and centralization in the central provinces there was not too much of a boost given to our efforts in this regard.
To bring my remarks to a conclusion, the situation that faces Canada at the present time as we pass through an era of transition demands more than a laissez-faire approach to the problem. It is not sufficient to say that eventually everything will work out for the best in the best of all possible worlds. When the member for Spadina (Mr. Croll) was speaking this afternoon on the excellent work of the combines investigation branch it occurred to me that he might turn the combines investigators loose in investigating this government; because I think it is one of the biggest monopolies that we have in any area of activity in this country.
As I have said before I think that big government, monopolistic government, is a much greater danger than any form of big business, or any other bigness. The hon. member for Greenwood (Mr. Macdonnell) has put forward again the idea of having an independent committee or commission to investigate government efficiency after the fashion of the Hoover commission in the United States. I think that this idea has merit in dealing with the problem to which I have just referred.
We must do more than rest on our laurels. Canada has had a great past. We have made tremendous strides since the war years. We have been amazingly fortunate and lucky, located as we are on the peace side of the conflicts that have occurred during the first part of this century in Europe. But we cannot expect our phenomenal good luck to continue forever. We must deserve it. During the war superhuman effort was made in the

The Budget-Mr. C. Cameron defence of our way of life. I believe that an even greater effort is needed at the present time if we are going to move safely and successfully through the transition period that faces us at the moment.
The government has taken credit for the booming prosperity of the past. I would suggest that by the same token it must take responsibility for the difficulties through which we are passing at the present time.


Mr. Colin Cameron (Nanaimo):: Mr. Speaker, it is with a certain amount of trepidation that one like myself, who has never had the slightest difficulty in counting money in his own possession, approaches the vast accumulation of money that was set forth in the budget speech. Without the slightest hesitancy the minister juggles these billions like a conjurer at a children's party. But if we are able to avoid having our eyes dazzled by these millions and billions, some things begin to emerge clearly out of the budget.
The first thing that emerges is that it is admirably designed to bring comfort to the comfortably off. During the last election campaign I had very great difficulty in convincing people in my audience that I was speaking the truth when I described to them what had been done by the government of Canada to protect the interests of a certain class of citizens-a privilege that was not accorded to the vast number of Canadians. When I attempted to show them that in certain circumstances a Canadian citizen with a wife and two children could draw an income of $10,000 a year without paying one cent of income tax, I was invariably challenged in all meetings and told it was ridiculous, that the government of Canada would never do any such thing, and that certainly the present Minister of Finance (Mr. Abbott) would never be guilty of such gross discrimination.
But, seeing that the protests that were made last session to the minister have been of no avail, I think perhaps it would be a good thing if once again the picture were placed on Hansard so that the people of Canada can see what the actual situation is. Now, this fortunate Canadian citizen with the wife and two children and an income of $10,000 a year is drawing his income from dividends of Canadian corporations.


An hon. Member:: Like a member of parliament.


Colin Cameron: A member of parliament is in a privileged position, but not quite as privileged as these gentlemen to whom I am referring. The position of the member of parliament is not quite as good. The person whose situation I am describing has, in the first place, an exemption of $2,300


a year, leaving him with a taxable income of $7,700 a year. The tax on the first $6,000 of that income is $1,140, and the tax on the $1,700 is $442, making a tax of $1,582, plus a social security tax of $60, bringing the amount to $1,642. There is a surtax of four per cent on investment income over $2,400 amounting to $304, making a total of $1,946. This amount the fortunate gentleman would have to pay to the treasury of Canada, were it not for the fact that under the Income Tax Act there is a credit coming to him of twenty per cent of his dividends, or $2,000. So that he does not pay any income tax at all.
Now, if such married man with two children were unwise enough to work for his living, and smart enough to get $10,000 a year for doing it, he would be in a much less privileged position and would actually pay $1,642 a year. I am quite sure the Minister of Finance will tell us that this is to offset the gross injustice of those who have been taxed on dividends before. He will point out that unless we have this provision, these individuals are in effect taxed twice. That is to say, the company earnings are taxed before the distribution of the dividends is made.
When I read the defence of his position which he put on Hansard last year I wondered just in what way this fortunate shareholder of a company differed from a man who worked for that company. I wondered just what extra privileges he would be entitled to over the head of the man who works to make money which provides the taxes and dividends. I think there can be little doubt that this is a privilege that is given to a group of Canadian citizens over the heads of the vast majority of Canadian people.
That however is not the only evidence in this budget that it is, as I say, a budget admirably designed to promote the comfort of the comfortably off. We have, of course, the provision with regard to the two per cent personal income tax for old age security. Here again we have an odd situation. The tax is payable on the first $3,000 of taxable income, making a tax of $60 for any taxpayer. I suppose the philosophy behind this is that, by and large, the majority of those who are going to seek old age pensions in their old age will come from the lower income brackets. Therefore, with unerring justice, the Minister of Finance provides that such people should pay a larger proportion of their income toward this cost than do the more fortunate people in society. But it has created a curious situation. The man with the taxable income of $3,000 a year pays $60, and the man with a taxable income of $10,000, $15,000, $20,000 or $25,000 a year

pays $60 for old age pensions, departing entirely from the principle of a graduated tax based on ability to pay which prevails throughout the whole of the rest of the income tax structure.
One of the features of this budget which has not been changed in any significant manner is one which perhaps the majority of Canadians are not aware of; at least they are not conscious of its impact on their pocketbooks. I refer to the 10 per cent sales tax. In the first place, I might say that most authorities are of the opinion that sales taxes are regressive taxes; that they tend to place the burden inequitably largely on the shoulders of those least able to pay. However, as I say, most Canadians are not conscious of the fact that they pay 10 per cent on a vast range of commodities they buy, and they are still less conscious of the fact that in actual fact in most instances they pay much more than that; because one of the most pernicious features of this tax is that as it is imposed at the manufacturing level it has a pyramiding effect as it is imposed throughout the economy.
The manufacturer adds the 10 per cent to his price to the wholesaler. The wholesaler, when he calculates his mark-up, does so on the basis of the price plus the 10 per cent, and the same process may take place when it passes into the hands of the retailer. It is of course impossible to estimate with any degree of accuracy the actual amount of money that the Canadian public pays in respect of this 10 per cent sales tax. Some investigators whose reports I have read suggest that it may exceed $1 billion a year, out of which of course the government of Canada receives about 75 per cent, $759 million in the present budget.
I suggest, Mr. Speaker, that these are evidences of the fact that this budget is designed not to impose the necessary burdens of taxation on the people of Canada in the most equitable manner possible, but to impose them as heavily as possible on the shoulders of the vast mass of the people who draw modest or small incomes to as great a degree as possible. The provisions of the Income Tax Act to which I have referred indicate that this government is extremely solicitous of a rather privileged minority in our society.
1 suppose one need not be surprised at this particular attitude on the part of the government toward the fiscal policies of the country. It is perhaps all of a part with the whole attitude towards our present economic situation that is revealed in the budget address of the minister and has been revealed before this session by other government 83276-2564
The Budget-Mr. C. Cameron spokesmen. We have all noted-and those who have spoken before have nearly all commented on it-the very optimistic picture painted by the minister of the future of the Canadian economy, and one must of course pay tribute to his powers of optimism, but I have been wondering just on what he bases his optimism. On examining his speech I find some flaws of logic in his argument, because at page 3723 of Hansard I find he has this to say:
In the economic sphere, 1953 has been a much better year. Industrial and agricultural production in almost all countries has continued to expand, and consumption has risen. Supplies of many products entering into international trade are becoming more plentiful, and international markets more competitive. The recovery of Germany and Japan has contributed to this development. It is becoming increasingly evident that after many years of scarcity and inflation we are returning to more normal competitive conditions.
That statement is perfectly true. I do not think any observer of events would quarrel, with it; but when we find the minister drawing the conclusion from that that the economy of Canada is facing a cloudless future, then, as I say, I wonder about his powers of logic. Because it is just the very recovery of these countries that has begun to create again the problems we have known so well in the past; it is just the fact that we have rehabilitated those war-torn countries that has brought them back into the picture as producers, producing very often the same goods that our own people produce in Canada. It is perhaps significant that in the last few months here in eastern Canada, and I imagine by now in western Canada, there are on the streets a great many German Volkswagens which have been shipped here from a rehabilitated Germany. It is perhaps no coincidence that the Japanese textile industry has been put on its feet again, and simultaneously we are bombarded with complaints from the Canadian textile industry about the sad state of their sector of the economy.
I am not suggesting for one moment that we should not have rehabilitated those countries. Plain common sense, in addition to human decency and humanitarianism, would have obliged us to do so; but I do think that we should take our heads out of the sand and not fail to understand just what the consequences are going to be.
I think we can find the parallel of this situation in the history of Great Britain, because in essence Canada and the United States have done in the post-war period what Great Britain did throughout the long period of time when she was at the top of the industrial tree, when she exported not only

The Budget-Mr. C. Cameron commodities but capital goods for the manufacture of commodities, to various countries of the world, and of course inevitably those countries entered the markets of the world in competition with Britain. We are therefore facing the inescapable results of a competitive and private profit-making enterprise system, and all the loud cheers of prosperity ahead will not enable us to get over that situation simply by words.
I suggest, Mr. Speaker, that a more realistic point of view would be to recognize the fact that the world is again approaching that stage when decisive international action will have to be taken at the cost of many cherished traditions, institutions and illusions which our society has fostered. We shall have to face the fact that the only solution for mankind with our appalling productive capacities is to plan for world-wide co-operation rather than to attempt to compete one with the other, to attempt to drive others out of our markets and drive ourselves into their markets, which must of course only mean further international dislocation.
The Minister of Finance also made another very striking and very revealing comment with regard to the economy of Canada. He said at one point that he recognized of course his optimism was based on the assumption that the present economic recession in the United States will grow no worse. Then he had this to say on page 3725 of Hansard:
A significant change took place in the direction of our export trade. Sales to the United States rose by over $100 million, while the proportion of our exports going to the United Kingdom and other commonwealth countries declined, reversing the trend which had prevailed during 1952.
There is a clear statement of the very state of affairs which hon. member after hon. member has complained about since the opening of this session. Here we have a plain statement from the Minister of Finance that under his government's auspices our trade has been channelled even more firmly to the United States market than it was before. No wonder he bases his assumption of continuing Canadian prosperity on the continuation of United States' prosperity. Because any doubts or hesitations he may have in his mind about the United States economy would, of course, undercut all his assumptions about a prosperous future for Canada.
Now these instances, Mr. Speaker, indicate to me that this government is still playing the role of Micawber and is still hoping that something will turn up; still hoping that by some miracle we can get past that rock upon which our economy nearly foundered in


the thirties; still hoping by some magic of international agreements-Heaven knows the last thirty years is strewn with the wreckage of international agreements-we shall overcome this inescapable contradiction of a profit-making society, the contradiction of each one of us forcing our goods on the other in order to balance the trade of every nation in the world.
I have wondered, Mr. Speaker, whether other members of the house have been struck, as I have, with the most outstanding feature of this budget; the one that hits you smack in the eye when you read the accounts of the Minister of Finance. It is the fact that Canada is still spending 43 per cent of her revenues on defence projects. One might have thought that in the light of the recent revelations with regard to the development of thermonuclear weapons of war there may have been some hesitation on the part of this government to continue a program which must have been instituted long before these revelations were made. But there has been no suggestion from the government that they have in any way considered recasting their plans for the defence of Canada, in spite of the fact that the United States has given us clear hints of that and disturbed us very much; despite the fact that Great Britain has announced a similar recasting of her plans. We hear no indication at all from the government of Canada that it is actually contemplating coping with the situation with plans governed by these recent rather terrifying developments.
One can see, Mr. Speaker, that even useless defence expenditures have a certain psychological value; that is to say they do comfort people in the thought that possibly they are protected from the danger of attack. I can recognize that psychological value very well. If I may be pardoned for referring to an incident in my own history, I recall an incident of the first war. Three of my comrades and I were overtaken by shell fire at night. We jumped into a disused trench and crawled under a shelter that was placed across the trench. We sat there quite happily, quite confident we were safe from flying pieces of shrapnel. When we got up to go after the shelling was over one of my comrades, upon reaching up, discovered we had been sitting underneath a blanket all that time. There is no doubt about it, it increased our equanimity greatly. We sat there in considerable comfort. No doubt even the expenditure on equally useless weapons of defence has the same comforting influence on the people.
I am not suggesting for one moment that it may not be necessary to spend all of $2 billion, perhaps more than that, on defence

against these modern weapons, if indeed there are any such defences. I might interject here that scientific opinion is not very encouraging on this score. I have yet to see any reputable scientist or any reputable authority on aerial warfare suggest that there is any real defence against these weapons. I have yet to hear the suggestion that there is any other defence than that suggested by Mr. Dulles, the suggestion that has so upset the rest of the world. It may be that there are some defences, and it may be that they will cost many times more than we are now spending for defence. The point I want to make is this, that we should be examining the necessity for that type of defence and looking with a critical eye in the direction in which our present vast expenditures are being made.
Speaking for myself, I should not care to be charged with the responsibility of justifying before this chamber the expenditure of nearly $2 billion in 1953 for defence plans which must have been formulated before there was any widespread knowledge of recent developments. I think the Minister of National Defence (Mr. Claxton) or the Minister of Finance or the Prime Minister (Mr. St. Laurent) or any of their colleagues would have a difficult job doing that. Of course we are not given, nor can we expect to be given, the details of the manner in which these funds are being expended today. Everyone recognizes that. But I think there is no one in this house who would suggest that the thought has not passed through his mind, and I am sure passed through the minds of most other Canadians, that a very large part of these funds must inevitably be going down the drain today, and be just about as useful as if we were spending the money on bows and arrows.
I suggest that while we are re-examining the reality of Canada's defence position, our government should be prepared to divert several hundred millions of dollars, possibly 25 per cent of this defence budget, to other purposes. By that means we could play a worth-while and really important part in the task of rehabilitating and developing those areas in the world which are today the danger spots. Every competent observer from Asia tells us that we are in a race with time today, a race with the communists, and that the measure of our success in that race will be the speed with which we can bring their standard of living up to something approaching our own. Not long ago a committee of this cabinet was interviewed by a delegation of workers from the agricultural implement industry who came to ask the government
13, 1S54
The Budget-Mr. C. Cameron for some help of some sort. They had no real suggestions to make, but they wanted some relief from their plight as a result of the curtailment of that industry.
I recall that the then acting prime minister, the Minister of Trade and Commerce (Mr. Howe), was unable to give them any more comfort than to suggest that they had better go elsewhere to look for other sorts of jobs. I feel that was rather cold comfort for a man with a wife and family and an established home in that area, particularly since the Minister of Trade and Commerce was unable to offer them any practical suggestions as to where they should look for jobs. How much more effective it would have been for those people and the economy of Canada had the acting prime minister been able to announce that this government was prepared to spend a large amount for agricultural machinery as a contribution to the development of southeast Asia. How much happier those men would have been when they went home, and how much more confident we could be with regard to the future were such a policy being followed today.
I am prepared to run the risk of being jeered at when I suggest that at least $500 million of the money the Minister of National Revenue (Mr. McCann) is going to collect from us this year is going to be completely wasted because it is going to be spent on weapons and means of defence that have been rendered as outdated and obsolete as the weapons that were in use before the first world war. As a matter of fact, Mr. Speaker, I should not be at all surprised when this House of Commons meets next year to find that our budget appropriations for defence have been severely pruned. I, in fact, will be very much surprised if they are not severely pruned. I would urge the government that they should do this in the open, that they should make a declaration to the people of Canada that they are recasting our whole defence program; that they are going to take advantage of the enormous sums we have appropriated to make a really worth-while contribution to world peace, which may indeed be more effective than any arms or any weapons of defence we could devise.
So, Mr. Speaker, we have had a budget which, as I said, is designed to bring comfort to those who are already comfortable; it is designed to place a heavy burden on those who are least able to bear it, and designed, moreover, to toss a great deal of the proceeds down the drain in pursuit of an obsolete and worn-out concept of defence.

The Budget-Mr. Weselak


Mr. Deputy Speaker:: Is the house ready for the question?


Some hon. Members:: Yes.


Mr. A. B. Weselak (Springfield):: Mr. Speaker, this being the first occasion on which I rise to address the house since becoming a member, I would like to follow the custom of the house by congratulating you, Mr. Deputy Speaker, and also Mr. Speaker. 1 must say that I have listened attentively to your rulings and have found them to be fair and just, and therefore I am pleased on this occasion to associate myself with other hon. members in this respect.
This afternoon, I listened with considerable interest to the speech made by the hon. member for Assiniboia (Mr. Argue). For forty minutes I heard a tirade such as I have never heard before. Throughout his speech the hon. member criticized the actions and policies of the government; forecast a depression, stated that we had lost all our markets, and that blue ruin was prevalent in the west. While it must be admitted that there is no room for overoptimism, neither is there licence for presenting a dismal and frightening picture to the public, particularly to those who are not normally familiar with the facts.
The hon. member for Assiniboia belittled every effort made by the government to move western surpluses, ignoring the fact that unusually large crops have produced record surpluses, while at the same time farmers in western Canada have marketed greater quantities of grain than ever before, and export sales have reached new peaks. His speech, while critical, certainly was not constructive, and contributed nothing toward a solution of the farmers' problems. When asked how he proposed financing a substantial gift of grain to southeast Asia his only reply was that we should tax corporations or, in the alternative, reduce defence expenditure by $500 million.
While I hold no brief for corporations, there is a limit to which taxes can be levied on corporations. Capital investment is essential to the development of this country and its progress, and eventually a saturation point is reached when the tax has the adverse effect of restricting investment of such capital. Offhand I am not in a position to say whether this point has been reached, but I do not believe the reply given was seriously considered by the hon. member before it was made. His alternative, namely to reduce our defence expenditure, also suggests a certain measure of lightness, and no doubt would be welcomed by any potential enemies of this country.
(Mr. Cameron (Nanaimo).]

Reverting to my remarks regarding wheat, I wish to go on record as being in support of our wheat board system of marketing. I feel that the government, through the wheat board, has done a tremendous job in disposing of the unusually large crops which have produced record surpluses.
During the debate yesterday, the hon. member for Inverness-Richmond (Mr. Mac-Eachen) pointed out that the unemployment figures today should be viewed bearing in mind the labour force and the total number presently employed. He pointed out that unless these factors were taken into consideration the unemployment figures were not being placed in their proper perspective.
As regards our wheat surplus, consideration should also be given to the fact that whereas our normal wheat crop is 325 million bushels per year, in the past three years the prairie production of wheat has reached anything from 529 to 664 million bushels. A total of 1,855 million bushels of wheat have been harvested in the past three years, compared with an average pre-war harvest of approximately 936 million bushels over a similar period, and which means in effect that the production has been practically doubled.
Our normal exports would have been adequate to absorb the pre-war production, but they have not been sufficient to keep pace with the production for the past three years. The record shows that in 1950 producer marketings were 367,845,000 bushels which was high for the period 1944 to 1950. In 1951 our producer marketings were 455,341,000 bushels. In 1952 our producer marketings were 535,942,000 bushels, and in the period August 1 to March 3 inclusive our 1953 marketings were 263,200,000 bushels for a period of seven months.
An analysis of these figures indicates that had we been producing average crops then we would not have had sufficient grain to fill the markets which we have had in the past three years. An examination of any of the records of the wheat board and board of grain commissioners will indicate that our exports exceeded 500 million bushels last year and our consumption last year, including grain for milling purposes, exceeded a total of 200 million bushels making a total in excess of 700 million bushels disposed of in the past year.
The wheat board is faced with a serious problem, but I have every confidence that if markets are to be obtained every effort will be made by the government to obtain these markets. We must admit that the marketing of these huge stocks of grain presently on hand presents a serious problem, and while

it is anticipated that the world demand for wheat will eventually increase so as to take care of the situation, there remains the immediate problem of disposing of the wheat now at hand.
In presenting his budget the Minister of Finance (Mr. Abbott) made the welcome announcement that there would be no tariff increases. Our economy is dependent upon exports and any steps taken by the government to curb international trade is bound to have an adverse effect upon the export of our produce. The minister admitted that considerable pressure was being put on the government for tariff protection in various industries, and he is to be commended upon the stand he has taken in this regard. We therefore welcome the minister's announcement to the effect that there will be no tariff increases, and we agree with his opinion that tariff increases are not in the best interests of Canada.
In his budget speech the minister referred to the fact that there had been a return to normal competitive conditions in world markets, and he pointed out that any retrograde step towards protectionism at this time would jeopardize any prospects for real progress in this country.
On this occasion I also wish to commend the minister on the consideration given by him to the municipalities in the matter of exemption from sales tax of road machinery and fire-fighting equipment purchased for their own use. The purchase of such equipment is usually a substantial item in any municipal budget, and the saving through this exemption will be of assistance to the municipalities who are hard pressed to find the required moneys to provide essential services in their communities.
In the face of the rigidity of our expenditures caused by commitments for social security, health measures and defence, there was little room for tax reduction. During the war public works were curtailed, and therefore we are faced with a backlog of required public works which also require attention and money for their completion.
The opposition decry the fact that no substantial tax reductions were made, yet a reading of Hansard during consideration of the estimates, particularly those with reference to the Public Works Department, discloses that the demands for increased public works for public buildings and other public structures emanated from the opposition benches.
Resolutions have appeared on the order paper in the names of hon. members of the opposition during the course of the session
The Budget-Mr. Weselak requesting further extension of expenditures in the field of health and social security. Had the government acceded to all these requests I can assure you, Mr. Speaker, that the budget brought down last Tuesday would have reflected in no -uncertain way the extent of such commitments which would have had to be passed on to the people of Canada in substantially increased taxation.
There is, however, one aspect of the budget which has caused me considerable concern and that is the reduction in net farm income. The white paper tabled before the presentation of the budget shows that net farm income had declined by almost 14 per cent in 1953 from the level of 1952. It explains that more than half of this decline can be attributed to a reduction in the volume of agricultural products produced and a small portion perhaps to the four per cent reduction in the farm labour force. I realize that with the rehabilitation of Europe markets for our products are not as readily available as they were in the war and immediate postwar years, and that agriculture as well as industry must face the fact that we are today faced with competitive markets and must therefore regulate our production costs accordingly.
The wholesale price index published in the budget papers appended to Hansard of April 6, 1954, discloses on page 3781 that the wholesale price index of fully and chiefly manufactured goods, which are mainly the goods required by farmers, rose from 211 in 1950 to 227-8 in January, 1954, while wholesale prices of Canadian farm products dropped from 236-7 in 1950 to 209-4 in January, 1954. It is therefore obvious that the farmer's cost of production has risen sharply in the past three years while his return has substantially dropped in the same period. The situation is becoming serious and on this occasion I would ask the government to give serious consideration either to referring this matter to the standing committee on agriculture or to setting up a body which could be a committee of this house perhaps to study the matter of this increasing spread in order to determine what remedies, if any, are available to solve this growing problem.
This being my first address in this house, I should like to take this opportunity to commend this government and particularly the Minister of National Health and Welfare (Mr. Martin) for the progress which has been made in the field of national health. For the past four years I have been closely associated with one of the phases of the health program, namely the construction and equipping of rural hospitals. In my own constituency of
4060	HOUSE OF
The Budget-Mr. Weselak Springfield, which I have the honour to represent and of which I am justifiably proud- the reasons for my pride in my constituency I will reserve for a later occasion-prior to the inauguration of the health plan we had no hospital within its confines except one located at Pine Falls at the northern end of its more populated area. As a result of the program we now have in Springfield a modern, well-equipped, 25-bed hospital at Beausejour and a well-equipped modern 10-bed nursing unit in Whitemouth. I might say in passing that the hospital in Beausejour has operated since 1949 without a deficit, despite the fact that per diem charges are far lower than those in city hospitals and that the services certainly are comparable. At the outset there was certain resistance to the plan to establish units in the area. However, the vote was favourable and, through the co-operation of the province and municipalities affected, these units became a reality.
There is one aspect of this particular scheme that deserves particular comment, namely the policy of putting the responsibility for construction and operation of these hospitals at the local level. My experience has been that while local boards flounder a bit in their inexperience, nevertheless the close financial limits within which they have to operate makes it necessary for them to get a dollar's value for each and every dollar which is available to them. In addition, these local boards contribute their time voluntarily and, I can assure you, unstintingly. The policy to which I have referred also has the effect of fostering a local pride in these units which is amply evidenced by the organization of local guilds which do a tremendous job towards providing the amenities which a budget-conscious board must overlook in an effort to provide the technical equipment and aids which are usually desired. The value of such services to a rural community can be assessed only by those who now have them but previously were without them. The saving in life, the saving in money and the conveniences which have been made available by these hospitals certainly have made well worth while the effort put into them by the various levels of government and by local boards.
In closing may I say that I believe we must all realize that we are in a period of transition from a wartime to a peacetime economy and that certain dislocations in our national economy are unavoidable. I am confident that given good leadership,-which, in my opinion, we have-the people of Canada will weather the adversities we now experience and that, despite the predictions of ruin, the future growth and wealth of Canada will well outstrip the record of the past.


Edmund Davie Fulton: Mr. Speaker-


Mr. Dickey:: Has the hon. member not spoken already?


Edmund Davie Fulton: I think the hon. member for Halifax (Mr. Dickey) is getting confused. He usually speaks twice himself, but others do not follow that habit.


John Horace Dickey: Another joke?


Edmund Davie Fulton: Mr. Speaker, this afternoon we heard made in this house an appeal for a restoration of good relations between the dominion and the provinces. That appeal was made directly to the Prime Minister (Mr. St. Laurent) but so far it has gone unanswered. I hope that before the house adjourns for the Easter recess some indication will be given to us whether the government of Canada regards seriously its pledges to the provinces and its responsibility not only to preserve the system of confederation but to make it more workable.
I am a little bit surprised that in the course of this debate today, no answer has yet been made to the statesmanlike appeal made by the Leader of the Opposition (Mr. Drew). I am a little bit surprised that no indication has been given whether the dominion government is prepared to meet the provinces and to sit down with them around the table in an effort to arrive at an agreement or in an effort to discuss the problems which prevent an agreement on these extremely important subjects which are at the moment outstanding matters of difference between the dominion and all the provinces. The reason I am surprised is that I recall the glowing phrases which were used by the Prime Minister and various other ministers of this government in connection with certain conferences which were held in the year 1950 when not only was it indicated that progress was being made in the matter of discussions of problems of this sort but that we were within an ace of getting an over-all agreement which would govern for all future time the relations between this central government and the provincial governments. I wonder a little bit whether the reason we have not had an answer from the Prime Minister so far or any indication from any other spokesman for the government is that they are afraid that their forecasts of the possibility of agreement are not capable of being realized. I wonder whether they are a little bit self-conscious, shall we say, about the basis which they themselves suggested for the meeting of that conference.
My mind goes back over the last few years since we have been here and I recall some of the statements that have been made by the Minister of Justice (Mr. Garson), that great

Canadian patriot who, as I recall it, started- in his own words, not mine-to remove from Canada the last vestiges of colonialism. Those were his words. He introduced certain measures which he said were forward-moving steps in that process; and the last great task which he set himself was the repatriation of the Canadian constitution. So far that task falls far short of realization. If there is one person who, together with the Prime Minister, shares the major portion of the responsibility for the lack of fulfilment of that task, it is the same Minister of Justice.
I wonder whether the government does not dare to meet the provinces because they know that the provinces have needs and requirements which they are not able to meet under the present arrangements which they have made and beyond which the federal government is not prepared to go.
I recall that the premier of my own province of British Columbia has been down in recent months and has indicated clearly to the federal government that they require certain assistance over and above that which they are now receiving. The premier of British Columbia has laid before the federal government certain concrete proposals which so far have gone unanswered. I remember that the other day the Minister of Transport (Mr. Chevrier) used the extraordinary argument that he had not realized that the request of the province of British Columbia for assistance in completing the Pacific Great Eastern Railway was even a request at all.
While I do not share the political convictions of the premier of the province of British Columbia, I do share with him an awareness that the needs of that province with respect to the development of its own resources demand financial means which at the present time are beyond the capabilities of the province to meet because of the disadvantageous agreement which they have made with the federal government. The premier of that province came down here to lay before the federal government well-considered and reasonable requests for assistance in connection with the railway problem and in connection with the matter of development and a long range yield program for the handling of the province's resources, requests which so far have gone entirely unanswered.
I wonder why it is that the dominion government is so unprepared, so reluctant to meet the provinces, particularly in the light of the glowing statements that were made just some three or four years ago. I recall that the Minister of Finance (Mr. Abbott) sought in his budget address to lay the problem on a certain specific or particular 83276-257
The Budget-Mr. Fulton basis. My answer to the Minister of Finance would be that before he is entitled to reproach any party in the house or any province in the dominion it is up to him and his government to indicate to the house and to the country the basis on which he would be prepared to deal with suggestions for an over-all solution of this whole problem. There could be nothing clearer, Mr. Speaker, than the fact that the responsibility for the initiative in this issue rests squarely upon the dominion government mainly through the instrumentality of the Minister of Justice (Mr. Garson).
But of course, as my leader pointed out this afternoon, the ultimate responsibility comes back to the Prime Minister of Canada. In substantiation of what I have said I want to refer in some detail to the record of the last dominion-provincial conference which held its first meeting on Tuesday, January 10, 1950. I hold in my hand the record of the proceedings entitled "Proceedings of the Constitutional Conference of Federal and Provincial Governments" for the first session on Tuesday, January 10, 1950 and the third session on Thursday, January 12, 1950. These meetings were held at Ottawa and in essence they were primarily devoted to a discussion of problems regarding amendment of the British North America Act. The conferences got off to an exceptionally good start. They were adjourned until September, 1950 when, at the invitation of the premier of Quebec, they met in Quebec city from September 25 to September 28. They met under the chairmanship of the Prime Minister of Canada, the right hon. gentleman who so far has shown an extraordinary reluctance to exercise any responsibility or any semblance of statesmanship notwithstanding the impasse into which dominion-provincial relations have fallen at the present time.


Douglas Charles Abbott: That is what it is to be a Rhodes scholar.


Edmund Davie Fulton: If any hon. member wishes to take exception to my words-


Mr. Lesage:: That is what you would like.


Edmund Davie Fulton: Yes, indeed I would, and I am going to give the hon. gentleman plenty of opportunity to do so because I am going to read from the record of this conference and the record of returns which were tabled in this house.


Jean Lesage: You are beating around the bush.


Edmund Davie Fulton: If my hon. friend wishes to interrupt, would he show the courtesy of rising to his feet to do so.

The Budget-Mr. Fulton


Douglas Charles Abbott: We would not want to interrupt. Go right ahead.


Mr. Deputy Speaker:: Order.


Edmund Davie Fulton: The Prime Minister of Canada, speaking in the course of the conference in September, 1950, said these words as reported at page 58 of the proceedings:
I do not want to imply that what has already been decided here has the importance of Magna Carta, but I think we have all greatly benefited from the evidence and realization that all those attending this conference were sincerely desirous of doing everything within each one's power to arrive at the goal of settling in Canada matters of interest to the Canadian public, and that we are determined that those matters will ultimately be settled through institutions responsible to the Canadian public.
I suggest that the institution responsible to the Canadian public is this government, but in the last few days, weeks or months, indeed, years since 1950, it has not shown any very great sense of responsibility in this matter. The premier of Ontario discussed the progress made in the course of the conference, the purpose of which was to settle matters as between the dominion and the provinces. He was referring to the press statement authorized by the conference and he said:
As the press statement sets out, we have made very substantial progress. We are going to make more progress. I think I should express appreciation for the attorneys general committee which has met and which is going to meet again. That committee did a valuable job indeed. We now have clarified a great many things and I do not think it is breaking any secret to say that we have enlarged the scope and authority of that committee. I feel quite sure that when we meet next December we will make, not only more progress, but we will achieve the objective to which we have set ourselves, the objective of finding a way to amend our constitution in Canada in a manner which will protect all the minorities, all the races and all the interests in this great country of ours.
These, sir, are the words of the premier of Ontario referring to the press statement submitted by the Prime Minister of this country not quite four years ago regarding a conference called under the aegis of the dominion government, a conference which has not met since although they appointed a continuing committee under the chairmanship of the Minister of Justice who has done nothing more than find reasons and excuses for that conference not to meet again.
Then we have the words of the gentleman whom we were pleased to honour in tributes paid in this house today discussing the progress made in this conference. At page 60 of the report of the proceedings we find that the Hon. Angus L. Macdonald said:
However, we are on the right road. We have achieved certain things here. The continuing committee of attorneys general, with the Minister of


Justice as chairman, will, I am sure, advance still further along that road and when the next plenary conference meets in December I feel sure we shall make still further progress.
I ask the Minister of Justice to ask himself, in the light of the remarks of that splendid Canadian voice which is now stilled, what thought he has given to making still further progress along that road? I hope the Minister of Justice (Mr. Gar son), who was going to repatriate the constitution of Canada, and set the badge of his great achievement upon the liberation of these things, will say soon in the course of this debate what plans he has in mind for resolving this impasse for which, next to the Prime Minister and the Minister of Finance he, perhaps more than any other gentleman opposite, is responsible.
Then we have the premier of New Brunswick who said this, as reported at page 61:
We have had much to inspire us and there have also been things that have tended to sober us. What I mean is that we all realize that the job which was undertaken last January by this conference is going to be done some time.
Perhaps the premier of New Brunswick did not realize how prophetic those last two words were. He went on to say:
If we of this generation of public men do not do this job, the men of some other generation are going to do it. It is somewhat of a challenge to us to rise to the levels of statesmanship which are necessary to accomplish a task so great.
I suggest to you, sir, that those words, in the light of the sober realization of the facts of the situation today carry with them their own accusation of the present government which, by an obstructionist and obstinate course, has set itself against the making of further progress along those lines.
Then the premier of New Brunswick again echoed the words of the premier of Nova Scotia when, in his closing paragraph he said:
I think also, Mr. Prime Minister, that we have profited much from the guidance and the way in which you have carried out the important duties of your position as chairman of the conference. In closing I want to add my belief to the confidence that others have expressed that we are going to succeed in this work in which we are engaged. I know I leave here with a feeling that in the not distant future we will reach the goal which we all have in prospect.
Then the premier of Manitoba had these encouraging words-and hon. members will keep in mind that this was not quite four years ago-
As far as the work of the conference is concerned I know that you, Mr. Chairman, and all of us recognize that it would be unrealistic and even untruthful to pretend that we have accomplished everything that we set out to do. On the other hand, and as has been mentioned earlier, we have taken long strides toward reaching our objective.

Then the premier of Manitoba continued:
I am optimistic and we from Manitoba have always been optimistic as to the eventual outcome of this and other conferences.
Then the premier of Prince Edward Island expressed himself to the same effect. They all paid tribute to the work done by the Prime Minister of Canada and by the Minister of Justice in advancing the work of that conference. The conference closed on September 28, at which time a press statement was issued containing the following:
The conference has had a full and frank discussion of the principles applicable to such a general amending procedure and has reached agreement on many of them. Its members are unanimously of the opinion that substantial progress has been made and are exceedingly gratified at the spirit of harmony and co-operation which has been shown by all delegates throughout the whole of the proceedings.
May I remind the house that this conference was held at the invitation of the government of that province, in the city of Quebec. The press release goes on to say: The conference has requested the continuing committee of attorneys general to study the proposals which it received with a view to arriving at an amending procedure satisfactory to all governments concerned. The continuing committee met today in the late afternoon and agreed that the provincial attorneys general and the Minister of Justice would exchange views by correspondence leading up to a meeting to be held at Ottawa on November 13, 1950 in order that the matters referred to it might be further considered and a report prepared for submission to a third plenary session of the constitutional conference to be held immediately after the federal-provincial conference on fiscal and other matters which is to meet in Ottawa on December 4, 1950.
The continuing committee has also been authorized to study the methods and techniques whereby a Canadian constitution can be domiciled in Canada as a purely Canadian instrument.
There I can read between the lines the fine Italian hand of the Minister of Justice, harking back to his oft-repeated shibboleth of repatriation of the Canadian constitution, liberating Canada from the shackles of colonialism. I wish the Minister of Justice would set himself occasionally to tasks which are important with the same realism and energy as, in the days of 1950, he set himself to this imaginary task of the liberation of Canada from those hypothetical and entirely imaginary chains which he thinks bound her. And I must say the Minister of Justice has not shown the same ambition, energy and zeal since 1950 which he showed in those well-worded and high-sounding press releases which followed the conference in September of 1950.
Because nothing-absolutely nothing-has happened since-not one thing. Nothing has resulted from this conference, which started off in such a blaze of glory and which dissolved on September 28, 1950 with so many 83276-257i
The Budget-Mr. Fulton high-sounding words, so many promises of progress for the future. Whether or not there was a meeting on November 13, 1950, as was arranged by the continuing committee, I have been unable to find out. But I do know that on December 4 the federal and provincial governments met again in conference in Ottawa, and issued this statement to the press, as it is reported at page 137 of the proceedings of that conference. The statement bears the following heading, "Statement to the press by the Right Hon. Louis S. St. Laurent at the conclusion of the conference", and states:
The conference discussed:
1.	The offer of the federal government for new tax agreements;
2.	The offer of the federal government respecting old age security;
3.	A provincial proposal for an amendment to the constitution to permit the provincial legislatures to levy an indirect sales tax at the retail level.
The press release goes on to set out the proposals in four short paragraphs, the concluding two of which are as follows:
And that the provincial governments would consider the proposal for new tax agreements and indicate their respective positions at a later date. It was also decided to suspend the further deliberations of the federal-provincial conference on constitutional amendment and of its continuing committee of attorneys general pending consideration of the tax agreements and related matters. Once these have been disposed of, the committee of attorneys general will resume its deliberations at the earliest convenience of the federal and provincial governments.
And that was the end of that conference. Since that time-since December of 1950- we have had nothing but a deep, dark and abysmal silence. The Minister of Justice apparently has abandoned his zeal and his energy. Perhaps he feels that notwithstanding the lack of progress he is nevertheless a good Canadian. I hope he feels he is. I hope he feels he does not labour under any disability because he has not bothered to reconvene this conference. I hope he also realizes to the full that the failure to reconvene this conference is now bedevilling the Canadian constitutional picture and the relationship between the dominion and the provinces to a point where there is grave danger to the whole of the Canadian confederation.
I say that, Mr. Speaker, because the Minister of Justice himself has tied in the whole of the fiscal arrangements between the dominion and the provinces with these constitutional conferences, by the exchange of correspondence which he himself tabled in the house the other day. The Minister of Justice admitted in the answers to questions quite recently that he was in fact appointed chairman of the continuing committee; that his appointment had never been revoked, and that the continuing committee has held no

The Budget-Mr. Fulton meetings since 1950. He also admitted that the dominion government has issued no invitations since 1950 for any further meetings of the conference, and that he had however received suggestions from some of the provinces that there should be further meetings. Those suggestions were received in inquiries from the premier of Alberta and from the premier of Saskatchewan. In substantiation of that, there was tabled in the house on April 8, as sessional paper No. 209, copies of correspondence exchanged between the premiers of Alberta and Saskatchewan and certain ministers of the present government.
What happened was that on July 12, 1951, the premier of Alberta wrote to the Prime Minister of Canada referring to a press report of the Prime Minister's "Nation's Business" broadcast, in which the Prime Minister said as follows:
We are actively striving to work out with the provincial authorities a suitable method ol making here in Canada any amendment which may be required in the future, to our own constitution.
It would be interesting to hear from the Prime Minister what he regards as being encompassed within the words "actively striving to work out." Will the Minister of Justice tell us; will the Prime Minister tell us; will the Minister of Finance tell us what active efforts have been made by the government since 1950 to work out this suitable method of amending our own constitution here in Canada? Will any of the hon. gentlemen tell us what active efforts have been made by them in this or in any other field of dominion-provincial relations to meet with the provinces and work out any method of agreement whatsoever? Will they tell us what active efforts are being made to meet the reasonable requests of the premier of the province of British Columbia in this or in any other field? Will the minister tell us what has caused him to abandon so entirely his position that until he had repatriated the Canadian constitution we were somehow or other labouring under the shackles of outmoded colonialism, as they have pointed out so enthusiastically? What is the reason for the great change in attitude between September, 1950 and April, 1954?
This is what the Prime Minister said in 1951:	They were actively striving to work
out with the provincial authorities a suitable method of amending the constitution here in Canada, and the premier of Alberta, I think with a pardonable and understandable curiosity, inquired as follows:
I would be interested to know if this statement indicates that you propose to reconvene shortly the dominion-provincial conference on constitutional matters. It is our sincere hope that this may be
tMr. Fulton.]

the case. We feel that no time should be lost in finding a satisfactory method of amending our own constitution in Canada.
Well, sir, that received a polite acknowledgment from Mr. J. W. Pickersgill, special assistant to the Prime Minister, a gentleman who has since been translated into another capacity, in which he remains singularly silent on this matter. I hope that when he returns from his undoubted well-earned Easter holiday he will also enter into this matter, and with the advantage of the great background which he has acquired behind the scenes he will be willing to stand up in front of the curtains and enlighten us on all the difficulties which have since beset the dominion government and have persuaded it that it would no longer be profitable even to meet with the provinces around the table to try to work out a solution. However, this Mr. J. W. Pickersgill acknowledged the letter from Mr. Manning and told him:
I am sending the letter on to Mr. St. Laurent at his summer home in St. Patrick, where he is hoping to spend most of the rest of this month.
And that, Mr. Speaker, was the extent of the satisfaction which Mr. Manning got out of this whole matter until some months later, in September, 1951, when there is a very interesting letter written to Mr. Manning, following upon the fact that the premier of Saskatchewan had made a similar inquiry as to whether and when this conference might be reconvened. After having discussed the matter on the telephone with the premier of Saskatchewan, the Minister of Justice wrote a letter to Mr. Manning dated September 6, in which he said this:
I believe with you, and feel sure that Mr. Douglas does also, that the best chance of achieving success in the solution of this problem lies in continuing the discussions that were commenced last year.
Some chance, in view of the complete inactivity of the Minister of Justice over the three-year period since the letter. However, he continued, there were certain reasons why it might not be convenient to have it at that particular moment. Then he said:
Moreover, we have a feeling here, which is shared by Premier Douglas and also by the attorneys general of two other provinces with whom I was conversing today, that we shall probably be able to make more progress in the conference on constitutional amendment after the outstanding fiscal matters relating particularly to the dominion-provincial tax agreements have been cleared up. We think, and in this we are confirmed by the views of several provinces, that it would be wiser to delay the reconvening of the dominion-provincial conference on constitutional amendment until after agreement has been reached between the dominion and the provinces with regard to the matters which were under discussion at the dominion-provincial conference on fiscal relations.

I suggest to you, sir, that no exchange of correspondence could have made it clearer that the whole matter of the relations, both on the particular matters and on the broad general scale, between the dominion and the provinces which were the subject of discussion at the dominion-provincial constitutional conference, is made dependent upon reaching an agreement on fiscal relations between the dominion and the provinces. Indeed, sir, it is difficult for me to understand how any agreement with respect to over-all constitutional amendments, modification or any other aspect of the constitution whatsoever could be reached without some discussion of their impact on the financial arrangements. And since the one is again dependent upon the other, and since the Prime Minister of Canada has issued such glowing statements as to the progress made in the one field and as to the prospects of success in the future with respect to that field, and since the Minister of Justice, as it were, practically staked the whole success of his political career upon repatriating the Canadian constitution, to use his own words, I must confess that I am unable to understand what excuse this government finds for its complete, its continued, its obstinate, and its deliberate failure to invite the provinces to meet with it since December, 1950, to continue those discussions.
I hope, sir, that you regard with equal seriousness to that which I regard it and with which I know every hon. member in all parties regard it, the desirability of reaching agreement on a method of amending Canada's constitution here in Canada. It is a matter to which the Prime Minister referred in a "Nation's Business" broadcast, a broadcast to all the Canadian people in 1951. It is a matter to which he referred again in the course of his election campaign tour of 1953 in the city of Vancouver, and I dare say elsewhere. It is a matter to which the Prime Minister attached the greatest of importance when it suited the political convenience of the moment and of the Liberal party and of the hon. gentleman to do so. But it appears to be a matter which, when it comes to be a concrete problem to be grasped and dealt with in the interests of the whole Dominion of Canada and in the interests of preserving the constitutional relationships of the Dominion of Canada, the hon. gentlemen are more concerned with their political advantage than they are with the national welfare.
Then, as now, they seek to temporize, to procrastinate and to dissimulate with regard to this matter, because they realize that if
The Budget-Mr. Lesage they grasp the nettle it may sting. The Liberal party, which has always been prepared to set its own particular partisan interests above those of the nation, is not prepared to be stung. But, sir, I suggest to you that this is an issue upon which it is necessary to take a national rather than a partisan point of view. For the reasons which I have advanced, and the quotations that I have placed on the record, I believe we are quite within our rights in saying that this government owes it as a bounden duty to the Canadian people to take up this matter where they left off in September, 1950, and to call the provinces around the table to meet with them under the continued chairmanship of the Prime Minister of Canada, and make a real national effort, rising above narrow party considerations, to solve the problem and find a basis upon which all the provinces and the dominion can go forward again in harmony and unity.
(Translation):


Jean Lesage: Mr. Speaker, in rising to take part in this debate I do wish it to be clear that I am neither dissimulating nor procrastinating, as the hon. member for Kamloops (Mr. Fulton) has accused the members of the government and its supporters of doing. On the contrary, in the time at my disposal, 1 would like to discuss financial relations between the federal government and the provinces. This problem, as he has said himself, by the way, has been a most difficult one for several years. Events which occurred in the province of Quebec in recent weeks have added to its seriousness.
Like the hon. member for Kamloops I think that this matter must be dealt with from a national point of view. But we must remain realistic and deal with this problem as it is, and in the light of present circumstances. I am sincerely convinced that the calling of a federal-provincial conference to examine the rights granted by the constitution would not bring about an immediate solution to the problem with which a large number of residents of the province of Quebec are now faced. The problem for these people is an immediate one, and it is with that matter particularly that I would like to deal, within the larger framework of federal-provincial financial relations in the whole of Canada.
Since it is now nearly ten o'clock 1 would like to move that the debate be adjourned.

Inquiries of the Ministry
(Text):
Motion agreed to and debate adjourned.



IMMIGRATION


Walter Edward Harris: I wonder whether I might have the consent of the house, Mr. Speaker, to revert to orders of the day to answer a question asked this afternoon by the hon. member for Dufferin-Simcoe (Mr. Rowe)?


Mr. Speaker:: Has the minister the consent of the house to revert to that period?


Some hon. Members:: Agreed.


Walter Edward Harris: He inquired about a gentleman by the name of Henri Zorin, who was under order of deportation in Montreal. I find I dealt with the appeal on December 15, and

dismissed it. In the meantime, however, this gentleman has taken proceedings in the courts of Quebec in order to delay the operation of the deportation order. I feel, therefore, I should not make any statement about it.



BUSINESS OF THE HOUSE

Walter Edward Harris: the adjournment of the house.
He said: As I shall not be here tomorrow evening, I should like to announce the business for the week following our return after the recess. We shall begin on Monday with a motion to go into supply, and when it is carried will call four departments. We shall then resume this debate, but on Thursday and Friday will take the estimates of public works and northern affairs.
Motion agreed to and the house adjourned at 9.58 p.m.

Wednesday, April 14, 1954