1954-04-14

DIPLOMATIC INSTRUMENTS


Hon. L. B. Pearson (Secretary of State for External Affairs):: I should like to table, in English and in French, texts of three multilateral agreements and eight bilateral agreements concluded recently between Canada and various other countries.



PRIVATE BILLS


[Stage Direction]
Bill No. 423, for the relief of Mary Joy Thomson Asselin.-Mr. Hunter.
Bill No. 424, for the relief of Ronald Arthur Leslie.-Mr. Hunter.
Bill No. 425, for the relief of Lucienne Saint-Laurent Calve.-Mr. Hunter.
Bill No. 426, for the relief of Roberta Barbara Shvemar Feigelman.-Mr. Hunter.
Bill No. 427, for the relief of Pearl Marie Neil Lane.-Mr. Hunter.
Bill No. 428, for the relief of Marjorie May Price Amory.-Mr. Hunter.
Bill No. 429, for the relief of Marie Jeannette Laure Lafreniere Lucas.-Mr. Hunter.
Bill No. 430, for the relief of Frances Goldberg Glegg.-Mr. Hunter.
Bill No. 431, for the relief of Thelma Nellie McKeage Patrick.-Mr. Hunter.
Bill No. 432, for the relief of Madeleine Roy Julien.-Mr. Hunter.
Bill No. 433, for the relief of Louis Tothe. -Mr. Hunter.
Bill No. 434, for the relief of Joseph Delphis Guillaume Delorme.-Mr. Hunter.
Bill No. 435, for the relief of Nicolas Joseph Ladislas Barath.-Mr. Hunter.
Bill No. 436, for the relief of Ferencz Gyula Babinszki.-Mr. Hunter.
Bill No. 437, for the relief of Beatrice Alexandra Duff Sheppard.-Mr. Hunter.
Bill No. 438, for the relief of Remi Char-bonneau.-Mr. Hunter.
Bill No. 439, for the relief of Kathleen Florence Pippy Hayward.-Mr. Hunter.
Bill No. 440, for the relief of Fred Skiffing-ton.-Mr. Hunter.


Mr. Thaicher:: 1.	What was the total cost of the Canadian Broadcasting Corporation's television installation in Toronto, including building, transmitter, tower, ground system and studio equipment?
2.	Were tenders called for this installation?
3.	If so, was more than one received?
4.	On what basis was the tender or tenders awarded?
5.	Who drew up the specifications for buildings and equipment?
6.	Were these specifications checked or revised by any outside source or authority?


Mr. McCann:: 1.	The corporation's television installation at 354 Jarvis street, Toronto, has cost $2,457,702.51 to February 28, 1954.
2.	Yes.
3.	Yes.
4.	Tenders were awarded on the basis of the lowest quotation to meet the specifications and requirements of the corporation.
5.	The corporation's architects and engineers.
6.	Yes. The tower was designed by the supplier. The reinforced concrete structural design of the building was prepared by outside engineer consultants. The designs and specifications of the tower and building were approved by municipal authorities of the city of Toronto.



CORPORATION INCOME TAX


Mr. Knowles:: 1.	For the latest taxation year for which the information is available, what was the total amount of money for which deductibility from corporation income tax was claimed by corporation income tax payers in respect of donations, contributions to approved charities, etc.?
2.	For the same taxation year, what was the total amount allowed as deductible?
3.	For the same taxation year, what was the total loss to the federal treasury because of such deductions?


Mr. McCann:: 1.	In 1951, corporations reporting profits claimed $24,691,000 as charitable donations. This is set forth in 1953 taxation statistics, page 121, line 34.
2 and 3. Statistical information not available.

Questions



MARSHLANDS REHABILITATION EXPENDITURES


Mr. Balcom:: What moneys have been spent in Nova Scotia, and in what locations, on marshlands rehabilitation in the fiscal year 1952-53?


Mr. McCubbin:: The following amounts
have been spent in Nova Scotia, on marshland rehabilitation, in the fiscal year 1952-53: Surveys and engineering, $78,257.90; construction work shop (Amherst, Nova Scotia), $50,021.94; construction and maintenance of projects, $587,062.40.
Name
Advocate	
Allan River	
Amherst Point	
Annapolis Royaltown ....
Barronsfield	
Bishop Beckwith	
Castle Frederick	
Converse	
Dentiballis	
Dugeau	
Elderkin	
Falmouth Great Dyke ..
Falmouth Village	
Fort Belcher	
Fox Bow	
Glenholme	
Grand Pre	
Granville Centre	
Habitant	
Hebert	
John Lusby	
Kennetcook	
Martock	
Masstown	
McKay	
Morse	
Morse Bishop	
Moschelle	
Mount Anne	
New Minas	
Newport Town	
Oslo North River	
Pre Rond	
Queen Anne	
Ricketson	
River Hebert	
Rosette	
Round	
Ryerson	
Saulnierville	
Scotch Village	
Seaman	
Selma	
St. Croix	
Tregothic	
Truro Dykeland Park ...
Upper Belleisle	
Upper Nappan	
Victoria Diamond Jubilee
Walker	
Wellington	
Windsor Forks	
Woodworth	
Total	
Grand total ____
County . Cumberland . Annapolis . Cumberland . Annapolis . Cumberland . Kings . Hants . Cumberland . Annapolis . Annapolis . Hants . Hants . Hants . Colchester . Annapolis . Colchester . Kings . Annapolis . Kings . Cumberland . Cumberland . Hants . Hants . Colchester . Cumberland . Annapolis . Annapolis . Annapolis . Annapolis . Kings . Hants . Colchester . Annapolis . Annapolis .Annapolis . Cumberland . Annapolis , Colchester . Annapolis Digby . Hants , Cumberland Hants Hants Hants Colchester Annapolis Cumberland Colchester Annapolis Kings Hants Annapolis
Amount $ 99,437.73
121.34 1,863.58
11,100.25
3,005.10
11,241.05
7,298.70
100,239.88
658.84 1,130.85 2,619.67
17.484.13 13,655.58
16,721.51
1.488.51 99.95
1,698.72
2.944.77 5,488.19
1.555.66
14.805.69 42.50
11,111.72
12.606.13 780.93
1,046.56
258.85
831.34 1,197.37
10.090.29 1,090.60
9.622.52 5,010.83
13,085.00
542.60
55,525.56
262.20
3,082.40
1.909.67
154.56
5.846.69 4.63
22.930.30 13,538.80
1,905.18
15,060.62
2.948.70
9.243.77
1.026.13 802.55
18,630.28
50,380.20
1,833.22





ARMED SERVICES PAYROLL


Samuel Rosborough Balcom: What is the total of the payroll in Halifax, for (a) army; (b) navy; (c) air force?


Mr. Blanchette:: Total pay and allowances for service personnel in Halifax during the year 1953 were:
(a)	army	$3,792,312.24(b)	navy	
5,106,973.67(c)	air force	
801,600.00



$9,700,885.91 FEDERAL EXPENDITURES  ALBERTA

Mr. Hanna:: 1.	What was the total expenditure in Alberta for the fiscal year 1952-53, by the federal government, including the statutory subsidy and tax rental agreement payments?
2.	What was the total expenditure during the fiscal year 1952-53 in Alberta by each federal government department and agency?


Mr. Benidickson:: 1 and 2.
Expenditures by the federal	Thousands
government in the province	of dollars
A Direct payments to the provincial government:
(a)	Compensation under dominionprovincial taxation agreements	$ 32,322
(b)	Compensation under section 7, Dominion-Provincial Tax Rental Agreements Act, 1947 (share of net taxes collected from certain public
utility companies)	 991
(c)	Statutory subsidies	 2,127
(d)	General health grants (national
health and welfare)	 2,106
37,546
B Direct payments to or on behalf of individual residents of the province:
(a)	Family allowances (national
health and welfare)	 22,576
(b)	Pensions (world wars 1 and 2)
-veterans affairs	 8,892
(c)	Veterans war service gratuities
and re-establishment credits (veterans affairs)	 858
(d)	Veterans post-discharge rehabilitation benefits (veterans affairs)...	220(e)	War veterans allowances (veterans affairs)	
1,793(f)	Old age pensions, pensions toblind persons (and old age security payments)-National health and welfare	
19,847
54,186
Questions
Expenditures by the federal	Thousands
government in the province	of dollars
C Interest paid on Government of Canada bonds:
Estimated amount of interest paid to holders of Government of Canada
bonds in the province	 15,577
D Estimate of major expenditures by government departments or agencies within the province:
(a)	Agriculture	
11,009(b)	Citizenship and immigration..	1,906(c)	Defence production	
68(d)	Finance	
873(e)	Fisheries	
13(f)	Justice	
326(g)	Labour	
1,630(h)	Mines and technical	surveys...	206(i)	National defence	
74,418(j)	National health and	welfare	.,	1,945(k)	National revenue	
2,024G) Public works	
2,177(m)	Resources and development...	7,750(n)	Royal Canadian Mounted Police	2,623(o)	Trade and commerce	
835(p)	Transport (including C.M.C.and N.H. board)	
2,263(q)	Veterans affairs	
4,152(r)	Central Mortgage and HousingCorporation	
91
114,309
E Proportional share of federal government's contribution to the unemployment insurance fund.
Portion allocated to province on basis of proportion of number of insured workers in province to number
of insured workers in Canada		1,561
Total expenditures	$223,179
Expenditure figures do not include:-
(a)	The more general type of budgetary expenditures which are made for the benefit of the country as a whole and which are of direct benefit to all the provinces. In this category are the expenses of the central legislative body at Ottawa, the financial and administrative departments at Ottawa and the research activities of the national research council.
(b)	Payments to the majority of suppliers of goods and services as the payments are in many cases made to the head office of the company and therefore do not lend themselves to an accurate segregation by provinces.

Questions



MARGARINE AND BUTTER-COMPARATIVE FOOD VALUE CANADIAN WHEAT BOARD    MIXING OF WHEAT GRADES

Mr. Poulin:: 1.	In taking as a basis of comparison butter and margarine sold by dealers in Canada, is the nutrition division of the Department of National Health and Welfare in a position to state which of these two products has the greater food value?
2.	If so, which product?


Mr. Robertson:: 1.	No, because sufficient analyses of butter and margarine as sold in Canada are not available in the files of the nutrition division.
2.	See answer to No. 1 above.



LA MARTONA, LION AND MONARCH SPREADS

Mr. Boisvert:: 1.	Are the products, labelled La Martona, Lion spread and Monarch spread, foods under the provisions of the Food and Drugs Act?
2.	If so, what are the components of such products and the proportion of each?
3.	Where are the producers of these foods located?


Mr. McCullough (Moose Mountain):: 1.	Is it the policy of the Canadian wheat board to mix different grades of wheat prior to sale?
2.	If so, what method is followed and for what reason is this done?
3.	What grade of wheat is used to make first grade flour?
4.	What was the net price per bushel for grade 3 northern wheat delivered by farmers to elevators at Carlyle, Saskatchewan, for each year 1939 to 1953 inclusive?
5.	For the years 1939 to 1953 inclusive, what percentage of Canadian wheat graded No. 1 northern; No. 2 northern and No. 3 northern?


Mr. Dickey:: 1.	The Canadian wheat board, not operating elevator facilities, does not mix grades of grain. Operators of elevators may mix grain in accordance with the terms of the Canada Grain Act and regulations thereunder.
2.	See answer to No. 1 above.


Mr. Robertson:: 1.	Yes.
2.	The product La Martona is labelled to show the ingredients as shortening, butter, emulsified cream cheese, with condiments and salt. Laboratory analysis of this product has shown a moisture content of 15-84 per cent and a fat content of 77-18 per cent.
The product Lion spread is labelled to show the ingredients as animal fat, salt, milk powder, flavouring and colour. No analytical report is available at the present time.
3.	The product La Martona is made by Les Fromages Davidson Cheese Products Ltee, Ste. Thecle, P.Q., and the product Lion spread
3.	The Canadian wheat board cannot answer this question because it is not engaged in the milling of wheat. Generally speaking, grades from No. 1 northern to No. 4 northern inclusive are considered as milling grades although at times lower grades can be used. Much depends upon the milling characteristics of each grade from year to year.
4.	The Canadian wheat board can only answer this question in so far as board initial payments, interim and final payments are concerned. The following table shows net proceeds to producers for No. 3 northern wheat delivered to the board at Carlyle (18
is made by the Lion Spread	Products Ltd., cents	per cwt.)	Prairie Farm Assistance Act	Grand'Mere, P.Q.	levy	deducted.	Net proceedsCrop years	Initial	Interim	Final	to producerpayments	payments	payment	at elevatorcents	cents	cents	cents1939	
46-530	46-5301940	47-025	8-146	55-1711941	
48-510	15-897	64-4071942	68-805	11-612	80-4171943	
104-940	12-146	117-0861944	
104-940	18-677	123-6171945	
104-940	49-500	8-341	162-7811946	
114-840	39-600	8-341	162-7811947	
114-345	39-600	8-341	162-2861948	
133-155	19-800	8-341	161-2961949	
152-955	8-341	161-2961950	
113-355	19-800	29-343	162-4981951	
117-315	19-800	25-333	162-4481952	
117-315	19-800	22-341	159-4561953 	
117-315	fMj From August 1, 1939 to September 27, 1943 producers may have marketed wheat	outside of the
Canadian wheat board.
[Mr. Benidickson.l

Questions
5.
No. 1	No. 2	No. 3	Total forNorthern	Northern	Northern	3 grades1939-40	
56-3	22-2	4-6	83-11940-41	
490	28-7	8-7	86-41941-42	
36-5	38-1	10-2	84-81942-43	
12-5	32-2	26-4	71-11943-44	
19-4	47-4	16-6	83-41944-45	
25-1	49-3	13-7	88-11945-46	
30-6	45-5	12-1	88-21946-47	
20-5	44-9	17-1	82-51947-48	
13-8	43-0	22-0	78-81948-49	.... 42-6	36-7	5-7	85-01949-50	
27-6	51-4	7-4	86-41950-51	
4-3	15-8	19-1	39-21951-52	
0-5	7-8	351	43-41952-53	
9-6	51-4	21-0	82-0Aug. 1-March 31, 1953-54	
3-7	51-2	30-7	85-6Percentage for whole period	
22-7	370	16-9	76-6
Percentages shown for the years 1939-42 inclusive are computed on the basis of inspections by Board of Grain Commissioners and do not include tough and damp classifications within these grades.
Percentages shown from 1943 on are taken from the marketing statistics of the board and include tough and damp classifications within the grades 1, 2 and 3.



INDIANS

Mr. Mang:: 1.	What is the Indian population of Canada?
2.	What has been the rate of increase in the last ten years of the Indian population under seven years of age?
3.	How many Indian day schools are there in Saskatchewan?
4.	How many Indian residential schools in Saskatchewan?
5.	How many new Indian schools have been constructed during the past four years?
6.	What is the total amount of money held by the federal government in trust for Indians in Canada, and what rate of interest does this amount bear?
7.	What has been the total earnings of Indians in Saskatchewan for the years 1950-51-52-53?
8.	From what sources is the revenue of Indians derived?
9.	What is the total annual expenditure of the Indian affairs branch in (a) Canada; (b) Saskatchewan?


Mr. McCann:: 1.	136,407, according to the 1949 departmental census.
2.	The population of this age group increased by 26-4 per cent during the period 1939 to 1949.
3.	52 day schools and one seasonal day school.
4.	Nine.
5.	205, including 31 constructed in the province of Saskatchewan.
6.	$22,881,111.38. The interest rate for $1,069,889.85 is six per centum and five per centum on the remainder.
7.	This information is not available.
8.	Sources of revenue of Indians include wages, salaries, or other returns from a wide
variety of occupations; also rentals and royalties from reserve lands, interest on trust funds and family allowances, old age pensions, etc.
9.	(a) $15,184,013 for the fiscal year ending March 31,1953.
(b) $1,794,596 for the fiscal year ending March 31, 1953.
The above figures are from the annual appropriation of the Indian affairs branch and do not include expenditures of the Department of National Health and Welfare.



IMMIGRATION-PERCENTAGE OP POPULATION

Mr. Fulton:: What is the figure, expressed as a percentage of total population, which it is felt by the government is acceptable as a rough guide to indicate the annual number of immigrants which, under normal circumstances, the country can safely bring in and successfully absorb?


Mr. McCann:: The number of immigrants admitted to Canada in any one year is not based on a percentage of the population but is related directly to the absorptive capacity of the country, which varies from time to time.



LOANS TO OTHER COUNTRIES

Mr. Hansell:: 1.	What loans or advances, if any, were made to any other countries, during the years 1950 to 1953 inclusive?
2.	What terms of repayment were agreed upon In each loan?
3.	What security does Canada hold in respect to each of these loans?


Mr. Benidickson:: 1. None.
2 and 3. Answered by No. 1.

Questions



INCOME TAX-QUEBEC

Mr. Deschaieleis:: What sum of money does five per cent of the amount of individual income taxes paid by the taxpayers of the province of Quebec, for the fiscal year 1953-54, represent?


James Joseph McCann: Information not available, as the time for filing 1953 income tax returns by individuals does not expire until 30th April, 1954.



MARITIME MARSHLAND REHABILITATION ACT


Mr. Lusby:: 1.	What were the total expenditures made in the province of Nova Scotia, by counties, during the fiscal year 1953-54 under the provisions of the Maritime Marshland Rehabilitation Act?
2.	What new construction projects under the provisions of the act are contemplated for the fiscal year 1954-55, in the county of Cumberland, and what is the proposed amount of expenditure on each such project?


Mr. McCubbin:: 1. The following amounts have been spent in Nova Scotia under the provisions of the Maritime Marshland Rehabilitation Act in
the fiscal year 1953-54:
Surveys and engineering

Construction work shop at
Amherst	 38,344.34
Construction supervision ...	28,181.54
Construction and maintenance
of projects	 729,991.80
Total	 $869,625.66
Project expenditures by counties:
Cumberland	 $297,516.26
Hants	 235,799.37
Colchester	 29,057.37
Annapolis	 150,207.86
Kings	 17,200.54
Digby	 161.00
Yarmouth	 49.40
Total	 $729,991.80
Note: These figures are not complete in
that April 30 is the closing date for paying accounts incurred during the fiscal year; and a few accounts not yet submitted are not included.
2.	Proposed expenditures by projects in Cumberland county in the fiscal year 1954-55:
Amherst Point marsh		$23,000
John Lusby marsh	 28,200
Minudie marsh	 76,000
Estimated cost of maintenance and repairs to existing works in county for fiscal year 1954-55: $7,000.



POST OFFICE EXPENDITURES


Mr. Balcom:: 1.	What was the total expenditure during the fiscal year 1952-53 for postal services in Nova Scotia, for (a) salaries at staff offices, district offices and for railway mail clerks: (b) salaries at semi staff, revenue and sub post offices and rental allowances paid by the Post Office Department?
2.	What were the estimated rentals and maintenance costs of post offices in public buildings and rentals paid by the public works department for other post offices, during the calendar year 1952?
3.	How many rural routes and other mail services, separately, were in operation in Nova Scotia on April 1, 1953 and what was the total cost thereof, during the fiscal year 1952-53?
4.	What was the revenue derived from postal operations in Nova Scotia, during the fiscal year 1952-53?
5.	How many post offices were there in operation in Nova Scotia as at April 1, 1953?


Mr. Kirk (Shelburne-Yarmouih-Clare):: 1.	(a) $1,968,043; (b) $939,803.
2.	$374,696.
3.	Rural routes, 302; side services, 207; stage services, 367; city services, 47. Total cost, $907,470.
This does not include the proportionate cost of railway and air services as it is not practical to apportion this on a provincial basis.
4.	$4,149,099.
5.	1,215.



UNEMPLOYMENT INSURANCE ACT


Mr. Knowles:: 1.	Has the Unemployment Insurance Act been studied, since January 1, 1954, by the government or by any officials thereof to determine whether there should be an increase in the rates of unemployment insurance benefits?
2.	If so, by whom have such studies been made?
3.	Have such studies resulted in any decisions or recommendations to the Minister of Labour?
4.	If so, what are the terms of any such decisions or recommendations?
5.	Will legislation based thereon be introduced at this session?


Mr. Martin:: 1.	Continuously under study.
2.	Unemployment insurance commission.
3.	No.
4 and 5. See answer to No. 3.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Mr. John Hunter (Parkdale):: I should like to address a question to the Secretary of State for External Affairs. Is the United Nations disarmament commission, which includes Canada as a member, taking any

action at present to achieve agreement on the prohibition and control of atomic weapons, including the H-bomb?


Lester Bowles Pearson: Mr. Speaker, the hon. member was good enough to give me notice of his intention to ask this question, the answer to which is in the affirmative. The United Nations general assembly, by resolution of November 28 last year, suggested that the disarmament commission, which consists of the members of the security council and Canada, should study the desirability of establishing a subcommittee consisting of representatives of powers principally involved which would seek by agreement to work out arrangements for the elimination of all major weapons adaptable to mass destruction, and for effective international control of atomic energy to ensure the prohibition of atomic weapons and the use of atomic energy for peaceful purposes only. As the house will be aware, the disarmament commission held its most recent meeting in New York on April 9, and is meeting again this afternoon. In the resolution now before that commission Canada has been proposed for inclusion in the subcommittee, as a power principally involved, although no final decision has yet been taken by the disarmament commission. The Canadian government will of course play its full part as a member of the commission and is ready to participate in renewed efforts to resolve the problems of the control of atomic energy.



PARIS CONFERENCE


[Stage Direction]
On the orders of the day:
Mr. Colin Cameron (Nanaimo):: Mr. Speaker, I should like to ask a question of the Secretary of State for External Affairs. Has the minister's attention been drawn to the press report from Paris appearing in this morning's Globe and Mail regarding the conference of fifteen countries in Paris meeting to revise the list of strategic goods that the West refuses to send to communist countries; and can the minister inform the house whether Canada is sufficiently represented at this meeting?


Lester Bowles Pearson: I wish to thank the hon. member for having given notice of his question. I have seen the press dispatch in question, and Canada is being represented at the meeting to which this press dispatch refers. The head of our delegation to that meeting will be Dana Wilgress.
Inquiries of the Ministry VETERANS LAND ACT



REPORTED REFUSAL OF FARM IMPROVEMENT LOANS

[Stage Direction]
On the orders of the day:
Hon. Douglas Abbott (Minister of Finance):: Mr. Speaker, on Monday, the hon. member for Brandon-Souris (Mr. Dinsdale) asked me if I was aware that veterans farming under the Veterans Land Act are being refused farm improvement loans. He also asked what is the reason for the change in policy respecting veterans.
I wish to state that there has been no change in the policy respecting these loans.
The Farm Improvement Loans Act provides for seven loan classes. The regulations under the act restrict loans in five of these seven classes to an owner of a farm. The definition of an owner under the Farm Improvement Loans Act is:
Owner includes one having an equitable or legal interest in the farm.
A person holding land under the Veterans Land Act is a tenant at will. Section 10 of the Veterans Land Act reads as follows:
Every veteran holding or occupying land sold by the director shall until the director grants or conveys the land to him be deemed a tenant at will.
It follows therefore that a Veterans Land Act settler would not be eligible for a farm improvement loan where a loan is restricted to an owner. A Veterans Land Act settler would, of course, be able to obtain a loan for the purchase of either livestock or farm implements. Under the regulations these two classes of loans can be made to tenants.
I am advised that one bank had issued a directive to its supervisors to the effect that Veterans Land Act settlers were not eligible for any loans under the Farm Improvement Loans Act. My officials took this up with the bank's supervisors and I have reason to believe that its head office will issue a corrected directive.



PURCHASES FOR GOVERNMENT BUILDINGS

[Stage Direction]
On the orders of the day:
Mr. H. B. McCulloch (Piclou):: Mr. Speaker, I should like to ask a question of the Minister of Mines and Technical Surveys (Mr. Prudham). How much bituminous coal was ordered for the federal government buildings in Ottawa for the fiscal years 1953-54 and 1954-55? How much of this, in each of the above two years, was Canadian coal?


Some hon. Members:: Order paper.


Henry Byron McCulloch: What prices per
ton were paid in each of the two years?

Inquiries of the Ministry


Hon. George Prudham (Minister of Mines and Technical Surveys):: Mr. Speaker, the
hon. member was good enough to give notice of his question, and I am in a position to answer it.
His first question is:
How much bituminous coal was ordered for the federal government buildings in Ottawa for the fiscal years 1953-54 and 1954-55?
In 1953-54 there were 52,980 tons purchased, and for 1954-55 62,908 tons have been ordered. In 1953-54 I find that 11,908 tons were of Canadian origin and in 1954-55 I find that 62,908 tons have been ordered from Canadian mines.
The price paid in 1953-54 was, for American coal, $10.50 per net ton and the price paid in the same year for Canadian coal was $11.95 per ton. Canadian coal ordered for this year has been ordered at $10.68 per net ton for slack coal and $11.43 for stoker coal.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Alistair Stewart (Winnipeg North):: should like to ask a question of the Minister of Justice. Is the newspaper story correct that the Royal Canadian Mounted Police have withdrawn protection from Igor Gouzenko?


Hon. Stuart S. Garson (Minister of Justice):: Yesterday my hon. friend's colleague, the hon. member for Winnipeg North Centre (Mr. Knowles), asked a somewhat similar question. I would say in reply to both questions -that asked yesterday by the hon. member for Winnipeg North Centre and the one today by the hon. member for Winnipeg North- that, as the house is aware, it has always been the policy of the government not to disclose the details of the security arrangements made on behalf of Mr. Gouzenko. This policy of non-disclosure is still in effect. The arrangements made for Mr. Gouzenko's protection have, naturally, varied from time to time and have been adjusted to the circumstances of Mr. Gouzenko's own activities. To this end the government has endeavoured at all times to co-operate with Mr. Gouzenko.
I think therefore the house will appreciate that it is not in the public interest, and certainly not in Mr. Gouzenko's interest, to express at this time any opinion about the usefulness of continuing the present arrangements, since the information which has been sought is that which, I should imagine, would be most valuable to those who might have a hostile attitude toward Mr. Gouzenko's security.



TRANSPORTATION


[Stage Direction]
On the orders of the day:
Mr. W. M. Hamilton (Notre Dame de Grace):: Mr. Speaker, I should like to ask a question of the Minister of Transport. Has he knowledge of any plan for federal aid to improve the Wellington street tunnel in Montreal, or consideration of a new tunnel in its place in the near future?


Hon. Lionel Chevrier (Minister of Transport):: All I can say is that during the sittings of the railways and shipping committee, when Mr. Donald Gordon was under examination, the hon. member for St. Ann (Mr. Healy) raised the same question. After some discussion during the course of the proceedings the president of the Canadian National Railways undertook to give the matter consideration. I understand since that, because of the representations made by the hon. member for St. Ann, the chief engineer of the Canadian National Railways and one of the representatives of the city of Montreal have been in consultation about the matter.
With reference to the second part of the hon. member's question, as to the tunnel, I would say that the federal government has already provided, in co-operation with the city of Montreal, two tunnels under the Lachine canal, one at St. Remi street and the other at Atwater street, the first at a cost of about $5 million and the second at a cost of about $7 million. I have no information as to any additional tunnels being provided at this time.



ACTING HOUSE LEADERSHIP OF THE PROGRESSIVE CONSERVATIVE PARTY

[Stage Direction]
On the orders of the day:
Mr. Daniel Mclvor (Fort William):: Mr. Speaker, I rise to a question of privilege. I should like to congratulate the hon. member for Peterborough (Mr. Fraser) upon his acting as leader of the Progressive Conservative group in the house. It is a good sign for the future.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. G. K. Fraser (Peterborough):: Mr. Speaker, I should like to ask a question of the Minister of National Defence. Owing to the fact that I have had a number of letters.

I should like to ask him to what branch of his department a school teacher would apply who wished to go overseas to teach the children of the men in the services. What are the qualifications required?


Hon. Brooke Claxton (Minister of National Defence):: Mr. Speaker, we are hoping to open a number of schools in connection with the military camps and air force camps in Germany and France at the beginning of the 1954-55 school year. Arrangements have been made with the provincial school authorities in all the provinces, I believe, under which teachers qualified to teach in the various provinces should apply through the provincial school authorities; and places are allocated on a quota basis approximately in the proportion of the number of children whose ordinary places of residence would be in each of the provinces. However, in addition, some applicants have applied to the department. Such applications will be considered in conjunction with those received by the provincial authorities, and they should be made to Mr. Harry Low, the director of the bureau of current affairs.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Lionel Chevrier: Mr. Speaker, I should like to reply to a question raised yesterday by the hon. member for Oxford (Mr. Nesbitt). The hon. member asked:
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?
I replied by stating that if it was a concessionaire operating the newsstand I did not think the railways would have any jurisdiction over it.
I have since inquired of the Canadian National Railways and I find that the newsstand at the Chateau Laurier hotel is and has for many years been operated by a concessionaire. The hotel management, while exercising no direct control over the operations of the newsstand, can and do bring to the attention of the concessionaire any complaints respecting the type of printed matter sold on the hotel premises and demand its removal if the complaint is found to be justified.
I am further informed that there have been no such complaints since the year 1948,
The Budget-Mr. Lesage over and above the one which, I take it, the hon. member wished to make yesterday. I should like to add that if the literature is found to be obscene within the meaning of the Criminal Code then a prosecution can be entered at the instance of the provincial or municipal authorities who are responsible for the implementation of that section of the Criminal Code.



ROYAL CANADIAN MOUNTED POLICE


[Stage Direction]
On the orders of the day:
Stuart Sinclair Garson: Mr. Speaker, yesterday the hon. member for Eglinton (Mr. Fleming), without notice, asked me two questions which I agreed to take as notice and to which I agreed to reply today. The first question was this:
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?
The answer to that is that it is the policy of the Royal Canadian Mounted Police to do so.
The second question was this:
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?
The answer to that question is yes.



THE BUDGET


[Stage Direction]
The house resumed, from Tuesday, April 13, 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.
(Translation):
Hon. Jean Lesage (Minister of Northern Affairs and National Resources):: Mr. Speaker, I was saying yesterday evening that the financial relations between the federal government and the provinces had been a thorny problem, especially in the last few years. I added that the events which occurred in the province of Quebec in recent weeks have added to its seriousness.
I do not seek to lessen the gravity of the situation in which a group of taxpayers of Quebec find themselves. I know that my colleagues in the house recognize that the matter cannot be lightly brushed aside or easily settled. Because the situation may have far-reaching consequences, it must be examined from all angles, and its causes and
4076	HOUSE OF
The Budget-Mr. Lesage effects determined in a dispassionate manner, avoiding charges and counter-charges and, above all, name-calling. Would there be any justification, for instance, for accusing me of being an enemy of my province?
I am a Canadian, a son, a resident and a representative of the province of Quebec; to my mind, the only emotion which the circumstances permit is that resulting from the concern that the citizens of my province may find themselves in a predicament.
I fully realize that the personal income tax levied by the Quebec government and the attitude-fully justified, in my opinion- of the Canadian government in regard to total deduction of the tax, give rise in my province to differences of opinion which may rend the unity of the racial group to which I belong.
Peace and contentment within each group as well as between the groups that compose the Canadian nation are so necessary for the safeguarding of national unity and for the social and economic progress of our country that every man of good will must leave aside any political prejudice and interest and conscientiously examine the problem in an effort to find a solution. This afternoon I shall endeavour to set forth as objectively as possible the data of this problem.
The distribution among the provinces of taxation revenues in the form of grants by parliament is a policy which is entirely consistent with the spirit of confederation.
Statistics prove that the payment of subsidies to the provinces was an integral part of the implementation of the act in 1867 by the fathers of confederation themselves. Indeed in 1868, 54 per cent of the provinces' total revenues were made up of subsidies granted to them by the Canadian government. This percentage varied from year to year between 42 per cent and 57 per cent until 1888; between 29 per cent and 37 per cent from 1888 to 1909; from then on it gradually decreased until the depression of 1930-35 when, in that last year, the percentage reached a level of 46 per cent, to fall off again afterwards.
In regard to Quebec, the subsidies received from the Canadian government made up 60 per cent of the provincial revenue for the fiscal year 1867-68 or 59-67 to be exact. During the first ten years of confederation, the average was 46 per cent; during the first twenty-five years it was 37-5 per cent. This percentage has consistently decreased so that it barely exceeds 1 per cent at present.


It is not fair, therefore, to claim that the payment of subsidies to the provinces is contrary to the wishes of the fathers of confederation. Throughout their lifetime, such payments were made on a high scale.
Being faithful to the spirit of confederation, in order to establish a fairer distribution of revenues which help all the provinces to fulfil their constitutional obligations, the Canadian government made, since 1945, various proposals to local governments with a view to reaching fiscal agreements which would at the same time offer the important advantage of avoiding double taxation.
I think that nobody will deny that, in order to maintain our system of government, every level of government must have the financial resources it needs to fulfil its constitutional obligations.
But certain provinces would not be able to meet these needs simply by tapping the direct taxation fields within their territorial limits. Such is the case with the maritime provinces which, unfortunately, participate only in a slight degree in the economic development of the nation. Manitoba and Saskatchewan can claim their share of the taxes levied on a national revenue to which they are contributing handsomely, but which is out of reach of their taxing powers.
We must keep in mind that most of the head offices of the companies which derive their profits from operations which they carry out in all the provinces are located in Ontario and Quebec and that it is in these provinces that their incomes are subject to taxation, as is the personal income of most of their highly-paid employees.
Under those circumstances, it is only fair that the tax revenues be divided in some manner between the various provinces.
In the province of Quebec, for instance, most of the taxes come from the island of Montreal and are distributed throughout the province by the Quebec government. And yet nobody complains about it.
The proposed tax rental agreements submitted by the Canadian government between 1945 and 1950 were not deemed acceptable by all the provinces; but the latter did not submit any workable alternatives.
In 1950, the Canadian government called a new conference and put forward a new system of agreements which possessed the advantage of not requiring acceptance by all the provinces. Without studying in detail, for

the time being, the basis of payments made under those agreements, I wish to stress an all-important point. The amount of $134 million which the province of Ontario received for the fiscal year 1953-54 is substantially the same as the one it could have collected itself in corporation and personal income taxes, which are deductible taxes, had it not accepted the agreements. The latter amount could be estimated as follows for 1953-54:
Millions of Dollars
1. 7 per cent on corporation
income	 81.0
2.	Taxes on capital of corpora- 16.3
tions and the educational tax such as the one collected in Quebec	 4.7
3.	5 per cent of the federal tax
on personal income	 30.7
132.7
It should also be noted that as far as the richest province is concerned, namely Ontario, the amount collected under the agreements on the one hand, and on the other, the product of direct deductible taxes it could levy are equal or quite so. The chief reason which prompted Ontario to sign an agreement was, therefore, to avoid double taxation.
The other provinces receive more, and Quebec could receive more, than they could levy themselves directly from deductible taxes.
The distribution of that surplus to each province out of general revenues of Canada is precisely the main reason for agreements, as I explained a while ago.
Quebec would have received, under the agreements, in 1953-54, the sum of $113 million. I exclude the succession duties which are not rented to the federal government by Ontario, and I leave out in my estimates constitutional subsidies. As it did not sign the agreement, it levied in corporation taxes, which are deductible taxes, the following amounts, according to the figures released by its minister of finance in his budget speech of February 12, 1954:
Millions of Dollars
7 per cent on corporation profits ..	53.1
Special corporation taxes
(a)	on paid-up capital	
13.5(b)	for educational purposes ...	3.5Total corporation taxes ....	70.1
The Budget-Mr. Lesage
It should be pointed out immediately, at this point, that 5 per cent of the taxes levied by us in the province of Quebec would have amounted to $15 million, whereas 5 per cent of the taxes levied by us in Ontario amounted to more than $30 million. In other words we have collected from Ontario more than twice as much in personal income tax as we have collected in Quebec.
But let me return to the province of Quebec: $70 million deductible in respect of corporation income tax, 15 per cent deductible in respect of 5 per cent of personal income tax, that is, a grand total of $85 million deductible, as compared to $113 million which it could have received under the agreements. Since it is not the richest province, this means that it could have collected an extra $28 million under agreements whose object is precisely to enable less wealthy provinces to meet their constitutional obligations through a more equitable distribution of national revenue.
I said "national revenue" and that should be made clear: the additional $28 million which the province would have obtained through the agreements do not represent an amount which would be collected specifically in the province of Quebec, it would come from the federal treasury out of general taxes paid by all Canadians.
I said that the Quebec government had not seen fit to accept the agreement. I repeat that no pressure was exerted to have it sign. The only pressure I am willing to exert is to appeal to the provincial government so that we might reach an understanding in order to avoid, among other things, double taxation which it has just imposed upon many of the taxpayers in my province.
Let us not forget, Mr. Speaker-and this is no criticism on my part, I merely point out widely-known facts-that it is pursuant to a one-sided action of the majority in the Quebec legislature, an action that was taken although it was well known that the federal law only provides for a 5 per cent deduction, that 300,000 taxpayers in my province will pay a double tax on their revenue.
This double taxation is exclusively due to the decision of the Quebec government which now attempts to throw the blame upon the Canadian government. This reminds me of the little boy who pulled the cat's tail and replied to his father, who had told him to stop: "I am not pulling: the cat is."
4078	HOUSE OF
The Budget-Mr. Lesage
We must clearly distinguish between two facts: on the one hand, there is the provincial legislation on personal income tax, the passing of which caused double taxation. On the other hand, there are the demands made upon the federal government to allow the total deduction of the provincial tax from the federal tax. These two questions should be distinguished with respect to their very nature as well as chronologically.
I would be the last one to suggest that the Quebec legislature had no right to impose such a tax. The constitution gives it the right to impose direct taxes within the province for provincial purposes. The problem is not whether the province has the right to tax personal income, for such a right is recognized.
The problem which we have to solve-and it seems to me it is important that we know just what this problem is-is not the matter of the right which the province has to levy income tax. This is a unanimously recognized right. That is not a problem.
The Quebec government has not consulted the federal authorities, neither before, during, ncr since the passing of its law, in order to find grounds for a mutual agreement as far as deductibility is concerned, which is the second point at issue. We have read statements in newspapers, we have received claims from the taxpayers, but we have not heard from the Quebec government.
Is it necessary to make any comments on such a procedure? I do not believe so because, I repeat, we must avoid charges and counter-charges.
Some citizens of Quebec have asked us to amend our income tax law in order to allow those taxpayers who pay the provincial income tax to deduct the total amount of this tax from the federal personal income tax, up to a maximum of 15 per cent.
The Minister of Finance (Mr. Abbott) has pointed out to us why this was impossible. But I repeat that it is the intention of no one to deny the legislatures their right to tax the income of individuals.
We cannot, however, accept the unjustified claim that the provinces have priority over the Canadian government in so far as direct taxation is concerned. To my knowledge, it is neither arrogant nor provocative on the part of anyone to mention politely, according to the terms of our oath, the rights that are


granted to the federal government by our constitution. Nothing in the B.N.A. Act may be construed as giving priority to local governments in the field of direct taxation.
I have already discussed this matter thoroughly in the house, and the member for Joliette-L'Assomption-Montcalm(Mr. Breton) expounded it in a masterly speech last November.
May I add that the law is so clear that it has never been referred to the courts. The right of the Canadian government to tax by every means has never been questioned, because the matter is beyond discussion. In 1945, the Leader of the Opposition himself, while premier of Ontario, stated:
The provinces were authorized to levy direct taxes . . . whereas the federal government was authorized to procure funds by means of any kind of taxes.
For that matter, the theory that the provinces have a prior right is absurd. If such a theory were accepted, a province could levy a tax amounting to 100 per cent of the federal taxes on personal and corporate income and even of the federal sales tax, and if this tax were deductible from the federal taxes, nothing would remain of the latter.
I have sometimes heard the following: inasmuch as parliament allows a deduction of 5 per cent in regard to provincial taxes, it therefore recognizes the prior right of the latter. Or the following: since parliament pays a rental to the provinces that have signed tax rental agreements in return for their rights to direct taxes, it recognizes that local governments have a prior right in this field.
In neither case, Mr. Speaker, is there anything but the recognition of a parallel and concurrent right; in both cases, the Canadian government makes an honest effort to help the provinces, while eliminating the inconvenience of double taxation for the taxpayers, and the cost thereof for the governments.
If, having entered a business partnership, my partner and I have equal rights, nothing prevents me from leasing out my share to my partner. But such lease surely does not imply any priority either of his right or mine. It implies equal rights.
Mr. Speaker, before giving an answer to those who have asked that the new provincial tax be made deductible, you may rest assured that we considered the matter seriously, that

everything was duly weighed because, as I have said, the members of this government are not satisfied with the present situation.
But we must consider the facts as they are. What we are being asked is, in fact, from the point of view of deductibility, to amend section 33 (1) of the Income Tax Act which now reads as follows:
Where an individual has paid tax on income for a taxation year to the government of a province in which he resided, was employed or carried on business during the year, there may be deducted from the tax otherwise payable under this part for the year the lesser of (a) an amount equal to the tax so paid, or (b) 5 per cent of the tax otherwise payable under this part for the year.
In other words, we are being asked to amend this section by changing the figure 5 to 15.
It is, in fact, what we are requested to do because, in order that each Quebec taxpayer may deduct his provincial tax in full, the deduction provided by section 33 on an individual basis must be allowed up to 15 per cent. This cannot be done otherwise than on an individual basis, of course.
What would be the effects of an amendment of that kind? Here I shall refer to the tax agreements since an attempt has been made to justify the merits of the suggestions which were brought forward by establishing a comparison between what the province of Quebec would receive under such agreements and what it now collects plus what it could collect in deductible taxes.
The suggested amendment would permit any province which has not signed an agreement or lets an agreement lapse, to levy on every taxpayer a personal income tax equal to 15 per cent of his federal tax and deductible from the latter. That means therefore that with a possible deduction of 15 per cent, Ontario would be greatly tempted to drop the agreements because that province could then collect over $60 million more than what it now receives under the agreements, at no additional cost to its taxpayers.
And more than that, I believe that Ontario could go so far as to request the termination of the agreement it signed on October 29, 1952. It could hold that there has been a breach of faith on the part of the federal government, since one of the bases of this agreement is precisely an amount equal to 5 per cent of the personal income tax liability
The Budget-Mr. Lesage of the residents of the province, as provided for by section 4 (1) (a) of the said agreement.
The $60 million surplus that I mentioned a moment ago could be collected by the Ontario government and would then be part of its revenue instead of going into the nation's consolidated fund. The benefit of the regulating effect of our taxation system would thus be lost for the nation and the province of Ontario would be placed financially in a privileged position, simply because it happens to be situated, geographically, in the centre of our country. Let us remember the case of Montreal, which I gave as an example, in relation to the rest of the province. Situated as it is, at the head of navigation, it pays the greater part of the provincial taxes.
On page 10 of its submission to the Prime Minister of Canada, the Montreal chamber of commerce says this:
In practice, the federal government accepts the deduction of the provincial income tax from its own income tax within certain limits.
On page 27 of the same brief, the chamber of commerce determines what that limit should be when it says that one could seriously object to the full deduction of the new provincial tax only if the said deduction gave the province of Quebec a privilege not granted already to the other provinces.
Now, I indicated a moment ago that one of the main characteristics of the present agreements is that the province of Ontario obtains the same amount it would get if it levied its own personal and corporation income taxes according to the present rates of deduction from the federal income tax, that is 5 per cent in the case of personal income tax. The province of Quebec would thus have an advantage over Ontario, although the latter provides nearly half of the federal revenue derived from personal income tax.
Or else, the province of Ontario could consent to the continuation of the agreement, on condition that it be revised so as to give her as much as she could levy herself in the form of deductible taxes, including 15 per cent of the federal income tax. Consequently, that province could ask for a payment of $196 million instead of $134 million, that is, an increase of 45 per cent.
But the amounts payable to the other provinces would also have to be changed. Under the new formula with its 45 per cent increase, if it were accepted for Ontario, the amount would be $164 million instead of $113 million for Quebec.

The Budget-Mr. Lesage
And it would go round and round. Quebec would no longer be satisfied with 15 per cent. If it is fair to say, as has been said, that we should accept the principle of authorizing a deduction corresponding to the amount which the province would have received had she signed an agreement, Quebec would then request a 31 per cent deduction from personal income tax.
Again Ontario could say: "I am entitled to the same treatment", and so on. The ultimate and ridiculous consequence of all this would be that the federal government would no longer enjoy the fields of taxation granted to it by the constitution.
Some have said: "Why is it that last year parliament authorized the deduction of the Quebec educational tax and increased the amount of deductibility from 5 to 7 per cent in the case of corporation taxes?" The answer is quite simple: such a decision did not have the effect of undermining the very basis of fiscal agreements with the other provinces. The other provinces, and more particularly Ontario, had they not signed the agreement, could have received in deductible taxes, including that part of provincial taxes which became deductible last year, an amount not greater than the amount paid to each province under the agreements. But that is no longer the case, because, I repeat, the two amounts are now equal as far as Ontario, the richest province, is concerned.
Some would lay down as a principle that any province which has not signed an agreement should be entitled to levy deductible taxes in proportion to the amount it would receive under the agreements.
I have mentioned that, taking into account the present deductibility of corporation taxes, the deductible percentage in Ontario for personal income tax would have to be 5 per cent, which is the present rate, in order to maintain a proper balance. In Quebec, as I will show later on, it would have to be a little less than 15 per cent. I made the calculation for New Brunswick also and in that province it would have to be 63 per cent.
We can already see the tremendous confusion that would follow the application of that principle subscribed to by the Conservatives at their last convention, but conveniently forgotten by them since.
If, for instance, we were to recognize that, in the case of New Brunswick, the deductible


percentage from personal income tax should be 63 per cent, would not the Quebec government be the first to ask for the same treatment?
How could we amend the Income Tax Act so as to recognize a percentage of deductibility which would vary from one province to another?
I cannot bring myself to believe that some would want to place us in such a position that we would have to put into force a law which would differ from one province to another.
It may be said that this could not happen, since all the other provinces, nine out of ten of them, have signed agreements. But these agreements are temporary and could be denounced for valid reasons. By laying down, at this time, the principle of discrimination, we would pave the way for anarchy.
But I will be told also that deductibility is being claimed, not in respect of 15 per cent of the whole of the federal income tax collected in the province of Quebec, but only in respect of 15 per cent of the income tax to be paid by the 300,000 taxpayers liable to the provincial income tax according to a scale of contributions providing for higher basic exemptions.
But let us not forget that section 33, which I quoted a while ago, provides for deductions on an individual basis. It could not be otherwise. This section allows every federal taxpayer to deduct up to 5 per cent in respect of the income tax paid to a province which is not party to an agreement.
If the figure 5 is changed for the figure 15, any non-signatory province, or any province which has allowed its agreement to lapse or which would have denounced its agreement for good and valid reasons, may benefit from the amendment. We must legislate here for all provinces, and when we allow a percentage of deduction, this percentage must be established in respect of the amount of income tax payable to the federal treasury, without any regard for the variable exemptions which may be allowed by the provinces in respect of their own tax. As a matter of fact these exemptions may well vary in a single province from session to session. How are we to know, for instance, whether, a few months from now, the Quebec government will not change their exemption levels to bring them down to the federal level, which would be much to their advantage since they would

thus be in a position to collect from every federal taxpayer up to 15 per cent of the federal levy without this costing these taxpayers one extra cent.
More than that, if the 15 per cent deduction were allowed, the province of Quebec itself could then levy more in deductible taxes than it would receive under the agreements. On the basis of the 1953-54 figures, I said that Quebec would have received $113 million, apart from the statutory grants, under the agreements. I do not take into account succession duties, as in Ontario; Quebec would find the same advantage in not renting this right. According to the figures given by its minister of finance, the province of Quebec has levied through various taxes on corporations-all of which were deductible for federal tax purposes-the sum of $70-1 million in 1953-54. Fifteen per cent of the federal personal income tax would have yielded $44 * 7 million in that same fiscal year, which means that the province could have levied $114-8 million in deductible taxes, or approximately $2 million more than what it would have received under the agreements.
The Montreal chamber of commerce will say: "Allow at least a 14 per cent deduction". But the difficulty which the chamber wants to avoid would still remain. There will still be double taxation, at least in respect of part of the 15 per cent tax to be paid by the taxpayers.
Is it not fitting to recall, Mr. Speaker, that this same body made representations to the Quebec authorities when the bill providing for a provincial income tax in that province was introduced, to the effect that the legislature should limit its tax to 5 per cent of the federal tax, while at the same time taking full advantage of it. This would have yielded, for 1953-54, an amount of $15 million, at no additional cost to its taxpayers. In my opinion, the chamber of commerce was in fact blaming the government of Quebec for imposing double taxation on personal incomes.
I have shown, I believe, that making the new provincial tax on personal incomes fully deductible in Quebec would not settle the problem. Far from being a solution, this deduction would create new difficulties with the other provinces as well as with Quebec itself.
In short, we are being asked to recognize that it is the privilege of the Quebec government to decide, as it deems fit and by one-
The Budget-Mr. Monteith sided action, what amount of revenue it may take from the federal treasury.
In other words, what is being asked of us is the power for Quebec not only to levy taxes upon its own taxpayers but on the Canadian government as well.
The government of the province of Quebec says that it does not want any subsidy. But what it is seeking from us is the permission to determine the amount of a federal subsidy to be collected in another way.
Mr. Speaker, it was only after seriously considering the possible consequences of what we have been asked to do, that we came to the conclusion that we could not accept the proposal made to us, as I say, not by the government, but by some Quebec taxpayers.
Since 1945, we have put forward various successive proposals which became acceptable to nine provinces out of ten only after various amendments.
The government of Quebec never made any counter-proposals; it acted unilaterally without any consultations whatsoever, and now there are those who would have us without further ado accept the fait accompli as the solution to this problem.
The fact that we are unable to accept this suggestion, which is the first offered to us whereas we have already made several that were rejected, does not mean that we are opposed to any further proposals. On the contrary. The study I have just made, speaking with due humility, and which has been made by others of this matter may perhaps throw more light upon the various aspects of the question, and thus provide the basis for a satisfactory solution.
If the government of Quebec is ready to try and find a common ground for agreement, I may assure you that, for their part, the members of this government are prepared to seek, in co-operation with the Quebec authorities, a solution to this difficult problem which we all want to solve.
There is no insoluble problem for men of good will, ready to discuss seriously, in all good faith, and without fanfare, a question on its merits.
(Text):


Mr. J. W. Monteith (Perth):: Mr. Speaker, there were certain thoughts that came to mind the other evening as the minister was presenting his budget, and I should like to mention a few of them: Some minor relief in excise tax; no change in income tax; no expected increase in the gross national product. Government members almost appeared

The Budget-Mr. Monteith to have a marked script telling them when to laugh and applaud. There was little concern for the Canadian taxpayer. Of course, with no apparent effort being made to curb expenditures, what else could be expected? The minister said that imports were up 9 per cent and exports down 4 per cent; exports to the United States were up and exports to the United Kingdom were down. He said that there was to be no further sales tax on road machinery, fire-fighting equipment and so on purchased by the municipalities, a very welcome gesture.
The minister does not believe that we have a high cost economy, which would seem to be a contradiction of some other ministers. There was uproarious laughter from the Liberal benches on the announcement that inventories on hand on April 6 must be sold, less the decreased tax. There was no apparent thought that while this is probably the only way the matter could be handled, some small operators could be forced out of business. There are plans to overhaul the federal Succession Duty Act. The present minister will start the overhaul, but who will finish the job?
There is no apparent concern about the hundreds of millions of bushels of wheat unsold in the west. In the minister's opinion there is no serious unemployment. When one considers the whole picture, Mr. Speaker, it seems to me to be anything but an impressive budget. My reaction as a newcomer to this experience of listening to a budget address was that there was very little of anything for anybody except the government.
There used to be a rule of thumb method of dividing profits of a company, Mr. Speaker. It was roughly 50 per cent to the shareholders in the way of dividends and roughly 50 per cent left in the company for further expansion, and so on. Now, the government takes approximately 50 per cent of the earnings, if those earnings are over $20,000, and leaves the other 50 per cent for these two purposes. This means possibly only 25 per cent of net earnings are left in the company to assist in the development of the company and of Canada.
I wonder if there is not a point of diminishing return in this matter of taxation. The minister found this out in connection with the taxing of tobacco and cigarettes. I feel a reduction in tax rates might well mean an increase in over-all taxes flowing into the treasury. I feel further that individual tax rates are too high. If the government could ever see its way clear to practise a certain amount of economy itself, as it preaches to others, there is no doubt that these onerous tax rates now in force could be reduced.


Just a word about unemployment. I should like to read a clipping from this morning's Globe and Mail which bears the heading "Lay-off at Stratford". The item is dated at Stratford, April 13, from the Canadian Press and says:
Fifty-six men will be laid off April 21 from the C.N.R. motive power shops here in what is expected to be general staff reduction of between 700 and 800 workers in motive power and car shops across the system, C.N.R. officials said today. The layoff here represents a staff reduction of eight per cent-to 901 workers in shops here.
I cannot reconcile this announcement with all the fine words coming from the government benches. May I repeat, as I said in the house last March 1, that the government should take the lead and assure their own employees in the Canadian National Railways that their jobs are secure. That, in itself, would give confidence to the country as a whole.
I am not able to dwell on this subject further today, but I would point out that the list of employees in the civil service has grown from 115,000 at the height of the war effort, when there were all sorts of special services in effect, such as rationing and the like, to 125,000 in 1950 and to 135,000 regular employees last December, at which time there were altogether 170,000 on the payroll. I am wondering why the government's own railway employees should be let out at this time, when the government itself declares that we are due for better times and conditions.
I should like now for a moment to get back to a discussion of the budget. The budget would authorize the deduction annually of $1,500 from taxable income for payments towards superannuation plans. This is a suggested increase from $900 per year. What workingman or so-called white-collar worker could this possibly affect? Only someone earning a very large salary could derive any benefit from this change. It will not benefit other than a very few Canadians in the higher income brackets. I think that in this particular the minister's efforts might well be labelled "An Executive's Budget".
The budget also provides for the taxation of a residential mutual insurance corporation, other than a life insurance corporation, as though the surplus arising from its insurance activities on and after January 1, 1954, were a profit from a business. The remainder of the minister's statement in this connection is not of importance as it has to do with nonresident mutual insurance corporations.
Might I outline briefly the history of taxing these mutual fire insurance companies, as I understand that history. I think it was in 1947 that the budget first proposed taxing

this type of co-operative effort. They were to be taxed on net earnings, the same as any other company-with one somewhat technical adjustment to the effect that the reserve for unearned premiums was to be calculated at 100 per cent rather than at 80 per cent as required by the Insurance Act.
One mutual company appealed an interpretation of the act, and the appeal was upheld by the appeal board. I believe this decision was later reversed by the Exchequer Court. Then the Supreme Court of Canada, some time around last May, after the budget for that year had been brought down, found that if all or the majority of the members of such a body of people were banded together to insure themselves, any surplus arising from overpayment for insurance by them was not taxable.
The Supreme Court did find that income arising from the investment of that surplus was taxable, after an allowance of some three per cent of such income was deducted to allow for the expense of operating the investment portfolio, and so on. The main point was that no underwriting profit was taxable.
Now, it is obvious the minister wishes to get his hands on that underwriting surplus.
Let us consider some of the circumstances surrounding these mutual fire insurance companies. First of all, usually the members are farmers grouping themselves together to provide protection for themselves against fire loss. It is a co-operative effort.
I should like now to place on record a schedule of the limit on refunds of surplus by insurance companies as set out in section 117A of the Insurance Act of Ontario. This is governed by a limit per $100 of insurance after refund has been deducted from surplus. A company with over $2 million of direct insurance in force must have $1 of surplus for every $100 of insurance at risk; a company with over $5 million insurance in force must have 80 cents per $100 at risk; a company with over $10 million must have 70 cents; one with over $25 million must have 60 cents; one with over $75 million must have 50 cents and one with over $125 million must have 40 cents. I believe most companies would fall in the category of 60 cents or 70 cents per $100 at risk.
In section 117 of the Insurance Act of Ontario, if a company falls below 25 cents for every $100 of insurance in force, the department will force the company to adopt a basic premium of insurance of 80 cents per $100, covering three years. Other provinces have provisions somewhat similar to those in Ontario. This is especially true in New Brunswick, where the act is patterned after that in Ontario.
The Budget-Mr. Monteith
One point that has made it exceedingly difficult for these companies has been the increase in prices during the last number of years. It has caused a tremendous increase in the amount of insurance in force and caused a drop in the proportion of surplus to insurance in force, which has forced them to try to accumulate surpluses to prevent the basic rate being applied, and has also made it more difficult for them to refund surplus. Therefore surplus seems to me to be more in the nature of a reserve.
It does not appear to me that these members are in business to make money. We all feel the tariff insurance companies do not as a rule like to insure farm risks. What are these people to do? They simply group together to protect themselves against the possibility of fire loss. I see no argument particularly against taxing income from the investment of surplus, but I do take objection to the taxing of any small excess of premium receipts over losses and expenses of operations, particularly when under their provincial charters they are required to keep a certain surplus on hand.
Now, Mr. Speaker, I would like to mention a few matters concerning the operation of the Income Tax Act which, I think, should be brought to the attention of the house. They may seem rather minor but in their own way I believe they are rather important. I would like to read section 27, subsection 1, paragraph (c) of the act from Stikeman's "Income Tax Act" annotated 1953 revised. Section 27 states:
(1) For the purpose of computing the taxable income of a taxpayer for a taxation year, there may be deducted from the income for the year such of the following amounts as are applicable:
We now come to paragraph (c):
an amount equal to that portion of medical expenses in excess of three per cent of the taxpayer's income for the year paid either by the taxpayer or his legal representative
(i) within a period of twelve months ending in the year and not included in the calculation of a deduction for medical expenses under this act for a previous year, . . .
It would appear from the wording of the act that the taxpayer who does not pay his medical bills promptly receives the greatest benefit. In other words, the government appears to bonus the delinquent payment of medical bills. The act states that medical expenses will be allowed which are paid within a 12-month period, and since there is a three per cent deduction, it would appear that the taxpayer would be further ahead if he accumulated several years' medical bills and paid them all within the 12-month period. You might say, the taxpayer who paid his bills promptly during a three-year period would have nine per cent of his
4D84

The Budget-Mr. Monteith income deducted for these medical bills, whereas, if he accumulated them and paid them in one year, he would have only three per cent deducted.
I would like to refer to another paragraph in section 27, namely paragraph (d). Section 27 states:
(1) For the purpose of computing the taxable income of a taxpayer for a taxation year, there may be deducted from the income for the year such of the following amounts as are applicable:
(d) $500 if the taxpayer
(i)	was totally blind at any time in the year or was, throughout the whole of the year, necessarily confined, by reason of illness, injury or affliction, to a bed or wheel chair, and
(ii)	did not include any amount in respect of remuneration for an attendant by reason of his blindness, illness, injury or affliction in calculating a deduction for medical expenses under this section for the year;
This does not appear to me to allow a person who is mentally unsound and who must have attendants looking after him at all times to make this $500 deduction unless he is confined to a bed or wheel chair. Actually he might be able to be taken for walks and so on but still require the fulltime company of attendants. In my estimation these two paragraphs of section 27, subsection 1, might well be reconsidered, examined, and probably amended.
Another section of the act which does not seem entirely equitable to me is the matter of refund on overpayments. Section 57, subsection 1, reads as follows:
If the return of a taxpayer's income for a taxation year has been made within two years from the end of the year, the minister
(a)	may, upon mailing the notice of assessment for the year, refund, without application therefor, any overpayment made on account of the tax, and
(b)	shall make such a refund after mailing the notice of assessment if application therefor has been made in writing by the taxpayer within 12 months from the day on which the overpayment was made or the day on which the notice of assessment was sent.
The general practice of the department, upon receiving a taxpayer's return, is to send an assessment notice which also acts as a receipt for any amount paid at that time. Let us assume a taxpayer files his return on April 30. He would receive an assessment notice dated probably some time in May. Presuming the department found nothing incorrect, upon checking the return, the taxpayer would have 12 months from that date in May to apply for a refund if he later felt he was entitled to such a refund.
Now, suppose a taxpayer did not meet instalment payments in time, the department would in the course of time send him a reassessment notice demanding payment of interest, though the amount may be very small. In that case the taxpayer has 12


months from the date of the reassessment notice to apply for a refund if he felt such to be coming to him. In other words, the taxpayer who was paid up completely, upon making his return, would be penalized for those extra months if he should later find he had overestimated the amount of tax he should pay.
I contend, Mr. Speaker, that many taxpayers have suffered as the result of being unable to apply for a refund due to this time restriction. In fact, I know of taxpayers who have suffered substantially due to being unable to apply for a refund more than 12 months after receiving their original assessment, while other companies who received a reassessment notice and paid a small amount of interest had several months more time in which to discover an error and make application for such refund. It seems to me that this prevailing situation is unfair and should be remedied.
Now, Mr. Speaker, I would like to say just a word on this net worth method of calculating a taxpayer's income, particularly as it applies to farmers. I would like to say at the outset that I realize the inspectors of the department have a real problem. It is a simple matter to check on the return of an employed person. There are T-4 slips for evidence. It is comparatively easy to check on corporations or individuals in business. They, as a rule, have adequate records and books of account. The one case of the taxpayer who has not been trained or accustomed to keeping track of his receipts or disbursements is the farmer. The law states the farmer should keep records. That is easy to say. I wonder how those in this house who are not farmers would care to work 12 to 14 hours a day in the summer months and then try to write up a record of what moneys they may have received or what petty expenditures they may have made. Maybe there is no great difficulty in keeping track of a monthly milk cheque or of the sale of some hogs or cattle beasts, but it would be almost impossible to recall all the petty payments which a farmer is likely to make, such as for some seed, a few bolts for a hay loader needing repairs, a piece of harness and so on. I feel that inspectors sent out to investigate farmers' returns should themselves have had farming experience.
Sometimes a practice that has been made use of is that of taking signed statements from farmers as to their estimated cost of living and as to other details of their financial operations. I cannot agree with this procedure. The farmer when first approached by an income tax inspector is bound to be nervous, is likely not to understand completely what it is all about, and hence is

likely to make statements about transactions which are not entirely correct, although well intentioned. They may have applied to another year. I have seen that sort of thing happen. As so many farmers deal to a great extent in actual cash, their memories of certain transactions may well be at fault. The transactions might have taken place in one year instead of another. It has been my experience that some such signed statements may later prove to be incorrect, to the detriment of the taxpayer. I will say that in most instances income tax inspectors have eventually agreed to adjustments if such adjustments could be shown to be justified. That is not, however, my point. I feel that every opportunity and assistance should be given to the farmer in order to help him come to a correct determination of his taxable income without the department using some hastily drawn up and signed statement as the basis of determining that income.
In conclusion, Mr. Speaker, might I point out that if an inspector has had previous farming experience he will have a much truer picture of what a farmer is likely to spend for his ordinary living expenses than will an inspector who is accustomed to living in a city. It occurs to me that in some cases at least farmers are assessed more than they should be in this respect.


Mr. G. H. Castleden (Yorkton):: Mr. Speaker, I think the 1954 budget will be remembered in Canada, if it is remembered at all, rather for what it failed to do at an important turn from the economic prosperity in Canada than for what it did. If ever a country needed leadership in the face of an admitted decline, it is now. But this budget reveals the same bankruptcy of effective action towards curing our unemployment, our declining markets and the slow-down in our production that prevailed preceding the last depression. I lived through that depression, Mr. Speaker, and it was one of my hopes that I would never see another one. If action is going to be taken to prevent one, it should be taken now. Instead of getting action which would prevent a depression, we get nothing but a continued song of optimism, of what great hopes there are for the future, of optimism with regard to international economic cooperation and an important program this year for the general agreement on trade and tariffs. In his budget speech the Minister of Finance (Mr. Abbott), as reported at page 3724 of Hansard, said this:
From what I have said, it is clear that events are shaping up to make the coming year an important one for progress in international economic cooperation.
The Budget-Mr. Castleden
What that means in terms of trade and what Canada is going to get out of it is not very clear. The minister continues:
The new and positive attitudes of many countries, their improved trade and payments position, and the substantial progress towards domestic economic stability have combined to create a more favourable climate for advance than at any time since the end of the war.
That is very nice sounding phraseology, Mr. Speaker, but I should like to know what it means in actual terms for 500,000 people who are unemployed in Canada. I should like to know what that phraseology, translated into terms, means to the fishermen of Newfoundland who have lost their markets for fish; to the coal miners of Nova Scotia who are being taken out of the mines because there is no market for the coal; to the potato growers in New Brunswick; to the industrial workers in Quebec and in Ontario, in the factories which are laying off people day after day and week after week; and this is continuing in a time when we were told that things were improving as the month of April advanced.
The wheat growers of the prairies are still looking in vain for an opportunity to sell their grain. What about the lumber workers and the ship workers? Yesterday we had from the Minister of Trade and Commerce (Mr. Howe) a statement about the great opening up of shipping and the prospects for a great flow of grain through the great lakes. But in this morning's Globe and Mail I notice, under dateline Ogdensburg, New York, April 13, an article which says as follows:
Because of a gloomy outlook for grain cargoes, the George Hall Corp. of Canada will commission only seven of its fifteen freighters Monday when navigation opens on the St. Lawrence river.
Frank A. Augsbury Jr., president of the company, described the situation as "very bad, a terrific problem in Canada". The holding of eight Hall ships at anchor will affect 200 employees, 25 on each vessel.
Phrases to the effect that Canada's declining inventories are basically a constructive adjustment do not mean much to 500,000 unemployed people who find their unemployment benefits running out as the weeks progress and that they cannot find work. The facts facing this government-and the members of the cabinet know this-are that Canadian industrial plants for years have been working on war contracts, with guaranteed prices and no competition. But today we have to place our goods in line with goods of other countries in order to sell them on the markets of the world against world competition where the cost of living is not so high and where those goods are being bought because of the difference in price. The cost of living in this country has gone high because of the administration of this government. Just a few years
4086	HOUSE OF
The Budget-Mr. Castleden ago, when we tried to get them to hold price controls, they scrapped them. The finance minister tells the great Canadian people that the cure is to sharpen their pencils. They will have to do a lot of sharpening to meet prices today, with the cost of living at the present level in Canada. The only sharpening of pencils that the western farmer knows about is when he goes to the bank to borrow some more money, because he can get no cash with which to carry on and to put in his crop this year. How can our gross national income and production increase if we have not markets in which we can sell our goods? What good is international economic co-operation or general agreements on trade and tariffs when our goods are too high priced to sell? Producers from Europe are delivering steel goods in Montreal; for instance, we are told that nails are being delivered at $3 a keg less than the figure at which we can produce them in Canada. No whistling-in-the-dark budget such as that which we are given will correct the facts of the situation. Every major sign of a serious decline is here, including the great optimism of the cabinet and of the minister himself. With such situations as this, Canadians review and look over the budget with a great deal of careful examination and with a discerning eye.
They look at various expenditures such as those on defence and wonder how much of this is outdated. I think every person in public life today should be warning the people and placing the facts before them with respect to one of the greatest dangers that face the world and civilization. Recent developments are such as to demand that the world powers get together on the H-bomb problem. Unless mankind can control the bomb then our civilization faces destruction. Time is rapidly running out. We have in the United Nations machinery which can control the H-bomb or N-bomb or cobalt bomb and can stop them. I do not think there is any other agency that can. But real cooperation is required in getting together those nations which have the know-how. Our existence depends on mankind's ability to accept the authority of the United Nations and its willingness to place all bomb experimentations under a United Nations committee.
It is evident today that bigger and more terrible bombs will be exploded as long as the three great powers that now have the know-how refuse to get together. More and more terrible means of destruction will be devised until finally humanity will be shocked out of its insanity. People who have watched the rapid growth of the power and destructiveness of this fearful weapon and who know its possibilities realize by now that this is


no longer merely a nightmare of the future, as we looked upon it a few years ago, but a hideous reality that is here today. Its fearful effects are slowly beginning to be realized by the masses of the people; and the masses of the people will make governments move some day if they do not move of their own volition. Man has finally found some of the inner secrets of nature which heretofore have mercifully been withheld from him, but man in refusing to work together with his fellow men is proving that he lacks to a great degree the moral responsibility to handle such knowledge.
The possibilities of even the H-bomb, let alone the nitrogen bomb, should arouse the most serious reflection in the mind and conscience of every human being capable of comprehension. Can science be allowed to produce more and more terrible engines of destruction? If we continue along the path which is being followed at present we will come to a point where vast areas of the world, now the homes of millions of people, will be contaminated by the vile dust from these death-dealing weapons. Recent reports show that the explosion at Bikini in March of this year affected a vessel some 2,200 miles away, a location heretofore thought to be beyond the range of harm. A report from Tokyo found in the Montreal Star of Saturday last has this to say:
The master of a radioactive Japanese fishing vessel reported today his boat was 2,200 miles away from Bikini when the United States touched off its second hydrogen device March 26. The log of the Misaki Maru said it was operating at a point near Angaur, in the Caroline islands, from March 19 through March 29. A geiger counter clicked 200 times per minute when it was placed near the head of one of the crew men after the Misaki Maru reached port yesterday. About 45 beats per minute is considered the safety limit. Nevertheless, the tuna catch of the Misaki Maru was pronounced free of contamination and sent to fish markets for sale.
The Misaki Maru's location was made known as the government fisheries bureau announced it would begin a search for new fishing grounds "secure from the hydrogen bomb." Examinations by Japanese doctors revealed that the Misaki Maru's crew had no external sores as in the cases of 23 men of the Fukuryu Maru who were burned by a fall out of hot ashes from the March 1 Bikini-Eniwetok blast.
In spite of past failures, I think Canada should be taking the lead in urging the nations of the world to get together. I was glad to hear the statement of the Secretary of State for External Affairs (Mr. Pearson) this afternoon, although it still seems to fall far short. I believe the matter is important enough for Canada to request a meeting of the general assembly of the United Nations in order that this problem may be solved, because the sands of time are running out.

Canada must persist ia its efforts. I believe we can succeed but if we do not succeed and have to face the horrible results of that failure, then let us be able to say that at least we fought on the side that was right and asked for sanity. I do not think the urgency of this matter can be overemphasized. We must have world control or world destruction. I think our national defence estimates should be geared to the situation as it exists today. There is no defence known for H-bomb activity, so why should we spend so much on types of defence many of which must be completely obsolete.
It is not my intention to deal with the ramifications of the problems that this government is having with the province of Quebec. I think it is the sort of squabble that is dangerous to the unity of Canada. The Liberal party is today reaping the harvest of some of the seeds it has planted down through the years. They will have to deal with it, but I know that Canadians are disturbed when they read such statements as that of the premier of Quebec reported in the Montreal Star of last Saturday. I do not wish to involve him particularly, but I think it is a sign of the times. The report reads as follows:
Mr. Abbott's statements certainly rejoiced the enemies of the province of Quebec who favour only one language and one religion.
Just think that in Canada that type of thing could be said, that a belief exists in the minds of a large number of people that we do not have freedom of religion in this land, that individuals have no right to freedom of religion, freedom of speech and freedom of assembly. This kind of thing can only arise in a nation where people are not aware of their own liberties and the liberties of all men, and recognize and tolerate those liberties in others. A bill of rights should have been written into the Canadian constitution years ago. Every Canadian bom and brought up in this land should know that there are certain basic human rights which are his and that they will be maintained for him by an impartial tribunal. These rights should be guaranteed to every citizen of Canada. I think the failure to do this is one of the failures of governments of Canada in the past. Such a bill establishing these rights for every Canadian citizen would do a great deal to promote unity within Canada and do away with some of the misunderstanding that exists.
We realize that every Canadian has a right to freedom of religion. We believe that the people of Quebec have that right in the same way that I believe they believe that we have a right to our religion. But if there were no 83276-258J
The Budget-Mr. Castleden question about them having such rights then no demagogue would be able to make such statements and cause disunity among Canadians. It would seem that too many people do not know of these rights. Certainly they are in the hearts of the people of that part of Canada from where I come. In the province of Saskatchewan we have a bill of rights on the provincial statute books, and these rights are established.
In the debate yesterday there was some reference made to the establishment in Canada of some kind of royal commission. I do not believe we need the kind of royal commission that was requested. Surely in Canada another of our basic rights is that everyone charged with any penal offence is presumed innocent until he is proven guilty according to law in a public trial in which he has had all the guarantees necessary for his defence. May Canada never be disgraced and divided by anything resembling the investigation committees of the United States. Due process of law is the bulwark of our freedom. It prevents the victimizing of men and women without any evidence and without any opportunity to defend themselves. It prevents the perversion of facts and the condemning of people by allegation when the charges are already disproved.
I do not know of anything which will weaken and divide a nation so much as the fear and suspicion that results from the establishment of that kind of so-called court or tribunal. I do not know of anything that will ruin a nation's position in the scale of greatness more quickly than the perversion of justice. Let us be thankful that Canada's R.C.M.P. and the investigating bodies charged with law enforcement in Canada have maintained justice in these difficult times. Canada can hold her head high. We in Canada need fear nothing except our own fear to attack wrongs when we see them in our midst.
The want of confidence motion regrets that that the government has failed to retain and regain those markets of our land for such things as fish, fruit, wheat, lumber and coal.
I believe that is one of the major failures of the present administration. In the falling markets of Canada lies the foundation of a depression which can bring havoc to this country and be felt from end to end of this nation. Our goods are finding it difficult to meet competition from other countries. The Minister of Trade and Commerce has made certain statements in this house concerning our trade which do not seem to be borne out by the facts as they have occurred.
We in the prairie provinces are particularly vulnerable when we cannot find markets

The Budget-Mr. Castleden
for our large crops of grain. The uncertainty of the situation was emphasized by the minister's statement in this house a week or so ago to the effect that he hoped this year to obtain the delivery of seven bushels per acre on our specified acreage by July 31 next. Seven bushels per acre amounts to approximately fourteen bushels per seeded acre which is approximately one-half of the 1953 crop in many areas of the west. The minister admits that, under present circumstances, the western producer cannot hope to deliver more than seven bushels.
There are two essentials in this situation which the people have a right to expect from this government. The first is that if the producer is to be placed in the impossible position of being unable to get a sufficient return from his crop to cover the cost of producing that crop, then he must have access to some means which will permit him to continue his production. The second essential to the farmer's well-being is that in each community there should be provided distribution of deliveries. In my own community there are farmers today who, because of their inability to deliver grain, are left in a position where they cannot meet the payments on their purchases of farm machinery and trucks. Already the implement companies and the automobile companies are repossessing farm machinery.
If these farmers lived in some portions of Alberta where the crop deliveries have been up to some seven bushels and more they would be able to meet these payments and would not suffer these losses. I want to know by what right the people in one portion of the prairies should be penalized and have to take extra losses because of the failure of this government to equitably distribute the right to deliver grain. In one area the farmers have only three or four bushels delivered, while others have seven or eight bushels delivered, and the difference would mean that a man would not have to suffer the loss he is today suffering because of this unequal distribution.
One of the tragedies of the situation has been the optimism with which the ministers have misled the people. People reading reports from the ministers here would imagine everything was all right; they would be able to deliver the grain all right and that wheat in the bin is as good as cash in the bank. Unfortunately, it is not. Many of these farmers who are having their implements repossessed have wheat in their bins, but they cannot dispose of it; it is not cash. To solve this problem I am going to recommend that the government should immediately
TMr. Castleden.]
undertake some arrangement whereby advances could be made to farmers on properly stored farm grain. This move need not cost the government very much It could be done through the wheat board. Ultimately, we hope that grain will be sold and the money then could be paid back to the government out of the selling price of the grain. Such an arrangement exists across the border in the United States, where the farmer is guaranteed 90 per cent of parity. If the farmer cannot deliver the grain, government officials inspect the bins on the farm and he gets an advance. This enables the communities to carry on. The situation is entirely different in western Canada.
The other thing that would help give some justice to these people would be some method for the equitable distribution of box cars. This would enable farmers to get the cash necessary to carry on their ordinary operations. Tax arrears in many parts of my own constituency have not been bigger than they are at the present time for over twelve years. Retailers are unable to collect advances they have made to farmers, and farmers are unable to make their scheduled payments. One would expect a clear-cut statement from the minister about this situation, because it is one of the big problems facing this government, and in addition the minister had attended the FAO conference. We thought the food and agriculture organization would meet and out of that would come a solution of the problem of disposing of our great surplus.
"But when the minister returned with the communique issued at the conclusion of this gathering we received no clear-cut statement. The communique, of which the Minister of Trade and Commerce approved, is woolly and indefinite. It is not at all like the one for which we had hoped from practical men of affairs who had the power to translate then-decisions into law." That is the opinion of one paper in the west which represents a large group of the wheat pool producers.
This government would do a great deal towards restoring the confidence of the people in it if they would make a statement of the facts and tell the people what they can expect. The government should guarantee the equitable distribution of box cars, and last fall should have told the farmers what they could expect in the way of delivery so the farmers could have planned their production in line with that information. To pretend that all is well when it is not is to condemn those people to an unnecessary and a brutal hardship, and at a time like this that is not good.
There are one or two things which the minister could have done to help restore the

confidence of the people of Canada in this government, and which might have been included in the budget. With production going down, with a large number of people in Canada unable to earn sufficient to carry on and maintain their homes, a change might have been made in the Old Age Security Act under which 2 per cent of all taxable income is paid by income taxpayers in Canada. That seems right and equitable as far as it goes, but when a limitation of $60 is placed on it, Mr. Speaker, a privilege is being granted to certain high income groups which the small man in the street does not like. The maximum should be eliminated.
Another thing that should have been done by this government to restore the confidence of the people in it is to extend the unemployment insurance benefits. Five hundred thousand people in this Canada of ours today are facing unemployment. For a short time they receive a portion in the way of unemployment insurance. They are facing the end of that in a few weeks, and what have they to look forward to? I say they will look to the House of Commons; they will look to the 265 members here who raised their own pay to $10,000 a year as far as the members are concerned and to $27,000 a year for the cabinet. They will say: When the cost of living hit you boys you took care of yourselves; how about us?
Until and unless such measures as we have been advocating here are taken in hand and put into effect by this government I do not think this government has a right to expect and certainly it does not deserve the confidence that the Canadian people placed in it on August 10 last year.
(Translation):


Mr. Joseph Fontaine (St. Hyacinihe-Bagoi):: Mr. Speaker, since April 6, when the Minister of Finance (Mr. Abbott) made his budget speech, several members have expressed their opinions and made such comments as they deemed appropriate.
I believe it is now my turn to speak on behalf of the people of St. Hyacinthe-Bagot, because I am deeply indebted to my constituents for having so generously placed their confidence in me. At the 1949 election they gave me the greatest majority of any candidate, not only of my own province but of the whole of Canada, that is 85 per cent of the vote cast, but they did even better at the last general election, because last year they elected me by acclamation. I therefore want my speech today to be the expression of
The Budget-Mr. Fontaine my gratitude to the electors of St. Hyacinthe-Bagot.
Our fine county is made up partly of rural people and partly of city folks. In the urban area, we have the city of St. Hyacinthe, the only one in my constituency with a population of 30,000 people. Industry in general is prosperous and I believe we can fairly say that the people are happy and moderately well-to-do. We have numerous and important industries, including wool, cotton and silk mills, to mention but a few. We also have metal works like Volcano Limitee, a home industry, and Griffin Steel, a subsidiary of a Chicago firm, which is now setting up a plant that will give work to some five hundred men and pay annual salaries in excess of half a million dollars. Such achievements have been brought about through the good will and foresight of our authorities.
We also have at St. Hyacinthe modem educational institutions, which have produced young men who honour us in the religious as well as the civil sphere. St. Hyacinthe also has a well-organized textile school, where we prepare young people who will hold key positions in industry in a few years.
I would be remiss in my duty if I failed to express here the sincere thanks of all my fellow citizens to the federal authorities concerned for having so generously co-operated in the erection of this school through a large subsidy of $238,500 for construction and of $75,000 for equipment. I want to draw the attention of the house to that grant, because, in the province of Quebec, it has become almost a tradition for the provincial authorities to accept contributions from the central power without uttering a word, so as to take all the credit for themselves.
This year, no less an honour was reflected on the farmers of my county.
The Canadian National Agricultural Congress has awarded, since its foundation, the title of "master breeder" to the best cattle breeders of this country. Out of five medals awarded since its foundation, two have gone to farmers of my constituency, namely to Mr. Donat Giard and Mr. William Bousquet. In appreciation for the good services rendered to our district by those two farmers I want to bring that fact to the notice of the members of this house.
As I said a few moments ago, Mr. Speaker, our agriculture is prosperous. This prosperity is, of course, as much due to the development of our foreign markets as to the foresight of
4090	HOUSE OF
The Budget-Mr. Fontaine our farmers, who have intelligently managed the distribution of agricultural production. Truck gardening is now practised on a large scale and all sorts of co-operative enterprises are operating with great success, such as the co-operative of St. Damase, the hub of small-scale farming.
When introducing the budget last year, the Hon. Mr. Abbott pointed out that our country's prosperity was the result of the collective and individual effort of the citizens of our nation.
There never was a better-deserved tribute, and this is still true today. Canada goes on setting the pattern of a united, strong and responsible nation. Our people know the value of work and co-operation.
The efforts now made by the opposition to rouse the people are useless. It would have the people believe that they are called upon to make too many sacrifices. They want to convince our people that they are not happy. But such efforts will not succeed even if, in some quarters, people indulge in demagogy and try to rouse the poor against the rich.
Never perhaps, Mr. Speaker, has the opposition offered such childish arguments; on the one hand, they claim that the government does not spend enough money, while on the other hand, they blame it for not reducing taxes. They ask more money for the Colombo plan, more subsidies, higher allowances and pensions and, at the same time, lower taxes. In other words, to implement those requests would mean budgeting for a deficit, even during the good years, whereas our Minister of Finance, like all good administrators, wants to balance his budget by equalizing revenues and expenditures. It is claimed that the Canadian taxpayer is being too heavily taxed by the government in this budget. Let us remember that federal expenditures, which the government cannot reduce at the present time, amount to about four billion and a half. I have said that they could not be reduced at this time. In fact, almost half of the total is for national defence and I wonder if our opponents are sincere when they talk about fighting communism while at the same time calling for the reduction or even the cancellation of this amount. To us it is a necessary and unavoidable sacrifice that must be made if we want to secure the greatest of all assets, freedom, and particularly freedom under a Christian system; it is also a sacrifice that must be made to maintain the material prosperity which we now enjoy.


It has been said that the landslide victories achieved by the Right Hon. Louis St. Laurent and by the Liberal party at the 1949 and 1953 elections are the sign of a healthy nation. The way the Canadian people have reacted to the present policies of the government and more particularly to the budgets of the Minister of Finance shows that the nation is healthy. In spite of the criticisms offered by the opposition, the Canadian people keep cool and continue to trust a man who, through wise administration, has made it possible for Canada to enjoy the greatest period of prosperity in our history. It would have been easy for the hon. Minister of Finance to reduce taxes in one or two important fields, so as to give the impression that all of the main burdens were removed. No, the present policy of the government does not aim at putting up a false front, at deceiving: it is a far-reaching policy directed solely toward the welfare of the nation as a whole.
I mentioned our national defence expenditures but there are also other very large expenditures which cannot be reduced; I refer to the amounts spent to maintain our social services, to pay the interest on the national debt, which has been reduced by two billion dollars, thanks to a wise and farsighted administration.
What is the source of these revenues needed to cover those extraordinary expenses? What taxes does the government collect for that purpose? First of all there is the tax on incomes, which supports the whole structure: it brings in more than two and a half billion dollars and covers our defence expenditures and part of the cost of our social security. It is evident therefore that the federal government cannot relinquish that tax.
The solicitor general for the province of Quebec said at Levis, on April 8, that the federal government had made a serious and insulting error when they refused to allow the Quebec taxpayers to deduct from the federal tax the whole of the provincial income tax. The Minister of Finance has explained in detail and very clearly why such a thing cannot be done, and I do not have to cover that ground again. One needs but to analyse that statement; if they keep on, they will have us believe that it is the federal government that has imposed that 15 per cent tax in the province of Quebec.
I fail to understand the attitude of the provincial government which was offered

more than $100 million and is now complaining that we are depriving it of some $15 to $20 million. And let no one say that the dominion-provincial agreements, which all the other provinces have signed, constitute an attack on autonomy!
Today-through sheer demagogy-they try to lead us to believe that the tax rental agreements between the dominion and the provinces are contrary to the spirit of the constitution and even encroach upon provincial autonomy. We would be very naive to believe that the premiers of the other provinces are not as anxious as Mr. Duplessis to protect the autonomy of their respective provinces. The premier of Quebec himself does not think so, because, on May 2, 1946, he stated, during the plenary session of the dominion-provincial conference, as reported at page 556 of the proceedings:
The province of Quebec is willing to consider a clear, precise, iron-clad and absolutely fair agreement to rent to Ottawa . . .
I repeat these words.
. . . agreement to rent to Ottawa the personal income tax and the corporation tax.
If renting taxation fields is an infringement upon provincial rights the Quebec premier is not speaking seriously, or else he is the first to accept this infringement. Can anybody believe in his sincerity when he now speaks of the federal government taking over a field which rightfully belongs to the province, while adding, with characteristic boldness, that for seven years now he has been attempting to enlist the federal government's co-operation.
We all know, for it is easy to see, that, on the contrary, Mr. Duplessis has been, with an eye ever turned towards forthcoming elections, a sworn opponent of the federal government. Alone among the provincial premiers he has refused to co-operate with respect to concluding taxation agreements, building the trans-Canada highway, accepting university grants, etc., thus depriving Quebec of numerous advantages which the other provinces enjoy and which could in no wise affect provincial autonomy. On the contrary this could have relieved the Quebec taxpayer, not only from the present 15 per cent tax, but also from the excessive, uncalled for and nuisance taxes imposed by the province in order to justify Mr. Duplessis' particular attitude.


Douglas Charles Abbott: Hear, hear.


Joseph Louis Rosario Fontaine: I may add that Mr. Duplessis does not seem to understand the meaning of
The Budget-Mr. Fontaine the words "national unity", for he has always considered the rest of the country, outside Quebec, as a foreign nation, the government at Ottawa as a naturally hostile government, and the Quebec members at Ottawa as nonexisting, as if they did not represent their province; and all this so as to be able to make Quebec a reserve, where he would be the big white chief with more and more dictatorial, more and more totalitarian powers.
The hon. Minister of Finance has presented to the nation a realistic budget, a budget which aims at ensuring the general prosperity of the country; moreover, he has left the door wide open for Quebec, whose credit Mr. Duplessis is ready to jeopardize, if it will serve his interests and those of the Union Nationale party.
Whatever Mr. Duplessis may say, the subsidies go back to confederation, when they were proportionately higher, for at that time they represented more than half of the revenue of the province. But enough has been said on this matter for the time being. I now wish to speak about problems which concern more particularly the electors of my constituency, especially those in the rural areas.
I said a few moments ago, Mr. Speaker, that agriculture is the basis of our whole economy and that, when the farmers are satisfied, all goes well for the rest of the country. In Canada, agriculture is prosperous and it is all to the good. The prosperity of agriculture depends on two conditions: first, its products must be sold and, second, the basic price must be such as to make this sale profitable.
Our farmers are entitled to a just and reasonable profit. It is towards that goal that the federal government has consistently aimed, never forgetting that agriculture is at the basis of all industry. If it be true, as has been said, that, when farmers are prosperous the rest of the country is necessarily prosperous, the opposite is just as undeniable. If agriculture is depressed because prices are too low or because producers cannot sell their products, either in this country or elsewhere, the whole of the industry will suffer.
When a building is begun the first thing that is done is not the construction of the roof: on the contrary the foundations must first be laid solidly so as to ensure the solidity and the resistance of the whole building.
Our Liberal federal government has at all times and in every circumstance held to these principles. It has always worked for the welfare of the Canadian nation as a whole, and as I was saying a moment ago,

The Budget-Mr. Fontaine they have helped with every means within their power and with all their strength the agricultural class of the whole country and of St. Hyacinthe in particular. This is of course the constituency with which I am most concerned, as will readily be understood. It is of course that part of the country which I am fondest of. As a matter of fact had I my choice of every constituency in this country, I must admit that it would be in that constituency first and foremost where I would choose to run.
Mr. Speaker, a large scale project is at present under way in the metropolis of this country, Montreal. It is the building of a large central market, where all truck gardeners, not only from the neighbouring districts, but also from the whole province of Quebec, could sell their products. I would like to ask the hon. Minister of Agriculture (Mr. Gardiner) to take into consideration the request for financial assistance which I sent him some time ago, on behalf of the horticulturists of my district.
Some might probably say that this is a project of a local nature which concerns mainly provincial authorities. I agree. But, because of the importance of this undertaking and of its immense usefulness for our agricultural people, I think that this question should be carefully examined by the officials in the federal Department of Agriculture to find out whether it would not be advisable to contribute to it.
The agreements entered into in 1936 by the federal and the provincial authorities respecting vocational training have contributed largely to the erection of technical and other similar schools. These institutions have rendered invaluable services to our people.
We, in St. Hyacinthe, have benefited from the building of our industrial school for textiles. On that occasion no inaccurate arguments of ill-conceived provincial autonomy intervened to deprive us of our rights.
The western provinces have often benefited from federal assistance, when their progress and the development of their resources were at stake. This assistance has always been approved by our people in the eastern provinces, because we knew it was justified.
Today, I believe, in all fairness, that we in Quebec may well hold out our hand to the hon. Minister of Agriculture, asking him to make a contribution equal to that of the province and the truck gardeners, in order to carry out this project, which, as I say, will help our farmers who specialize in certain crops, by eliminating sacrifice sales due to the inadequacy of existing facilities.
IMr. Fontaine.]
By bettering the position of our truck gardeners with regard to the grading of their products, for instance, by providing them with the necessary space for displaying and selling their products, we shall not only help the truck gardeners, but, in a general way, all the farming people.
Moreover, the wholesaler, the jobber, the retailer, the farmer, the consumer, the whole province and the whole country would benefit from it. Montreal being the main centre of distribution of fruits and vegetables in Canada, all producers and consumers are directly affected by the prices paid for these products on the Montreal market.
In conclusion, it can be stated that the building of a central market in Montreal is of fundamental importance for the producers as well as for the retailers and the consumers, who must absorb in part at least the excessive cost of the distribution of fruit and vegetable products, caused by the deplorable conditions which prevail today on the Montreal market.
(Text):
For my English speaking compatriots, with whom we get along so well in St. Hyacinthe, I think I should now say a few words in their language, even though I recognize I cannot do so well in English as many of them do in French. However, I will be brief.
All I would say to the electors of St. Hyacinthe, who have given me support such as few people have ever had, is that they can continue to rejoice in the wonderful state of health of our country from the Atlantic to the Pacific, and that they can continue to have confidence in our great leader whom I believe to be the greatest since confederation.


Mr. Elmore Philpott (Vancouver South):: Mr. Speaker, this is the first budget debate in which I have had the honour to take part.


Daniel (Dan) McIvor: It will not be the last.


Elmore Philpott: I must say it is with deep regret that I have heard from different quarters in the house that this might be the farewell budget of the present Minister of Finance (Mr. Abbott). While throughout my writing career I have had, shall I say, the privilege and at times even the pleasure of taking a good lusty crack at just about every minister in this and every other government that has been in office since I began writing, I must admit that in all of the ten budgets presented by the present Minister of Finance I have found nothing really serious to criticize. I believe, Mr. Speaker, that quite often we are very lavish with our tributes when the person involved is no longer around to receive them, and I simply wish to say for

my part that I think the present Minister of Finance has been the most competent Minister of Finance we have ever had in my lifetime, and I know of no superior in any other country.
May I say, Mr. Speaker, that I certainly have no intention whatever of entering, in any shape or form, the discussion on the double taxation question precipitated by the premier of the province of Quebec. 1 do not regard in any way the issue created by the premier of Quebec an issue of Quebec versus Canada, or the French-speaking people in Quebec versus the rest of the country. I regard it entirely as an internal matter and if you want to sum it up you might well label it a question of Duplessis versus Quebec, but certainly not Quebec versus the rest of Canada. I believe that if we have anything of which to be proud in this country it is that, perhaps better than we ourselves realize, we have worked out a sort of modus vivendi in living together. These two great races, with their different culture and language, have not always been the best of friends.
Sometimes, Mr. Speaker, when I look around this chamber and listen in this chamber I hear people talking about the inevitability of war between Russia and the west. I hear people suggest that the two great blocs of today are the bitterest enemies in history. But, Mr. Speaker, it is not so, and I believe we in this chamber have forgotten that we ourselves, whether of French or English descent, are descendants of the very people who were the bitterest and most inveterate enemies there ever were. Getting along as well as we do in this country I think we should give ourselves a little pat on the back every now and again, and never forget that only a couple of hundred years ago our own forefathers were as bitter enemies as Russia and America today, or the capitalists and the communists.
I remember on one of the last trips I made to the old country I watched some children playing in the back yard and suddenly I had to laugh aloud because I realized the name they were giving to their game was not the same as it would have had in North America. In North America we would have called that chase "Cops and Robbers" or "Cowboys and Indians", but in England, if you please, they called the game "French and English". I think that speaks for itself.
I would repeat that I have no intention of getting into the Quebec double taxation situation. I do believe that if we have any genius in this country it is for development along parallel lines. Whether this Liberal party has any ideological basis for its success, I think 83276-259
The Budget-Mr. Philpott that every member in this house will admit -whether it is good luck or whatever it is- that the greatest periods of success in this Canada of ours have been in the administrations of Liberal governments, particularly the Liberal government that we have right today. What is the ideological basis that gives rise to the success of the Liberal administration?
I have often thought about our friend the Minister of Trade and Commerce (Mr. Howe). I sometimes hear our friends immediately opposite me-or who should be immediately opposite me; I refer to our socialist friends -talking about the benefit of socialism. May I say this. If we were going to give medals to the Canadians who have promoted the most successful public enterprises that there have ever been in Canada, we would not give them to my hon. friends who should be opposite me but would give them to the Minister of Trade and Commerce who has promoted the most successful public enterprises certainly since the days of Sir Adam Beck and the great hydro enterprise in Ontario or Sir Henry Thornton who made such a great success of the C.N.R.
But if we suggested to the Minister of Trade and Commerce that he was a socialist, he would look at us absolutely aghast because, of course, he is no such thing. He believes in taking what instruments will do the best job for whatever we have to do. Hence we get him making a success in the public enterprise field of such things as T.C.A., the artificial rubber plant at Sarnia and we also, to a much greater degree get him and all the ministers on the front bench of this government promoting policies which give prosperity to the great substantial basis of industry and commerce in this country; and that is, of course, to private enterprise.
If we have any basis for our success in this country I think it is because we have allowed public enterprise and private enterprise to develop and that we have certainly never shown any, shall we say, narrowminded preference for one as against the other. That is why, Mr. Speaker-and I do not say this in any way as criticism of the policies of this present government but because I believe a peculiar situation exists in the whole field of radio and television-I want to avail myself of the privilege of speaking for a few minutes on the exact setup of radio and television in Canada.
In the tables which the Minister of Finance supplied to us with his budget speech at page 3805 in the appendix to Hansard of April 6 I notice that he sets forth the amount of money that will be spent in the present

The Budget-Mr. Philpott year by the Canadian Broadcasting Corporation. That figure amounts to $24-8 million. That, of course, does not include a loan of $4-7 million which was made by the treasury in the year 1953-54. We all know that that is a considerable increase from the expenditures of the past. That is, the grant has gone up from $8-2 million in 1953 to $24-8 million in the present year. That amount, of course, is going to come out of the special 15 per cent tax which is imposed on radio and television sets, tubes and accessories. When we have that amount of money involved, and even if it was not concerned with something of which we are all so justifiably proud as we are of the C.B.C., I would think it would be the duty of every one of us to give a long and careful look at that expenditure. I myself have had the privilege of working with the C.B.C. over a great many years, although not for the last several years. I have also had the privilege of working for private radio stations for a good many years. I thus had the privilege of perhaps getting a close-up view of how the two of them operate and what their peculiar difficulties are.
When you look back at the growth of the C.B.C., you see that it has not come up as a straight agency of the government. If there is anything of which they are most jealous and proud I think it is of the fact that they are not a subsidiary agency of the government, taking their instructions from the government and that they certainly do not follow any particular political line. If we wanted to name the things about the C.B.C. of which we are all most justifiably proud I think the chief one would be that in its political basis it is absolutely impartial, absolutely fair and that it has worked out the most fair and just system, especially at election times, that I know of in any country which it has ever been my privilege to visit.
If you look back at the period of growth of the C.B.C. you will see that we allowed it to develop. Nobody ever had a plan in advance which was carried right through to a successful completion. For instance, in the Aird report the idea was that eventually the Dominion of Canada would take over all radio broadcasting. As we know, as the years went on, that became an impractical policy and just by the pressure of events it did not happen. We also know-and I think this is an extremely important point for us to realize-that when the C.B.C. first came into operation and when there was a limited number of private stations-that is auxiliary stations or stations in separate operation from the C.B.C.-the audience of the Canadian people was divided on a much different basis from that on which it is divided now.


A large percentage of Canadian listeners did not listen at all to Canadian radio stations, either public or private, but rather tuned in to United States stations. Hence, as we know, over the years there grew up, shall I say, the peculiarly Canadian system which we now have in Canada, with the C.B.C. the dominant party-some would say the senior partner-in the whole radio set-up in Canada, but nevertheless with the private stations-the commercial stations as they are sometimes called-performing an extremely useful and valuable public service without any kind of subsidy from the treasury of this country.
We are now faced with the rise of a new medium; and I say that television, as it is coming up in North America and all over the world, is a utility of such tremendous potential that it may have a far greater effect on the lives of all of us, and especially on the lives of our children, than radio has had in the past, or possibly even the press. What I am anxious to stress today, Mr. Speaker, is that it would be a mistake for us to try to duplicate exactly in the television field the set-up that we have had in the radio field. I note that on March 30 of 1953 the Minister of National Revenue (Mr. McCann) set forth clearly the government's policy with regard to television in Canada. As reported at page 3393 of Hansard, among other things he said this:
These words make it clear that it was not the policy of the government to create monopoly in television or to limit any one area indefinitely to one television station.
The minister was of course explaining the necessity of having coverage right across the country, that we should have either a public station or a private station in every centre right across the country before there could be any duplication. Then he added:
... it may not be long before there is a sufficient degree of national coverage to justify the government and the C.B.C. giving consideration to permitting two and perhaps in some cases more than two stations in certain areas. It is anticipated that, in due course, private stations will be permitted in areas covered by C.B.C. stations, and the C.B.C. may establish stations in some areas originally covered by private stations.
I think that is a statement of policy with which everyone can agree. It is a good, sensible, common-sense statement setting forth the position of the government at that time, but I submit that the time is rapidly approaching to follow the course set forth by the minister. I look at the television set-up in Canada as it exists today and this is how it shapes up to me. We have C.B.C. stations actually operating in Vancouver, Winnipeg, Toronto, Ottawa and Montreal, with one in the process of being established

in Halifax. We also have private stations already licensed for Edmonton, Calgary, Saskatoon, Regina, Fort William and Port Arthur, Sudbury, Windsor, Kitchener, London, Peterborough, Kingston, Quebec, Sherbrooke, Rimouski, Saint John, New Brunswick, and Sydney, Nova Scotia.
But the fact that Canada, even with that number of stations actually in operation or already licensed, lags very far behind the United States where 253 standard band television stations are already in operation, and that does not include the 129 ultra high frequency stations. At the beginning of this year Canada had a total of 365,400 sets in operation compared with some 12 million to 15 million sets in operation in the United States. What I am suggesting and what I am urging for the consideration of the house is that in our television policy we should carry out what seems to me to be what is right in line with the genius of our whole Canadian two-culture set-up, and especially at the basis of Liberal ideology. We should allow the fullest free development of both types of television.
We should of course complete and make strong the coast-to-coast national C.B.C. television set-up. Let us make up our minds always to keep the C.B.C., so far as television is concerned, in the same position that it occupies in the radio field, the dominant factor in the national picture or, if you want to call it that, the senior partner. But whatever we do let us never be guilty of holding back and frustrating the free development of free enterprise when free enterprise has a certain job to do in this Dominion of Canada.
When I look at our country and see, for instance, that in Vancouver alone there are something like three vacancies-there are certainly two-and that in almost every great city in Canada there is now only one C.B.C. station and listeners have to tune in private stations in the United States if they want a change of diet, then I suggest that the time is very close at hand when we can carry out the government policy suggested by the Minister of National Revenue (Mr. McCann) last year
The Budget-Mr. Philpott and give the green light to free enterprise television stations where they are needed to fill out the picture.
I do not regard free enterprise privately-owned radio or television stations as poor relations in any way or, as some might say, country cousins of whom we are just a little bit ashamed. Certainly they are not in any way, shape or form second-class citizens. I look for the time when the full speed ahead signal will be given to private television station owners in Canada to go ahead and do the job to the very best of their ability.
I am not one of those who has as little confidence in public ownership and public operation of the C.B.C. as one gentleman with whom I was talking the other day. He was in favour of never allowing the private television interests to go ahead because he feared that if they did so in such cities as Toronto, Winnipeg, Montreal and Vancouver the C.B.C. would not be able to survive under free competition. On the contrary, Mr. Speaker, I have never yet seen a city which was not a better city if it had two good live newspapers competing. I have never seen a country which was not a better country if it had two live political parties competing, the one ready to throw the other out if and when it got the chance through the people tiring of the other party.
Therefore I suggest that the time is rapidly approaching when we should give the private radio stations, which have hitherto been held back from applying in the great metropolitan centres where the C.B.C. has had a justifiable monopoly up to the present time, a chance to go full speed ahead and make a two-fisted job of television in Canada.
On motion of Mr. Winch the debate was adjourned.



BUSINESS OF THE HOUSE

Douglas Charles Abbott: I move that the house do now adjourn.
Motion agreed to and the house adjourned at 5.19 p.m. until Monday, April 26, 1954, at 2.30 p.m.
83276-259J

Monday, April 26, 1954