1955-05-03

Hon. George C. Marler (Minister of Transport):: Mr. Speaker, I wish to table copies in English and in French of the interim report of the board of transport commissioners on the equalization of freight rates.
This report is a summary account of what the board has done up to the present in the matter of the equalization of freight rates. Technical details of the class rate equalization have been omitted from this report, but will be found in the board's judgment and order dated March 1, 1954, and the subsequent notes and reasons for judgment dated February 28, 1955.



REPORTED FREE DISTRIBUTION OF LITERATURE BY SOVIET REPRESENTATIVES

[Stage Direction]
On the orders of the day:
Mr. J. H. Ferguson (Simcoe North):: I should like to ask a question of the Prime Minister. Is he aware that literature is being distributed, free, by Soviet representatives to members of parliament bringing very forcibly to the attention of the members the Soviet side of the story-which is incorrect-on matters pertaining to world affairs? If he is aware, has the Prime Minister read the document in question?


Right Hon. L. S. St. Laurent (Prime Minister):: I am not even aware that the document has been received in my office, and I am not aware that it has been received by others, so I cannot give the hon. member any information about it.


Julian Harcourt Ferguson: I will be very glad to see that the Prime Minister receives the document, which is marked, very distinctly, "free".



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. J. Wilfrid Dufresne (Quebec West):: Mr. Speaker, I should like to ask a question of the Acting Postmaster General. Is he in
50433-214J
a position to give a statement to the house regarding the theft of around $7,000 from a downtown post office of Quebec city during the last week end?


Mr. T. A. M. Kirk (Parliamentary Assistant to the Postmaster General):: The office has reported just recently that their officials and the city police have full details of the robbery. City police and officers of the department are making an investigation.



COMBINES INVESTIGATION ACT


[Stage Direction]
On the orders of the day:
Mr. Bona Arsenault (Bonavenlure):: Mr. Speaker, I should like to ask a question of the Minister of Justice. Could the minister tell us whether the inquiry by the combines investigation branch into the buying of pulp-wood and into prices paid for pulpwood, to farmers and settlers, will be extended beyond the Gatineau district of the province of Quebec, in respect of which district the hon. member for Gatineau (Mr. Leduc) originally raised his complaint?


Hon. Stuart S. Garson (Minister of Justice):: Mr. Speaker, I wish to thank the hon. member for having given me notice of his intention to ask the question he has just asked. In fairness to the parties involved in an inquiry, and also in the interests of the inquiry itself, it is not the general practice to make statements about an inquiry unless and until a report is made and published. On March 4, therefore, I said in reply to a question by the member for Charlevoix (Mr. Maltais) that it would be impossible to anticipate the districts throughout which the inquiry would extend; and indeed might be detrimental to the inquiry to try to do so.
For these reasons, I can only reply now to the member for Bonaventure that the inquiry will be extended as widely as the information received by the combines branch justifies.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. H. A. Bryson (Humboldl-Melforl):: Mr. Speaker, I should like to ask a question of

Inquiries of the Ministry the Minister of National Defence. Will the minister comment on this morning's radio report that the Soviet air force has developed a new bombing technique that will render the proposed distant early warning line ineffective. In view of this report, is the government reconsidering its participation in the construction of the D.E.W. line?


Hon. R. O. Campney (Minister of National Defence):: Mr. Speaker, the hon. member gave me notice of his question, but since I did not hear the radio report to which he has alluded I cannot make any comment.



INDUSTRIAL STATUS OF WOMEN


[Stage Direction]
On the orders of the day:
Mrs. Ellen L. Fairclough (Hamilton West):: I should like to address a question to the Minister of Labour. Will the minister inform the house whether the policy of the government has changed to conform with the support given by the director of the women's bureau to the principle of equal pay for equal work, as reported in the local press last week end? If so, does the minister propose to bring down appropriate legislation during this session?


Hon. Milion F. Gregg (Minister of Labour):: Mr. Speaker, I have not seen the press report to which my hon. friend refers.


Ellen Louks Fairclough: Mr. Speaker, I should like to follow up my previous questions to the Minister of Labour now that he has had an opportunity of perusing the article to which I referred. Would he answer my former questions: first, is the principle of equal pay for equal work now the policy of the government and, second, when may we expect legislation?


Milton Fowler Gregg: I thank the hon. member for sending me the clipping, which I have now read. The head of the women's bureau was expressing her own opinion in a discussion carried on at a women's convention. If the government changes its position with regard to this matter an announcement will be made if and when a decision is arrived at.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Secretary of State for External Affairs):: Last Friday the hon. member for Prince Albert asked a question concerning freedom of movement in North Viet


Nam, a matter which has aroused very considerable interest throughout the country, and I should like to make a statement on it now, Mr. Speaker.
The situation with respect to freedom of movement for refugees from Viet Nam, which was provided for under article 14(d) of the armistice agreement, is not satisfactory, nor does the international supervisory commission regard it as so; certainly the Canadian member on that commission does not.
The commission announced early in February last that it had found that the procedure to ensure this movement by the issue of travel permits was cumbrous and complicated, and that fears current among the population in North Viet Nam had tended to make them reluctant to apply to the authorities for such permits. Action was taken by the commission which it was hoped would facilitate the proper and more effective implementation of this part of the agreement. However, reports to the effect that people in North Viet Nam were still being prevented from exercising their rights of freedom of movement have persisted. Therefore the international commission recently sent three further mobile teams, on each of which of course there was a Canadian, to make a special survey of those areas in North Viet Nam concerning which complaints had been made. On the basis of the reports of this survey, the commission is now determining what further action is necessary.
There are, Mr. Speaker, of course, limitations on the effectiveness of international inspection by the commission in this and in other matters. Some of these limitations are inherent in the cease-fire agreement itself. It reflects the fact that the commission is not a supra-national body, that it does not have any executive responsibilities with respect to the carrying out of the agreement and that its inspection teams do not in any sense constitute international police detachments. The commission can only operate with the effective co-operation of the parties to the agreement and it does not always receive that co-operation, especially in this question of freedom of movement, from the communist government in North Viet Nam, and that is the main reason why in this matter the results have been disappointing, to say the least.
I would not wish anyone to think that our representatives on the international commission for Viet Nam are satisfied with the way the freedom of movement provisions of the armistice agreement are being carried out. They are not satisfied, and the government fully shares that dissatisfaction. Our Views have been stated very clearly in the

international commission in Viet Nam, and have, I think, had some effect on the decisions of the commission.
If one of the parties to the agreement is evading its clear obligations and responsibilities with respect to the freedom of movement for civilians, it is not going unnoticed by our representative on the commission or by the government. But this is not a situation, I suggest, which will be solved merely by letting off steam. We are convinced that in order to ensure that the provisions of the agreement are carried out to the greatest degree possible in the circumstances, we must continue to work through our representative on the commission in the same manner as we have done over the last eight months, pressing for better performance in every way possible and exposing violations when they can be detected. That still seems to us to be the most likely method of ensuring that the greatest possible number of people who wish to do so can leave North Viet Nam for the south.
There have been suggestions in some quarters that Canada might withdraw from the commission as a gesture of protest about the way the commission has been prevented from correcting the situation with respect to freedom of movement. Such a move would, however, prejudice also the fulfilment of the main military provisions of the agreement, thus creating new tensions and possibly jeopardizing the maintenance of peace, not only in Viet Nam but also in the neighbouring countries of Laos and Cambodia. Nor would our withdrawal be of any assistance whatsoever to those in North Viet Nam who want to leave. Indeed, It might eliminate any remaining hope that their lot might be alleviated. We must, therefore, keep our sense of perspective in this matter, but without condoning or forgetting some of the terrible things that are being done.
A question was asked also by the hon. member for Prince Albert the other day as to the possibility that the time for freedom of movement for refugees might be extended beyond the terminal date, which is May 18, I think. The commission is actively concerned with finding ways and means of ensuring that this provision of the cease-fire agreement is properly implemented, and it will, I am sure, consider the possibility of an extension, if necessary; but any extension of the period would require the concurrence of both parties to the cease-fire agreement, whose full co-operation would be required if an extension were to provide a real solution to the problem.
I tabled today, Mr. Speaker, copies of the first interim reports of the commission for
Inquiries of the Ministry Viet Nam and the second interim report. But I should like to point out now and emphasize that the reports of the commission were in each case prepared by the commission as a whole, including the Polish and Indian members as well as the Canadian representative. It may be that these reports, therefore, do not reflect entirely our dissatisfaction with the freedom of movement position.
I understand that the Viet Nam commission has recently completed a third interim report which is now being forwarded to the Geneva conference powers, as indeed the first two have been. In connection with the submission of this report, steps have been taken by the Canadian representative to ensure that the unsatisfactory situation with respect to the carrying out of the provisions in the agreement for freedom of movement for the civil population will be given special attention.


Mr. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I want to thank the minister for delaying until today the making of this report. I should like to ask him one or two specific questions arising out of his statement today, as well as out of the two reports of the commission.
Has he noted in an article by Ainslie Kerr the following matters as examples of flagrant breaches of the agreement, and does he know whether or not these examples are actually correct in fact? The first is, is it a fact that communist Viet Nam guards have made Indian committee members surrender, at bayonet point, documents handed to them by the inhabitants of North Viet Nam who had prepared those documents in pursuance of the Geneva agreement? Is it so that masses of military equipment and red troops are pouring into Viet Nam contrary to the agreements that were entered into at the time of the truce? Is it so that even our Canadian inspection teams are denied the opportunity to inspect without first giving notice, thereby denying anything in the nature of factual inspection? If he has seen that, will he also say what has been the nature of the protest to which he alluded in his statement? To whom are the protests made and approximately when was the last date of such protest?


Lester Bowles Pearson: I am not able to confirm in all its detail the accuracy of the report to which my hon. friend has referred. We are trying to get specific information from Viet Nam on these three points. However, I think I can say that it is probably an exaggeration to indicate that Chinese troops are pouring into Viet Nam across the borders. Reports cannot be entirely conclusive in these matters because of the nature of the situation, but there is nothing in the reports we have received which would warrant that conclusion.

Inquiries of the Ministry
I have said already that there is an unsatisfactory situation with regard to freedom of movement, but that is as far as I can go in regard to details.
So far as the other question is concerned, when any complaint comes to the attention of the commission or to the attention of our representative on the commission he makes his position clear to the other members. Very often as a result of the attitude taken by our member or by some other member of the commission steps are taken to correct a situation, but the government on the spot in North Viet Nam has the responsibility of taking the actual executive remedial action. Of course there is difficulty at times in ensuring that that is done.
I do not know that I can go beyond that. Our member on the commission has to work with the other members. Naturally we hope that the commission will act unanimously in all these matters. While we do make our position known and when a complaint is justified we make a complaint; nevertheless we do try to work with the other two members of the commission.


John George Diefenbaker: Would it not be possible for the Canadian member, particularly when he is such an able administrator as Sherwood Lett, to make a minority report so that this situation could be brought to the attention of the world. Secondly, I should like to ask whether it is not a fact that the rate of evacuation at the present time from North Viet Nam is such that there will be several hundred thousand who would like to get out of that country but who will be denied an opportunity to do so unless there is an extension beyond May 18.


Lester Bowles Pearson: As to the first point, I would ask the hon. member to suspend judgment until he sees the third report of the commission, which should be printed shortly and which I think will deal with the point he has mentioned. On the second point, I think it is true that if the date of May 18 is reached without a further extension there will be substantial numbers of people in the north who may not be able to get to the south. It is also true that several hundreds of thousands of North Viet Namese have left that part of Viet Nam for the south in recent months.


Mr. Roland Michener (St. Paul's):: Mr. Speaker, I should like to ask a supplementary question. In connection with the restriction of movement to which the minister has referred, has he any information that other than North Viet Namese are concerned? In other words, are there any Canadian citizens
[Mr. Pearson.)

involved or are there non-Viet Namese who are restricted in their movements?


Lester Bowles Pearson: No, we have no information that any Canadians have been prevented from moving from the north to the south. There are some Canadian missionaries in the north who are doing an heroic and most useful work in that part of Viet Nam at this time, but they are there of their own free will.


Mr. J. M. Macdonnell (Greenwood):: Having regard to what the minister said about the hope that the commission would be able to work unanimously, has that in fact been the case or can they act by majority?


Lester Bowles Pearson: In some matters the commission can act by a majority vote but in other matters there has to be unanimity. It has been felt by our representative on the commission that wherever possible he should try to get the support of the other two members in order to make sure that any recommendations which are made would have a better chance of being executed by the government concerned.


Hon. George A. Drew (Leader of the Opposition):: Growing out of the question, but not directly part of the discussion, may I ask the minister of external affairs if he can give us any clear picture of the present situation in regard to the government of Viet Nam, which is so closely related to this whole problem?


Lester Bowles Pearson: I promised the hon. member yesterday that I would do that as soon as there was some further information, but we have received nothing since yesterday to permit me to add anything to what I said then, namely, that the members of the commission seem to be safe and in good condition. We have had no reports of any Canadian casualties.
The situation with regard to the civil disturbances is most unfortunate. As I indicated yesterday, the Diem government seems for the time being at least to have established its control over Saigon and the immediate vicinity. There is nothing I could usefully add on that matter to what has appeared in the press.



THE BUDGET


[Stage Direction]
The house resumed, from Monday, May 2, consideration of the motion of Hon. W. E. Harris (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, and the amendment to the amendment of Mr. Coldwell.
Mr. H. J. Murphy (Westmorland):: Mr. Speaker, when the house adjourned last evening I was referring to the Chignecto canal and I should like to complete my remarks on that subject. Before I do so I should like to bring to the attention of the house something I have read since last evening of the third annual report of the Colombo plan. On page 119 the following appears:
The Canadian parliament voted $25-4 million for use under the Colombo plan in 1954-55, making a total of approximately $102 million which has been made available by Canada for capital and technical assistance in the first four years of the plan.
And then on the following page, under "India":
6. Some parts of the 1954-55 program for India are still under discussion. However, to date India has been allocated approximately $49 million in Colombo plan assistance from Canada.
8. Another project which is to be assisted by Canada is the Umtru hydro-electric scheme in Assam. Canada will provide electrical equipment to an estimated amount of $1-2 million.
10.	Other projects in India are being examined by the Canadian authorities, including the possibility of supplying a number of small thermal power units for use in a number of communities spread widely throughout India.
And then under "Pakistan":
11.	However, to date Pakistan has been allocated a total of approximately $33 million in Colombo plan assistance from Canada.
12.	As mentioned in the 1953 report Canada has undertaken to participate in the construction of the Warsak dam in northwest Pakistan. Up to the present $5-4 million has been earmarked for the purchase of hydro-electric and related equipment.
Under "Ceylon", on page 122, I find in item 17:
To assist in the development of the port of Colombo, electrical and other equipment up to a value of $400,000 will be supplied by Canada.
On page 48 of this report I find mention made of several projects. One is the Nangal dam and the Nangal canal. Also mentioned is the Kakrapara canal system.
I thought that this was an opportune time to bring to the attention of this house the Canadian money that is being spent under the Colombo plan for the development in India, Pakistan and Ceylon of canals and dams, similar to what we are asking for in New Brunswick. I feel that we in New Brunswick are as worthy of assistance as anybody outside of Canada, and we should be given the same break as the people of India, Pakistan and Ceylon. At least, we should be regarded as a friendly country.
If you will look at a map of the sea lanes, you will find sea lanes coming out of the
The Budget-Mr. H. J. Murphy St. Lawrence river and going around the maritime provinces to the ports of New York and Boston and the cities farther south. To say that the St. Lawrence seaway will not benefit the province of New Brunswick is in my opinion true, and especially in my own constituency of Westmorland, where the Canadian National Railways shops and offices are located. That may mean a lessening of rail traffic, because in the wintertime and even at other times of the year a considerable volume of goods is shipped from western Canada and the central provinces to Halifax and Saint John by rail. It is in the interests of Canada, and we accept the fact that the St. Lawrence seaway should be built, but I do not think that the applause for building this seaway should be so loud that notice should not be taken or arguments heard for the continuance of the seaway by building the Chignecto canal.
In case there are some hon. members who are not familiar with the geography of the maritime provinces, I want to tell you that the province of Nova Scotia is connected with the province of New Brunswick by the isthmus of Chignecto. This isthmus is 18 miles wide and separates Northumberland strait from the bay of Fundy, so that a ship coming out of the St. Lawrence seaway through Northumberland strait must go around the entire province of Nova Scotia, an additional distance of 500 miles, to reach the ports of the eastern seaboard. Another matter which occurs to me is the part that is to be played by the United States in the construction of this seaway. I have often heard it said, "Let us be fair". Then let us be fair to the Americans. We should complete the seaway by the construction of this canal so that, after they have paid for so much of the cost of the construction of the St. Lawrence seaway, they will not be cut off from the use of their eastern ports by the isthmus of Chignecto. If this isthmus were pierced by a canal, the ships from Chignecto could go to New York through Chignecto with their loads of grain and continue to South America, discharging or taking on cargoes in passing. It seems to me that, as far as use by the ports of Portland, Boston and New York of the St. Lawrence seaway is concerned, such use will be very limited. The St. Lawrence seaway has been put over on the Americans in that they did not insist on the construction of the Chignecto canal.
This year there will be a ferry running from Yarmouth to Portland, and I understand that this ferry will be able to carry approximately 150 cars. The trip from Yarmouth to Portland is 700 miles by land; by sea, I understand, it is somewhat less than

The Budget~Mr. Fleming 200 miles. Now, the people of Yarmouth and that part of Nova Scotia near it are going to have the advantages of shipping their produce to the markets of New England by the use of this ferry from Yarmouth to Portland, but the people on the north side of the isthmus, along the northern coast of Nova Scotia, the eastern coast of New Brunswick and Prince Edward Island, are being denied the use of the sea route to the United States ports by the failure to build the Chignecto canal.
I have spoken in this house every time I have got the chance about the Chignecto canal and, to tell you the truth, I have not got much further ahead than when I started with the process of construction. So I was going to ask that this house institute an investigation, a survey, a commission, or some board, to look into all the aspects of the construction of the Chignecto canal so that we will know once and for all whether or not we can look forward in the near future to the construction of this canal, and by the same token we will know what our economic possibilities are in New Brunswick.


Mr. Donald M. Fleming (Eglinton):: Mr. Speaker, the presentation of the budget provides one of the annual dramas in the House of Commons. We have few of them indeed in a normal session of parliament, and we all look forward to the presentation of the budget. The task that falls to the opposition following the presentation of that budget is not always a dramatic one, but it is a highly important one in relation to the whole purpose of our parliamentary institutions. In no particular of its responsibilities in any normal session does the opposition rise to a higher duty than in relation to the examination of the government's budget.
It is true that in the house, constituted as this one is at present, the government wins the vote. But it is equally true that in relation to the kind of budget we are discussing here today the opposition wins the debate. But what of the people? The Canadian people from this budget will glean but little benefit, but they will glean something of benefit from the debate in which the proposals of the government are examined.
I wish to be fair to the minister. This is his first budget, and one would of course wish to congratulate him upon the opportunity of presenting the budget. He had to face conditions that were not entirely of his responsibility. He has been Minister of Finance for the last nine months only of the fiscal year which closed a month ago. However, as to previous budgets, the Minister of Finance must bear his share of responsibility as a member of the government for


some years past in relation to the shortcomings of previous budgets and the effect they have had in creating the type of situation with which the Minister of. Finance found himself confronted when preparing his budget proposals introduced in this house a month ago.
May I say that we are looking forward to a vote this afternoon upon the amendment to the amendment. As the amendment introduced by the hon. member for Rosetown-Biggar (Mr. Coldwell) is quite in keeping with the policies that have been set forth in this house on behalf of Her Majesty's loyal opposition, we of the official opposition intend to give our support to that amendment.
In the approach to any budget some fair and proper questions to ask ourselves are these:	What is the principle of the budget?
What does it seek to accomplish? What are the principal features of the problems that it envisages and what is the general nature of the solutions that are offered? If one submits the present budget to that type of scrutiny, one will find oneself unable to find a clear answer. The fact is that this is not a clear budget. It has no clear view of the problems of the day and consequently it has no clear-headed approach to them.
This is a budget without any pattern. This is a budget that is not founded upon any principle. So far as the minister's comments upon it are concerned, it is a budget that proceeds from one denial to another. His comments upon it were all of a negative nature. It is not dictated by Keynesian economics; it is not intended to meet the problem of unemployment; it is not this and it is not that.
After the closest examination of the budget and of the minister's comments upon it, one can only conclude that this budget is the product of muddled thinking, confusion, indecision and fear on the part of the government to admit the existence of problems with which the taxpayers and the people of this country are all too familiar. It was therefore highly proper that The Economist in its issue of April 19, in a letter from its Ottawa correspondent, should make this observation upon the budget:
On the assumption that Canada needs some stimulus to get back to its proper rate of expansion after last year's modest setback, this financing of tax cuts out of deficit is easily defensible. The budget speech in fact made it perfectly clear that this was the intention. But the government refuses to say so explicitly. It has never admitted that anything was wrong with the Canadian economy that required artificial stimulus, and it will not do so now. It would rather do good by stealth. The result is to leave it without any logical defence of the plunge into deficit financing.
Hence we have an approach to problems based not upon the admission of the existence

of problems but upon stealth. So this budget has no pattern and it has no principle; indeed, it is neither flesh nor fowl nor good red herring.
What are to be the effects of this budget? We do not know, Mr. Speaker, because the Minister of Finance (Mr. Harris) will not tell us what were the intended effects of it. But we have had some interesting observations upon it. Mr. J. H. Perry, director of the Canadian Tax Foundation, in a speech last week on this budget, made this comment on the deficit financing that has now appeared:
While some have interpreted it as a shot in the arm for the economy, I would say it is more in the nature of a pink pill.
As I remember the purpose of pink pills, Mr. Speaker, they were for pale people. But the government makes no admission.
It is not unrealistic that we should look for some title for this budget. In the past we have had budgets that have been characterized in history by certain names. We have and many others. I suppose it would not be unfair to label this budget as "the budget of crumbs". That is the true measure of the size of the niggardly reductions which have been made in taxes. These niggardly reductions are the crumbs that have been permitted by this government to fall from its table;
I refer to the table of the swollen government treasury. In these trumpeted reductions we see certain facts that bring them into true focus and perspective.
Just what is in these income tax reductions? Here is this great reduction trumpeted as a reduction of 13-3 per cent. The married man, on an income of $3,000 per annum, with two children who receives this maximum reduction gets a total reduction this year of $7 in his income tax, and $14 in a full year. That is a reduction of 2 cents a day to him this year, and 4 cents a day next year.
These reductions, Mr. Speaker, are too small to give any material encouragement to enterprise in this country. Then with resort to a typical government device-that is, typical on the part of this government-these reductions have been postponed to July 1. In referring to that matter, the Minister of Finance spoke about this postponement as being usual. It is usual in the case of this government. They have had resort to this device in the past, making people think they were receiving bigger reductions than the budget actually brought about.
What was needed in relation to the income tax this year was a boost to initiative. What was needed was also a frank look at the present exemptions which, as the minister himself admitted in a speech some months 50433-215
The Budget-Mr. Fleming ago, are too low; and at the rates of taxation which, also by his admission, likewise are too high.
Second, what shall we say about this slight reduction in the corporation tax? It has been attacked by the C.C.F. in the course of this debate. They do not realize-or if they do so, it is no part of their wish-that the function of profits in the kind of economy we have, namely a free economy, is to provide the capital with which new plants, new jobs and new opportunities are created. That is the function of profits and capital in our economy. If you go on depriving people of the fruits of their labours and of their risks, you just blunt incentive, and the result is loss of opportunity and contraction in the number of jobs.
In recent years in this country we have seen a system whereby the government has been taking half of all the profits corporations have made. As I heard one government minister say in a speech in Montreal several years ago, the government is a 50 per cent partner in every Canadian corporation. It is true, Mr. Speaker, that it is a partner in the sense that it reaches in its long hand and abstracts from the treasury one-half of all the profits of every corporation in Canada. But in the sense that this is a profit and loss system and having regard to the fact that every one of these corporations that are talked about is capable of earning a loss as well as a profit, the government of course has no part in that aspect of its business.
However, it is interesting to see how the C.C.F. are at variance in this regard with Mr. Mosher, the president of the Canadian Congress of Labour. In a recent speech Mr. Mosher had this to say:
We have no alternative but to ensure sufficient profits to keep industry in motion, or be faced with unemployment, resulting in lower standards of living for a larger proportion of the workers.
I wish that hon. members of the C.C.F. would take to heart those words of Mr. Mosher. Then he went on to express the hope that "these words of common sense"- and indeed they were words of common sense -"would help to give recognition to the obvious fact that employers and employees are interdependent". That is a common-sense observation by Mr. Mosher, the truth of which has apparently never yet dawned upon those who mould the thinking and speaking of the C.C.F.
There is one thing I wish the minister had done with regard to corporation profits. I wish he had grasped the opportunity he had to encourage smaller businesses by enlarging the total permissible income on the part of those who qualify for the lower rate. Twenty

The Budget-Mr. Fleming thousand dollars is not enough in the way of permissible net earnings for a corporation to be entitled to the 20 per cent rate instead of the 47 per cent rate of taxation. The minister had there an opportunity to help small businesses in Canada, but he has allowed it to slip through his fingers.
But, sir, after this review of the vaunted reductions that have been made in the budget, let us in fairness realize this, that the minister has given to the people of Canada something that is going to help them so greatly to bear the burdens that he has laid upon them, help that will make them rather bear those ills they have than fly to others that they know not of. What has the minister given to the people of Canada to lighten the load? Sir, he has given them advice, and this is the advice that the minister has contributed to the suffering Canadian taxpayer. On February 21 he suggested that "Canadians accept in good humour the heavy taxes I have to impose". What a contribution to easing the burden of the Canadian taxpayer! The minister recommends that the Canadian taxpayer accept these heavy and excessive burdens with good humour. What a contribution to lightening the burden of the taxpayer!
This is the principal contribution of the budget to that end. I suppose it is in application of this new government panacea that the Minister of Citizenship and Immigration (Mr. Pickersgill) has been going about the country making both his humorous and not so humorous observations. However, the Minister of Finance has given a new imposition, a new directive. The new imposition from the government that is dictated to the Canadian people is good humour in the acceptance of these burdens. We of Her Majesty's loyal opposition think on the contrary that a sense of tax consciousness and tax resistance on the part of the Canadian people is a much healthier panacea for this government to face. It is only a strongly aroused sense of tax resistance on the part of the Canadian people that is going to drive the government opposite to measure up to its responsibilities to husband the resources of the Canadian people and not to inflict upon them unwarranted impositions.
As to the deficit, the minister hardly owned the poor thing. It had no part apparently in relation to any policy of the government. I call to mind a remark that the Minister of Trade and Commerce (Mr. Howe) made on his return from Europe on December 29 when he said: "I wouldn't say a small deficit would be calamitous, but I think it's better to balance the budget." Sir, at least there is a statement of government policy, better to balance the budget, but we have had no explanation from the Minister of Finance as to why on tMr. Fleming.]
this occasion he felt it wise to depart from the only semblance of a statement of government policy in this regard that has recently come from any minister of the government.
But, sir, this budget is built upon an assumption. The whole basis, the whole foundation upon which the minister has constructed this budgetary edifice has been hope. We of Her Majesty's loyal opposition share the hope that the Canadian economy will be prosperous and strong, that it will expand this year, that there will be more prosperity this year than there was last year, but we do not think the minister should escape criticism for going about the building of his budget upon assumptions that do not seem to have much more relation to present reality than do the comments that have come from the government from time to time during the session in relation to the problem of unemployment. Bear in mind, Mr. Speaker, that this year the Minister of Finance is assuming that the gross national product will be between 5 and 6 per cent more than it was in 1954; in other words, the gross national product will be $25J billion or more in 1955 and, as he himself says, "on that figure I shall base my revenue forecasts".
Let it be remembered that corporation profits in 1954 were 6 per cent smaller than they were in 1953. Let us remember that there was a disastrous decline in personal savings in Canada in 1954. At page 2777 of the appendix to Hansard of April 5 we have this statement:
. . . personal saving, or the amount set aside from current personal income, constituted 6'8 per cent of disposable income in 1954 compared with 9-2 per cent in 1953. In absolute terms personal saving fell from $1,539 million in 1953 to $1,137 million in 1954, a decline of $402 million, of which about half represented a reduction in saving in the form of farm inventories. The growth in personal assets was even more sharply reduced in 1954 than the $402 million reduction in personal saving would indicate: for personal saving takes many forms and involves changes in both assets and liabilities.
The trade outlook has a definite bearing on this question. Last year Canada slipped from third place, the proud position she had held for several years past in world trade, to fourth place, with Germany passing her and entering third place. In our current account on international transactions Canada had an unfavourable net balance of $427 million in 1954 and, notwithstanding a very slight improvement, we still had a trade deficit with the United States of $600 million. I am not going further into the subject of trade now. My leader will be speaking tomorrow and will deal in larger measure with this subject, but I call the attention of hon. members to the fact that in the face of these incontestable facts the minister goes

blithely ahead and bases all his calculations upon a very optimistic assumption.
Indeed, the minister gave some warning of his approach. Apparently he has been living in very close company with the Minister of Trade and Commerce for he said at Regina, as reported in the press of September 13, that "Canada's economy has nowhere to go but up." Yet at the very time he was making that statement all the figures indicated that the Canadian economy was going down. There was some improvement towards the end of the year but that came later.
We are faced with the unhappy fact with respect to agriculture in Canada today that farm cash income was down in 1954 to $2,378 million, a reduction of 14-3 per cent compared with 1953 and a reduction of 16-5 per cent compared with 1952.
We still have this vast problem of marketing our wheat, and until we do succeed in marketing our wheat in greater quantities it is simply idle for the Minister of Finance to go ahead and base budgetary plans upon optimistic and rosy assumptions of the kind he has made.
I wish to turn now to the subject of the problems that the budget has not touched, and there are many of them. Indeed, one could spend considerable time discussing problems that have been conveniently overlooked by the Minister of Finance and the government in the preparation of the budget.
The first is the problem of the sales and excise taxes. The fact is that this is a problem on which the minister has turned his back. If he was looking for a chance to help all the Canadian people, why did he ignore the sales tax? His predecessor had this to say about taxes on commodities in a speech I found recently which he made in Toronto a year ago. He made it a couple of weeks after presenting his budget, and here is what he said about the reductions he then proposed in the excise tax:
However, it appeared to me that some tax reduction was both possible and desirable. During the balance of the fiscal year, the tax reductions proposed in the budget will reduce taxes by about $36 million. When I came to consider just where tax cuts should be made, I decided, both for reasons of equity and of economic effects, that the bulk of the possible tax reduction should be in the commodity tax field.
Note these words, sir.
And that way, the tax cuts would benefit most Canadians.
That was in April, 1954, two weeks after the minister had made his budget speech in the House of Commons. His conception of the way to spread the benefits of tax reduction was to make reductions in excise taxes, these indirect taxes-
The Budget-Mr. Fleming


Mr. Benidickson:: And that has been done this year in the income tax, too.


Donald Methuen Fleming: Nonsense; that is nonsense.
The sales tax has been completely overlooked. The excise tax has largely been ignored in the minister's approach to the problem.
Here is the sales tax that this government has raised to 10 per cent, this tax that was denounced by the predecessors of hon. gentlemen opposite, in 1935, at the general election in that year. Mr. Mackenzie King went up and down this country and denounced the sales tax as "that iniquitous tax". And what did he do when he came to office? He raised the sales tax to 6 per cent, and later it was raised under the Liberal government to 8 per cent, and then again to 10 per cent.
Yes, that is the way in which the Canadian people are made to enjoy the benefits of tax increases on the part of this government. Now, what about this sales tax? What about the excise taxes that apply to commodities that are in common use? I turn back to an editorial that appeared in the Toronto Daily Star of August 6, 1935, in which that mouthpiece of the Liberal party and of this government referred to the sales tax as imposing- and these are the words the editorial used- "a fine for selling and buying." Yes, a fine for selling and buying; and that was at a time when the sales tax was at less than half its present rate. They have more than doubled it since that time. They have more than doubled the fine on buying and selling.
And those are the taxes that, apparently, they believe in continuing to apply and enforce. These taxes apply to many of the basic necessities of life. How can this government possibly justify continuing the application of a 10 per cent sales tax on clothing, on boots and shoes, on household furniture, and a number of other necessities? How can this government any more justify the imposition of its tax on, for instance, tea and coffee? A deputation waited upon the minister before his budget was brought down and showed him how, if he would remove the tax on tea and coffee, he could save the Canadian consumers $9 million a year. But to that plea the minister turned a deaf ear.
Oh, they made much of the removal of the luxury tax-because that is the guise in which it was introduced a few years ago- on tires for motor vehicles. They have made much of the reduction of the excise tax from 15 per cent to 10 per cent on motor vehicles. Well, what they have done, in the way they have gone about it-in leaving the tax at far too high a figure, and giving no benefit at all to those dealers who had a stocked-up inventory of motor cars-has been to bedevil
3396	HOUSE OF
The Budget-Mr. Fleming the wholesale and retail motor car business in Canada today. Many dealers have large inventories. In fact, I suppose there is hardly a dealer in Canada today who did not have a swollen inventory of motor cars before this reduction came about. And the government proceeds upon the assumption that, because some dealers may have benefited from the imposition years ago of this luxury tax, this 15 per cent tax-at the time of the Korean budget-therefore they should take a beating now. Now, sir, that was four years ago. And, what is more, the people are not the same today; and they are taking a very serious beating in this respect. The government is not prepared, however, to do anything to meet the inventory situation. On they go, applying these indirect taxes. They like them.
The second problem which has been ignored by the government is the problem of unemployment. This problem has been discussed at length in this session, or I would seek to go into it at greater length today. But let me content myself, in this limited time, with making this limited observation on the subject, that the government throughout this session has observed a conspiracy of silence in regard to unemployment; and it has carried that conspiracy of silence into the budget. It is still running away from the problem of unemployment.
This budget does not meet, in fact it cannot even make the pretence of meeting or even assisting to meet, the problem of unemployment. The government is still running away from that problem; they hope to ignore it. And only last Friday in this House of Commons we heard the Prime Minister of Canada (Mr. St. Laurent) running away from the promises the government made in 1945. Those promises that were made in 1945, that the federal government would assume the responsibility of providing for the unemployed employables-those promises, those undertakings, were most indecently interred here last Friday. The Prime Minister may think he can bury the proposals of the green book of 1945 in that indecent manner. But there are more recent phrases which will dog his political footsteps as long as time shall last, and they are his own words uttered in Quebec last September when he said this:
We have a country where there should be work for everybody and if we are not smart enough to organize the economy of the nation to provide work for everybody we are incompetent. '
And we say to the Prime Minister, "Out of thine own mouth hast thou condemned


thyself, and not only thyself, but condemned thy colleagues as well".
This is a problem that is national in scope. It is beyond local responsibility. What we want on the part of this government, and what we still look for, are employment measures, some constructive and some effective approach to meeting the deterioration in the economic condition and the unemployment situation in Canada today.
The third problem this budget ignored is that taxes in Canada are far too high. In 1954 the total taxes imposed upon the Canadian taxpayer, whether dominion, provincial or municipal, aggregated something over $7 billion, a record sum. And, sir, of course the lion's share of this was taken by the federal government. I am thinking at the moment of the over-all problem. In 1929 figures show that 13 per cent of the gross national product of Canada went in taxes. In 1939 the figure was 16 per cent, and in 1955 it was 29 per cent of the gross national product. And of course there is an infinitely larger gross national product today. I say this is an unwarrantably heavy imposition upon the Canadian people, and that it has tended to reduce initiative at a time when the Canadian producer is facing keener competitive forces than have been faced for many, many years.
The fourth problem this budget does not meet is the problem of centralization, a problem created by the deliberate policy of this government to concentrate all taxgathering here at Ottawa. The dominion's proportion of the total revenue pie in Canada, placed upon the backs of the taxpayer, has doubled, in percentage, since pre-war days. This has got to the point now where it remained for a Liberal premier, Premier Hicks of Nova Scotia, in a speech he made on March 1, referring to the concentration of taxgathering at Ottawa, to say this:
It is possible that if the present trends continue we may lose our federal system of government by default, and will have brought about a one-government state without the Canadian people ever having paused to decide if such a result is desirable.
Note the words "one-government state". That is the trend in the taxing policy of this government, so clearly discerned and described by a Liberal provincial premier.
The fifth problem the budget ignores is the problem of waste and inefficiency. Sir, the contempt of hon. gentlemen opposite

was heaped upon Progressive Conservatives in the general election campaign of 1953 because we said that expenditures could be reduced without the sacrifice of any essential public interest in Canada, whether in defence or otherwise. Well, after ridiculing us, since those days the government has reduced the expenditures on national defence. They were running then at about $2 billion a year. They are now to run at a rate of $1,700 million a year. What we said could and should be done has been proven to be possible, but what has the government done at the same time? Have they sought to observe economy, to eliminate waste and extravagance in other departments? No, they have not. There is still the same old attitude on the part of the government. They can do no wrong, and it is not the kind of attitude that makes for efficiency on the part of those who serve under them.
There is still far too much water in the estimates that the government brings down before this house, and we shall continue to condemn this government for the deliberate way in which they endeavour to thwart and frustrate our efforts to squeeze some of that water out of those estimates. It is a known fact. The Auditor General has told us in the public accounts committee in previous years that there is a padding in all those estimates that runs to at least 5 per cent and sometimes 10 per cent. But let opposition members, as was done recently in the committee on estimates, in reviewing the estimates of the Department of Citizenship and Immigration, try to reduce those estimates by 5 per cent, to eliminate that cushion, to squeeze the water out of the estimates, and what happens? The government opposite rallies its forces to defeat such a motion and preserve the water in these estimates.


Mr. Prudham:: It is already squeezed out.


Donald Methuen Fleming: Well, I am afraid the minister has not yet gone very deeply into the estimates. This is just a sample. The minister who has made this interruption is as good as any minister of this government. He has just said that he does not know of any water in the estimates. The fact of the matter is that apparently the existence of the water in the estimates is something that has escaped the notice of every minister, has escaped the attention of the government opposite, because they have no measures for squeezing the water out of the estimates, and so the waste goes on.
The Budget-Mr. Fleming
Although we are supposed to be having some regard for economy, the total numbers in the civil service increased by 10,000 from October, 1953, to October, 1954. Now, there are many civil servants who are not being adequately paid for their services. But, sir, it will take more proof than the government has given that increasing its numbers is the way to meet the problem of the civil service.
The sixth problem ignored by the minister in this budget is the succession duty. The succession duty act is crying for revision. On April 6, 1954, in his budget speech Mr. Abbott said at page 3733 of Hansard: "Our succession duty act is in need of revision." Then he pointed to efforts that had been made to revise other taxation legislation and said that he had asked the officials of the three departments concerned, finance, national revenue and justice, to commence work on rewriting the law and that he would hear representations. We were led to expect that within a year a new bill would be brought down, but now we are told by the present minister that he has not completed this work, and we have to wait another year for any approach whatever, even the simplest revision of this statute which is crying for revision today.
Seventh, this budget ignores the problems of the provinces and the municipalities. I point particularly to the fact that the budget makes no provision for reduction in the sales tax on goods purchased by municipal corporations or boards of education. Whatever, for example, our boards of education across Canada purchase that is subject to sales tax bears a double burden. It is paid for by the municipal and provincial taxpayers but the federal government comes along and loads another burden on them in the form of the sales tax.
Eighth, the government has ignored the problem of the welfare organizations, which have been pleading for remission of the sales tax on purchases made by them of goods for use in their work.
Ninth, the budget ignores the special problems of certain depressed industries, such as textiles, electrical goods and others.
Tenth, it has not faced the problem of providing exemption for pension contributions of recognized groups of self-employed persons.
Eleventh, it has not grappled with the silly way in which the finances of the Canadian Broadcasting Corporation are handled today
3398	HOUSE OF
The Budget-Mr. Fleming by farming out to them the total yield from the indirect taxes on the sales of television sets and tubes and radio receiving sets and tubes.
Twelfth, it has not dealt with the problem arising from the fact that more money is taken from the people of Canada in deductions at the source from wages and salaries than is justified, and more than half of the taxpayers of Canada today are obliged to apply for refunds as a result of overpayment of taxes. It is time that problem was faced.
Thirteenth, the government has not met the problem of seizure of property and attachment permitted under taxing acts, as the government today arrogates to itself procedures that go far beyond the normal legal methods of recovery.
Fourteenth, the minister, while he acknowledged the problem of complicated provisions in our Income Tax Act, in a speech he made some months ago, has so far taken no note of that problem. We shall await with interest in that respect his bill to amend the act.
Fifteenth, the government has not dealt beyond this past year with the problem of the deficit in the old age security fund. We are still going along from hand to mouth, continuing the pretence that it is a contributory scheme. These are fifteen of the shortcomings of the budget.
In conclusion I wish to say that in so far as the proposed royal commission is concerned, a commission, as the minister described it, "to survey the future economic prospects" of our country, while we have no objection whatever to the appointment of a royal commission for this purpose, we do recognize that the selection of the personnel will be made by the government, and the success of this inquiry will largely depend upon the selection of the personnel. In any event, the task that has been assigned to the royal commission will be no substitute for action on the part of the government to meet immediately the pressing problems. There is one kind of inquiry that the commission might well have been asked to make, and that is the inquiry for which we have been asking for years, into the efficiency of government.
And so, sir, we have a budget which can only be described, it seems to me, as a budget of crumbs. It has turned its back upon and ignored pressing Canadian problems. It will be the duty of Her Majesty's loyal opposition to continue to press for remedy and redress


for the Canadian people in the face of those burdens that the government continues to load upon them.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, in his budget address on Tuesday, April 5, the Minister of Finance made a great deal out of the fact that the income tax reductions which are provided in the budget are very heavy percentagewise for those in the lower income brackets and very light percentagewise for those in the upper income reaches. He pointed out, and it is a fact, that a married man earning $2,500 a year, if he has two children eligible for family allowances, will have the amount of income tax he pays reduced as a result of this budget by 13-3 per cent. In contrast to that, he pointed out that a married man with two children eligible for family allowances, if his income is $400,000 a year, will have the amount of income tax he pays reduced by only 2-8 per cent. My leader, the hon. member for Rosetown-Biggar, and other members of this group, have already pointed out that though those percentages are factual, they are, like many percentages, deceiving.
It is my desire, Mr. Speaker, to place on Hansard a table-if there is any objection to it being placed there by unanimous consent I can read it on my own time-which will show, in the case of one category of taxpayer, namely a married man with two children, both eligible for family allowances, what these percentage reductions in income tax amount to in actual dollars, in a full year, or in dollars and cents per week, starting July 1, 1955.
This table corresponds in a sense to the table which the Minister of Finance placed on Hansard of April 5, 1955 at page 2737. At that time the minister placed three tables on Hansard; one for single taxpayers, one for married taxpayers without children and one for married taxpayers with two children eligible for family allowances. What I have done could have been done with respect to all three tables, but for the sake of simplicity I have done it with respect to just the one category, namely the married taxpayer with two children eligible for family allowances. My table is entitled "Table showing two columns missing from table V on page 2737 of Hansard of April 5, 1955. Effect of the proposed personal income tax changes. Married taxpayer-with two children eligible for family allowances."


Mr. Speaker:: Has the hon. member unanimous consent to place this table on Hansard?


Some hon. Members:: Agreed.


Stanley Howard Knowles: The table is as follows:

The Budget-Mr. Knowles Table showing two columns missing from table V on page 2737 of Hansard for April 5, 195.3 Effect of the proposed personal income tax changes Married taxpayer-With two children eligible for family allowances
Income	Percentage reduction in full year, as indicated by the Minister of Finance	Actual tax reduction in full year, in dollars	Actual tax reduction per week, in dollars and cents$	%	$ cts.	$ cts.2,300 	2*500 	13-3	4 00	0 073*000 	13-3	14 00	0 263*500 	13-0	24 00	0 464,000	12-6	34 00	0 655,000	11-9	54 00	1 037*500	10-8	104 00	2 0010^000	9-7	154 00	2 9615*000	7-8	254 00	4 8820,000	6-6	354 00	6 8030,000	5-5	554 00	10 6550,000	4-5	954 00	18 3475^000	4-0	1,454 00	27 96100,000	3-7	1,954 00	37 57200*000	3-2	3.954	00 7.954	00	76 03400,000	2-8	152 96
Notes:
Columns 1 and 2 in the above table are the same as columns 1 and 5 in the minister's table on page 2737 of Hansard.
Columns 3 and 4 in the above table are the two columns missing from the minister's table.
I am grateful to the house for the leave which has been given me to place this table on Hansard. Hon. members will notice that I have two notes which read:
Columns 1 and 2 in the above table are the same as columns 1 and 5 in the minister's table on page 2737 of Hansard.
Columns 3 and 4 in the above table are the two columns missing from the minister's table.
If hon. members will consult this table they will discover that it is a fact that a married man with two children eligible for family allowances, if his income is $2,500 a year, gets a reduction in income tax to the extent of 13-3 per cent, and a married man in the same situation with an income of $400,000 a year gets a reduction in income tax of only 2-8 per cent. It sounds good.


Mr. McCann:: Do you know anyone who has an annual income of $400,000?


Stanley Howard Knowles: None of my friends is in that category. These are figures taken from the table placed on Hansard by the Minister of Finance. They are the minister's figures, not figures that I have invented. The fact of the matter is that the 13-3 per cent reduction which the $2,500 man gets is only $4 a year
or 7 cents a week, whereas the 2-8 per cent reduction which the $400,000 man gets is $7,954 a year or $152.96 a week. I am ready to accept a question from any hon. member in just a moment. May I point out that my table, as can be seen by reference to Hansard, gives figures for the groups in between.


Mr. Cameron (High Park):: When the hon. member is dealing with income, is he taking the taxable income or the real income? A married man with two children would have an exemption of $2,300 a year and if he had a taxable income of $2,500 his real income would be $4,800.


Stanley Howard Knowles: We are not talking about taxable income, we are talking about gross income. These figures correspond line by line to the figures the minister placed on Hansard at page 2737 of April 5. As 1 say, my table, so far as the first two columns are concerned, is the same as the minister's table, but I have added two columns which obviously he did not include.
The reason we have emphasized the fact that the minister's income tax reductions amount to so little for the taxpayer in the
3400	HOUSE OF
The Budget-Mr. Knowles lower brackets and so much for the taxpayer in the upper reaches is that we feel this was the wrong way to do it. It is the minister himself who decides that he can afford a certain amount of money for income tax reduction. He says that the reduction he is going to make so far as personal income taxes are concerned will amount to $128 million in a full year or $85 million in 195556. He has said also that the reduction he is making in the corporation tax will amount to $43 million in a full year or $28 million in 1955-56. Those two tax abatements alone- never mind any others which are provided for in the budget-amount to $171 million in a full year or $113 million in 1955-56.
It is our contention that that full amount of $113 million in 1955-56, or $171 million in a full year, should have been made available to those in the lower income brackets. There are various ways in which that could be done, but mainly there are two ways. One way in which it could be done would be to raise the present exemption levels which are now $1,000 single and $2,000 married to figures such as $1,500 single and $3,000 married. At the same time it would be necessary-this is what we advocate-to increase the rates of taxation in the upper brackets. If you merely raised the exemption levels you would be giving more to the wealthy than you would to those in the lower brackets. If one is going to change the exemption levels, which is what we advocate should be done, it would call for a revamping of the rates for the various brackets, particularly those in the upper reaches.
Another way in which some of this $113 million in 1955-56 or $171 million in a full year could have been made available to those in the lower brackets would be by a reduction or elimination of the sales tax. It is our contention that when a government is supposedly concerned over the great masses of the people and has some money that it can throw in as a tax abatement it should arrange its budget so that that money accrues to the benefit of those who need it most and not those in the upper brackets. For example, a person drawing $30,000 a year does not need another $554 a year, as is shown in the table which I have placed on Hansard, but those in the $2,000 and $3,000 brackets do need whatever improvement in their economic position, whatever improvement in their standard of living, it is possible for the minister to provide in his budget.
I know as we all do from our experience here that the chances of getting a change in the budget once it has been announced are next to nil in the session in which such 

changes are proposed, but statesmen are always looking to the future, and of course all of us are statesmen when budget matters are under discussion. We are speaking to the minister having in mind next year's budget or perhaps the one the year after that. I suppose it is possible that the budget in the year after next may be an election budget, or perhaps next year's budget will be an election budget. Taxpayers generally are always glad to see elections because they do seem to have their effect on budgets.
Whenever that time comes I hope the minister will give the greatest amount of consideration, not to those in the upper income brackets who do not need assistance but to those in the lower income brackets who need far more in the way of improvement in their economic position and in their standard of living than is provided by a weekly tax reduction of 7 cents or 26 cents as provided by the minister in the budget now before parliament. I plead as strongly as I can that the minister in future budgets should think not of those who do not need assistance but rather of those who do.
There is another matter on which I should like to comment for a moment. That is with reference to the announcement made by the minister in his budget speech, as indicated on page 2740 of Hansard for April 5, 1955, when he said:
The government intends, therefore, to appoint a royal commission with instructions to look ahead and examine carefully our future economic prospects.
Mr. Speaker, I join with those who have welcomed the announcement of this royal commission. I hope it will be set up at an early date and that it will enter upon its work in the confidence that the findings it brings down will be implemented in an attempt to improve the general well-being of the people of this country. I think I might be pardoned for putting on Hansard at this point, in close relationship to the announcement of the minister which I have just read, this notice of motion of mine, which appears on the order paper where it has been since March 17 of this year. It reads as follows:
That, in the opinion of this house, the government should give consideration to the setting up of a 100th anniversary committee, with provision for participation by representatives of the federal and the provincial governments, for the purpose of planning the economic and social development of this country on a vast scale, including housing, slum clearance, conservation, irrigation and power projects, highway construction, the elimination of grade crossings, the building of hospitals, assistance to municipal projects, other public works and the strengthening of the economy of every section of the country; and that consideration should be given to the advisability of such a program being launched immediately and being pursued vigorously year by year so that on July 1,

1967, the people of Canada will be in a position to celebrate this nation's 100th birthday not only with fireworks and speeches but by the achievement of a land of health and abundance for all our people.
I shall	allow those who	may	read theminister's	announcement on	the	one	handand my proposed resolution on the other to note the interesting similarity. I earnestly hope this	royal commission	will	be	giventerms of reference that will	enable it	to do
a good job of research and that on the basis of its findings we will pursue vigorously a program of development for the health and well-being of this country and all our people.
I have just mentioned in my statement with regard to the future of Canada the question of health, and I should like to devote the remaining section of my remarks today to that question, arising in particular out of a question and answer, to be found in Hansard of Friday, April 29, 1955, on the orders of the day. The exchange is recorded on page 3289 and is as follows:


Stanley Howard Knowles: Mr. Speaker, may I ask a
supplementary question of the Prime Minister? In view of his statement as to the greater weight that attaches to the views of the government of Ontario than attaches to that of some of the smaller provinces of the country, will he say that in view of what happened on Tuesday and Wednesday we are now closer to a nation-wide health insurance program than we were at the beginning of this week?


Louis Stephen St-Laurent: I do not know how much closer we are to a nation-wide health program than we were before Tuesday and Wednesday, but very close attention is being given to the cost of that kind of a program.
Though I am one who deplores the long delay in connection with this matter of health insurance, I must say that I was glad to get that reply from the Prime Minister and I am glad to know that he is involved in a commitment that close attention is being given to the cost of a program of health insurance.
I call on the government to proceed with this matter now with much greater vigour and expedition than has been the case for the past 36 years, since it was first written into the Liberal platform in 1919. I believe that some progress was made in this building last week. I am speaking now of the cause of health insurance, not of the fortunes of any one political party, my own or any other. Previous to last week it seemed to me that Canada was more or less up against a brick wall so far as health insurance was concerned. My hon. friend, the Minister of National Health and Welfare (Mr. Martin), some months ago on the radio in the "Farm Forum" program, and more recently on television in a press conference program, had something to say about the possible need of a constitutional amendment-
The Budget-Mr. Knowles


Mr. Marlin:: For a certain kind of plan.


Stanley Howard Knowles: -the possible need of a constitutional amendment for a certain kind of plan of health insurance. I think I know the kind of distinction that the minister had in his mind and still has. But I think he also muddied the waters by saying that, if a constitutional amendment were required, that would make necessary the agreement of all ten provinces. He did not say that all ten provinces had to agree before we could arrange to have a plan of health insurance in some of the provinces, but he did say that all ten would have to agree to the constitutional amendment if the plan to be put into effect were of a certain kind. I know the distinction, and I could discuss it at length, but that would simply take up my time. I know the distinction between a national health insurance plan and a nation-wide insurance plan. Some may think it is a distinction without a difference, but it is there and I realize that it is real.
My point is that, with the Minister of National Health and Welfare saying that kind of thing and with this question being kicked about from one election to another and being the subject of political speeches made in various quarters, it looked as though we were up against a brick wall. It seemed to me-and I shall speak quite frankly about it-that the federal government, with these references to unanimity or the fact that more than two or three of the provinces had to agree, was relying on the fact that the two central provinces would not agree and that therefore nothing would be done.
Quite honestly, I was afraid that they had some reason for that sense of reliance. It looked as though neither of the large central provinces of Canada was interested in this question, but last week, when the federal-provincial conference was held in the railway committee room, not far from where we are now in session, we had rather a surprise. The premier of Ontario joined other premiers who have already indicated an interest in health insurance by being actually the first one at that conference to ask that a study of a nation-wide health insurance program be put on the agenda for the meeting which is now to be held on the 3rd of October of this year.
I could make some political comments about the suggestion made by the premier of Ontario. We all know that there is an election campaign now on in Ontario, and maybe there is some connection, but even after the election is over, the fact of the matter is that Ontario has shown a definite interest in this question. Whatever party

The Budget-Mr. Knowles is elected on the 9th of June in Ontario, whether Conservative, Liberal or C.C.F., they all have health insurance in their platforms; so that whatever provincial government comes from Ontario to the federal-provincial conference here in October, it will be committed to carry through the expressed interest of the government of Ontario in a nationwide health insurance program.
I might interject at this point that no one is now suggesting that health insurance should be bureaucratically administered at the centre for every nook and hamlet in Canada. Everyone accepts the idea, laid down as a matter of fact in the 1945 green books, that it should be provincially administered. A growing number accept the principle that the responsibility of the government is to take those financial and other steps that will put the provincial governments in a position to carry through a program of health insurance, but the federal government simply has to meet that responsibility.
As I say, what took place last week is a matter that one could discuss at some length. It has many implications. It has many interesting political connotations. No doubt they will be discussed on the hustings in Ontario during the next four or five weeks. However, I think an objective summing up of what transpired last week must include the hopeful view that we made some headway; I refer to those of us who are interested in the cause of health insurance itself.
My main purpose in introducing this subject at this time is to call upon the federal government to be ready to give a lead in this matter in October. I am glad that the minister of health and welfare is paying me the compliment of being here and being interested in what I am saying. I hope that the federal government will be really ready, without any excuse, to lay before that conference on October 3 all the information that is necessary, on the basis of which this country might go ahead with a nation-wide health insurance program. It is my view that the federal government should take the lead, along the lines laid down in the green books of 1945, in making it possible for such provinces as are interested to get such a plan started. We now know that there are at least five provinces that are interested. There are four-British Columbia, Alberta, Saskatchewan and Newfoundland-that have hospital insurance of some sort and in some instances they are a bit further ahead. They are interested. Now Ontario has shown its interest. On that basis I think the federal government should take this matter as one of the most serious questions to be dealt with at the conference which will be convened on October 3.

I hope it will not be said at any point that between now and then there is not time to get all the necessary information together. If that is said by anyone, I am sure it will not be by the Minister of National Health and Welfare because I am sure he will remember that quite a while ago, on June 20, 1947, as recorded at page 4423 of Hansard of that year, he said this:
I can only repeat that we are engaging the full time of at least six persons in the department, with four additional persons who have other duties to perform. When we have the type of conference with the provinces which we envisage we shall be prepared at that conference to submit details in respect to the studies we have been making and are making and to bring about at the earliest possible moment the realization of a health insurance scheme.
I suggest to the Minister of National Health and Welfare that if in June, 1947-nearly eight years ago-he could stand in this house during the course of the consideration of his estimates and say that his officials were ready with the details to make it possible to bring about at the earliest possible moment the realization of a health insurance scheme, they have infinitely more information now than they had then. The minister knows how highly we in this house think of the staff he has in his department. He not only is favoured in that he has two deputy ministers; he has two of the topmost civil servants in the federal government, namely Dr. Cameron, the deputy minister of health, and Dr. Davidson, the deputy minister of welfare.
In that department he has many other officials who really are most able and most efficient. He has a research department headed up by Mr. Willard, the staff of which really knows what is going on in the field of health insurance as well as in all the fields in which this department is interested. He has as director of the health grants program and of health insurance studies an outstanding man in the person of Dr. Jackson, who came to the service here from my province of Manitoba. I could go on with other names, and the minister has them in his mind too. He really has a good staff for getting together the information and for working out the details that could fulfil what he promised in 1947, namely that the federal government would be ready when a conference was held. It is going to be held now. It is eight years later. I am sure that the minister is ready.
Perhaps I should not take too long with these references, but on March 19, 1952, as recorded at page 586 of Hansard, there is a lengthy reply to questions that were put on the order paper with regard to progress made by the government since the previous session in health insurance studies and surveys in Canada. It is a lengthy and interesting reply

showing the attention then being given to this subject. Likewise, on Friday, January 22, 1954 the minister tabled sessional paper 84-A in reply to certain questions of mine in which I asked if the department had any papers, memoranda, studies, et cetera, regarding health insurance in other countries and any material relating to any possible program of health insurance in Canada. The reply was a long list on more than two sheets of foolscap paper, giving just the titles of many documents and memoranda on this question that had been prepared in the department. I myself have copies of some of them, and I can vouch for their usefulness and the thoroughness with which this work has been done.
My fifth question in the series that brought forth this sessional paper was this one:
What use is the government now making of this material?
The reply was:
This material is constantly being studied by senior officers of the department.
Similarly on Wednesday, May 5, 1954, the minister tabled sessional paper No. 84-D in response to certain questions of mine also on health insurance and on discussions with the provinces. This is a lengthy one. I will just read one question and answer. The question was:
Have there been consultations with the provinces concerning a program of health insurance?
The answer was:
Yes, at each meeting of the dominion council of health composed of the federal and provincial deputy ministers of health. Advantage has also been taken of frequent meetings of provincial ministers of health and welfare with the federal Minister of National Health and Welfare. In addition there have been consultations with certain provincial premiers.
In other words, across these years which have involved a delay that some of us have deplored, it is nevertheless true-and I will pay my compliment to the minister and his officials for it-that work has been done on this important question.
Mr. Speaker, if this government felt that in 1944 it could have a committee lay on the table of this house a draft bill entitled "The National Health Act", copies of which were printed and of which a certain use was made in 1945 as well, I submit that the government is far more ready today than it was then. Yet 11 years ago there was this draft bill of 43 pages which I hold in my hand, with most of the detail of a national health act, including health insurance grants, all spelled out. My copy is getting a bit yellow. I suppose the government cannot find its copies. But the main thing is not necessarily the resurrecting of this document of 11 years ago but
The Budget-Mr. Knowles rather the doing of something definite when this conference meets this fall.
My plea to the government is that when the conference meets, Mr. Frost be taken at his word and more. He asked for studies. I say this to the Minister of National Health and Welfare. Give him more than studies. Or if Mr. Frost is not back here, and it is somebody else instead-


Mr. Hodgson:: He will be back.


Stanley Howard Knowles: -you will find co-operation from the other possible premiers as well, because I believe that the people of Ontario and the people in the country generally are asking for and are anxious to have a real lead in this matter of nation-wide health insurance. I know that one of the tests so far as the great man of the Liberal government is concerned, namely, the Minister of Trade and Commerce (Mr. Howe), was spelled out according to a report in the Ottawa Citizen of June 24, 1953, when he said this:
A Liberal government will introduce a sound, workable national health insurance scheme in due course, just as soon as it can be done without placing an undue burden on the Canadian people.
The story goes on to point out, and the Prime Minister (Mr. St. Laurent) did so as well in the summer of 1953, that this would be done when it was clear that the people of Canada want it.


Mr. Martin:: My hon. friend is quoting the Prime Minister now. He knows that I have placed the statement of the Prime Minister on Hansard, and I think he ought to be very exact in what he attributes to the head of the government.


Stanley Howard Knowles: I confess I am not able at the moment to find that in the Prime Minister's statement, and if I have misinterpreted what the Prime Minister said I shall withdraw it so far as he is concerned.


Paul Joseph James Martin: It will be found in Hansard of June 19 last.


Stanley Howard Knowles: Yes, I have it here. It is about half a column. But I am sure the Prime Minister would not disagree with the proposition that if the people of Canada want health insurance the Liberals would be prepared to bring it in. My contention is that the government should be giving a lead in this matter and should not be waiting forever only to come along when it is finally realized that every last person in the country wants it. It is now wanted by a large number of people in a large number of provinces in this country, and I urge that action on this matter be taken in October of this year. So often we rise in the house and, in the very

The Budget-Mr. Knowles nature of things, say that action should be taken as soon as possible. I am pinning it down to October.
When the conference meets I think the government should go further than just meeting Mr. Frost's suggestion of studies of health insurance. It should have the details ready to carry through with the kind of plan that was so well spelled out in the green book proposals of 1945. I remind the house, the minister and others that although the provinces and the federal government did not get together on the package deal in 1945 nevertheless the idea of health insurance was not dropped from the terminology of the government. As everyone knows, when Mr. King on May 14, 1948, announced the important health grants program he started off by saying:
Mr. Speaker, I should like to make a statement to the house on government policy with respect to health services and health insurance.
Later Mr. King said:
These measures also represent first stages in the development of a comprehensive health insurance plan for all Canada.
There comes to my desk many an item which uses that very language. I have here the five-year report on the national health program put out by the Department of National Health and Welfare. On pages 1 and 2 there is a summary statement of the purposes of the program, and point (f) in the summary of the purposes of the program is "to lay sound foundations for health insurance". I received not long ago the report of the annual meeting of the board of evangelism and social service of the United Church of Canada. Beginning on page 13 I find a report of an address made at the annual meeting in Toronto in January of this year by Dr. Gordon E. Wride of the Department of National Health and Welfare. At that time he said:
. . . these measures represented the first stage in the development of a comprehensive health insurance plan for all Canada.
The Minister of National Health and Welfare will recall that a while ago he let me have, because I complimented him on it, a copy of a very interesting address he made at Carleton Place on Saturday, February 12, 1955. He referred in the text of that address to the announcement made by Mr. King in May, 1948 and concluded an important sentence with these words:
. . . and the eventual establishment of a nationwide system of health insurance.


Paul Joseph James Martin: Would you mind reading the whole thing so we will get the context? I have just forgotten it.


Stanley Howard Knowles: Would you give me the extra minute or two it takes to read it?


Paul Joseph James Martin: Well, it is worth reading, I think.


Stanley Howard Knowles: 1 agree. The whole speech was good.


Paul Joseph James Martin: Well, never mind.


Stanley Howard Knowles: Maybe the minister will enter the debate and read the whole speech. The sentence he wants me to read in full is this:
Nearly seven years ago, Mr. King announced to parliament a program of national health grants which had as its objective the immediate strengthening of provincial and local health services and the eventual establishment of a nation-wide system of health insurance.
My point is that I want "eventual" to be made synonymous with October, 1955, not any later. Earlier this session I took advantage of the very kind invitation of the minister to visit some of the laboratories in his department. The hon. member for Winnipeg South (Mr. Trainor) and others went along. We enjoyed our visit and found it very interesting and useful. On the way we were given some literature about the work of the department. One of the items was a mimeographed document entitled "Canada's National Health Services". I find that the first of these services that is spelled out is the national health grants program, and again I read:
The purposes of the program are-
Then there is a long paragraph which ends with these words:
... to lay the foundation for health insurance.


Paul Joseph James Martin: May I ask if the hon. member for Winnipeg South and the hon. member who is now speaking found themselves fully agreed on this subject when they visited our department?


Stanley Howard Knowles: On the subject of health insurance I think the hon. member for Winnipeg South and the Winnipeg Tribune are about the only two in Canada who are still opposed to health insurance.


Mr. Trainor:: On a question of privilege, I know the hon. member would not wish to misrepresent me, and the statement he has made now is not correct. He said that I and the Winnipeg Tribune are the only two in Canada not in favour of health insurance. I cannot speak for the Winnipeg Tribune but I can for myself, and I say that statement is not correct. I am in favour of health insurance, but not the type of health insurance the hon. member is in favour of. If he will permit me, I should like to ask him a question while I am on my feet. Does he not realize that Canada is a federal state, and that constitutionally the matter of health and health

insurance comes within the purview of the provinces? Would he not think, therefore, that the initiative at the conference in October should come from the provinces rather than from the federal government?


Stanley Howard Knowles: I accept the hon. member's statement of privilege. So far as the Winnipeg Tribune is concerned, I had reference to an editorial a few days ago in which that paper took issue with the very request Mr. Frost had made. So far as my hon. friend is concerned, I am glad to find out that, while he may be interested in a different type of plan than I am, basically he also wants to see health insurance. I hope the Minister of National Health and Welfare will take note of that. It is now nearly unanimous.
I point out also that during the summer of 1953, when we were in the midst of an election campaign, there was an article on this question written by none other than Mr. J. A. Hume, Citizen parliamentary writer. We all know the accurate prophet Mr. Hume has become. He was able to foretell with uncanny accuracy the outcome of the federal election in 1953. He seemed to know pretty well last December or January what would be in the speech from the throne opening this session of parliament. He had some pretty good ideas as to what might be expected in the budget which was announced on April 5, and just a short while ago he predicted accurately the date of the Ontario election which has now been set for the 9th of June.
In the summer of 1953 this uncanny prophet, whose record for accuracy one must note, had this to say in an article which appeared in the Ottawa Citizen headed "Health Insurance First Liberal Aim":
Inauguration of a contributory national health insurance scheme during the life of the new 22nd parliament will shortly be announced by Prime Minister St. Laurent as the No. 1 objective of his Liberal administration if re-elected on August 10.
I am sure my hon. friends across the way will not want to disappoint Mr. Hume, let alone some 15 million other Canadians. I am sure they do not want to spoil his record as an accurate prophet, and I hope the point in the life of the twenty-second parliament to which Mr. Hume referred will be in October of this year, and that the government will really take action.
I have shown-


Mr. Deputy Speaker:: I am sorry to interrupt the hon. member, but I am obliged to advise him that his time has expired.


Stanley Howard Knowles: Perhaps I could go on for two minutes to make up for the time I spent
The Budget-Mr. Decore reading from the speech of the Minister of National Health and Welfare.


Mr. Deputy Speaker:: Order. I had already made what I thought was a generous allowance for the interjection of the minister. But if the hon. member is accorded unanimous consent, then of course he may proceed.


Some hon. Members:: Agreed.


James MacKerras Macdonnell: Would the hon. member permit a question before he takes those two minutes more? He has dealt, in some particularity, with the speech made by the Minister of National Health and Welfare before the 1949 election. It seems to me, however, that he overlooked a very important matter when he did not give us the speech or speeches made by the minister before the 1953 election. I think we can assume that they were made, and it would be important to have them on the record.


Paul Joseph James Martin: To save the hon. member's time, because I realize his time is precious, may I say to the adventurous member for Greenwood (Mr. Macdonnell) that I shall be very glad to supply him with all the material which, obviously, he requires-


Stanley Howard Knowles: That saves me not two minutes but two hours, Mr. Speaker.
Just this in conclusion, let me thank the house for giving me the extra time. I have shown this front page of the Toronto Daily Star of May 15, 1948, to the house on a number of occasions, and I feel that perhaps I should apologize for bringing it down again today. It is almost worn out. However, I did bring it down because it does seem to me that today it is more appropriate than ever. Mr. Mackenzie King made his announcement of the health grants program on May 14, 1948. The next day the Toronto Daily Star ran this headline, "Can't Wait for Ontario-King".
I ask, Mr. Speaker, who is waiting for whom now? Ontario wants studies in the matter. The Minister of National Health and Welfare says he wants health insurance as soon as possible, as soon as we can afford it, as soon as all the difficulties can be ironed out. The people of Canada want it. I call for action, without fail, on this important question at the federal-provincial conference to be held on October 3 of this year.


Mr. John Decore (Vegreville):: Mr. Speaker, during the course of this debate some hon. members in the opposition have endeavoured to create the impression that Canadians in the lower income brackets did not get very much consideration by way of personal income tax reductions as compared with those in the substantially higher income brackets.

The Budget-Mr. Decore
I think a very good example of that type of thinking has been shown to us this afternoon by the hon. member for Winnipeg North Centre (Mr. Knowles), who has just taken his seat. And I might add that if we were to examine the statement made by his leader, the hon. member for Rosetown-Biggar (Mr. Coldwell), it would be clear that he follows the same line of thinking. I now quote from Hansard, page 2956, where the hon. member for Rosetown-Biggar, the leader of the C.C.F. party, had this to say:
When we heard the minister we jumped to the conclusion that the reduction in the tax was more substantial in the lower brackets than in the higher income brackets. What the minister actually did, in spite of any impression to the contrary which was contained in the table which I looked at the night the budget was placed before us, was to reduce the tax rate by two percentage points in all personal income brackets.
This means that the married taxpayer with two children receiving family allowance and earning $3,000 a year gets a tax reduction of $7 for the whole of 1955.
Then he went on to say this:
The married man with two children receiving family allowances with an income of $100,000 a year will receive a tax reduction of nearly $1,000, or to be precise, $977. The higher the income the more rebate that is received.
The hon. member for Winnipeg North Centre gave an example of the reduction for a person who has an income of $400,000 a year, and I believe he gave the reduction as $3,977.


Stanley Howard Knowles: No, $7,954.


John Decore: Perhaps my arithmetic was not correct. I accept the hon. member's figure. In any event, in all fairness to the hon. member for Rosetown-Biggar and the hon. member for Winnipeg North Centre I would say that the figures they have given are correct. I think, however, that these same figures should be examined from a different angle, so we can get a better perspective and a better picture of the whole situation.
If we were to refer to table V at page 2737 of Hansard, to which the hon. member for Winnipeg North Centre referred, we might see what is stated there concerning the married man with an income of $2,300 and with two children, both of whom are eligible for family allowance. What happens to him? The fact is that this taxpayer does not receive any tax reduction at all. If I were to leave it at that, then of course I would be endeavouring to leave the same impression the hon. member for Winnipeg North Centre has been trying to leave. But the reason this taxpayer has not received any reduction in personal income tax lies in the fact that he is not taxable at all. At the same time, in addition to his income of $2,300 this same


man receives family allowance cheques for his two children which, in the year, amount to something like $150.
Let us now turn to the man with two children and an income of $2,500. What is the tax he would pay in 1955? Of course when using the figures shown in table V one must add the 2 per cent old age security tax. It appears from the table that his tax in 1955 would be $28. Yet, at the same time this man who must pay the tax of $28 receives family allowance cheques from the people of Canada, through the policy initiated by this government, to the extent of about $150. In other words, in addition to his income of $2,500 he receives a bonus of approximately $120.
Let us take another figure that was used by the hon. member for Rosetown-Biggar, who referred to the man with an income of $3,000 and with two children eligible for family allowance. His tax for the year 1955 would be $98. At the same time, by way of family allowance cheques he receives $150, which leaves him more than $50 to the good, by way of bonus, if one wishes to put it that way.
Family allowances were enacted to assist people with children in the lower income brackets, so those children may be better fed, better clothed and have better educational facilities; in general, to afford them better opportunities to become good citizens of this country. At the same time, one should take this into account. A young married couple with two children usually have to care for, or they have a moral obligation to assist, their fathers and mothers in their old age, when they reach the age of 65 or 70. Under the policy of the federal government these people in the lower income brackets are receiving indirect benefits from our social security measures in the form of old age security or old age pensions. I would remind this house that the government will spend approximately $1 billion in the coming year on our social security measures, which were intended to assist in particular those who require assistance, and those who are in the lower income brackets.
Let us again refer to table V to see what happens to a person who has an income of $100,000. A person with an income of $100,000 is obliged to pay in taxes the sum of $51,892; a married man with two children whose income is $200,000 is obliged to pay $123,527 in taxes. The hon. member for Winnipeg North Centre gave an example of a married man with two children whose income is $400,000. He should have given us not only the reduction this man will receive but also the taxes he will pay in 1955 under this budget. According to this table a married

man with two children, whose income is $400,000, is obliged to pay income tax of $278,162.


Mr. Nicholson:: How much does that leave him?


John Decore: Well, it still leaves him a substantial amount.


Stanley Howard Knowles: It leaves him $121,838.


John Decore: That is what he will have left, unless you take the whole thing away from him. If that is what you want to do, it is a different matter. The fact is that he will pay over $278,000 out of the $400,000 income that he will receive, if there are such people in Canada.


Alexander Malcolm Nicholson: And he still has a lot left.


John Decore: It has been the policy of the present government for some years to tax people with high incomes to assist those in the lower income brackets. It is a form of distribution of wealth. The government also follows the policy of encouraging private free enterprise in order to induce people to take risks and to go into various business ventures. Despite our huge expenditures for defence purposes-and as we all know they amount to almost one-half of our total revenue-in this country we have one of the best social security programs of any comparable country in the world. It is also a fact-and if anyone wishes to challenge this I should like to hear him do so-that our rates of income tax are among the lowest in the world, and our personal exemptions for income tax purposes are the best in the world for people in the lower income tax brackets.
Having dealt with some of the criticisms that have been levelled against the government and the budget, I should now like to bring to the attention of the Minister of Finance and the government certain problems which exist, so the government may take the necessary steps to solve them. I have in mind a problem which is very real and very serious. It has to do with young men who wish to make a start in farming. I have made reference to this matter before, and I wish to do so again. Everybody knows that because of the increased value of farm land generally and the mechanization of farming which involves costly farm machinery, a young man who wishes to start in farming must have at least in the neighbourhood of $15,000.
Nearly all the young men who desire to go into farming in this country find that this amount of money is simply not available to them. It is true we have the farm loan act and the farm improvement act, which were intended to provide credit to farmers, but
The Budget-Mr. Hansell this credit is extended to farmers who already have land, who already have buildings and machinery. They may be able to borrow money from the farm loan board to buy more land or additional machinery, or to borrow for farming purposes under the Farm Improvement Loans Act, but there is nothing on our statute books to give assistance to young men who wish to start in farming.
It is my contention that those young men who have the experience, who have the knowhow and who desire to farm, should remain on the land. They should not go into the industrial centres seeking jobs when they are better qualified to remain on the land, because in so doing they merely add to the problem of unemployment. Therefore I ask the question, could not some scheme or some plan be put into operation to assist these young people and give them a start in farming? I do not pretend to have any formula, but I should like to draw attention to the National Housing Act. Under that act thousands and thousands of Canadians have been able to acquire houses which they otherwise would never have been able to acquire. They have been able to do so because there was a plan or scheme introduced by this government. In enacting that legislation the government did not take any risk, and the lending institutions did not take any risk. Thousands of people have benefited and thousands more will continue to benefit under the National Housing Act. Perhaps a similar scheme could be enacted along those lines for young men and women who wish to go into farming.
I believe that investment in land is the best investment one can make. Furthermore, we already have the machinery set up. The Department of Veterans Affairs offices in the various provinces in Canada have had some experience in this type of work. Therefore, Mr. Speaker, I urge the Minister of Finance, the Minister of Agriculture, and the cabinet to give this matter some thought. Probably they could appoint a committee or find some other means of solving this problem.


Mr. E. G. Hansell (Macleod):: Mr. Speaker, the hon. member for Vegreville (Mr. Decore) has stolen a march on me. I thought he was going to continue until five o'clock. Since he has not, I shall have to look over my notes. However, I think I can take up the time of the house for five minutes.
I must confess frankly that I feel a little ashamed coming in at this late date and attempting to find anything new to say. Of course as members of parliament we all like to get something on the record. As I said, it is difficult to find anything new to say

The Budget-Mr. Hansell when so many have preceded me. I have listened to about 19 budgets brought down by this government, and during that time have listened to the number of speeches which have been delivered this session multiplied by 19. I find it difficult to say much that is new.
The budgets we listen to every year are the same old budgets. There is no difference basically and fundamentally in any of them; they are all the same with respect to basic financial policy. The only shade of difference is that there may be a reshuffling of taxation. Some years some things are taxed higher than others, but the next year those same things may be taxed a little less. It is entirely a matter of running the country one year after another with no change in basic financial policy, but only a reshuffling of the mechanics of the same policy.
I am not going to attempt a detailed analysis of the financial aspects of the budget, as there are other members of the house who are more capable of doing that. Some of them have already tried to give evidence of their capabilities. I am not too much concerned with the analysis of budgets; I am not too concerned with what the financial wizards of the finance department have to say about things; I am not too much concerned about what the big boys of Wall street or of St. James street or of Bay street have to say; I am more concerned about what my friend Joe of Fifth street has to say. I am not too much concerned as to what big business or big industrialists may say about the budget, but I am concerned with one of two things, that is how it affects the rank and file of the people of Canada.
I do not know, but my experience is that these budgets are somewhat glamourized. Budgets come and budgets go, and somehow or other we bow down in humble obeisance to finance and surround it with all the dignity of great potentates and what have you. I always want to laugh when the financial critic of the Conservative party rises in the house and with an air of importance looks over at the finance minister and says, "May I ask the hon. Minister of Finance a question; can he inform us when we may expect the budget?" This happens every year. Then the minister rises; he does not tell him, he simply puts him off. Then perhaps a week or two later some front bencher will rise and ask the minister if he has given any further consideration to the date of the budget.
I do not think my friend Joe of Fifth street cares one bit about the date the budget is brought down. It is brought down eventually, and then another thing happens. Why people

should want to crowd into this house on budget night to hear the budget speech is beyond me. As a matter of fact we get telephone calls from our friends and other people wanting to know if they can get tickets to the galleries.


An hon. Member:: How about Joe?


Ernest George Hansell: The Sergeant-at-Arms informs us that there is a certain precedence in connection with choice seats and the fact is that people line up at the door of the house long before eight o'clock. I do not know why they do that, because frankly the budget speech is one of the driest speeches I have to listen to. I shall try to make mine less dry when I continue at eight o'clock.


The Acting Speaker (Mr. Applewhaiie):: It being five o'clock the house will proceed to the consideration of private and public bills.



CANADA GRAIN ACT


Mr. H. R. Argue (Assiniboia) moved: the second reading of Bill No. 22, to amend the Canada Grain Act.
He said: Mr. Speaker, in the words of the Saskatchewan wheat pool, the western farmer is fighting mad today, and he is fighting mad for a good reason. A fundamental right which he has enjoyed for over 50 years has been arbitrarily taken away. I refer to the right of the farmer to deliver grain to the elevator of his choice. This is the third successive year in which I have introduced this bill, which sets forth a method by which farmers may have restored to them the right to deliver grain to the elevators of their own choice. Canadians fought in two wars to protect democracy and to prevent the coercion of the few by the many. Thousands of western farmers today are asking that this fundamental right be restored to them.
Under the present system farmers have lost that fundamental right. As hon. members know, in periods of congestion elevators have been plugged. Farmers have been able to deliver grain only to those elevators that obtain the box cars, and they are able to deliver grain to a particular elevator only to the extent that that elevator company may obtain box cars. The railway companies and the government have in their hands the power to decide where and in what proportion farmers may be able to deliver their grain to the various elevator companies. Far too often railway companies going into a town with four or five elevators, ignoring completely the desires of the farmers as to where

they wish to deliver their grain, spot one box car to each elevator and therefore determine by that method the proportion of grain that will be handled by the various elevator companies.
Farmers and farm organizations of western Canada have been very patient indeed with this government. They believed that if they came to the minister and the government quietly, without publicity, and explained particularly to the Minister of Trade and Commerce in a reasonable manner their important and just demands, the minister would lend to them a sympathetic ear and that between them they would be able to find a method by which that fundamental right could be restored to western farmers. But, instead of getting a sympathetic ear, instead of getting action from the government, they have found that the government has ignored their requests. The government has turned a deaf ear and has said, in effect, "You shall not have restored to you the right to do your business with the elevator firm of your choosing".
I wonder how any cabinet minister or any member opposite would like to be told the business firm from which he must buy his automobile. How would any hon. member like to be told that he would have to take a Volkswagen if he wanted a Cadillac? I am sure he would resent it very much. I wonder if the wife of any hon. member opposite would like to be told that she must shop for her groceries at a certain store on a certain day, and at no other store, if she wants to eat and to feed her family. That in effect is what farmers have been told by this unfair and unjust method of box car distribution, namely that if they are to get any income at all in a given period of time in order to buy food and clothing for their families and for the purchase of farm supplies, they must deliver grain whether they like it or not to the elevator that has the box cars.
So I say that every hon. member opposite should support the measure I am now moving; and every member of parliament from the prairie provinces, if he is to carry out the wishes of his constituents, particularly if he represents a rural constituency, has no choice but to support the proposition that farmers right now shall have restored to them this fundamental right that has been so arbitrarily taken away.
I know that hundreds of letters come to my desk from individual prairie producers asking that this fundamental right be restored, and I know that my colleagues in
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this group are also receiving many hundreds of letters. I am sure the Minister of Trade and Commerce must have received in his office many thousands of letters from wheat producers, and I would like to have the information as to just how many thousands of letters have come to the minister's office asking that this fundamental right be restored to the farmers. Is it 5,000 letters or
10,000	letters? Is the wheat pool now nearing its objective of getting to the federal government and to members of parliament a total of 30,000 letters asking that this democratic right be restored? I know the campaign has gone on very successfully during the past few weeks, and it is still going on.
I venture to say that the Minister of Trade and Commerce has received more letters from western farmers on this subject in the last three weeks than any western cabinet minister has received since 1942, when farmers staged a march on Ottawa. In the words of the Saskatchewan wheat pool, the farmers are fighting mad; they are out to get justice for themselves; and if the method of requesting the government by letter this time does not work, then they are going to adopt other measures until this right is restored. In that campaign they have the full and complete support of the C.C.F. party.
I am hoping that members of parliament on all sides of this house will vote for the measure that is before the house today. When I first moved this bill in the spring of 1953, Mr. Ross, the then member for Souris, speaking on behalf of the Conservative party, said that it was a step in the right direction. The Minister of Trade and Commerce then moved an amendment that the bill be given the six months' hoist, and the members of the Conservative party voted against that move by the government to kill the bill. Last year, however, the Conservative party in this house reversed its stand. I am going to issue a warning to the Conservative party right now that, if they wish to get any support whatever in rural areas of western Canada, they had better support the proposition that farmers be given the right to deliver grain to the elevator of their own choice. I am asking them to reconsider their stand and when the vote is taken to support this measure.
As I have said, the letters have come in by the thousand to members of parliament and to the government. I am sure I could not explain the desires and the wishes of western grain producers in this regard as well as

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they are explained in this letter from Mr. Harold E. Voechting, of Tribune, Saskatchewan, dated April 20, 1955, which reads as follows:
Mr. Hazen Argue, M.P.,
Ottawa, Ontario.
Dear Mr. Argue,
As our member of parliament for our riding, I follow with interest your various speeches and debates in the House of Commons.
As a farmer, grain grower, I am vitally interested in any legislation that is for better living and1 working conditions for the farmer. Grain quotas, box car shortage, and storage space are as you know one of our biggest headaches on the farm, and the unequal distribution of box cars is very annoying. Under the present system, if a farmer wants to sell any grain he must take it to the elevator that the railways see fit to send cars to. Special shipping orders by the wheat board have made the car order book obsolete. I think it is time some legislation was enacted to let the farmer at least have a choice of where he can deliver his grain. We are supposed to be living in the freest country in the world, yet our government will not devise a plan that will enable the grain grower to be able to deliver his grain to the elevator of his choice.
I urge you, Mr. Argue, as our very capable M.P., to do your utmost to have the government pass such legislation at this sitting.
That sets forth the wish of western farmers to have restored to them the right to deliver grain to the elevator of their own choice.
Government members may claim that the present situation is merely temporary, that if we should have another poor crop the congestion will not be nearly as great, and that therefore it is unnecessary to amend the Canada Grain Act in this regard. However, I should like to point out to government members that modern methods of harvesting our grain crops make it possible and practical for farmers to harvest all their grain within a few weeks, and haul it out to the elevators. The farmers being very short of cash, as they are particularly when their crop is small, are anxious to haul out as much grain as they can, as quickly as they can, in order to cover their accounts. Hence they naturally attempt to haul their grain out as quickly as possible after harvesting so that even if there is a relatively small crop, as there was in 1954, the congestion continues. The congestion that has continued over the last three years with regard to this box car situation is therefore likely to continue in the future, I suggest, because of our new, modern methods of harvesting and hauling grain.
That being the case, I suggest to the government that the amendment that is required is not one to amend the Canada Grain Act just for this year, to meet a temporary situation, but is an amendment that is necessary to meet a situation that is likely to continue for many years to come.
In this demand all farm organizations in western Canada are united. The western

wheat pools are speaking with one voice. The farmers' union, in one brief after another presented to the government, have mentioned the problem of box car distribution and have asked that a fair method of box car distribution be adopted. The measure I am proposing this afternoon is that the Canada Grain Act be amended to read as follows:
If, at any time, no unfilled application for a car appears In the car order book at a marketing point, the railway agent shall then apportion railway cars among the elevator companies in the proportion that the acreage has been divided among the elevator companies.
The bill in the preceding paragraph makes it possible for farmers to list their acreage and to apportion their acreage among the elevator companies at the marketing point. After they do that, as set forth in this bill, before October 1 in each year, then the number of acres allotted to each elevator shall be added up and, on the basis of the farmer's choice as outlined by the allocation of his acreage, the railway companies are accordingly required to apportion the box cars among the elevator companies.
As I have said, this fundamental principle is being supported by all farm organizations today. The Saskatchewan wheat pool has sent to the various members of parliament a brochure setting forth their opinions and their suggestions as to how this problem can be dealt with. They are asking that the farmer himself have the right, by posting his acreage, to elect where he wishes to deliver his grain and by so doing to make provision for box cars to be spotted accordingly.
The only real difference I can see between the bill that is now before the house and the proposition advanced by the western wheat pools is that by my bill the farmers would vote by open ballot, whereas the wheat pools are suggesting that the choice be made by secret ballot. If the government is prepared to adopt the suggestion of the wheat pool organization, I for one shall be pleased to support it. I do not think it makes much difference whether the farmer sets forth in his permit book, as he now does with regard to his seeded acreage, his opinion as to where he wishes to deliver his grain or whether, as the pools suggest, he expresses his opinion on a ballot which is subsequently placed in an envelope and sent to the board of grain commissioners for their guidance.
The thing that is important is the principle, namely that farmers have a right to deliver grain to the elevator of their own choice. Farmers, I believe, should have the same economic freedom as is now enjoyed by every other group in the Canadian economy.

By this bill we are asking that farmers in western Canada have that fundamental freedom restored to them.
I suppose that members from non-prairie provinces may say they do not take any interest in this measure. But I suggest that the principle involved in this measure is far more fundamental than whether a number of box cars should go to one prairie elevator or another. The extremely important principle is that no group of Canadians should be denied something that I suggest every member of parliament must believe is a democratic, basic Canadian right. The right is that any Canadian, when he decides to sell his produce-whether it be agricultural produce or whether it be his labour-has a right to sell that product to the firm of his own choosing. To say that western farmers today have that freedom would be to deny the truth of the statements by thousands of farmers that have been received by members of parliament and by the government.
The wheat pool set out in some detail the type of amendment they are seeking. In addition to this general, broad method of determining the distribution of box cars, they say that if the wheat board must order out of turn box cars, those additional out of turn box cars must also be calculated in the formula. I would suggest one further amendment that might be placed in the statute or might be provided for by regulation. That is if, because of the out of turn box cars, within the full year period the exact apportionment has not taken place according to the farmers' own wishes, whatever extra box cars an elevator may have obtained should be carried forward into the next year and be treated in the next year's formula. If that were done the apportionment could be made absolutely in keeping with the farmers' own wishes.
We have been at this problem now for a number of years. We expected that we would get it solved when the transport controller was appointed. The transport controller had his powers extended in the 1953-54 session. Under that statute the transport controller has power, in my judgment, to do everything that we are now asking be done in the way of the distribution of box cars. However, he has never cared to exercise the authority to allocate box cars that parliament has provided.
As I have said in previous debates, he does not really allocate box cars at all. If a member or someone else gets a complaint that a given point is not getting sufficient box cars, and if the transport controller is asked to do something about the situation, he will
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bring it to the attention of the railway company in the hope that the railway company will provide additional cars at that marketing point; but at no time does he allocate box cars among the elevator companies on the basis of the farmers' own choice.
To solve this problem we have tried the transport controller, and that has been a complete failure. The minister has said in the past that the car order book, a provision that has been in the Canada Grain Act for a great many years, was sufficient to give farmers the right to deliver grain to the elevator of their own choice. For example, in the debate on December 15, 1953, the Minister of Trade and Commerce had this to say, as found at page 937 of Hansard:
I do not think enough attention is being paid to the car order book.
Then he went on to explain the provisions of the car order book. He said the car order book is a method by which the farmers can determine where box cars shall be spotted, and by that method can provide for their use sufficient space in the elevator where they wish to market their grain. Of course the fallacy of that argument is that the car order book has already been tried. The car order book has a lot of merit and can do a job in many instances, but as soon as the farmers at a local marketing point have the car order book in effect, and as soon as other farmers at other marketing points across western Canada have the car order book in effect, what happens? The transport controller steps in, uses his wide powers and suspends the operation of the car order book. Farmers are then back in exactly the same position they were in before they began using the car order book.
In other words, instead of the transport controller and the government assisting the farmers to market their grain at the elevator of their own choice they have taken away in many instances the one provision which was placed on the statute books of the country long ago so the farmers might have that right. Instead of helping the farmers to use this fundamental right the government helped take it away.
We thought we were making some progress last year. We had a long discussion in the standing committee on agriculture. We had witnesses from the various grain companies. We had the minister saying that he was considering the implementation of a car cycle whereby the government, the transport controller, whoever was in charge, would take a period following the war in which there was little congestion, and on the basis of the business done by each elevator company at the marketing point would apportion box

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cars accordingly. I was never enthusiastic about that procedure. I thought something better should be done. I did not think you could obtain justice for the farmers in 1955 by tying the distribution of box cars to the dead past, to the wishes of farmers in a previous period even though it was a period in which there was little congestion. But I was quite prepared to admit that that kind of car cycle woud be a vast improvement over the present method of allowing the railway companies, in the main, to determine the distribution of box cars at any elevator point.
I have reviewed the lack of action by the government. I have pointed out the fact that the government, instead of helping the farmers to solve this problem whenever by their own volition they have attempted to do so, has permitted the transport controller to step in and block the farmers' action by cancelling the car order book.
I have said many times that the personnel of the board of grain commissioners are not carrying out the wishes of organized agriculture and the farmers generally. We all know that in some instances the board is loaded with straight political appointees, and if it is not a straight political appointment then you can almost be certain it will be somebody who was very closely connected with the Winnipeg grain exchange. Whenever you get this Liberal-grain exchange partnership the farmers of western Canada are bound to suffer. I think that is one of the real reasons why they are in this difficulty today. Apparently there is no one in the board of grain commissioners or in the ranks of the cabinet who wishes to restore to the farmers this fundamental right. They would far rather continue this conspiracy to deprive the farmers of a fundamental Canadian right.
I do not claim that this bill is necessarily the final answer. I do not really care whether or not this particular measure is adopted, as long as I get the assurance from a responsible cabinet minister that legislation will be brought in by the government at this session to fulfil the letter and the spirit of the requests of the three western wheat pools as far as amendments to the law are concerned. I am prepared to go further. I am prepared to support in committee any amendment by the government that they might think would improve the measure in order to carry out its principal objective. As a further alternative, if after the measure has received second reading, the government would like the whole question reviewed once again by the standing committee on agriculture and the bill reported back to the house at this session, I am quite prepared to agree.

But I shall not allow the measure to drop unless and until there is concrete assurance from the government that action will be taken at this session to meet the requests of organized agriculture. If the Liberal members from Saskatchewan wish to stay in tune, which is questionable, with the opinions of the Saskatchewan Liberal party, they will support the principle of this measure. But since Saskatchewan now has two Liberal parties, or a Liberal party that functions in two parts, it is rather difficult to forecast what their position may happen to be.


Mr. Studer:: The socialists have none.


Hazen Robert Argue: I should like to remind the hon. member who has interrupted that at a certain Liberal party convention held in the province of Saskatchewan in September, 1954, a motion was moved and adopted with respect to this matter, and in the Saskatoon Star-Phoenix of September 23, 1954 there is the following:
Resolutions designed to make life more enjoyable for farmers were passed at the provincial Liberal party convention here Friday.
Wonderful.
On the question of box car allocation, the convention urged that the Canada Grain Act be amended to provide for placing box cars at country elevators in accordance with the farmers' preference so they could deliver grain to the elevator of their choice. At the same time, the act would retain for the individual growers their right to order cars under the car order book section.
Liberal members of the house from Saskatchewan can demonstrate that they really want to take steps that would make farm life in Saskatchewan more enjoyable, not by supporting a fundamentally C.C.F. measure but by supporting a resolution of their own convention in Saskatchewan last fall, calling for amendments to the Canada Grain Act to restore this fundamental right to western farmers.
To show that at least the provincial section of the Liberal party meant business, may I point out that a resolution was unanimously supported in the Saskatchewan legislature which asked that this right be restored. The resolution, moved by Mr. Wooff and seconded by Mr. Swallow, is listed in the votes and proceedings of the legislative assembly of the province of Saskatchewan for March 24, 1955, and reads as follows:
That this assembly urge the federal government to implement a box car distribution that insures the farmer the right to deliver grain to the elevator of his choice.
A debate arising, and the question being put, it was agreed to unanimously.
That was the resolution passed by the Saskatchewan legislature and agreed to unanimously by members of the Liberal party and of the C.C.F. party, asking the federal

government to implement a box car distribution system that would ensure to the farmer the right to deliver grain to the elevator of his own choice. It was carried unanimously; all were for it.
I ask Liberal members of parliament from Saskatchewan and from other provinces in western Canada to stand in their places and support the restoration of this fundamental right to western farmers.


Mr. Casileden:: And call a vote on it, too.


Hazen Robert Argue: We shall take care of calling the vote in due course.
The three western wheat pools are asking for such an amendment to the Canada Grain Act. The demand is also approved by the farm unions. And I suggest to Liberal members from western Canada that they should look at the state of the Liberal party and ask themselves why their party in three of the western provinces is, for all practical purposes, almost non-existent. It is because it has ceased to be the voice of the common people of those provinces. And if the Liberal party in Manitoba as well is not to continue on the skids, downhill, then Liberal members from that province who sit in the House of Commons should on this occasion, and on future occasions, vote in the interests of their farmer constituents who have sent them to the House of Commons to work on their behalf.
I suggest to members on all sides of the house that, as good Canadians, believing in the democratic right of free choice, they should support this measure that will restore to western farmers a fundamental Canadian right, namely the right to deliver grain to the elevators of their choice.


Mr. Rene N. Juiras (Provencher):: Mr. Speaker, I wish to say a few words about Bill No. 22. As the hon. member sponsoring the bill has said, this very same bill was presented to the house last year and the year before. Each year I have had quite a bit to say, and I do not propose this year to repeat what I said previously.
However, in view of statements made by the hon. member for Assiniboia (Mr. Argue), not to mention the gratuitous political advice he so profusely handed out to all members in the house, I should like to refer to some of his remarks. One thing that struck me above everything else is that he tried to leave the impression-indeed he so stated specifically and repeatedly-that the government had purposely gone out of its way to deny a long-acquired right of farmers to deliver to the elevator of their choice. Of course nothing could be more ridiculous than such a statement.
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George Hugh Castleden: Prove it.


René Jutras: I shall. Just hold on. I have 40 minutes to prove it. Everybody knows that no one has denied anyone any right on that score at all. It just so happens that, because of a shortage of box cars, a situation has developed.
The hon. member said the government had ignored the plea and the demand of farm organizations out west. Again, to say the least, this is a very broad exaggeration of the true situation; because I am sure that even the farm organizations, particularly the three wheat pools primarily concerned with this matter, would be the first to deny that statement. On every occasion-and it was repeated recently-the government and the Canadian wheat board have given the matter careful consideration and have tried to meet the wishes of all concerned, including the private line companies, in order to find a solution to this problem.
One of the main difficulties of my hon. friend from Assiniboia is that he associates with this bill the right of a person to deliver to the elevator of his choice. I suggest there is a vast difference between the bill as he has presented it and the right to deliver to the elevators of our choice; because there are grave doubts in the minds of many producers in western Canada that this bill will do what the hon. member says it will do.
Last year, when we sat in the committee on agriculture, this whole matter was gone into at some length. Representatives of the pools were there to testify and the secretary of the line elevators' association, which represents all the line elevators in western Canada, was also present to give his testimony.
In this way we got the story from all angles, including evidence from the board of grain commissioners and the Canadian wheat board. As a matter of fact representatives of the various pools were asked what they thought of the bill sponsored by the hon. member for Assiniboia, and each of them replied that he had very grave doubts that the bill could be made workable.
After listening to all the evidence and doing my share of study of this problem, it is my opinion that the bill is not workable and, as I said, I believe the pools agree. As a matter of fact, as the hon. member has said, the pools have offered another method by which they thought this situation might be resolved.


George Hugh Castleden: Almost identical.


René Jutras: If it had been the same the pools would not have gone to the trouble of preparing it.


George Hugh Castleden: It is the same; I have it.

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René Jutras: The mere fact that they went to the trouble of circularizing all members in Saskatchewan, and of sending the resolution to members of the government is proof enough that they thought their system was better than the one offered by the hon. member for Assiniboia. I do not think there can be any doubt about that.
Now, the hon. member for Assiniboia suggests in one breath that we should adopt this bill today, and in the same breath urges that we should adopt the suggestion of the pools. I do not see how the two views can be reconciled.


Hazen Robert Argue: Which are you for?


René Jutras: If the act is amended as set out in Bill No. 22, then automatically the suggestion by the pools falls by the wayside. Surely the hon. member is not advocating both. The hon. member has tried to excuse himself by saying that, in effect, the suggestion by the pools is the same as his. Obviously this is not so.
Mind you, let me say that I do not think the suggestion of the pools would solve the problem, either. We know that the objective everybody is seeking-and it is not to be found exclusively in the C.C.F. party, the Liberal party or for that matter any other political party-is to devise a way of reestablishing the order of things as it existed before the shortage of box cars occurred, and that is to allow the farmer to sell to the elevator of his choice. Well, the car order book is one part of the Canada Grain Act which attempts to preserve that right.
Last year we had a suggestion from the pools, mainly, that the car order book be reinstated, and the government reinstated it. At the time I did make my position quite clear. I did say that I doubted very much whether you could make the car order book function in a condition of congestion such as we have at the moment. I expressed grave doubts. I thought the transport controller had shown good judgment the year before when he suspended the operation of the car order book.
We have had the experience of another year with the car order book. I think I detected-although he did not say so in so many words

in the remarks of the hon. member for Assiniboia that he now thinks the car order book is not functioning the way it should. He did not suggest that it be suspended again, but personally I think the time has probably come when it should be suspended, because it cannot be made to work efficiently and equitably in a condition of acute shortage such as we have at the moment.
[Mr. Castleden.l
It will be interesting to hear what the various pools will have to say before the agriculture committee. This whole matter should be left until we have discussed the matter again before that committee. Again I hope that all the pools and all the organizations concerned will make it a point to appear before that committee and present their case and try to find a solution, if one can be found, to the problem. Mind you, the problem today is not what it was last year and the year before. My impression is that the problem has greatly shifted. The problem at the moment is not so much the equitable distribution as between elevators at one point. As I understand it at the moment, the problem is far more the allocation as between companies, and that is a problem which has to be met in another way.
As long as there is an acute shortage of cars, I do not care what scheme anybody tries to devise, there will be a problem and it will be a hard one to solve. Personally I do not think we should clutter up the Canada Grain Act with any elaborate scheme of car distribution. I do not think it should be included in the act as permanent legislation. I admit that the situation is not as acute in Manitoba as it is in Saskatchewan, and my understanding is that it is not as acute in Alberta as it is in Saskatchewan.
A moment ago the hon. member referred to the hundreds of letters he had received from the various pools. I for one have not received any letters except the one master copy that was sent from the Saskatchewan wheat pool organization, and I do not know of any other members from my province who have received any copies. I think that is generally true of members from Alberta. That would tend to indicate that the problem is definitely more acute in Saskatchewan than it is in Manitoba or Alberta. The point is that we do not hear the cry we heard in previous years that the railways were distributing box cars on the basis of one elevator, one car. I notice that the hon. member for Assiniboia, whether deliberately or not, did not refer to it this year, which would again prove my contention that the problem is not exactly the same as it was in previous years.
The evidence in the agriculture committee last year proved that it would be hard to argue that box cars were allocated on the basis of one elevator, one car, because the statistics presented to the committee showed that the various companies, line elevators as against the pools, did not deliver the same amount of grain and consequently could not receive the same number of box cars. The only dispute there could be would be about

percentages. Therefore the argument that they delivered on the basis of one elevator, one car, could not be advanced very successfully in view of that evidence. However, as I say, this matter will come before the agriculture committee and I hope that we will all avail ourselves of the opportunity to get all the information necessary on that point. I know we can get it, because the witnesses will all be there. Surely it would be advisable and wise to wait until we have all the latest evidence and the recommendations of the various bodies before we embark on any particular scheme.
In view of the fact that the Saskatchewan wheat pool, which is the major marketing agency in the province and which handles a very large percentage of the crop-as a matter of fact, in 1952-53 they handled 46 per cent of all marketings in that province-has a suggestion of its own, we should at least give it the advantage and privilege of presenting its scheme to us in the agriculture committee, and we should study that scheme before passing this bill. As I say, the one is not the same as the other.
It is all very well to ask the farmer to elect where he wishes to deliver his grain. I say to the hon. member who presented this bill that I never could understand why he chose October 1 for the allocation of cars. After all, by October 1 in Manitoba most of the crop has already been sold. This is just a technical detail. Once the farmer has elected to deliver to an elevator his choice disappears, because he has to deliver to that elevator. In other words, he is at the mercy of that one elevator for that crop year.
My hon. friend shakes his head. I know what he has in mind. He says oh, no, he does not have to; he can elect. How can you allocate cars if the farmer can change his mind and give his grain to one elevator one day and another elevator another day? If you do that you will have more confusion than ever. If a farmer is to elect according to his choice, then he has to make the choice. If he does not have to make a choice, how can you allocate box cars? It is either one or the other. You cannot possibly have it both ways. That is the opinion of a great many people.
Let me tell the hon. member that a great many producers would hesitate before tying themselves up to one elevator for a whole crop year. It may be all right in some places where there is a very staunch supporter of the pool. He may not hesitate too much to sign all his acreage to the pool elevator. But there are many points at which there are no pool elevators, for instance, and there are two or three private concerns. I am sure
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farmers would hesitate before tying themselves down for the whole crop year to one line elevator or the other.
In spite of the fact that at the moment the farmer may not have a full choice, he still has a choice; and when he gets into a row with elevator A he can cross over to elevator B or elevator C and sell over there. I have done it myself in the last two years, though I am not saying I have gotten into rows with elevator companies. I did it because the line-up was too great. There are a great many factors to be taken into consideration when a farmer has to deliver, and he cannot foresee what may happen five or six months in the future.
As I said, I do not intend to reiterate everything I said last year and the year before. But the fact is that a lot of people are leery of this great rigidity, and I do not think it should be placed in the Canada Grain Act. But that does not mean that the problem cannot be solved to a large degree.
The hon. member made the statement that the railroad companies have the power to deny to a farmer the right to deliver to the elevator of his choice. That statement is outdated, and I challenge the hon. member to give me one case in the last year where the station agent was in position to do that. You can read the statement and think it over. The cars are not sent to the agent for the agent to do what he likes with them. This situation does not exist at the moment. If the hon. member will write to any of his friends who are station agents they will tell him that they have not had that privilege for some time.
Then the hon. member said the matter had been referred to the transport controller, who had done nothing. Again this is an exaggeration of the facts. The transport controller and the board of grain commissioners have no jurisdiction in the matter. I challenge the hon. member to show me any section in the Canada Grain Act which gives them authority to allocate box cars in a given point. To say that the matter was referred to the transport controller who had done nothing is leaving a wrong impression, and I do not think it is fair to the transport controller, who has done an excellent job. There are many producers in the west who are grateful for what he has done. He is still doing a great job as controller. There has never been a case to my knowledge since he was appointed controller where a ship has had to wait for grain because there were no cars to move it. Anyone who will look at the matter objectively must agree that he has done a great job.

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The fact remains that the board of grain commissioners never had any authority to allocate box cars. Possibly under section 15 (k) they could allocate cars as between stations, but that is all they could do. Acting unofficially the controller has tried to help because he is in constant contact with the railroads. His efforts have relieved the situation in some places. I do not think anyone has any complaint to make as to the allocation between stations. The hon. member has raised this point consistently every year in these debates but the fact is that these people are not involved, because they have no authority in the matter. Authority has never been given to them.
This bill is not what the wheat pool is asking for. The wheat pool has made its own suggestion, which will be placed before the agriculture committee. I expect that their representatives will be there to defend it, and I expect also that representatives of the line companies will be there to present their case. We will then be in position to appraise the situation and see if anything can be done.
It has been said that this box car shortage will be a continuing condition, and with that I agree to a degree. It is quite likely that there will be congestion at the time of harvesting for perhaps three or four weeks, but apart from that it is quite likely that there will not be the necessity to allocate box cars.
It comes down to this one fundamental, that there are just not enough cars to go around and you cannot split a car in two.
We have tried various methods and they have not worked. According to the experts the method suggested by the hon. member for Assiniboia is not workable either. The pool have another one, and there are grave doubts whether that will be workable. However, we do not know the details but we will find out later about it. I suggest that this debate should be postponed until hon. members have had an opportunity to discuss the whole matter in the agriculture committee. They will then be in better position to make recommendations.
May I call it six o'clock?


The Acting Speaker (Mr. Applewhaite):: At
eight o'clock the house will resume consideration of the business it was considering at five o'clock.
At six o'clock the house took recess.
[Mr. Jutras.l


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.


[Stage Direction]
The house, resumed consideration of the motion of Hon. W. E. Harris (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, and the amendment to the amendment of Mr. Coldwell.
Ernest George Hansell: Mr. Speaker, before five o'clock I had just a few minutes to begin my presentation on the budget, and at that time I stated that I did not quite comprehend why the budget that is brought down from year to year had been so glamourized. I stated that for my own part I considered it one of the driest speeches during the whole parliamentary session, perhaps because a good deal of it was technical. I wondered why it should be surrounded with such glamour for, after all, almost any budget that is brought down is bad news. However, it is glamourized.
I remember many years ago the first budget speech I listened to. Hon. Mr. Dunning, who presented that budget, came dressed for the occasion in his morning coat and striped trousers, and with a flower in his lapel. It certainly added to the dignity of the occasion, but when I attempted to analyse that budget and discover what he had done for the people in those depression days, I wondered why he really needed to don such finery.


Stanley Howard Knowles: The morning coat was appropriate, if it is spelled right.


Ernest George Hansell: If it is spelled right. The practice evidently has continued; although the present finance minister did not wear such dignified apparel, he did put on his Sunday clothes and wore a flower in his lapel.
I am not so interested in why he should look his neatest when he presents a budget. The amazing thing to me is that the people crowd into the gallery so much to listen to that speech. If they were only wise they would tune in their radios that night, or go out and buy a newspaper, and they could read in about three minutes the thing they really wanted to find out; that is, whether or not they were going to get any relief from their taxation. But when I see them in the gallery, crowded as they are, I cannot help thinking that they look like several hundred or a thousand prisoners in the dock. There

they sit, in reality waiting to hear their economic sentence for the next year.
These citizens have committed no crime. They have not robbed any banks, they have not cheated, and I do not think they have done too much lying-not any more than I have. Yet there they sit, waiting to hear their economic sentence, the sentence for being good citizens. They may not know it, but there they are with a noose around their necks-an imaginary one perhaps, and yet a very real one. It is the noose of taxation and, as they listen to the Minister of Finance, they are actually listening to find out whether that noose is to be tightened a little and choke them a little more, or whether it is to be loosened just a little-not very much, as they cannot afford to loosen it too much. Of course they cannot afford to tighten it too much either, or the patient will die and then, of course, they will not get any taxes at all because dead people pay no taxes. That is how it appears to me.
As I said before five o'clock, these budgets may be of interest to business in the country, but I really wondered what the average person thought about them. I had a request the other day from a friend of mine for a copy of Hansard containing the budget speech. So I sent him a complimentary copy with a covering letter telling him that I was very happy to enclose this budget speech but that I was quite sure he would not understand what it was all about. I said it would take him much longer to read than I thought he perhaps at first had anticipated; and that when he got into some of the tables I was quite certain that he would not be able to understand them, as perhaps 99 per cent of members of parliament are unable to understand them.
What is it that the average person is looking for? What is it that the average person is thinking about? I do not believe he is thinking in terms of all sorts of complicated tables, necessary as they may be, coming from the Minister of Finance of this country. What the average person is looking for is the highest possible standard of living in order that he might enjoy life as a free citizen of Canada.
It seems to me that the great objective of the financial policy of the government should be to give the people of Canada the highest standard of living, and yet allow them to remain free to enjoy life to the utmost of our productive capacity. It seems to me that should be a very simple thing, yet somehow or other the government does not seem to be arriving at that ultimate objective. The people look around and recognize that Canada is capable of producing tremendous quantities 50433-216
The Budget-Mr. Hansell of almost everything- They see that Canada's productive capacity is able to give perhaps the highest standard to all citizens in the country. I must be fair in this regard, and I think when times are good we have a reasonably high standard of living. However, it occurs to me that it is a strange state of affairs that times can be good only when the country is going into debt. People want to be free to live and enjoy life in their own way without any interference from dictatorial controls from the top.
We are facing a problem in Canada today. I am not going to take time to speak on the unemployment problem, but there is no question that it exists. The Minister of Trade and Commerce, as well as other officials, have admitted that one of the reasons for our unemployment is that there is overproduction. We in this corner of the house refuse to use that term "overproduction". We claim there is underconsumption. However, ministers have admitted that because there is an abundance of everything-overstocked inventories, I believe, is the phraseology used-therefore we have unemployment and hardship.
To those who sit in this corner of the house the problem is not difficult but, evidently because the government are pursuing a certain financial policy, the problem does appear to them to be difficult. They call their dominion-provincial conferences and make all sorts of plans as to how they are going to deal with this situation, without fundamentally changing their financial policy.
What is the picture? We have a picture here of an abundance of everything that could make life happy and contented and secure. Canada is able to do that, as far as material production is concerned. We have the goods piled up. It does not make any difference what it is. It can be foodstuffs, furniture or clothing. It can be whatever it is that meets the people's needs. There we have it piled up in abundance.
On the other hand what do we find? We find people with incomes that are not adequate to live on. Even those who have fair incomes are obliged to stretch their dollars in order to live. If some of them want to get something that is a little bit beyond their everyday pay envelope, they are obliged to get it on the instalment plan, thus mortgaging their future incomes so they cannot possibly buy future production. Those who are unemployed have no incomes, and those who are employed have not incomes high enough to buy that great volume of goods that Canada is able to produce and does produce.

The Budget-Mr. Hansell
Between those people and that great pile of production sit the cabinet, the people who govern the business and economic welfare of Canada. There they sit. What is their problem? Their problem should be simple. Their problem is to get that pile of goods distributed to those people. That should be a simple matter. Yet somehow or other it is a tremendous problem for the brains of this country, sitting in the seats of the mighty, to bring those goods to the people to whom they really belong. Why is it that they cannot move those goods? To put the matter in a simpler fashion, here are six loaves of bread and here are six hungry men. Yet the brains of the country cannot say how those six loaves of bread can be moved to those six hungry men.


Mr. Ellis:: They believe in private enterprise.


Ernest George Hansell: That is a strange situation. You would think there were enough brains in the cabinet to figure out the solution, would you not? There should be. The other day I happened to look in the Parliamentary Guide and did a little bit of figuring. It may be startling, Mr. Speaker, for me to tell you that distributed among the men in the cabinet are no less than 59 doctor's degrees. Some of them, of course, are honorary degrees. There are 7 master's degrees and perhaps a good many more that are not mentioned because of the fact that if their doctor's degrees are earned, their master's degrees are not always mentioned. There are 12 bachelor's degrees. There are one or two of the cabinet who were lecturers in universities, and two of the cabinet were at one time chancellors of universities.
You would think that with all those brains residing within the craniums of those who sit on the treasury benches, Mr. Speaker, they should be able to figure out how to move that vast production over to the people of Canada who have produced it and to whom it rightfully belongs. You would think that, but they cannot do it with all their brains. Yet it is said that those of us in this corner of the house who claim to have the solution to the problem have no brains.


Some hon. Members:: Oh, oh.


Stanley Howard Knowles: Put it on Hansard.


Ernest George Hansell: My leader says he is going to quit the party now. I hope I am not left to lead it, because I am afraid I shall have to lead a party without any brains. At least that is what our Liberal friends think.


Stanley Howard Knowles: The blind leading the blind.


Ernest George Hansell: We have been labelled the crackpots; we have been labelled the funny money men, but I am going to say this. If all those brains that are now resting on the treasury benches cannot solve this simple problem, perhaps the people will some day see fit to use their brains and put us crackpots over there on the government side to do the job. I am quite satisfied that we could do a job of that kind more efficiently than those who have among them 59 doctor's degrees, 7 master's degrees, 12 bachelor's degrees, university lecturers and university chancellors.


Mr. Winch:: The independents are looking for a leader.


Ernest George Hansell: The independents may be looking for a leader but if the C.C.F. go on the way they are going, they will be looking for members.


Stanley Howard Knowles: The country is full of them.


Ernest George Hansell: I have listened to some of the speeches today and there is no question in the world, Mr. Speaker, that the present Liberal government is not solving the problems that face the Canadian people. Of course, I must go around the house. I have listened to my Conservative friends.


An hon. Member:: Friends? What do you mean?


Ernest George Hansell: I hope I never cease to have friends. Even those in the Liberal party are my friends, I hope. I sometimes really hate myself. Do you know what my job is? Believe it or not, my job is to go out through this country and depose all you members. That is a dirty thing. I am obliged to go out through this country and help to unseat my friends. Just imagine that.


Mr. Boisvert:: You may find yourself unseated some day.


Ernest George Hansell: As I say, I hate myself when I think of it. My only compensating thought is the knowledge that my friends are out to unseat me.
I have heard my Conservative friends speak on this budget and I am amazed. There are some bright chaps in the Conservative party today.


Mr. MacDougall:: There were until they went over to you.


Ernest George Hansell: They rant away at what is wrong with the budget, yet they do not offer any change in fundamental policy.


J.-Wilfrid Dufresne: We are not through yet.


Stanley Howard Knowles: When are you going to start?


Ernest George Hansell: It is a nice thing to know that my friends are not through yet; but I have listened to them for a good many years and I have not heard them suggest any change in fundamental policy. What they are doing may be illustrated in this way. The Liberal party is in an automobile. There is something wrong with the carburetor and something wrong with the fundamental principle of the combustion engine.


Some hon. Members:: Oh, oh.


Ernest George Hansell: My Conservative friends say, "If you will only let us get in the driver's seat we will be able to make that old jalopy go much better than you can. The trouble with you is you have too many bolts on the bumper at the back and not enough bolts on the bumper at the front". They would change the bumpers around and put more bolts in here and more nuts in there.


An hon. Member:: You have a monopoly on the nuts.


Ernest George Hansell: I call my Conservative friends the bolts and nuts boys. What we need is a different fundamental policy. We are trying to ride in the old jalopy when we are now in a new age with a different type of combustion engine altogether. What we Social Crediters claim is that present financial policy cannot possibly meet the needs of this advanced age. I want to say a word to my socialist friends.


An hon. Member:: They want to take the wheels off the car.


Ernest George Hansell: They are not concerned with such changes. They are concerned with who owns the car. That is their trouble, but I do not like to say too much about them. They are having their troubles, and I do not want to put myself in the position of kicking a man who is down. I am afraid I will have to be a little more gracious to them. My friends have simply gone all to pieces lately, and I like to be as kind and considerate to them as I can.
Of course the reason they have gone to pieces is that they have been trying to ride two horses at the same time. They have been advocating nationalization when in reality they have at the same time been supporting a good deal of free enterprise. They talk nationalization, yet some of them own their own farms and businesses. When you talk of nationalizing their farms and businesses they turn thumbs down on that. In fact we listened to a speech this afternoon by the hon. member for Assiniboia (Mr. Argue). I cannot quote from his speech because it was in another debate, but what did he do? He 50433-216i
The Budget-Mr. Hansell made a speech on the necessity of the farmers of Canada being free to choose-


Alfred Claude Ellis: C.C.F. policy.


Ernest George Hansell: -where to deliver their grain. My C.C.F. friends talk continually of a planned economy, but when the government attempts to plan the routing of cars in an emergency they say, oh no, you must not do that. You must not plan, you must give the farmers an absolutely free hand. It does not make sense. All I am saying is that you cannot ride two horses at the same time. If it is to be a planned economy then let them go the limit and have a planned economy.
I hope the day never comes when we have a socialist planned economy in this country. I have asked them before and I ask them again, who is going to do the planning? They are not going to be satisfied to let us do the planning. They are not going to be satisfied to let the government do the planning. They are the ones who want to do the planning, so when they talk of a planned economy you can put it down, and make no mistake about it, that they believe in a socialist planned economy. A socialist planned economy means that the freedom of the people is thrown to the winds. You cannot have a planned economy if the people rise up and say "We do not want to fit into the plan". What is going to happen then? A planned economy means the loss of freedom.
I do not like to say I had a dream the other night, but I am mighty glad it was a dream. I woke up with a nightmare. I saw my C.C.F. friends sitting on the government benches.


An hon. Member:: That will be the day.


Alfred Claude Ellis: A vision of the future.


An hon. Member:: That certainly was a dream.


Ernest George Hansell: It was worse than a dream; it was a nightmare. They had their own boys sitting there and they had changed the names of the portfolios somewhat. Here was Hon. Mr. Coldwell sitting there as prime minister. Beside him was Hon. Mr. Maclnnis who was labelled as minister of the public purse and taxation. Beside him was Hon. Mr. Cameron, controller of defence production. Here was Hon. Mr. Stewart, minister of foreign affairs, world government and demobilization of NATO. Then there was Hon. Mr. Nicholson, minister of justice, Hon. Mr. Regier, minister of provincial relations, Hon. Mr. Knight, minister of propaganda and cultural stimuli, and Hon. Mr.* Noseworthy was minister of labour. Then Hon. Mr. Knowles-this was the nightmare-was secretary of state for war. Hon. Mr. Herridge

The Budget-Mr. Hansell was minister of northern affairs and dam sites. Hon. Mr. Ellis was minister of salt mines and technical surveys. Hon. Mr. McCullough was minister of socialization and confiscation, but there was one thing they would not allow him to socialize or confiscate, and that was the very pretentious farm he owns. Then there was Hon. Mr. Argue, minister of agriculture and bull raising.
That did not make up all their cabinet. They wondered where they could get a minister of citizenship, so they drafted Hon. Mr. Pickers-gill and made him minister of citizenship, immigration and birth regulation. There was no minister of welfare because there was no welfare to administer. There was no minister of trade and commerce because they had planned and priced themselves out of the market and could not sell anything. One thing they have always said they would do when they got into office was abolish the Senate, but they did not do away with the Senate. I found that they had elevated Hon. Mr. Harold Winch as leader of the Senate.


Stanley Howard Knowles: He would see that it was abolished.


Ernest George Hansell: There was another thing I saw and then I shall be through, Mr. Speaker, because I know you must think I am wasting a lot of time. There was one man in their party they thought should be used for something lest they might lose him, as they have lost others in the past. Yet they did not want him in an official position where he could upset the applecart. So they decided to make Hon. Mr. Clarie Gillis speaker of the house, and Hon. Mr. Coldwell came to him and offered him that position. Mr. Gillis said, "Oh, M. J., just a minute, now; I don't know anything about the rules and regulations of this house. I have not studied those." Mr. Coldwell said, "Just a minute now, Clarie, my boy; you won't have to worry about that. You will have our friend Stan sitting beside you all the time, and he will be able to help you. A wink of the right eye will mean to decide Yes, and a wink of the left eye will mean that you are to decide No. The only reason we are putting you in this position is that we have looked around, and we believe you are the only one who can wear those robes with authority and that tricorn hat with any degree of dignity." And so Clarie was put there.
I know I should close on a serious note. I do say this, that it will always be a problem for this government to find a solution to the difficulties confronting the country. They will always have difficulty if they do not alter the basic principles of their financial policy so those principles reflect the physical
fMr. Hansell.]

facts and physical possibilities. That can be done. We are not going into all the technical arguments on the subject, because we have done that on occasions over the years. But if this government does not alter its basic principles in finance, then the people of this country are going to arise and change the government.
I say once again that I believe the only party in this country that has a solution for that problem consists of those of us who believe in the financial reforms the Social Credit party has presented to the house for a good many years.


Mr. A. J. Brooks (Royal):: Mr. Speaker, I am sure we all enjoyed the speech of the hon. member for Macleod, who has just taken his seat. I might say there was just one disappointment in his description of his nightmare and that was that, in my view, he did not complete it. To complete a nightmare such as he described, the Social Credit party would have to be Her Majesty's loyal opposition, with the hon. member for Macleod the leader of the opposition. I think that would just about complete the sort of nightmare or dream he had.
When the hon. member rose to speak this evening he apologized, and I almost feel I should follow his example, because I know a great many members are getting pretty tired of this debate. I would point out to them, however, that I have sat here a good many hours and listened to some tiresome speeches, and I think perhaps I am justified in speaking for a few moments this evening. Perhaps I should add that I do not intend to speak for any considerable length of time.
However, one subject was touched upon in the debate which appealed to me, as did many others. This one in particular, however, had to do with the recommendation made by the government in connection with the appointment of a royal commission. At page 2740 of Hansard the Minister of Finance said:
The government intends, therefore, to appoint a royal commission with instructions to look ahead and examine carefully our future economic prospects. The sort of study we have in mind would include probable developments both in our productive capacities and in our external markets.
Not only does that appeal to me, but I am sure it will appeal to the people in my province. I would say, before this commission is appointed, that I am sure when they visit New Brunswick, as no doubt they will, they will find there is one thing in particular we require, and one thing to which I hope this government will pay more attention. The commission will find that the great need in New Brunswick is the development of cheap hydroelectric power.

I listened to two hon. members discuss this subject, the hon. member for Westmorland (Mr. Murphy) from the government side and the hon. member for Saint John-Albert (Mr. Bell) from the official opposition, each of whom discussed the subject from a different angle. I feel there is not much difference of opinion in the province with respect to the development of hydroelectric power. I believe the hon. member for Saint John-Albert expressed very well the views of the people of New Brunswick when he said that such hydro development should be on the Saint John river.
I have been amused at times when listening to the hon. member for Westmorland discuss the question of the Chignecto canal. I was amused in particular when, at the first session the hon. member attended, after speaking about the Chignecto canal he said to me, "I hope you will back me up in this." Well, as the hon. member knows, there is a long history to the Chignecto canal, but I do not intend to go into that history this evening. I have done it before on a number of occasions.
However, if hon. members will permit I would go back to the year 1949 only to point out that at that time I had this matter very seriously in mind. At page 912 of Hansard for February 25, 1949, during the discussion of the St. Lawrence seaway, I had this to say:
This afternoon it is not necessary for me to weary the house with the history of the Chignecto canai. It is sufficient to say that by its construction over 400 miles will be eliminated from the water route of ships travelling from the St. Lawrence river to Saint John, Digby and other ports on the bay of Fundy.
As far as coastal service is concerned, it would help to shorten the distance for ships wishing to trade with Boston, New York, and ports of the New England states. The gypsum that we produce in the region of the bay of Fundy could be shipped through the Chignecto canal to the central part of Canada, and that industry would benefit greatly. The construction of the canal would benefit our lumbering industry, our fishing industry and practically every other industry in our province.
I quote that simply to show that in 1949, six years ago-four years before the hon. member came to the house-this matter was being very seriously discussed by members of the opposition. Then I went on to say, as reported at page 913:
I hope that, when the question of the St. Lawrence waterway is being discussed, members of the house will bear in mind that, as we will be called upon to help to pay for the development of the St. Lawrence waterway, we should be given some consideration as far as the development of the Chignecto canal is concerned, for it is something that was promised to the people of the maritime provinces many years ago.
I also went on to mention the possibility of hydroelectric power being developed through the building of the Chignecto canal.
The Budget-Mr. Brooks
But I was not the only one who was discussing the subject at that time. This afternoon the hon. member for Westmorland recommended that a commission be appointed to study the Chignecto canal. I might say that in 1930 a similar request was made. I would point out that in 1949, Mr. Black who represented the constituency of Cumberland for a number of years, recommended the appointment of a commission, but was turned down by Hon. Mr. Chevrier, the then minister of transport. At that time Mr. Black had this to say, as reported at page 2929 of Hansard for December 8, 1949:
I am going to take a few minutes to refer to canals, to the Chignecto canal. The building of this canal has been before this house ever since confederation. The hon. member for Royal has brought it up recently, as well as the hon. member for Queens and the hon. member for Gloucester. This session it was brought up by the hon. member for Saint John-Albert, the hon. member for Anti-gonish-Guysborough and other hon. members.
Therefore, Mr. Speaker, this is a matter which has been before the house on a great many occasions. But, as I said before, the development of the Chignecto canal at the present time is not the answer to our hydroelectric requirements in New Brunswick. Mind you, I feel the Chignecto canal should be, and I believe will be, built in time as a continuation of the St. Lawrence seaway.
Many hon. members have recommended measures for the solution of our problem. The hon. member for Gloucester (Mr. Robi-chaud) mentioned the Albert shale; the hon. member for Kent, N.B. (Mr. Michaud) spoke about atomic energy. The hon. member for Westmorland spoke about the Chignecto canal; the hon. member for Charlotte (Mr. Stuart) spoke about the Passamaquoddy project. These are all good, Mr. Speaker, but I do not think anyone in New Brunswick today believes that any of them is the answer to our immediate problem in that province. They may enter into the picture later on.
As far as the Chignecto canal is concerned, it is a matter for the federal government; it is not something the provincial government can undertake. My hon. friend was not here when a delegation came from the maritime provinces. It consisted of boards of trade and mayors of the cities of Saint John, Amherst, Moncton and Fredericton. It was a large delegation and consisted of some of the outstanding businessmen of the maritime provinces, such as Mr. Irving. They came up here and they were given the brush-off. The hon. member for Saint John-Albert spoke about a run-around. Well, these men were given the run-around; they were absolutely turned down. They were given the brush-off in 1949 so far as the Chignecto canal was concerned.

The Budget-Mr. Brooks
The Passamaquoddy project is something the federal government will have to deal with. It is not something the province can handle. As we see it, the only solution in New Brunswick is the development of the Saint John river. The hon. member for Saint John-Albert complained about all these red herrings. Hon. members know when they suggest these other solutions for the immediate future that they are not practicable, yet not one of them will rise in his place and advocate, as he should, the development of Beech-wood on the Saint John river. The hon. member for Victoria-Carleton (Mr. Montgomery)-


John Lorne MacDougall: The hon. member for Temiscouata-


Alfred Johnson Brooks: No, not the hon. member for Temiscouata, the hon. member for Victoria-Carleton and the hon. member for Saint John-Albert have been advocating this in the house at every opportunity. The New Brunswick government has gone ahead with it. I might say that the previous government of New Brunswick, the McNair government, started the Beechwood project. I give them credit for that. I have been amazed at the attitude of members in the house on the government side. Once there was an election in the province of New Brunswick and the McNair government was defeated, the interest that should have been evinced by those members waned. We heard nothing more about it. For instance, we heard nothing from the minister who represents New Brunswick in this government, as far as the development of Beechwood is concerned.
The government of New Brunswick found that it would cost $45 million to develop Beechwood. As we pointed out, New Brunswick is not a rich province. Today we are paying nearly one-third or more of our revenue in interest on bonds. Cheap electric power can be obtained only if the bonds of the province are backed by the federal government in order to obtain low interest rates. The federal government were not asked to give money to the province of New Brunswick; they were asked under the circumstances, when it was almost impossible for us to look after the matter ourselves, whether they would lend money to the province of New Brunswick so the interest rate would be low enough to enable the province to obtain cheap electric power in order to develop our different industries.
I am not going into the history of that, Mr. Speaker, but I should like to quote from a speech made by the premier of New Brunswick in the provincial legislature on March

25, 1955. Hon. Mr. Flemming, premier of New Brunswick, said:
In view of misgivings which have been expressed in this house in regard to this particular point-
That was the point of financing.
-I would like to place special emphasis upon the three endorsements just cited.
Those were endorsements by three engineering concerns in the Dominion of Canada. Mr. Flemming continued:
The report of the Power Corporation of Canada, among other recommendations, dealt with the cost of financing Beechwood. estimating that money at 5 per cent would produce power at a cost of 5-4 mills per kilowatt hour-
That would be too high.
-but that money at 2\ per cent would reduce generating costs to 3-1 mills per kilowatt hour.
This would mean the difference between cheap and costly electric power in the province of New Brunswick. Further on in his speech Mr. Flemming had this to say:
On April 27, 1953, a brief outlining the need for assistance to that province to develop the Beechwood site, was presented by this government to the government of Canada, together with a request that the federal government agree to advance to the province, as the work progressed, sufficient funds to permit the development of Beechwood: that the repayment rate should be 11 per cent per year, starting one year after the plant went into operation; and that the interest rate should not exceed 21 per cent.
The government of New Brunswick was not asking the federal government to give the money; they were asked to lend the money so New Brunswick could have a low rate of interest and cheap hydroelectric power to develop the mineral and other resources of the province. Later on the premier quoted a letter from K. W. Taylor, of the finance department, with reference to this matter, as follows:
I am now directed by my minister to say that he has reviewed this matter with his colleagues, and the conclusion reached is that it would not be right or proper for the federal government to provide funds by loan or otherwise for the development of provincial natural resources along the lines you suggest.
I am sure you can realize, Mr. Speaker, as hon. members realize, just what the disappointment-yes, and the discouragement- was, not only to the government of New Brunswick but to the people of that province when they received that news.
I am not going to enlarge on that further. The provincial government is going ahead. But I should like to point this out, and it hardly seems necessary for me to do so. Other matters which are of benefit to the provinces of this dominion are dealt with in a different way. For instance, we hear the Minister of Agriculture (Mr. Gardiner),

Liberals, Conservatives, C.C.F. and Social Credit members talking about the South Saskatchewan dam. It has been practically promised that the South Saskatchewan dam will be built. It will be built with federal money, not money they are asked to lend but money that will be given by the federal government.
The St. Lawrence seaway will be of no great benefit to the maritime provinces. Money being spent on the St. Lawrence seaway is not being loaned; it is being given to the people of Ontario, Quebec and certain parts of the west to benefit their future. This afternoon the hon. member for Westmorland referred to certain things being done in Nova Scotia. We are pleased that the Canso causeway has been built; we are pleased that there is to be a ferry operating between Bar Harbor and Yarmouth, but the money for these projects is not being loaned to Nova Scotia to assist that province, it is being given to the province by the federal government. I could quote many other instances.
Yesterday I was reading the Financial Times, and I noticed an article that stated that the St. Lawrence seaway was expected to boost rather than reduce the shipping business in Montreal. According to the writer of this article it was expected that the time would come when federal money would be used to keep open the St. Lawrence river, not just for a short additional time in the spring and fall but all year, so that boats might use Montreal and other ports on the St. Lawrence the year round. If that ever happens, and I sincerely hope it will not, it will mean that federal money will be spent for the advantage of Montreal and other parts of central Canada. We in the maritimes not only will be the losers, we will have to pay part of the shot.
On the same page of this publication it states that Toronto harbour facilities are being prepared for seaway traffic and that the day after tomorrow the Minister of Transport (Mr. Marler) is to be in Toronto to open the marine terminal at pier No. 2. I do not know whether the federal government is paying for that, but I assume that it is.


George Carlyle Marler: The city of Toronto is paying for it.


Alfred Johnson Brooks: I am glad that somebody other than the federal government is paying for something. I could go on and name a long list of things which have been provided by the federal government for the benefit of other provinces. We have here an instance where money could have been loaned and should have been loaned. The problem was not insurmountable. We in New Brunswick
The Budget-Mr. Jones feel it is very strange that when money is needed for development in other parts of Canada it car. be found and given to those other parts, but when we want to borrow money for a development which would be of tremendous advantage to the people of our province we are told it cannot be done, that the constitution will not permit it.
I do not intend to press this matter further tonight, but 1 do want to say that it is a serious problem for New Brunswick. I believe if we were to take the opinion of individual members, whether they be Liberal, Conservative, Social Credit or C.C.F., we would find them almost 100 per cent in favour of giving this assistance to the province of New Brunswick.


Mr. O. L. Jones (Okanagan Boundary):: Mr. Speaker, I want to express my support of the subamendment, which I hope will come to a vote shortly. I do this because it deals with a subject close to my heart, the municipality.
I do so for another reason also. One of the finest municipalities in Canada, the city of Kelowna, is celebrating its fiftieth anniversary this week.
The history of Kelowna is similar to the history of many other communities in Canada. It was founded at the turn of the century and has had a steady growth since. It was started by men and women of vision who laid the groundwork for a modern city by setting aside ample space for parks, wide roads and lanes. Most western towns are laid out to provide good lanes in which such services as sewers and water mains, garbage collection and so on can be located. I am sure that places like Montreal, Ottawa and Toronto often wish they had had similar foresight many years ago.
When many of these towns were incorporated 50 years or so ago their areas were quite limited. Rapid growth within these limits has brought special problems with which the municipalities find it hard to cope. Because of the limited area the owners of land have had to assume increased burdens to provide schools, roads and the other facilities usual to municipal endeavour. The result is that municipal taxes are very high today in comparison with taxes at the time of incorporation 40, 50 or 60 years ago.
In the meantime the municipalities have had imposed upon them responsibilities which were unheard of 50 years ago. They are the creatures of the province, and they have had to submit to many impositions on the part of provincial governments. I would refer especially to education. When the city of Kelowna was incorporated 50 years ago the cost of education was borne by the government of
3424	HOUSE OF
The Budget-Mr. Jones British Columbia. Eventually this was foisted on the backs of the municipalities, and now it would appear that they are carrying the burden assisted by the provincial government. Many social services are now undertaken by the municipality which really belong to the provincial governments.
I want to say a few words in support of the C.C.F. amendment which deals with this very problem. I want to put this subamendment on the record again because we shall be voting on it very shortly, and some hon. members may have forgotten what it covers. It reads:
That the amendment be amended by addins at the end thereof the following words:
(e) to provide assistance to the provincial governments in order to enable them to plan their financing m such a manner as to relieve the people of this country from the crushing load of heavv municipal taxation."
There is no need for me to explain in full this crushing load and what it consists of, as it is well known to all hon. members. For instance, education is taking approximately 50 per cent of municipal taxation. Roads also require a large portion of municipal taxes. Many roads must be widened, repaved and made stronger to carry the traffic of modern commerce, and this creates a heavy cost for municipal bodies.
Another problem is the small area of taxable land to be found in many municipalities. In the average municipality in western Canada anywhere from 25 to 35 per cent of the area is non-taxable, being taken up by parks, schools, churches, public buildings and so on. That problem is increasing. Those areas taken up by federal and provincial buildings, churches and so on go off the tax roll. So the burden falls upon the 70 per cent or less of the taxpayers who must continue paying taxes. Naturally the growth of population demands more services and makes it costly for water, sewage and so on. It is true to say that in the average municipality in the last ten years taxes have more than doubled, with no additional tax resources allowed to the municipalities. All the taxes are still borne by land and home owners.
These municipal taxpayers are the people who support both the provincial and federal governments with their taxes, whether they be excise taxes, sales taxes, income tax or other indirect taxes, so the burden has been added from that point of view as well. The municipal taxpayer must pay his way; failing to do so means the loss of his home or the loss of his land, and he is thrown out.
This subamendment seeks to give relief to that taxpayer on grounds which to my mind are logical. Municipal dwellers contribute


most to federal revenues. They have the right to demand the return of part of these revenues to take care of their expenditures in the municipalities. Of the three governing bodies, the municipalities alone are confined to a restricted field of taxation. This field has not been enlarged for several generations and possibly could not be enlarged unless one of the senior governments relinquished a field of its own in favour of the municipalities. I personally am against inventing any new field of taxation for municipal dwellers, who are taxed enough already, but I would suggest one or two ways in which assistance could be given.
First, it could be given by carrying out the suggestion contained in the subamendment, that is by financial assistance provided through the provincial government earmarked for the use of the municipalities and if possible paid on a per capita basis, so that municipalities as they grew would receive more and more.
Second, it could be given by both governments accepting their tax responsibility in full on all properties owned within municipal limits. This principle has been more or less tacitly agreed to in the steps taken by the federal government recently. But I am not satisfied and I will not be satisfied until all taxes on federal buildings are paid by the federal government, thus rendering valuable assistance. These buildings logically should pay for the services rendered by the city, the water, sewers, police protection, fire protection, and everything else for which they now pay nothing. In paying for those services they would assume their rightful liability.
Third, I would suggest to the government the immediate abolition of sales tax and excise taxes on all municipal purchases. It is unfair for the senior government to impose taxes on a junior government, because it cannot come back at the senior government. It cannot even tax the post office in a municipality. Therefore it is helpless and hopeless, and it depends on the senior government to be great enough to realize the plight of the municipality and open its heart as far as sales tax on municipal purchases is concerned.
A fourth way would be direct assistance by means of loans. Some years ago, during the war, we had a very good act in operation; it is still on the statute books and has not been rescinded. It was the Municipal Improvements Assistance Act, under which self-liquidating projects in municipalities could be financed with money loaned by the government at 2 per cent. This act functioned splendidly and permitted several small towns in British Columbia to build up valuable

waterworks and extensions of service in power and lighting. I would point out-the government already know it-that all the loans made, running into millions, were paid back in full and the interest was paid in full; not a dime was defaulted.
I cannot see for the life of me why the government decided to discontinue such a valuable service to municipalities that would bring to them in turn splendid returns on their investment. Not only would this money loaned at 2 per cent help the municipalities in their present plight, but it would allow them to take part in the relief of unemployment. Unemployment relief is also a municipal burden that has been unfairly thrust upon them, and the government could assist them by loaning them money immediately for public works of this nature to take care of the unemployment within their municipal boundaries.
A fifth way would be by federal aid for education. The cost of education is one of the great burdens of our modern municipalities. This could be a most effective method of dealing with this question. As this matter has already been dealt with very fully and in detail by the hon. member for Saskatoon (Mr. Knight), I shall not go any further into it, but I would recommend that the cabinet find out to what extent the suggestions made by the hon. member for Saskatoon could be carried out, with a view to relieving the crushing burden on the municipalities.
I pass these suggestions to the minister for his earliest consideration. Municipalities, I feel, must be given a new and fair deal. I trust that members of all parties will see the fairness and the justice of this subamendment, and will give it support. It does not matter to what party you belong when the vote is called. I know that the municipalities of British Columbia-and, I take it, the rest of Canada-all deserve financial support through the medium of this subamendment.


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


Some hon. Members:: Question.


Mr. Speaker:: Before putting the question may I tell hon. members that shortly after the amendment was moved I had some concern as to its regularity. As hon. members know, as soon as an amendment is moved it is in order to move an amendment to the amendment. Recognizing the fact that if the amendment is out of order the amendment to the amendment must fall, I searched the authorities and my soul as well.
Considering the fact that on the budget wide latitude is always given, and that the main reason the amendment could have been 50433-217
3,	1955	3425
The Budget-Amendments to Motion declared out of order was the fact that the amendments to the address in reply had covered a variety of subjects, I decided not to intervene. I know hon. members may feel at this moment that it might be a matter of some fancy on my part for me to make these remarks. But I want to tell hon. members that if they look at certain rulings that have been made in the past they will see that the matter of similarity of amendments as between one which is moved on the addres in reply and one which is moved on the motion for the Speaker to leave the chair for the house to go into committee of ways and means or supply is something that has been considered seriously by my predecessors.
There were some borderline cases, and there is one I have here with which Mr. Speaker Macdonald had to deal. His statement is to be found in the Journals of February 28, 1950, at page 47. I should like hon. members to look also at the ruling made on November 22, 1932, which appears at page 113 of the Journals, by Mr. Speaker Black.
Hon. members will see that because the subject of unemployment had already been dealt with by the house in one amendment and was later again submitted to the judgment of the house in another amendment, Mr. Speaker Black not only considered the matter of the similarity of the two amendments but also looked at the arguments put forward in the debate, and came to the conclusion that the house having refused to condemn the government's policy on unemployment by rejecting the amendment moved to the address by the leader of the opposition, the house could not be called upon to decide the same question again.
Hon. members may refer, for information on this point, to Bourinot at page 328 and citation 357 of Beauchesne's third edition.
As to the other point, which is to the effect that any irregularity in any portion of a motion shall render the whole motion irregular and that therefore the amendment to the amendment should fall, citation 330 of Beauchesne will be found to be specific on the subject.
As I said before, I do not want to create any difficulties at this moment. I had considered the amendment shortly after it was moved and felt that I would perhaps do as my predecessor did in 1950 and say that in future hon. members should be extremely careful in the moving of their amendments on the address in reply because otherwise, the house having given its judgment on the various points brought forward then, if later other amendments are moved which touch

The Budget-Division
these very points which have already been decided upon, any later amendments should be declared out of order.
For the present I know the house will support my generosity, and I shall put the question. My present attitude should not be invoked as a precedent in future.


Mr. Raoul Poulin (Beauce):: The Budget-Mr. Poulin
When the cost of living is as high as it is today, surely an amount of between $210 and $246 in the case of children under 16 and of $400 in the case of those over 16 is insufficient to support a child decently during a whole year.
I may say, from personal experience, that each child costs hundreds of dollars more than the amounts I just mentioned. So that parents who have enough generosity left to face their moral and family obligations, not only have to bear the heavy burden of tremendous sacrifices, very often unknown to the public at large, but it is also their sorry lot to have their generosity taxed, as they have to pay taxes on a more or less considerable part of their income earmarked for the maintenance and education of their children.
There is another class of citizen to whom the last budget will bring no direct relief and who will again remain the forever forgotten ones; I mean the vast category of consumers who do not buy cars, who neither have shares nor stocks in the large corporations, nor even the means to pay a little income tax. They only have the very costly obligation to pay the general sales tax on a number of commodities they need to buy. It is precisely on their behalf that, in my remarks of March 22, I asked for a reduction of the sales tax. I sincerely believe that it would have been the only way for the Minister of Finance (Mr. Harris) to bring them some relief. And I want to stress this negative aspect of the budget. I can easily imagine what the answer to my suggestions and representations will be -if they are deemed worthy of an answer. I will be told that the government would have to face a still greater deficit than the one expected.
Personally, 1 believe that an increase of $50 million in the deficit would have helped the revival of business, providing, of course, greater relief had been given in this operation to the mass of consumers so as to increase their purchasing power.
Before concluding my remarks, I would like to say a word or two on a problem of the utmost importance to the farmers, the settlers and the workers, the lumberjacks of Beauce county in particular and of the whole province of Quebec. And I am referring to the price paid to settlers and farmers for the wood they sell to pulp and paper companies.
I congratulate the hon. member for Gatineau (Mr. Leduc) who laid the problem


before this house and the people of Canada. For my part, I have received from the Quebec south shore section of the Catholic farmers' union a recommendation in which I was asked to urge the Minister of Justice (Mr. Garson) to extend this investigation to the Beauce district. I considered it my duty to comply with the request of that professional organization and I conveyed that recommendation to the proper authority, adding my personal views on the matter. You will understand that it is all that I can say at this stage. It is particularly gratifying for me to bring my humble contribution to the study of that problem, because I may say without bragging that I know it quite well and I could mention the names of hundreds of citizens of my constituency who, especially during certain periods, were the victims of this intolerable situation.
We should be very careful, though, not to attack the small middleman, the dealer who annually buys a few hundred cords of wood to resell at a profit which is often ridiculously small, at the risk of losses which I would not like to assume myself.
Like the producer, he is subjected to the rule according to which might is right. It is not here that the root of the evil must be sought. The scandal will be found higher up.
On the other hand, though, we should be very careful not to confuse the issue, intentionally or otherwise. We should not attempt to assess responsibilities before the investigation is concluded.
One wonders if certain powerful interests, conscious of their guilt and fearful of being caught, are not attempting to confuse public opinion on this issue through dilatory tactics of all kinds so as to make it reticent, nervous, blind, and possibly prejudiced. In this way the work necessary to a comprehensive and objective investigation would be diverted along the wrong channels or, at least, rendered far more difficult.
For my part, Mr. Speaker, I have full confidence in the royal commission which the federal government will set up, and I wish to set the minds of the members of the Catholic farmers' union and those of every farmer and settler in my riding at rest. I have every reason to believe that this investigation will be a serious one, will bring justice to all, will show the cause of the evils and let the responsibility in that respect fall where it must. If it failed in its task something else would have to be done.

(Text):
The budget speech presented by the Minister of Finance contains, no doubt, advantageous measures for the Canadian taxpayers as a whole, which is at least a step in the right direction. In my opinion, however, the government has not gone far enough, and that is what I tried to prove in my remarks in French.
In certain fields the minister has totally neglected to attempt to remedy some urgent and serious situations, namely a reduction of the 10 per cent sales tax, an increase in the basic exemption in personal income tax, and an increase in the deductible amount for each child, whether or not he be eligible for family allowances, and particularly in regard to the unemployment situation. I would be inclined to support the amendment of the Conservatives, but they forgot to acknowledge the partial result accomplished in some fields by the present budget. For this reason, and having considered all the budget proposals, I have decided, after long hesitation, to vote for the budget introduced by the Minister of Finance.
May I say that I am entitled to declare that my opinion is also shared by my independent colleagues.


Mr. J. Watson MacNaughl (Prince):: Mr. Speaker, before this debate is concluded there is one matter I should like to bring to the attention of the house. Before doing so, however, I wish to congratulate the Minister of Finance on his first budget which has been so well received by the people of Canada.
At this time I think I should also express the thanks of the people of my province to the government for the announcement that the support policy for butter will be continued. Dairying is one of the important branches of the agricultural economy of Prince Edward Island, and most of our farmers depend upon dairying to some extent for their livelihood. I well remember hearing the late Premier Jones, who was one of the outstanding farmers of Canada, say that if it were not for dairy cattle Prince Edward Island would turn into a sand bank. It was therefore with a great deal of satisfaction that our dairy farmers heard the announcement that the support price would be continued for another year.
The matter about which I rose to speak, however, has to do with the statement in the budget speech that the tariff agreements on potatoes between Canada and the United States would be referred to the tariff board for study. This announcement was well received by potato growers all across Canada. I was further pleased to read in the newspapers over the week end that the Minister
The Budget-Mr. MacNaught
of Finance had referred the matter to the tariff board and that the hearing had been set for June 13.
I think at this time it would not be inappropriate to bring to the attention of the house some of the history of the potato tariff agreements between Canada and the United States for the last 35 years. In 1929 the United States duty on potatoes from Canada was 50 cents a hundredweight. On the other hand, Canada had a duty of 35 cents a hundredweight on potatoes from the United States. On June 18, 1930, the United States increased its duty from 50 cents to 75 cents per hundredweight. This increase resulted from the Hawley-Smoot revision of the United States tariffs.
In May of that year Canada introduced what was known as the countervailing duty. This stipulated that if smother country imposed a duty on Canadian potatoes an equal duty would be imposed on imports of potatoes into Canada from such country. In September, 1930, the countervailing provision was deleted from the tariff and a rate of 75 cents per hundredweight was substituted. It will be seen, therefore, that for a certain period of the year 1930 the duty on potatoes was the same in both countries.
In 1931 there was no change in the United States tariff. The Canadian government, however, changed its tariff regulations to permit the free entry of seed potatoes. In 1936 the duty on table stock potatoes going from Canada to the United States was still 75 cents per hundredweight. The duty on seed potatoes, however, was reduced substantially. A quota was set whereby 750,000 bushels of seed potatoes would be permitted entry into the United States at reduced rates. During the months of March to November the rate would be 45 cents per hundredweight, and from December to February it would be 60 cents per hundredweight. The reduction resulted from negotiations between the two countries and was bound in the Canada-United States trade agreements of 1936.
These rates continued until the year 1939, when a quota was placed on table stock potatoes going from Canada to the United States. Under this quota 1,000,000 bushels plus any amount by which the United States department of agriculture's estimate of the domestic crop fell below 350,000,000 bushels would be admitted at the reduced rate of 37J cents per hundredweight from March to November and, if the quota was not completed, at 60 cents per hundredweight from December to February. The ex quota rate on table potatoes remained at 75 cents per hundredweight. The quota rate on seed potatoes was further reduced from 45 and 60i


have gone into the production of potatoes in a large way. Long Island produced last year over 18,000,000 bushels of potatoes. Producers can take advantage of the trucking of citrus fruits which takes place between the southern states and the New York areas. Fruit trucks going south for a load of fruit are anxious to have a paying load, and it is thus possible for the farmers in Long Island to have their potatoes shipped to the southern states at low cost.
It must also be remembered that the state of Maine produces as many potatoes as all of Canada. The ten-year average for Maine is 62,000,000 bushels. In 1954 the state of Maine produced 49,000,000 bushels of potatoes. Canada produced something over 50,000,000. Maine is closer to the large Canadian central markets than is any of the maritime provinces. Potato producers in Maine can deliver truckloads of potatoes to the Montreal market cheaper than can producers in any of the maritime provinces. The result is that with no duty on potatoes coming from the United States to Canada, Maine dealers can and often do undersell the maritime producers in the Montreal market.
It is interesting to note also that during the last three years more potatoes have been shipped from the United States into Canada than from Canada to the United States. For the last three years we exported roughly
6,600,000	bushels of potatoes to the United States. For the same period we imported from the United States 8,500,000 bushels of potatoes.
The growing of potatoes is a large part of the agricultural economy of the province of Prince Edward Island. Our potato producers, therefore, were much pleased when it was learned that the problem of potato tariffs would be studied by the tariff board. I certainly hope that the studies of the board will be exhaustive, and that a satisfactory solution of this problem will be reached. If no changes in the tariff arrangements are made, the potato industry in the maritimes could well be ruined.
I want to refer at this time to an editorial which appeared in the April 30 edition of the Ottawa Citizen. This editorial dealt with Canada's tariff record. It referred to the fact that the Minister of Finance in his budget speech mentioned that three matters would be referred to the tariff board for study. The editorial concluded with this sentence:
The potato inquiry is to be launched in June and it should be especially interesting because a

section of agriculture-usually associated with antiprotection in this country-will be arguing for tariff aid against the United States.
I submit, Mr. Speaker, that this is hardly a correct statement of the facts. I should not want to be described as a person who is anxious to put any blocks in the way of free interchange of products between countries. That is why I took some time to set out that I thought the tariff arrangement between Canada and the United States was most onesided. All the people of my province want is some equalization of the tariff, so the
The Budget-Mr. MacNaught American potato growers will enjoy such tremendous advantages in tariff rates.
On motion of Mr. Drew the debate was adjourned.



BUSINESS OF THE HOUSE

Mr. Sinclair:: Tomorrow we shall continue with this debate.
It being four minutes past ten the house adjourned, without question put, pursuant to standing order.



Wednesday, May 4, 1955