1955-04-28

PRIVILEGE


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I rise on a question of privilege. In an editorial in the Montreal Gazette of Wednesday, April 27, 1955 headed "The 'Hearsay' was not 'Irrelevant' ", there appears this sentence:
The next day, when Mr. Hamilton-
The reference is to the hon. member for Notre Dame de Grace.

again introduced the matter, Mr. Pickersgill was joined by Jean Lesage, minister for northern aifairs, Stanley Knowles, C.C.F., and John Dickey, Liberal of Halifax, in objecting to the use of newspaper stories in a debate.
In the interests of accuracy, and since it is well known that I am more in the habit of protecting members' rights to speak than in trying to restrict those rights, may I point out that when I spoke on the point of order on April 6, as recorded at page 2864 of Hansard, I summed up my remarks with this short sentence:
It seems to me that he-
The hon. member for Notre Dame de Grace.
-is not out of order.
I am sure the Montreal Gazette would like to be more accurate than it has been in this editorial.



MR. DIEFENBAKER  REFERENCE TO CANADIAN PRESS REPORT

Mr. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I rise on a question of privilege arising out of a Canadian Press article in last night's Citizen headed "Diefenbaker's Charge Denied" and which reads as follows:
Calgary (CP)-A statement in the Commons that the C.N.R. has hired 1,000 immigrants in the Calgary area while bypassing men previously laid off was denied today by railway officials.
The statement was made Tuesday by John Diefenbaker, Progressive Conservative member of parliament for Prince Albert.
A C.N.R. spokesman said: "We have not hired 1,000 immigrants in the Calgary division-not at all."
The Canadian Press dispatch in question read that I had made the statement:
. . . C.N.R. employees are living in fear of layoffs. In the Calgary area, those laid off were passed over recently when 1,000 immigrants were hired for extra gang work.
My question of privilege is simply this. I never made any such statement at any time. What I did say is reported in Hansard at page 3176:
Strong complaints have been made about R. F. Welch Limited, I think that is the name of the company. Mr. Gordon gave his promise that the things complained of would cease after March 31, but he did not say what year. Since March 31, 1,000 people who have been recently brought into Canada have been placed on two extra gangs out of Calgary, according to my information. What about the men who have been laid off? Why were they not given an opportunity, those who would be fitted for that work, to take this employment? A promise was given by Mr. Gordon that this was going to stop, that the injustices resulting from the hiring agreements of that company would be a thing of the past.
I put the emphasis on the word "that". My reference was to R. F. Welch Limited holding certain contracts with the Canadian National Railways, that this company had recently hired 1,000 men and had not taken into account unemployed section and maintenance men. My point of privilege is that the statement alleged to have been made by me, as reported by the Canadian Press, is not in any way in accordance with the statement I made in the house.



INDUSTRIAL RELATIONS


[Stage Direction]
Mr. G. E. Nixon (Algoma West) presented the first report of the standing committee on industrial relations, and moved that the report be concurred in.
Motion agreed to.


Mr. Mitchell (London):: 1.	How many passenger cars of all types were delivered to Canadian National Railways In the years, 1952, 1953, 1954, which were manufactured by firms outside Canada?
2.	By what company or companies were such cars manufactured?
3.	Were tenders invited for any or all of such cars before the contracts were let?

Questions
4.	Can any or all of these cars be manufactured on a competitive basis by Canadian National Railways car shops? If not, for what reason?


Mr. Langlois (Gaspe):: The Canadian National Railways advise as follows:
1.	1952: 4-for United States lines of the Grand Trunk Western Railroad Company. 1953: 6-5 for United States lines of the Grand Trunk Western Railroad Company and 1 rail diesel car for use in Canada. 1954: 143-2 for United States lines of the Grand Trunk Western Railroad Company; 139 units of passenger equipment of various types for use in Canada; 2 rail diesel cars for use in Canada.
2.	The rail diesel cars were manufactured by the Budd Company and the others by the Pullman-Standard Manufacturing Company and A.C.F. Industries Inc.
3.	Tenders were invited for all of the above mentioned equipment, excepting the rail diesel cars of which the Buda Company is the patentee and sole manufacturer.
4.	No. C.N.R. car shops are not equipped for the manufacture of these units.


FARM IMPROVEMENT LOANS, NOVA SCOTIA
Mr. Purdy:: 1.	What is the total number and amount of farm improvement loans made in the province of Nova Scotia from the inception of the act to December 31, 1954?
2.	What is the aggregate amount of such loans still unpaid as at December 31, 1954?
3.	What amount has been repaid during the above period by (a) original borrowers; (b) government?


Mr. Benidickson:: 1.	4,456 loans in an amount of $3,889,110.
2.	$1,371,841.
3.	(a) $2,517,269 (b) $1,182.44,


P.F.A.A. CHEQUES
Mr. Caslleden:: 1.	How many P.F.A.A. crop failure cheques had yet to be issued to eligible farmers in (a) Alberta; (b) Saskatchewan; (c) Manitoba, as of April 15 last?
2.	How many P.F.A.A. cheques were issued to eligible farmers in each of these provinces, during each week between February 1 and April 9, 1955?


Mr. Gardiner:: Mr. Speaker, I do not think the hon. member for Yorkton is in the house at the moment, but I should like to call attention to the fact that it would be impossible to answer the first part of the question, which reads:
How many P.F.A.A. crop failure cheques had yet to be issued to eligible farmers in (a) Alberta; (b) Saskatchewan; (c) Manitoba, as of April 15 last?

It is impossible to indicate how many remain to be issued. Up to the present time all the decisions have not been made as to who are eligible for payment. The second part of the question reads:
How many P.F.A.A. cheques were issued to eligible farmers in each of these provinces, during each week between February 1 and April 9, 1955?
The records are not kept in such a form as to be able to give an answer to that question. I wish the hon. member would drop the question now and reword it.


Mr. Speaker:: Dropped.



QUESTIONS PASSED AS ORDERS FOR RETURNS


ESTIMATES


Mr. Knowles:: 1.	With respect to how many votes in the estimates of the fiscal year ending March 31, 1955, were changes made in the details as printed in the book of estimates?
2.	What is the number of each such vote the details of which were altered?
3.	What was the date of treasury board authorization of each such alteration?


Mr. Benidickson:: With respect to this question, I should like the answer to parts 1 and 2 to be considered as answers to an order for return. I understand that the hon. member for Winnipeg North Centre (Mr. Knowles) has agreed to drop part 3 until he has examined the answers to parts 1 and 2, which I am now tabling as an order for return.


Mr. Speaker:: Order for return now tabled.



P.F.A.A. INSPECTORS-QUESTIONS ASKED

Mr. Campbell:: 1.	What questions are asked of farmers by P.F.A.A. inspectors?
2.	Do they relate wholly to grain crops? CANADIAN NATIONAL RAILWAYS



QUEEN ELIZABETH HOTEL


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Transport. In view of the report in various morning newspapers of an antitrust action which is being taken by the United States government against the Hilton hotel chain, will the government ask Canadian National Railways to reconsider the matter of arranging for the Queen Elizabeth hotel to be operated by the Hilton chain?


Hon. George C. Marler (Minister of Transport):: The answer, Mr. Speaker, is no. I should like to say that, as reported in

today's issue of the Montreal Gazette, a statement was made yesterday on behalf of Canadian National Railways saying that the United States government action against the Hilton Hotels Corporation will not affect the contract between the railway and the hotel company.


Stanley Howard Knowles: May I ask the Minister of Transport to direct his reply to my question? I asked if, in view of the action taken, the government would ask the railway to reconsider the matter.


George Carlyle Marler: My answer to that question was no.



POSTAL SERVICE


[Stage Direction]
On the orders of the day:
Mr. T. H. Goode (Burnaby-Richmond):: should like to address a question to the Acting Postmaster General. Can he make a statement now with respect to the postal situation in East Burnaby, British Columbia?


Hon. J. W. Pickersgill (Acting Postmaster General):: Mr. Speaker, early this year representations were made to the effect that the Burnaby area should be treated as a postal entity. At the present time, North Burnaby and South Burnaby are served under the jurisdiction of the postmaster, Vancouver; East Burnaby is served under the jurisdiction of the postmaster, New Westminster. It was understood that it was the desire of the people of East Burnaby that they should be served in a similar manner to the people in the rest of Burnaby, namely from Vancouver. Based on this understanding, the department agreed to the change.
This change in service would affect the postage rates charged. At the present time the local letter rate of 4 cents applies to mail between East Burnaby and New Westminster. Under the rearrangement contemplated the rate would be 5 cents, but on the other hand the rate to Vancouver which previously had been 5 cents would be 4 cents.
No sooner had the decision been made public than representations were received from people in East Burnaby objecting to the change. From a practical post office point of view, I am informed, East Burnaby could be served either under the postmaster at Vancouver or the postmaster at New Westminster.
In view of these representations further consideration was given to the question, including representations heretofore made to the effect that there should be one metropolitan postal area comprising the territory
Inquiries of the Ministry served within the letter carrier delivery boundaries of both Vancouver and New Westminster. This would mean that the local letter rate of 4 cents would apply within this whole area.
It has been decided that the most equitable and efficient arrangement would be to establish a metropolitan postal area covering both the Vancouver and New Westminster postal districts. Vancouver and New Westminster will both continue to have post offices described by those names. There need be no change in the method of addressing or handling mails. It is essential, however, that there should appear in the address a positive indication of the locality in which the address is situated, otherwise delays will undoubtedly ensue. East Burnaby will be designated as "Burnaby 3".
The four-cent rate for the area will be effective from May 1, 1955.


Mr. Regier:: Will it be sufficient for letters to be addressed "Burnaby 1", "Burnaby 2", or "Burnaby 3", as the case may be, without the additional identification of "via Vancouver" or "via New Westminster"?


John Whitney Pickersgill: Yes. I understand that is the correct interpretation.


Mr. Hahn:: Will the rural routes originating in New Westminster come under the four-cent letter rate as well?


John Whitney Pickersgill: I think the statement says that it applies to the letter carrier areas in the two places, which, I believe, include rural routes beginning in either.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. S. R. Balcom (Halifax):: I should like to direct a question to the Minister of Transport. Have tenders been called for a new lightship to replace the old C.G.S. Sambro stationed off Halifax harbour? If so, when is work on the new ship expected to start?


George Carlyle Marler: Tenders have been called for a new lightship for Halifax. It is expected a contract will be awarded shortly, after which work will commence immediately.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. G. R. Pearkes (Esquimau-Saanich):: Would the Minister of National Defence give
3244	HOUSE OF
Inquiries of the Ministry the house a report on the alleged losses in connection with No. 11 works company, either now or in the near future?


Hon. R. O. Campney (Minister of National Defence):: I shall be glad to make a report on No. 11 works company as soon as the R.C.M.P. and the provost corps have completed their investigations. I am keeping in close touch with the matter, but they are still investigating a number of cases.


Mr. Fulton:: Has it been possible to make any estimate of the total amount involved in the losses?


Ralph Osborne Campney: I would not care to quote any figure, but I think I can safely say that reports of the losses appearing in the press are greatly exaggerated.



PRAIRIE FARM ASSISTANCE


[Stage Direction]
On the orders of the day:
Mr. G. H. Castleden (Yorkton):: I should like to ask the Minister of Agriculture whether he can inform the house when the P.F.A.A. administration expects to be able to send the farmers the balance of the crop failure bonus cheques?


James Garfield Gardiner: Just as soon as all of the appeals made have been taken care of the cheques will be issued accordingly.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Hon. George A. Drew (Leader of the Opposition):: I wish to direct a question to the Secretary of State for External Affairs. In view of the disclosure yesterday that there has been correspondence between President Eisenhower and Marshal Zhukov for the apparent purpose of arranging meetings, is the minister in a position to say whether or not similar correspondence has been taking place between the Canadian government and any representative of the Russian government?


Hon. L. B. Pearson (Secretary of State for External Affairs):: I do not know of any such correspondence.


PRAIRIE FARM REHABILITATION
[Stage Direction]
On the orders of the day:
Mr. O. C. Trainor (Winnipeg South):: should like to ask the Minister of Agriculture if contracts for works projects under


P.F.R.A. are awarded by public tender. If not, will he state how they are awarded?


James Garfield Gardiner: Yes, contracts are let by public tender. There may be an occasional small job that is done by day labour, but practically all work is done by tender and the tenders are open to the public.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Can the Minister of Labour explain what he meant by the words "professional unemployed" in a statement attributed to him and to Mr. Barrette in this morning's Montreal Gazette? The minister is reported to have agreed that 20 per cent of the total unemployed are "professional unemployed" and the words are within quotation marks.


Hon. Milton F. Gregg (Minister of Labour):: I admit my bewilderment at once because I have not read the Montreal Gazette very carefully today and I have not seen the expression quoted by my hon. friend. I can tell him right away that I cannot recall having ever used the words "professional unemployed".


Stanley Howard Knowles: I would hope not.



PUBLIC BUILDINGS


[Stage Direction]
On the orders of the day:
Mr. G. K. Fraser (Peterborough):: I should like to address a question to the Minister of National Revenue. Has the old customs house in Peterborough been turned over to the Crown Assets Disposal Corporation for disposal as yet? The customs house has no further use.


Hon. J. J. McCann (Minister of National Revenue):: Not to my knowledge, but I shall find out definitely and let the hon. member know later.



EDUCATION


[Stage Direction]
On the orders of the day:
Erhart Regier: should like to direct a question to the Minister of Labour which is of immediate concern to

those in charge of planning education. Can he assure the house and the country that the federal government is not planning to cease giving assistance to vocational training in Canada?


Milton Fowler Gregg: This matter will be discussed when my estimates are before the house, I am sure, but I can assure hon. members at once that the government and the Department of Labour are at present continuing in the field of vocational training exactly as they have done in recent years. The only change that has occurred during the last 12 months has been that long-term agreements with the provinces have expired, but we are continuing in exactly the same manner while consideration is being given concerning their renewal.



INQUIRY FOR RETURN


[Stage Direction]
On the orders of the day:
Mr. John Palleli (Peel):: I should like to direct a question to the Minister of Transport. Can he tell me when I might expect the tabling of the order for return that was passed in my name on March 24?


George Carlyle Marler: Concerning what matter?
Mr. Pallet!: Concerning the expropriations of lands around Malton airport.


George Carlyle Marler: I shall have to look into the matter, Mr. Speaker.



THE BUDGET


[Stage Direction]
The house resumed, from Wednesday, April 27, 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. Macdon-nell, and the amendment to the amendment of Mr. Coldwell.
(Translation) :
Mr. Bona Arsenault (Bonaventure):: Mr. Speaker, agriculture, offshore fishing and lumbering are among the chief means of livelihood of a great many people in the province of Quebec. More particularly in the eastern part, in Gaspe, on the north shore of the St. Lawrence, the people are almost entirely dependent upon those three sources
The Budget-Mr. Arsenault
of income to live on or, in some cases, to achieve a modicum of comfort.
Indeed very few farmers of that area earn their living through farming alone, and few fishermen engage exclusively in fishing operations. Therefore, lumbering and the sale of pulpwood constitute a necessary if not indispensable adjunct to the family budget. Those three sources of revenue, sea, land and forest, can be said to constitute the very basis of the economy of the eastern part of the province of Quebec.
Last year, because of bad weather and of the heavy damage done to crops by insects, in various parts of the province, many farmers sustained irretrievable losses. In Gaspe, many of them even lack the necessary seed for this spring. I have received numerous and pathetic appeals for assistance from farm organizations and individual farmers of my constituency. But that problem is not a responsibility of the federal government.
However, due to the urgency of the matter and the pressing needs of the farmers of my county, I feel I must call this situation to the attention of the provincial authorities whose responsibility this is. Let me make clear, though, that these words of mine, and the statements I wish to make in the course of my remarks today, are by no means intended to embarrass the Quebec government.
It is a well known fact that, for several months, the farmers of this country, more particularly those from the province of Quebec, have been expressing alarm over the very important matter of the price of butter. Federal members from that province have received numerous representations in this regard, notably from the officers and members of the Catholic farmers' union. Personally, I have received some 1,400 letters on this subject.
The Quebec members in this house have joined hands in placing those pressing demands before federal authorities. Farmers of that province have thus received renewed proof of the fact that they have good friends here, on whom they can rely in emergencies.
The federal government has attempted to protect the Canadian farmer, and more particularly the farmer from Quebec, from the disastrous effects of a drop in dairy prices.
Price support on butter has once more been fixed at 58 cents a pound.
On behalf of the farmers of my riding, I wish to extend my sincere thanks to the government, in particular to the right hon.

The Budget-Mr. Arsenault
Prime Minister (Mr. St. Laurent) and to the right hon. Minister of Agriculture (Mr. Gardiner) for this wise decision which will be beneficial not only to farmers but also, indirectly, to everyone in Canada. When agriculture is prosperous, the entire country is also prosperous.
I said that a large part of the population of the province of Quebec earns its living from fishing. I must remind the house, however, that the value of the catch in that province for 1954 was 23 per cent lower than in 1953, and 29 per cent less than in 1952.
For instance, in the province of Quebec 35 million pounds of cod were caught in 1954. This catch, as it came out of the net, was worth $773,000.
In comparison with 1953, the amount of cod caught was 28-5 per cent smaller, the value 15-3 per cent less. A comparison between 1954 and 1952 shows that the amount of cod taken was down 39-5 per cent, and the sums paid to the fishermen, 45 [DOT] 6 per cent.
The herring catch, which had been 28,000 tons in 1952 and 24,000 tons in 1953, was down to 18,000 tons in 1954.
The salmon catch has also been seriously reduced in the last few years. The gradual disappearance of salmon from the Atlantic coast is such as to give rise to the most serious misgivings.
On the other hand, in the Magdalen islands, the total value of the lobster catch was up from $485,000 in 1952 to $703,000 in 1953 and $721,000 in 1954. But that is only one happy exception to the rule, and of no advantage to the other eastern districts of the province of Quebec.
Generally speaking, then, it may be said that in 1954 there was a serious reduction in the revenue of fishermen from the counties of Bonaventure, Gaspe South, Gaspe North, Charlevoix and Saguenay, compared to 1953 and especially to 1952.
Consequently, if on one hand some sections of the eastern part of the province of Quebec met with serious difficulties last year on account of excessive rain and of insects, on the other hand the income from our offshore fishing, especially for the past two years, has been sadly inadequate, and is greatly missed by our people.
The catch and the prices paid to fishermen have dropped so much that the total revenue


of our Quebec sea fisheries is but $2,440,473 compared to $2,706,248 in 1953, and $3,088,448 in 1952.
I said just now that in the eastern part of the province, more particularly in Gaspe and on the north shore of the St. Lawrence river, the lumbering industry constitutes a necessary adjunct to the revenue of the people, more especially when farming and fishing fail.
Now, considering the serious conditions in agriculture and offshore fishing, which I just mentioned, farmers and fishermen of the province of Quebec, especially in the eastern district, who own woodlots had reason to expect from the sale of pulpwood a fair return which would have enabled them to support their families. On the contrary, even in that field, they have been shamefully exploited.
Considering the high cost of living, the cost of newsprint both on the national and international market, and the profits revealed in the financial reports of the pulpwood companies which are taking advantage of our natural resources, the ridiculously low prices paid in recent years, and last year in particular for pulpwood in the constituency of Bonaventure in the Gaspe peninsula, and in many other districts in the province of Quebec, are nothing less than an inducement to lawlessness.
I have here the results of investigations conducted during the winter by officers of the Catholic farmers' union in the counties of Bonaventure and Gaspe, on prices paid to pulpwood producers in the Gaspe peninsula.
Those investigations show that, in February and March 1955, prices as low as $10.50, $9.50, $8.50 and even $7.50 were being paid in the Gaspe peninsula for a cord of pulpwood delivered to the truck roads.
Do you know how much it costs to fell, saw or "bucksaw", as the lumberjacks say, and cart to the truck roads, often miles away, a cord of pulpwood cut on the average farmer's or settler's lot in the Gaspe peninsula?
Two good men, a good horse and ten hours of work a day are required to do the job.
It costs $2 a day to feed two men, and this is no exaggeration; and for a horse at least $1. For a good horse, the value of a day's work is $3, which makes a total of $6.
That means that when pulpwood is paid $10 a cord, delivered alongside the truck roads, there is left only $4 in net revenue to

be split between two men. It also means that not only do the pulpwood producers in eastern Quebec have to be content with a measly salary of $2 a day, for ten hours of hard work, but they are practically giving their wood away to the shareholders of pulpwood companies, the majority of whom are quite often foreigners.
And when pulpwood is paid $7.50 a cord, alongside the truck roads, as was the case last winter in certain parts of the Gaspe peninsula-and I have proof of it right here-we find, on the basis of the same figures, that those two men net only 75 cents each a day, which amounts to about 7 A cents an hour, on which to raise a large family.
When I see some printers of the Montreal newspaper Le Devoir, who already get a salary of $4,000, $5,000 and $6,000 a year, go on strike, I really wonder what they would do if their situation was that of the woodcutters and the pulpwood producers in the province of Quebec.
Some will say that, with modern equipment -which our woodcutters are not always able to get-two men can cut more than a cord of wood in a day. Of course they can, if this wood is cut on company limits, right in the middle of a virgin forest and close to the river down which the wood is floated. But not so on the woodlots of the farmers and settlers of the Gaspe peninsula, where the trees are sparse and have to be hauled long distances to the truck road during the winter, or even in the mud during the fall and spring.
From 75 cents to $2 a day for a man who works hard, often from morning till night, to raise a large family and try to make both ends meet! And things have come to such a pass in this twentieth century, in a Christian country which is often held up as an example for other countries of the world, in a democratic country which earmarks billions of dollars for the defence of our way of life, of that way of life, and especially in a province which claims to be in the vanguard of the fight against communism.
I say that our woodcutters and settlers in Quebec are not immunized against the seeds of revolutionary and communistic ideas, and I would add that the wonder drug that would immunize them has not yet been found. Let our industrial leaders take heed and consider seriously their responsibilities before it is too late!
The Budget-Mr. Arsenault
For, by enriching the foreigners who are taking advantage of our natural wealth while making capital out of indigence, the suffering and even the despair of our people, we sow the most fertile seed of revolution and communism to be found in the country.
Thus some capitalists, blinded by greed, avarice, or sheer stupidity, are acting as the best promoters of Moscow in our midst.
Communism! They are the ones who, by their unfair practices, arouse communism in the minds and hearts of our people. And unfortunately, those exploiters are beyond the reach of the padlock law.
Our own Canadian forests, the woods of Quebec, our own province and, in particular, those of the Gaspe peninsula, were not created by the Lord for the sole benefit of Thread-needle street, Wall street, Bay street or St. James street.
The lumber industry is one of the most important in the province of Quebec, if not actually the most important. The pulp industry, in particular, is an essential factor of our economic and social structure. It directly affects the standard of living of a large part of our population.
Lest we take for granted that the province of Quebec has become the colonial empire of a few privileged rich men, the development of our natural resources, of our forests, should first and foremost assure the subsistence and welfare of our population in Quebec.
If there is a field in which Quebec should be autonomous, it is that one, for our provincial government has the sole jurisdiction with regard to our forests, and our lumber industry within the province.
As a matter of fact, lease permits either for settlers' lots or wooded lands are granted or refused by the provincial government.
The only authority entitled to grant timber rights to individuals or companies is the provincial government. It is the provincial government that collects cutting fees. It is also the provincial government that has established the ceiling price to be paid by the owners of provincial newspapers for their newsprint by direct representations to the companies. In view of the uncompromising attitude of some pulp companies in their transactions with the lumber producers, and of the extreme unfairness they show to the farmers and settlers of the province of
3248	HOUSE OF
The Budget-Mr. Arsenault Quebec, in spite of the solemn warning that was given to them in this very house, by the hon. member for Gatineau (Mr. Leduc) and in the very words of the premier of Quebec, I believe it to be the duty of the government of that province to intervene with regard to the establishment of the floor price to be paid the farmers and settlers for their pulp-wood.
The provincial government has the power to fix a maximum price for the newsprint sold to the newspaper publishers of the province. By the same token, it should have the right to fix a minimum price to be paid to settlers and farmers.
Because we live in the province of Quebec we should not have to pay more taxes than elsewhere. Because we live in the province of Quebec we should not be paid lower salaries than elsewhere. Because we are from the province of Quebec we should not be forced to sell our products more cheaply than elsewhere, pulpwood in particular.
This situation, Mr. Speaker, has lasted all too long. There is no reason in the world why a cord of pulpwood cut in Gaspe should not fetch as high a price as a cord of pulpwood cut in Ontario or on the Pacific coast.
I might add that a cord of pulpwood, which often costs as much as $25 to $35 delivered at the mill, when it has been cut on company limits and floated or hauled over long distances, should be worth at least $15 when delivered to truck loading points on roads by our farmers or settlers: not $7.50 nor $8, but $15.
Therefore I say that a minimum price of $15 a cord should be set right away throughout the eastern region of the province for pulpwood bought from farmers, settlers or other producers.
I do not mention any figure for the other parts of the province as I am not familiar with conditions there.
But I do know that since 1952, because pulpwood has been paid from $5 to $7 a cord less than should have been paid to our farmers and settlers, at a time when the price of newsprint kept going up and the profits of pulpwood companies kept piling up, the people of the Gaspe peninsula and of eastern Quebec have been cheated out of some $2 million a year. Thus the benefit of family allowances generously distributed to the families in those regions by the federal


government has, to a large extent, been cancelled out.
Such a highly unjust situation must be met with an immediate remedy. Here is what I should like to suggest:
1.	I propose that the inquiry which the hon. member for Gatineau (Mr. Leduc) has asked the Department of Justice to undertake with respect to the Gatineau valley under the Combines Investigation Act be extended to every region of the province of Quebec and particularly to the Gaspe peninsula.
2.	I respectfully urge the Hon. Maurice Duplessis, premier of the province of Quebec, and the members of his government, to pass an order in council fixing the minimum price to be paid to pulpwood producers in the province of Quebec. Such a minimum price would have to be at least $15 a cord, delivered at a truck loading site, for the eastern part of the province.
3.	As a citizen of the province of Quebec, I respectfully urge the Quebec provincial legislature to adopt at its next session a legislative measure which would empower the minister of lands and forests of the province, among other things, to:
(a)	investigate prices paid to farmers and settlers for pulpwood cut in the province on wooded lands or licenced lots;
(b)	issue regulations governing the establishment of the minimum price to be paid to producers for pulpwood; concerning the measuring of the wood and the quantity of pulpwood to be bought each year from settlers and farmers, taking into account their other sources of supply and their needs;
(c)	issue any other regulation to safeguard the interests of wood producers within the province of Quebec.
Before resuming my seat, I repeat that the remarks I have just made must not be interpreted as an attack either against the wood dealers, or the pulp companies or the provincial government.
I attack nobody in particular and I lay no charge whatsoever against anybody.
I am only stating facts that have lasted long enough, conditions I believe it is my duty to reveal and proclaim, and which I shall denounce and proclaim as long as they have not been efficiently remedied.
As a farmer's son, I know from my own experience how strenuously our men must work to support their families.

I also know, from personal experience, that a lumberman, a farmer, a settler or lumber producer, be he from the Gaspe peninsula, from the north shore of the St. Lawrence or the Gatineau, deserves as fair a compensation for a good day's work as any other Canadian, from any other part of our country, in a similar profession.
(Text) :


Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, first of all I should like to congratulate the Minister of Finance (Mr. Harris) on his first budget. I am glad to note that the minister is an optimist, because that is a state of mind that is always good to have in a country like Canada. I hope the gross national product for this year turns out to be as high as his estimate.
As far as the budget is concerned, there have been some tax reductions. While the minister decided to make these reductions in the income tax they really do not amount to very much, as has been pointed out, to the average family. The total saving will be only 40 or 50 cents a week, which I do not think will buy many refrigerators or other appliances.
I suppose we should all be thankful for any reduction in taxation, however small it may be, but the result of this reduction is that those who need a tax reduction most are receiving the least benefit. I refer to those whose incomes are so small that they are not taxable at all. The only way those people can be benefited is by removing the sales tax from essential commodities. I do not suppose that would make any great impression on the mind of the public, at least not as much as a reduction in the income tax even though it is not very large. However, in his next budget the minister may consider removing the sales tax from such commodities, as it will then be a little closer to election time.
There are three aspects of the budget with which I should like to deal briefly. The first is the failure of the minister to remove the sales tax from stationery and other essential supplies used by welfare organizations such as the Red Cross, the cancer society and so on. Representations on behalf of these organizations have been made in this house in other years and on other occasions, and I cannot help but feel that it is perfectly ridiculous for people to donate to these organizations and be able to deduct their donations
The Budget-Mr. Nesbitt from their taxable income, then have the government turn around and make these welfare organizations pay the sales tax on necessary supplies, stationery, advertising material and so on.
The second matter with which I should like to deal concerns the druggists of this country. Representations were made to me earlier this year which I passed on to the minister. I understand that other hon. members and various associations have also made representations to the minister in this regard. In this connection I should like to read a letter which was sent to me by the retail pharmacists' association of Woodstock, a small city in my riding, which I think sets out the situation very cogently and concisely.
Dear Sir,
We the retail pharmacists' association of Woodstock wish to present a brief on a subject which has been causing us increasing concern during the last year or so. In recent months the problem has become increasingly acute and shows every indication of becoming a very real point of contention.
During the last year or so this association has expended considerable time, money and energy to make it practical and advantageous to the medical practitioner and his patient for the doctor to write prescriptions to be dispensed by the pharmacist rather than dispense medicine from his own office.
Our endeavours in this respect have met with considerable success but we now find that we are being stymied to a great extent due to the following situation.
The new modern drugs in use by the medical practitioner are quite expensive, prescriptions running from $5 to $15 are no longer uncommon. If these prescriptions are filled by the doctor in his office, they are deductible as a medical expense for income tax purposes. If however the doctor writes a prescription and it is filled by the pharmacist the patient cannot then claim the cost as a deduction on his income tax.
As a result of this inconsistency we are finding that local doctors in sympathy with their patients who are in need of expensive medication are handing out these medicines in their offices. In addition we have also been advised that patients are asking their doctor to supply expensive medication when required, rather than give them a written prescription for the pharmacist to fill.
We believe the situation as it exists at the present time causes definite discrimination against the pharmacist and that it merits the sincere consideration of the income tax department. Why should the same prescription be income tax deductible when the doctor fills it and not be deductible when the pharmacist fills it?
I omit the remainder of this letter, which is not particularly relevant to the point. The letter is signed:
Woodstock retail pharmacists' association M. A. Bernath, president Gordon Reinhart, secretary
I do not think it is necessary for me to make any further comment on this matter, as I think it has been expressed neatly in this
3250	HOUSE OF
The Budget-Mr. Nesbitt letter of the association. I hope the Minister of Finance will consider this matter, if not this year then perhaps next year.
The third item with which I should like to deal refers to the present monetary situation in the country, under which prices are decidedly inflated. I want to refer to the effects of these inflated price levels upon older persons who are in receipt of relatively small pensions, or who are living on small fixed incomes. I think all hon. members realize that elderly people, whether they be living on small fixed incomes or on pensions, cannot save very much with the present prices of necessities such as food, clothing and so on.
These high prices also affect young married couples, who quite often find it impossible to save anything. I notice in an article in the paper the other day that instalment buying is at the highest level in the history of the Dominion of Canada. I submit that this practice has been aided and abetted by the government. I do not say that it is necessarily wrong, but the buying of N.H.A. houses, war veterans housing and so on on the instalment plan gets people into the habit. When people buy houses under these plans they find they need furniture, and that is also bought on the instalment plan. Then they need a television set and a car and everything else.
In a country as wealthy as Canada people are entitled to these things. As things are at the present time they have to buy them on the instalment plan or wait perhaps 50 or 60 years before being able to buy a car or some furniture which they would like to have. It may be extravagant, but these young people feel that they should have these things if at all possible. As a result of this instalment buying many young married couples are not able to save any substantial amount of money for a rainy day, and things are still worse should the breadwinner happen to die.
There are a number of hon. members in this house who are in the legal profession. I am quite sure many of those hon. members will have come in contact with that situation as I have myself. Dependents of elderly persons and dependents of young married persons who die are often left destitute, except for the various public welfare schemes which the provincial and federal governments have in force. Very often you have a young married man-it does not occur too often, fortunately, but I have seen such cases-who belongs to a lodge. The lodge may pay funeral expenses; it may be one of these mutual benefit schemes. Then the wife and two or three children are left with the


house, and a great many instalments to pay on it and the furniture, the car, and the television set. They are left with instalments to meet every month and no money to do it with except family allowances or, in certain provinces such as the province of Ontario, mothers' allowance.
That is hardly a desirable situation. Not only does it occur with young people but, as I have mentioned before, it occurs with elderly people who have been unable to save too much and who have retired on small fixed incomes and on pensions. To help this situation I suggest for the consideration of the minister that premiums on straight life insurance policies up to $10,000-that is the amount of the policy, not the premium-if these policies are payable directly or indirectly to the dependents as defined under the Income Tax Act, that such premiums be allowed as a deduction from the taxable income.
Statistics are difficult to obtain with regard to the number of life insurance policyholders in Canada, and it is impossible at the present time to obtain statistics with regard to the types of life insurance the policyholders hold, whether it is term insurance, straight insurance, twenty-pay life or some other form. It is also impossible at the present time to find out how many heads of families are policyholders. The department of insurance and the dominion bureau of statistics have no statistics available in this respect.
However, I was able to obtain some figures on this matter. It appears that Mr. A. Bruce Matthews, president of the Canadian Life Insurance Officers Association, in a recent statement set out that there were approximately 5,500,000 life insurance policyholders in Canada at the end of 1954. This is out of a population of 15 million. It must be remembered that by no means all those policyholders are heads of families. They are married women, very often, and very frequently young children have policies put on their lives at an early age in order to get the lower premium, and so on.
I have some further figures that I think are relevant. In 1951-and these figures are in the 1954 Canada Year Book-Canada had a population of approximately 13,600,000. In that total population there were 3,287,384 heads of families. In 1955, with the increase of our population to approximately 15 million, the number of heads of families must have been increased considerably. As a result of these figures the conclusion that must almost necessarily follow-and it is the opinion of various life insurance executives with whom I have talked, both senior and junior-that

there must be a great many heads of families in Canada at the present time who do not carry any type of life insurance.
Another point that is interesting in this regard is that in 1951 the median income for the head of the family in Canada was $2,345. As most hon. members know, the median is a type of average. It is not an arithmetical or geometric average, but it is the picking of a figure out of the centre of a group of other figures. It is a type of average. In any event, as I say, in 1951 the median income for the head of a family in Canada was $2,345. This figure again was obtained from the dominion bureau of statistics. If that is the median income of the head of the family in Canada, it hardly allows for much saving with the present high rents, cost of consumer goods, and so on.
The normal cost-and when I say "normal cost" it does not envisage any unusual situation as to health, occupation or anything of that nature-of $10,000 of straight life insurance for a man age 30 is $213 a year in premium; at age 35 it is $250; at age 40 it is $294. For younger people, of course, it would be less and for an older person it would increase proportionately. If this amount were allowed as a deduction from taxable income, I do not think it would make a great deal of difference in the revenue which the government would have, but it would undoubtedly encourage the purchase of life insurance by people who should have it.
If the breadwinner of the family should die, $10,000 would protect the family for a considerable time and would save them immediate financial embarrassment. That is only the immediate effect. It would also give the dependents a much greater measure of security for the future, and it would cut down certain public welfare charges such as mothers' allowances and so on.
In addition to that-and most important of all, in my opinion-if when the breadwinner died the family were to get $10,000 plus family allowance in some cases, or the old age pension at the other end of the scale, this would make the difference between bare subsistence, as is the situation at the present time in many cases, and moderately comfortable living such as the families of our young married people and our old people deserve.
If the government or rather the minister should, as I have suggested, under the conditions I have suggested, allow insurance premiums on policies to $10,000 to be deducted from taxable income, I am not suggesting for a minute that everybody would go out and buy life insurance, but I certainly think it would encourage them to do so.
The Budget-Mr. Pouliot If the minister would consider doing this at some future time, I should like to see it tried. I think it would help to remedy a situation that needs to be remedied.


Mr. Jean-Frangois Poulioi (Temiscouata):: Mr. Speaker, I wish to join with hon. members who have congratulated the Minister of Finance on his budget. He has done exceptionally well, and his budget has been received by the press and by the people of Canada as a good budget which gives hope to the businessmen and all the people of this country.
The accomplishments of the government are so numerous and so vast, Mr. Speaker, that it would take a long time to touch on each subject. There is, however, a matter with which I should like to deal today. I refer to the social legislation of the government, which is improved at every session. Few people realize what great sums of money are paid each year by three departments, namely the Department of National Health and Welfare, the Department of Veterans Affairs and the unemployment insurance commission which comes under the Minister of Labour (Mr. Gregg). For instance, the amounts in the estimates for the
current year are as follows:
1.	National health and welfare .. $ 849,736,017
2.	Veterans affairs	 234,477,896
3.	Unemployment insurance
(benefits paid to claimants) ____ 174,730,279
Total expenditure	 $1,238,944,192
These figures mean that each year the government is spending much more than a billion dollars in pensions and their administration. I wish to pay special attention to the welfare division of the Department of National Health and Welfare. The national health branch of that department spends $56,229,456. The welfare branch has a much heavier expenditure of $785,241,681, and for civil defence there is an amount of $7,001,024, making a total of $848,472,161. This does not include costs of administration.
With regard to family allowances, the amount in the estimates is $383 million. For old age security payments there is $367,600,000, for old age assistance $22,100,000, for blind persons' allowances $3 million, and for disabled persons' allowances $6 million. The increases in 1955-56 over 1954-55 are $17,600,000 for family allowances, $11,750,000 for old age security payments, $500,000 for old age assistance and $6 million for disabled persons' allowances, making a total increase of $35,850,000 this year over last year. This includes allowances to disabled persons who are very dear to my heart, because I deeply sympathize with those who have suffered

The Budget-Mr. Pouliot
so much that they are invalids and cannot live normal lives. I congratulate the minister and the government on reaching an understanding with the provinces to pay pensions to invalids.
The amount of $35,850,000 represents the increase this year over last year. As I said before, the total expenditure of the Department of National Health and Welfare is nearly $850 million this year. It will be more than that with the supplementary estimates which will come before us before the end of the session.
In March, 1954, there were 4,942,044 children receiving family allowances. It is enormous when we think of it. In my county, for instance, the amount paid each year to the mothers for their children is about $2 million. There are 686,127 old age security pensioners in Canada, 93,273 old age assistance recipients and 8,214 people receiving blind persons' allowances. This means that in this country there are 5,729,658 people receiving a pension of some sort out of a total population of some 15 million people, and this figure does not include the disabled persons who have only been receiving allowances for a short time.
The government deserves to be warmly congratulated for having understood that in these years of the progress of human understanding it is necessary for the government to divide the wealth of the country in such a way that the less fortunate may have an opportunity to enjoy the comforts of life. To what extent? The extent is limited by the ability of the taxpayers to pay. And this is not all. This is the share of the federal government in a certain field where the provinces make other expenditures.
For instance, family allowances to mothers for their young children under 16 are paid entirely by the federal government at Ottawa. Old age pensions are paid 50-50 by the federal government and the provinces. Allowances to the blind are paid 75 per cent by Ottawa and 25 per cent by the provinces. Out of each dollar paid to the old people and the blind Ottawa pays more than 91 cents. Pensions to the disabled will be paid 50 per cent by Ottawa and 50 per cent by the provinces. Pensions for people 70 years of age and over are entirely paid by Ottawa, and the allowances paid to those between 65 and 70 are paid half by the provinces and half by Ottawa.
I am very pleased that the Minister of National Health and Welfare (Mr. Martin) has been successful in reaching an agreement with the provinces respecting the payment of allowances to disabled persons or invalids. It is important to note that these


pensions are administered and paid by the provinces, who then receive a refund of half the amount of the pension from Ottawa after it is paid. This is a very considerable expenditure.
I am not so very old, but I remember the time when there were no old age pensions or family allowances. There was nothing of that kind. It is not only that the provinces are doing their share. They pay a certain proportion of the old age pension, of the pensions for invalids and for the blind. They pay a pension also to needy mothers, and they pay a lot in workmen's compensation. They have many other social undertakings which are very helpful to the people of Canada. I am very glad that the government of Canada and the governments of the provinces are working hand in hand to improve the social conditions and health of the Canadian people. Naturally it cannot all be done at one time.
Twenty-five years ago, when old age pensions were first introduced in this house, nobody would have believed that needy people between 65 and 70 would receive a pension. They would have raised their shoulders if one had told them that nearly five million children would receive family allowances. They never would have believed it. They would have found it incredible. To the blind we are most sympathetic, but it took some time to get pensions for the blind. Their case was argued in the house and in the press and people were sympathetic to them, but it was done gradually. We have reached a point unequalled in any country in the world. There is no country that has as complete social legislation as Canada has.
I congratulate very warmly my neighbour and friend the Minister of National Health and Welfare (Mr. Martin), who has worked so hard to have his point of view accepted by the government and by this house. I am very proud of him and of the officials of the health department of Quebec, especially Dr. Jean Gregoire and Dr. J. C. Beaudet, whom I know very well. Dr. Beaudet was with the health unit at Riviere du Loup before becoming assistant deputy minister in Quebec city. They have done a lot for the people of our province. I am not going to dwell on that because I want to speak particularly about the welfare side of the question. I am not so familiar with the welfare department in Quebec, but it has come to my knowledge that there are many cases in which they have done well for people who were ill.
Now, sir, what I have said is something that is general knowledge. What the government has done has not been done for political purposes, but it has been done in the good Samaritan way, just to give a hand to the

needy; to the mothers of large families; to old Canadians who had the benefit of long lives and who needed some support in their old age; to the blind, who deserve every consideration; and to the invalids. Perhaps the invalids should have been looked after earlier, but better late than never. In this case the amount paid in family allowances and old age pensions was so high it was impossible to do it all at once. All this deserves special consideration.
I am greatly surprised when some people who are heartless, who are intriguers, use propaganda to try to double the old age pension. This is a thing I cannot understand. I am in favour of as high an amount as possible being paid to the mothers of large families. Everybody is. But there is a limit that cannot be exceeded, and it is the ability of the taxpayer to meet the expenditures. Very often we have suggestions from gentlemen who want certain large expenditures made but who, at the same time, ask for a reduction in taxes. This is a thing I have never understood.


Mr. Nicholson:: Would the hon. member permit a question, Mr. Speaker? Would he not have said that during the war, when the proposal was first made to introduce family allowances, it might have been argued that Canada was at war and we could not consider introducing family allowances? Would the member comment on that?


Jean-François Pouliot: Well, during the war the expenditure was so large that it was unbelievable, and the purpose of the war expenditure was to protect not only Canadian children but all the Canadian people from attacks by the enemy. This was why all the money spent during the war was used for that purpose. Unfortunately the allowance was delayed. I regretted that. But if my hon. friend looks at Hansard he will see that I, along with others, made speeches in favour of this measure. I refer to the hon. members for Bellechasse (Mr. Picard), for Compton-Frontenac (Mr. Blanchette) and for Terrebonne (Mr. Bertrand). It was because of the repetition of our requests that finally it was granted. I must remind the hon. member for Mackenzie (Mr. Nicholson) also that the thing that touched me very deeply was the very kind words of the minister in the house, when he said that I had been among those members who had insisted the most upon pensions for invalids.
All this has been done, and as I have said it comes gradually. Is it possible to increase it? My hon. friend says yes. Perhaps he is right. He is right if he finds expenditures that can be dropped or new taxes that can be imposed on the Canadian people. If he
The Budget-Mr. Pouliot
found new taxes that were popular and that would be accepted by the Canadian people, he could increase the family allowances; otherwise he could not. If he thinks about it he will realize the soundness of my argument. The government is well disposed to give assistance to large families. There is no discussion about it. On the other hand the government cannot impose taxation so heavy that it would destroy trade and business in Canada. If we are to have revenue it must come from business in general, and business must prosper if we are to be able to pay taxation.
It is a very difficult problem, and my hon. friends should be careful when they are discussing it. There are some people who make a comparison between the indemnity of $8,000 plus the $2,000 for expenses paid to members of parliament and the amounts paid for family allowances, old age pensions and things of that kind. In the first place the indemnity of $10,000-and this sum includes the expenses-paid to members of parliament represents so small a fraction of the money spent for social welfare purposes that it is quite infinitesimal. But we do not hide it. We accept the $10,000. Are we worth it or not? That is for the people to judge. The amount of salary paid to anyone out of public moneys is not like the ages of women. It can be known; it can be disclosed. I feel no shame when I go tomorrow to get my cheque, because most of it I spend among my constituents. They get the money, and that must be the same with all hon. members.
There are some persons who agitate that the indemnities paid to members of parliament are too high. But what do they receive, themselves? I would refer to Turnon des electeurs de la province de Quebec, the Quebec Social Crediters. I call them crazy; they abuse me, but it makes no difference. Very often when I drive along in my car small dogs bark as the car passes, but they do not follow the dust of the car very long. And I attach no more importance to it than that. But when I see members of municipal councils who are credulous enough to send me resolutions prepared by impostors, asking that we double family allowances without increasing taxation-well, I say this is the time to tell them to stop. It is the time to open the eyes of the people, and I am going to do so.
I say that the editor of the monthly Vers Demain and la cantiniere are exploiters of public credulity. They are impostors. Their idea is not at all-and I wish to be well understood when I say this-to have family allowances doubled; it is to double the circulation of their papers, which is something

The Budget-Mr. Pouliot
entirely different. And I have some proof of this. One of the conquerors was silly enough to send me the receipt he gives to those who subscribed to Vers Demain. Naturally it is yellow. The ordinary subscription to the paper is $2, or 24 months for $4; and if one wants to become a member of the chamber of Social Credit, it is $10 a year. They get that money.
A highly respected gentleman in the province of Quebec, Mr. Abel Marion, president of the Catholic farmers' union, has authorized me to tell the house that once he held meetings at La Sarre and Abitibi, at which there were some white caps present to make trouble. He canned them, tamed them, by telling them, "We have come here to render our accounts. You never have any accounts rendered to you by the heads of l'union des electeurs de la province de Quebec, and there is not only a subscription to the paper but there are also the collections taken after each meeting."
Where do the collections go? I do not know, but it is easy to guess, when we think that some years ago the editor of Vers Demain lost his bank book and there was $41,000 in it to his credit-collections for Vers Demain, collections from the credulity of the naive people who are silly enough to give them money. It goes to support la cantiniere or Vers Demain. That is a fine scheme; it is a racket.
They behave like the witnesses of Jehovah. They have the same tactics, and that is the reason I tell them to get out of my office. They came, just as the witnesses of Jehovah came; so much so that when I saw an old man with his white cap coming to my office I said, "Are you a witness of Jehovah?" He said, "No, I am a Social Crediter from Quebec." I said, "Well, I understand there is no difference between them."
To prove that I am right I shall go one step further. In L'Action Catholique of March 23 last it is stated that the Social Crediters of Quebec, I mean the white caps-who have nothing in common with my hon. friends from Alberta-met together to honour the editor of the monthly, Vers Demain, on the occasion of his 70th birthday anniversary with 500 new subscriptions to that paper. It was a gift. And what was the reason for the gift? The reason was that it is the purpose of l'union des electeurs to have 100,000 subscribers to Vers Demain. But it fell flat. They did not have as many as that. It fell so flat that some of the conquerors have resigned. They told Louis Even and Gilberte Cote that it was a racket, and that they were not going to belong to it any longer, with the


result that they have lost rather than increased subscribers. In one of the last editions there is a figure of 4,025 new subscriptions. It is a fake; it is untrue. Did they lose 4,000? Perhaps but they surely did not gain 4,025, because I was credibly informed that subscriptions to the monthly Vers Demain are on the downgrade.
I regret very much that some otherwise intelligent men who happen to be honoured by the confidence of those who have the right to vote in municipal elections have shown their credulity to the point of passing resolutions suggesting to the government that they should double family allowances without increasing taxation. That is beyond me. I told them I presumed that next fall when they come they will not collect any money from the taxpayers of the municipality; they will find some money; they will get a recipe from Vers Demain to pay taxes without collecting anything from the taxpayers of the municipality.
Sir, I have been in politics a long time. As I said the other day, I have been very much abused. Sometimes I was praised, whether I deserved it or not. I have done my duty. I have done my duty to my constituents, and when I thought something was wrong I told them that I thought it was wrong, subject to listening anew to their point of view. The people cannot be fooled indefinitely. They have been fooled to a certain extent by that paper. Those who belong to that party have made fools of themselves by masquerading the whole year round. It did not bring them success. They have realized one thing, namely that the more they abuse the member for Temiscouata the less success they have. They are like a snake that destroyed its teeth by biting a file; and they will not be the better, they will be the worse for it.
In conclusion, sir, I wish to thank hon. members for their attention and to ask them to think about the large amounts of money that are spent by the government for the benefit of all Canadians of every party, of every race, to improve the conditions under which they live. This is the right way to serve the Canadian people.


Mr. J. W. Noseworthy (York South):: Mr. Speaker, before turning to the subject matter of the budget I should like to compliment the government on the preliminary federal-provincial conference which ended yesterday. Notwithstanding the fact that for two or three years we have been pressing for such a conference, I am quite sure that all sections of the community across Canada will be pleased that at long last the first steps toward calling a general conference have been taken. The

very fact that top-ranking politicians in this country from five different political parties could sit down together with so much amity and agreement is an indication that we have come a long way since 1945. Some of our provincial governments certainly seem to have outgrown the somewhat childish attitude which they adopted at the conference of 1945, an attitude which said, in effect, "if you do not agree with me I will not play in your back yard."
It is very encouraging to find that in 1955 representatives of all 10 provincial governments can sit down with the representatives of the federal government and reach at least some tentative agreement. I think everyone agrees that the exclusion of the question of unemployment relief from the agenda of the October conference is a move in the right direction. We all certainly hope that before the October conference is called some agreement will have been reached under which the provinces and the federal government between them may take care of the relief of those who are unemployed.
Several features of that conference are commendable. I was particularly happy to read in the Globe and Mail that the Minister of National Health and Welfare indicated to the conference that the federal government would be willing to go along with the provinces on a national health insurance scheme, provided that the majority of the provinces-I suppose a majority would mean six including one of the two large provinces would agree on such a scheme. That certainly is an advance on anything we have heard in this house on the matter of national health insurance. It would appear, Mr. Speaker, that dawn is at last breaking on that long Liberal night which began back in 1919, when national health insurance first became a part of the policy of the Liberal party.


Stanley Howard Knowles: Thirty-six years is a long night.


Joseph William Noseworthy: It is true, as the minister has informed us on a number of occasions, that these things cannot all be done overnight, but that long night would seem to be coming to an end.
There will be fairly general approval of the five topics which it has been agreed to place on the agenda of the October conference. The best we can hope is that such agreements as are reached at that conference will not be too narrow and too late to boost the sagging economy of this country.
If I may turn to the budget itself, I wish first of all to say that there are some commendable points in it. I disagree with those
28, 1955
The Budget-Mr. Noseworthy
speakers from the official opposition who could find nothing whatever to commend in the budget, who insisted that nothing in the budget would do much good. We all welcome the reduction in the income tax, such as it is. I must point out, however, as did the hon. member for Rosetown-Biggar (Mr. Coldwell), that the minister's statement on budget night, as recorded at page 2735 of Hansard, seemed to inspire a little more optimism than was warranted. He told us, for instance, that the new schedule would reduce the tax payable by 12 to 13 per cent for 85 per cent of our taxpayers. That sounds pretty good, that 85 per cent of our taxpayers should get a reduction of from 12 to 13 per cent in their taxes. A little later on, as reported on page 2735 of Hansard he said:
Every married taxpayer with an income up to about $5,000 will get about a 12 per cent reduction. The rate of reduction beyond this point drops of! gradually until it reaches 2-8 per cent at the highest income levels.
That would seem to indicate that the budget was weighted in favour of those in the lower income groups, but if we look at the tables placed on Hansard by the minister, which appear at pages 2736 and 2737, we find that the picture is not too rosy for the taxpayer in the lower income groups. According to those figures, in the year 1955 the single taxpayer earning $2,000 will have a saving of $10; the single taxpayer with an income of $3,000 will have a saving of $20 in his taxes, and the single taxpayer in the $5,000 bracket will have a saving of $40.
The married taxpayers without children with incomes of $3,000, $4,000 and $5,000 will have savings of $10, $20, and $30 respectively in 1955. The married taxpayers with two children in the same categories of $3,000, $4,000 and $5,000 will have savings in 1955 of $7, $17 and $27 respectively. I merely wanted to call attention to that fact in passing. Small as the reduction is, it will be welcomed by the taxpayers across this country.
The 5 per cent reduction in the excise tax on cars will also be welcomed, and I am sure that the reduction of 2 per cent in the corporation tax on profits over $20,000 will be welcomed by the corporations. I gather from the speeches made by representatives of the official opposition that they would have welcomed a much larger reduction in the corporation tax. As far as I am concerned, and as far as members of this group are concerned-I speak now for the present C.C.F. group of 23-we question the necessity for any reduction in corporation taxes at this time, particularly when we note from the balance sheets of the corporations how good 1954 was for most of them.
3256	HOUSE OF
The Budget-Mr. Noseworthy
We in this group approve of budgeting for a deficit. When I spoke on the address in reply to the speech from the throne I suggested that the government should follow the policy they had laid down in their white paper in 1945. At that time they indicated that while it was a good policy to budget for a surplus in prosperous years, it would be good business to budget for a deficit when the economy began to slow down.
We approve also of the notice given in the budget speech that a royal commission will be appointed to study the economic position of our country. We have long advocated economic planning, and if this royal commission means anything it means that the government at last has reached the conclusion that there must be some economic planning in our public affairs and government policy.
I was rather intrigued by the number of Conservative speakers who criticized the government because they have no economic plan at the present time, and who indicated that they thought the setting up of this royal commission was an admission on the part of the government that they had no such plan. This is the first time in my public life that I have known or learned that economic planning was part of the Conservative program as well as that of the Liberals. However, we welcome it regardless of from what corner of the house it comes.
I rise on this occasion to support the amendment moved by the hon. member for Greenwood and the amendment to the amendment moved by the hon. member for Rose-town-Biggar, the leader of this C.C.F. group. It might be well to remind ourselves of the nature of those amendments. The amendment moved by the hon. member for Greenwood will be found on page 2954 of Hansard of April 19. It reads:
That all the words after "That" to the end of the question be deleted and the following substituted therefor:
"this house regrets that in its budget proposals the government has failed:
(a)	to give effective stimulus to Canadian enterprise to create employment and opportunity;
(b)	to reduce taxation affecting those on low income and allowances;
(c)	to curb its own extravagance and inefficiency;
(d)	to recognize the serious position in which the Canadian farmer and other producers now find themselves."
The amendment to the amendment moved by the hon. member for Rosetown-Biggar, as reported on page 2958 of Hansard, reads:
That the amendment be amended by adding at the end thereof the following words:
"(e) to provide assistance to the provincial governments in order to enable them to plan their financing in such a manner as to relieve the people of this country from the crushing load of heavy municipal taxation."


While we support the amendment moved by the official opposition we do so without committing ourselves to the support of the methods suggested by official opposition speakers to implement the policy enunciated in that amendment.
From speeches by the official opposition I tried to find just what they meant by "effective stimulus to Canadian enterprise to create employment and opportunity". I went, of course, to the speech of the hon. member for Broadview (Mr. Hees). He holds an extremely important position in the Conservative party. I find that the hon. member for Broadview does not think that the income tax reductions will do anything to stimulate purchasing of our surplus goods and that he thinks that the reduction in the corporation tax is not enough to cause companies to embark on a capital expansion program, indicating that he would like to see a much greater corporation tax reduction.
Much to my surprise, he pointed out that the 2 per cent reduction in corporation tax- that is a reduction from 47 per cent to 45 per cent; in reality it amounts to about a 4 per cent total reduction-will not be passed on to consumers in the form of lower prices. That statement was a bit surprising to me. It was surprising to me that the national president of the Conservative association should have lost faith in private enterprise to the extent that he now does not believe that the corporations of this country will pass on the benefit of their tax reduction to the consuming public in the form of lower prices. If that is so, I just do not know on what logic he bases his appeal for a still larger reduction in corporation taxes.
Then on the question of the royal commission, the hon. member for Broadview was critical of the fact that the government has no economic plan. He went on to say that if the government had had its various departments gathering all this information during the past ten years, they would now have an economic plan. As I said before, we welcome the thought that at long last not only the Liberal party but also the Conservative party has come around to the adoption of that plank in the C.C.F. program which has always been a major one, namely that of economic planning in government.
Then apparently another one of the stimuli which governments could give, according to the member for Broadview, is to take some measures to lower the cost of products we manufacture. From a Conservative whose party supports private enterprise, and who is so critical of government interference with business in any form, this is a surprising suggestion. One wonders what the government

can do to lower the cost of the products that we manufacture without interfering with or exercising some control over industry, as we in the C.C.F. have long suggested.
Then another Conservative stimulus is to take some measures to ensure that more of our primary products are processed in Canada. I do not know how this stimulus can be provided by a government or a party that does not believe in interfering with private enterprise, that does not believe in the government's participation in industry or business or that does not believe in the exercise of any control by government. I just do not see how such governments or such parties can provide the kind of stimulus that is suggested by Conservative speakers for the improvement of our economic condition.
Most of those who have spoken in the debate have offered the government advice. I suppose a little more advice at this stage of the debate will do no more harm and probably no more good than most of the other advice that has come from this side of the house. I suggest-and on this I think all parties are agreed-that the condition of employment in this country is one that requires study. I say "employment", because I think the provision of employment is our No. 1 problem. I think we must think in terms of employment rather than in terms of unemployment. I think we must take the positive attitude or the positive approach and consider ways and means of providing more jobs for more people for longer periods of time.
This country just cannot afford the luxury of having 600,000 people looking for jobs and unable to find them or 600,000 people registered with our unemployment insurance commission. The waste of that manpower is a luxury that we cannot afford. Certainly it represents a condition that should engage the most serious attention of all of us, regardless of our party affiliations. The workers were told that, if they wanted increased wages, they must increase production. For some years since the war the emphasis has been on increasing production. We have been increasing production. We have increased production to the point where, in many lines, we now have more goods than we can dispose of. We have inventories piling up. We have factories laying off help and men going idle. We have reached the point where we have carried increases in production so far that we now have 600,000 unemployed. There are those who advocate, as did the hon. member for Broadview (Mr. Hees), that one of the remedies for that is a reduction in the price of commodities and the cost of production. There are those who blame our having a surplus of commodities which we 50433-206
28, 1955
The Budget-Mr. Noseworthy
cannot dispose of on the fact that we have priced ourselves out of the market and who say that lower prices would be the remedy.
I am sure those of us who lived through the thirties must realize that if the thirties taught us anything they taught us that the lowering of prices alone is not enough to remedy the kind of economic situation in which the country then was and which we are in danger of falling into again. If lowering prices was the answer to the problem, we had the answer in the 1930's. Goodness knows, prices were low enough. We must, as I have said, find some way of creating more jobs for more people, and since industry, and the manufacturing industry in particular, employs the majority of our workers we must find some means of making more jobs for more workers in more factories in this country.
There are those of course who believe that this matter should be left entirely to private enterprise, that it is not the business of the government to get into the construction field, for instance, in competition with private enterprise. I would merely point out that when the necessities of war showed that private enterprise was unable to fill the bill required of it the government, with the approval and support of electors all across the country, stepped into the breach and did not hesitate to direct and control those industries whose products were needed for war but with respect to which private enterprise had failed to fill the bill. Whether in the production of war machines, munitions, ships or whatever it was, when private enterprise failed to meet the needs of the times the government, with the approval of the Canadian public, as I said, entered into the particular field and took steps to see that those needs were met.
Today private enterprise has failed to employ all our people, or perhaps I should say that private enterprise and governments combined have failed to employ all our people with the result that we now have 600,000 unemployed. Does that not seem sufficient justification and reason for the government to undertake at this time a large-scale public works program to supplement the efforts of private enterprise, to create more jobs where private enterprise is failing to create them? It is true that some public works contribute very little to employment. I suppose the experience of the Ontario government in the past year has shown that highway construction, for instance, provides more profits for contractors than it does work for the unemployed.
But there are fields the government can enter which will provide many jobs. We need a trans-Canada highway. We have been working on the project now for some years. The

The Budget-Mr. Noseworthy
federal government has made a very generous offer to the provinces but the provinces are having difficulty with the construction of the trans-Canada highway. Some are finding the cost of construction per mile too high for them to bear under the present arrangement. Some are finding that to put their money into the construction of the trans-Canada highway will result in the neglect of many other highways in the province. I suggest this is a good time for the government to increase its share of the cost of the trans-Canada highway in order to offset the high construction costs that are slowing up the building of the highway in various provinces. That will not only speed up the construction of the highway with resulting improvement throughout the country, but it will also help to take care to some extent of the waste of manpower taking place in the country at the present time.
There are other fields. There is the question of railway grade crossings. While we commend the government for the increased support it is giving to the railway grade crossing fund, we think there is room for a still further increase in the contribution to the fund so that a very sizeable crossing improvement program can be undertaken throughout Canada. There again we would be doing something that would be useful, something that would result in saving lives, that would improve the transportation system of our country and would also be of some assistance in relieving the unemployment situation.
The third proposal, to mention only three, is that introduced in the house by the hon. member for Spadina (Mr. Croll) and emphasized by numerous speakers on both sides of the house, the initiation of a broad, imaginative plan for the building of low rental houses. If there is any one field in which the government can assist in meeting the unemployment problem, it is in the building of houses.
While Central Mortgage and Housing has done a reasonably good job within the limits of the regulations by which they are governed, the fact is that the houses which are built are beyond the reach of the people who most need houses. Today it is just as difficult for a family with four, five, or six children to find a home in Toronto as it has been at any time within the past 10 years. When a family is ejected in the city of Toronto today, it is just hopeless for that family to try to find a house that they can rent. There is a great need across this country for the kind of housing scheme that will provide houses on a large scale at a price that those in the lower income groups can rent or buy.


While speaking of a public works program, I trust that when the conference meets in the fall, and when the question of public investment and the development of our natural resources comes before that conference, some arrangement will be made and some agreement reached on the kind of public works that should be undertaken across Canada, the kind of public works in which the federal and provincial governments may unite for the good of the people of Canada. If any of these projects are to be of any use before another winter's unemployment is upon us, then we must take steps now to plan the nature of those projects, and all the preliminary matters that must be settled before the contracts can be let. It is of extreme importance that we waste no time in getting on with a public works program, at both the federal and the provincial levels, with projects of such a nature that the federal and provincial governments may combine their resources.
Another point I think that we should consider-


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


Joseph William Noseworthy: I shall conclude then, Mr. Speaker. I am sorry I did not watch the clock. I shall conclude by suggesting that anything we can do to increase the purchasing power of the masses of the people, by an increase in the personal income tax exemption, by an increase in social security benefits, disability pensions, guidance allowances for the blind or anything of that kind, will help us in our present emergency. I trust that the government will not wait until fall to take some forward steps to prevent this country from falling into the condition that harassed us during the thirties.


Mr. Harris:: And none more than Harris.


Mr. F. T. Fairey (Victoria, B.C.):: I rise, Mr. Speaker, to take part in this debate at this time because traditionally the debate on the budget, like that on the address in reply to the speech from the throne, permits a member to range rather widely and introduce a number of topics in the one speech. Before I address myself to matters relating to the budget, I feel it is necessary to comment upon the extraordinary statement made, first by the hon. member for Kindersley (Mr. Johnson) and later, in similar language, by the hon. member for Regina City (Mr. Ellis), concerning tax reductions as proposed by the Minister of Finance (Mr. Harris).

On page 3084 of Hansard for April 22, 1955, in the second column, I find this:
The minister touted the income tax reductions and pointed out how they ranged from 13-3 per cent for those in the lower income tax brackets to 2-8 per cent for those in the higher brackets.-
This is the statement which caused some of us in this corner a little concern.
-when actually it was a 2 per cent reduction across the board. The minister placed the mirage at a distance in the hope that by the time the people became aware of the results, the matters would be forgotten.
Then, in the next paragraph I find this:
Indeed it is nothing but deception to tell the people of Canada they are being given a tax reduction of 13-3 per cent when the tax reduction is 2 per cent and ranges in amount from $5 to $7 to $40.
The same day, a little later, the hon. member for Regina City made a similar statement on page 3113. He said:
I wonder who the government thought they were fooling with that sort of subterfuge. No matter how you figure it out it means a 2 per cent blanket reduction across the board. The government brought this in in a deceptive manner and tried to convey the impression that there was some fairness and equity in the manner in which these reductions were being made, when all the time there was plain evidence that the income tax reductions amounted to a flat 2 per cent reduction across the board.
Now, Mr. Speaker, I point to the similarity of the statements, and there are two things to which I object. The first is the suggestion of deception and the second is that the arithmetic is quite wrong. I am sure that, at least in recent years, the education of the Canadian people has reached a point where they can do a simple problem in percentages. The example that both gentlemen used was that of a married man with two children, the first having an income of $3,000, and the second man having an income of $20,000. The first will get a reduction of $14 and the second of $354. The point is, a reduction from what? In the first case it is a reduction of $14 from $105, which is the amount to be paid in 1954. This is a reduction of 13.3 per cent because $14 is 13.3 per cent of $105. In the second case it is a reduction of $354 from $5,375, which is 6.6 per cent.
I might suggest that the hon. members have mistaken what the minister said, and I therefore refer to page 2735 of Hansard for April 5. These are the words the minister used:
The method by which this result will be reached is to reduce the rates of tax payable on each bracket of income by 2 percentage points.
I suggest, Mr. Speaker, that there is a vast difference between a reduction of two percentage points in each bracket of income and a straight 2 per cent across the board. Had it been a straight 2 per cent reduction 50433-206J
The Budget-Mr. Fairey
across the board, the reduction would be of course $2.08 rather than $14, because 2 per cent of $105 is $2.08. And in the second place the reduction would have been $107.50 instead of $354.
I have no quarrel whatever with the statement of both hon. gentlemen, that the minister might have achieved similar or perhaps better results in another way. That is a matter of opinion. But as an old schoolmaster I could not allow that bad calculation to go without comment; because it is likely that these speeches will receive rather wide circulation, and I thought it necessary to make the correction. As for the rhetorical question, whom the government were fooling-well, I will leave that to the Canadian people. I do not think they were trying to fool anybody, except perhaps the two hon. gentlemen.
Now a few words about the budget itself. In my opinion it is a good budget. The minister has been bold enough to reduce taxes, which will result in a sum of money approaching $200 million being added as extra purchasing power in the hands of the public. That is what hon. members on both sides of the house have been asking for. Naturally it will result in increased spending, chiefly on consumer goods. The boldness on the part of the minister and of the government will I think generate confidence and thus encourage investment and the expansion of industry. And if these results ensue, the resulting expansion in industry must in itself stimulate employment.
It was my hope that the minister would find it possible to reconsider, as a special case, the problem of the retail automobile dealers. In this regard I add my support to the views already expressed by the hon. member for Niagara Falls (Mr. Houck). In my opinion, because of the policy of manufacturers, the retail automobile dealers find themselves in a position which they cannot avoid by any action they themselves may take. Although I know perfectly well that the government is on very dangerous ground when exceptions are suggested, I do feel there is strong justification for the claim of the automobile dealers for a rebate of the excise tax paid on cars which were not sold at the time the reduction was announced. I do think, though, that the remedy lies within the industry itself. They have anticipated this kind of thing for some years past and, in my opinion, they should have worked out some way to avoid this difficulty. Surely the manufacturers and the retail dealers can devise some method by which dealers stand neither to gain nor to lose, owing to changes in excise tax rates. In the meantime I hope
3260	HOUSE OF
The Budget-Mr. Fairey
the minister will take not a second look- but, perhaps it may be, a twenty-second look.
Then, something about Canada's future: We all have great confidence in Canada, and believe that we are now on the threshold of a great industrial expansion. In all provinces and from all parts of the country we hear of increased business activity, and of the projection of great enterprises. There is a bustling awareness of strong forces at work. To activate these forces the government must, as I think it intends to do, first of all create a situation which encourages the greatest possible degree of free enterprise. I do not use this word in a trite sense. I mean freedom in every possible way for the manufacturer and the individual to take advantage of the growth which is upon us. Secondly, it must reduce government controls of all kinds, including any taxes which have been thought to be crippling, and thus allow the greatest possible choice of freedom of movement both for the businessman and the individual worker.
I think the people in this country want the greatest measure of social security for those not able to look after themselves, but I do not believe they want social services so extensive as to stifle willingness to work or to discourage adventure. They want wages high enough to provide for present needs, and for savings and investment for the future.
It seems to me that industrial growth depends upon several factors, the first of which is a firm, constant and stable government policy to encourage risk capital and investment in a growing country; secondly, a high degree of skill in engineering and in industrial and personnel management- and this I believe we have; third, stable and sound relations between labour and capital; and fourth, a skilled and mobile work force. And it is about this latter that I wish to speak at some length, and to emphasize its importance as strongly as I can.
It is my opinion that our experience in wartime demonstrated, without any doubt whatever, that an industrial economy is impossible without a large body of skilled craftsmen. Whatever skills we may have with respect to finance and management, without skilled workmen we face a hopeless task. We know that for years before the first war, and between the two wars, we were content to extract from the land, sea, forest and streams the raw materials which formed the bulk of our exports. Now we demand the establishment of secondary industries. We have grown tired of purchasing


back our own raw materials in the form of manufactured articles and we find ourselves in the competitive markets of the world where sentiment does not exist.
To secure a fair share of these markets for our manufactured goods and, at the same time, maintain a high standard of living as expressed in a high scale of wages, we must produce cheaper, better and more attractive goods than our competitors. This cannot be done unless we reduce the cost of production by producing goods in greater quantities, in shorter time. If we are to prosper industrially, and if we insist on the five day or shorter work week, then we must produce more in those five days than we formerly did in six days, and without any decline in quality or appearance.
At the turn of the century, when Canada emerged from a mainly agricultural economy and began to lay the foundation of a great nation with a balanced economy, it was possible only because we were able to draw upon Europe, and chiefly Great Britain, for the majority of our skilled craftsmen- we trained none of our own, or very few. The United States had done the same. Those days are over. The two wars ended all that. The trained mechanics in the older countries are needed in their own countries. So now we must do one of two things:-[DOT] first, institute a vigorous campaign for the recruitment of skilled workers from Europe- and I know how far we would get if we suggested that-or, secondly, train our own.
There is no choice here. In the meantime until we can train our own we must approve an immigration policy which is selective and which will bring to this country those immigrants who can best fit into the industrial Canada that is to be. I think the Minister of Citizenship and Immigration (Mr. Pickers-gill) is doing just that.
Mr. Speaker, because I have mentioned immigration, I hope I do not offend the rules of the house, if I revert to an incident, or a series of incidents, concerning a supposed statement by the Minister of Citizenship and Immigration at a meeting we both attended in Victoria during the Easter recess. Because this matter has been raised in this debate, by others, 1 think I may have the privilege of adding a word.
I certainly have no desire, nor is it my place, to defend any minister or, for that matter, any member of this house, for something he actually did say. That is his responsibility. But when I know for a fact, having been present at the time, that the statement, or the implication of any such statement, which has been attributed to the minister, definitely was not made, then I think it is

my duty to stand up in this house and say so. When I first saw the comments in the press, and statements had been made in this house -there was a good deal of hilarity about it because, Mr. Speaker, we did return to the house on the first day in rather a jovial mood -I thought hon. members were having a joke at the expense of the minister. But, sir, the matter has gone beyond a joke and 1 am compelled to say that in the interests of us all this unfair and unjustified attack upon the minister, which appeared in the press from many parts of the country, and even in editorial comment, should be answered. May I put it to my colleagues-and I am reading this because I do not want my words to be misinterpreted-this is a matter which affects us all. I know it has been said that we on this side of the house suffer from the occupational disease of being wrongly quoted; but only today we had two hon. members on the other side of the house rise in their places and complain about the same kind of thing. But that is not the case today because in no newspaper article that I have seen has any statement appeared in quotation marks, except one or two words, and then a gap. What is increasingly common, as we all know, is that in newspaper reporting, particularly of the kind of meeting that we were attending, a young reporter, in his desire to shorten his report, puts in his own words what he thinks you say. We have all suffered from that kind of thing at times.
On the whole, the newspapers do exceptionally well, but in this case they slipped. Many papers in Canada jumped on the bandwagon. What happened was simply this. A meeting had been arranged in the Oak Bay high school, at which I, as the representative of the constituency of which Oak Bay is a part, was to be the speaker. I found that the Minister of Citizenship and Immigration was to be in Victoria on business, and I persuaded him to speak at the meeting, which he did, and he made a jolly good speech, too. He did speak about immigration and he did mention Canadian babies, but not in the way it has been reported. Let me end this by reading an editorial which appeared in the Victoria Daily Times of Saturday, April 16, written after the adverse publicity in the eastern press, and by a man who was present at the meeting:
What Mr. Pickersgill said:
Mr. Pickersgill's speech in Oak Bay a few nights ago apparently has become something of a cause celebre in national politics. The Minister of Citizenship and Immigration has been made the victim of a gross distortion in some newspapers.
He was quoted as saying, in effect, that native-born Canadians are superior to foreign immigrants. He said just the opposite, as the news report in the Times recorded next day.
The Budget-Mr. Fairey
The Oak Bay audience which heard him will remember that, choosing his words with obvious care, he said that he was an unrepentant believer in "the cradle" as the best method of increasing the nation's population. He immediately added that he did not mean to say for a moment that Canadians were superior to foreign peoples and hoped he would never be so foolish as to suggest such a thing.
He argued only that a child born in Canada could be adjusted to the ways of Canada more rapidly and completely than a foreigner who must learn an entirely new way of life. But as the cradles of Canada could not produce all the people needed in our under-populated country it was necessary to encourage immigration, which he is doing.
Few Canadians will disagree with a statement so obviously sound. Reported as it was delivered it would cause little comment and general approval. But Mr. Pickersgill reaches Ottawa to find himself quoted in the eastern press as announcing a crude racialist theory of Canadian superiority, which was the last thing in his mind.
Even though he denies such a statement in parliament, even though some newspapers have quoted him accurately, many Canadians who do not read the news carefully no doubt will continue to believe the original distortion.
This is the final paragraph, and the most important:
For this some unknown newspaper reporters are solely responsible. Their newspapers should be the first to offer Mr. Pickersgill a public apology and a full, accurate report of what he actually said in Oak Bay.
I led up to a suggestion that we had a choice in preparing for a great Canadian industrial economy by choosing between instituting a vigorous immigration policy for trained mechanics and training our own, but I got sidetracked onto this other thing.
I have given it as my firm opinion on more than one occasion that Canada must look to its own for its skilled workers. It is pathetic to ponder on the meagre efforts now made in this regard. Our universities are crowded with first-class students. The applied science faculties are crowded to capacity. Day and evening classes are offered at most of our universities in business administration, management, salesmanship and so forth. But what are we doing for the basic need, the skilled craftsmen who translate the ideas and the plans of the engineer into tangible goods? We talk very boastfully of projects such as Kitimat, steel mills on the Pacific, pulp mills running into millions of dollars, the Frobisher scheme, the great industries around Edmonton and tremendous factory expansion schemes in the great provinces of Ontario and Quebec. Where are the skilled men to come from to man all these expanded industries? Please remember that it is the unskilled man who is first unemployed. Moreover, to take advantage of these expansions, the labour force must not only be skilled but it must be mobile.

The Budget-Mr. Fairey
The hon. member for Cape Breton South (Mr. Gillis) breaks his heart over the plight of miners in the province of Nova Scotia, who are facing, as they must, a dying industry there. They cannot be left gazing at a closed mine; they are too valuable. Men used to hard work and anxious to continue at it must either be trained for new jobs and moved where the jobs are, or be trained for jobs in industry which may be induced to locate in their own particular districts. At any rate, Mr. Speaker, surely this is important enough, vital enough and urgent enough to be considered a federal responsibility, as it affects the whole of Canada.
What has been done? Well, I am not going to be too long over this because I talked about it during the last session. Assistance to the provinces has been provided over a period of years. First of all, there was the Technical Education Act of the 1900's, which provided $10 million over the period of 10 years, and that was the end of that. Then the depression forced the establishment of a number of vocational or shop training schemes in improvised shops for the most part, and these, together with the provincial technical vocational shops, formed the backbone of the war emergency training program and later the rehabilitation program for the veterans of the war. But, in 1942, this parliament passed the Vocational Training Co-ordination Act, which is a permissive act. It simply authorizes the minister to conclude agreements with the provinces further to assist vocational training. It tied together a number of agreements which had been in effect and authorized the minister to continue. The main agreement, which is called the vocational schools assistance agreement provided $10 million as capital grants; that is, for buildings and major equipment, and $20 million to be allotted at the rate of $2 million a year for 10 years, to be used for maintenance and operation. That agreement expired in 1953 and has been renewed for one year. That is the thing that is causing us concern at the moment. Why was it renewed for only one year? It was renewed for one year to give the federal government an opportunity to look over the situation and decide what is the best thing to do.
I have spoken this afternoon on the importance of training a skilled labour force and I want to suggest what the federal government ought to do. Some people have interpreted the action of this government in renewing the agreements for one year only as a warning that the end of federal assistance is in sight. I urge the contrary view. Surely the accomplishments of the past and the needs of the future demand, not a curtailment of federal


assistance but a considerable increase if a skilled working force of our own people is to be able to man our expanding industry.
Just look around, Mr. Speaker. With the exception of a few schools like the Halifax technical school, the Montreal technical school, the Ryerson Institute in Toronto, a new school in Winnipeg, the Manitoba Technical Institute, the Calgary Polytech and the Vancouver Vocational Institute, we have not adequate training facilities in Canada. The rest of the schools of this type in Canada are simply small industrial arts shops and, as I say, these technical schools are not fully equipped to properly supply the demands which will be made upon them.
We have no school in Canada like the Massachusetts Institute of Technology and the California Tech, and dozens of others in the United States. None of the schools we have is big enough or properly equipped for the task which faces it. There are not enough of them.
Here is another point which is rather important. We have a committee on manpower working under the Department of Labour, and there is also an advisory committee on apprenticeship training. During the past session the Minister of National Health and Welfare (Mr. Martin) asked our approval for a measure to rehabilitate the physically handicapped, the basis of which was rehabilitation training. Where are those people going to be trained? Unless we stimulate the building and equipping and expansion of our vocational training facilities the provinces will be unable to carry this load alone.
This type of school is the most expensive to equip, to man and to operate; this is entirely beyond the capacities of the cities and the municipalities. I have mentioned the mobile nature of the working force that will be required and because of that I think it is a federal responsibility to assume part of the load in this regard. If there is any justification for federal assistance in any field, I submit that this is that field.
Furthermore, any agreement which the federal government may make with the province must be on a long-term basis. No city, no province can plan for education, certainly in the technical field, on a year to year basis. I was bold enough to go into the conference the other morning when the provincial premiers were making their initial addresses. I heard one say that there must be agreements for at least five years, but in my view five years is too short. I would go further and say that there should be a permanent arrangement.

Furthermore, any funds which are allotted should be adequate. I realize that that is a very loose term. I know we have had $10 million in the last 10 years for capital account, but I submit that $10 million would not do much more than build one school. There will have to be more money for capital account and for equipment and then assistance must be provided for the operation and the continuance of the work of these schools.
Lastly, and I think this is a most important thing, the funds allotted should not be merged into a general subsidy. I was a member of the vocational training advisory council, and I have also been a civil servant. I know that in a desire to simplify administration it is quite easy to suggest that it would be better to lump all this enormous number-it is an enormous number-of federal grants into one grant, and say to the province, "Here, take this and administer it yourself".
My answer is that that should not be done, for the simple reason that unless the federal grant is earmarked for a particular purpose the chances are that once it gets into the provincial treasury it will not come out in the same way and for the purpose for which it was allotted.
Therefore I am pleading that any financial arrangements made between the provinces and the federal government in connection with vocational training and technical assistance should be such that the assistance given by the federal government should form a separate fund and be kept separate from any general subsidy.
Lest I be thought to be one-sided, lest it be thought that a person interested in technical education has no interest whatever in other kinds of education, lest it be thought that one is either intellectual or not-of course I disagree with that entirely-I want to say that it was a matter of great satisfaction to me, and I am sure to all of us, to hear the statement made by the Prime Minister (Mr. St. Laurent) on Thursday last that it is still the intention of the government to recommend to parliament the establishment of the Canada Council.
While I have stressed the importance of training a skilled work force, and while I urge its vital importance, that is not to say that the more intellectual pursuits are not of equal importance. This council will be concerned with the arts, letters and sciences and it can do much to raise the cultural standards of our people so that both forms of education or training may march side by side, in no way antagonistic the one to the other but each contributing in its own way to the growth and development of a rich and satisfying way of life.
The Budget-Mr. Harkness


Mr. D. S. Harkness (Calgary North):: Mr. Speaker, I wish to carry on my part in this debate in the traditional manner by taking up a totally different subject. During the past two or three weeks I have been reading editorials which have appeared in some of our newspapers dealing with the budget, and I am sure the Minister of Finance (Mr. Harris) has also. I would think that probably as a result of that reading he may be having a few doubts as to how good the budget is, although he certainly seemed to have no doubts on budget night. I should like to read from these editorial comments briefly. The first is from the Vancouver Sun of April 6 and it reads:
Economic experts may now speculate about the minister's reasons for bringing down a deficit budget for what he expects to be the most prosperous year in the nation's history. Mr. Harris himself didn't say . . .
Our own guess is that Mr. Harris kept mum because it would be too hard to supply a rational explanation.
The last thing I pretend to be is an economic expert. However, one does not need to be an economic expert to see some of the irrational aspects of this budget. One of the basic premises from which the minister proceeded to make his calculations and estimates in regard to what the gross national product would be and so forth was that the poor grain crop last year in western Canada was largely responsible for the decline in the gross national product, that it had had a generally depressing effect on the economy of the country and therefore was responsible for the deficit.
To a quite considerable extent that is a demonstrable fallacy. It seems to be government policy to blame the weather last year in the west for any economic difficulties which are being experienced at the present time. The Minister of Agriculture (Mr. Gardiner) set the pattern for this when speaking in an earlier debate. He said that the poor western grain crop last year was completely responsible for any difficulties in which the farmers found themselves, for the general economic picture, and so forth. In other words the Minister of Finance was simply picking up that assertion of the Minister of Agriculture and making it one of the basic premises on which he based his budget calculations.
At that time, in the previous debate, I pointed out that the Minister of Agriculture (Mr. Gardiner) was completely wrong. I pointed out that last year's bad crop had very little effect on the cash position of the farmer for the year just past and that it would make its effect felt in this present

The Budget-Mr. Harkness year 1955. When the hon. member for Rose-town-Biggar (Mr. Coldwell) spoke in this debate I notice that he took up the same point and pointed out that this assumption made by the minister was quite wrong.
As the budget is based, to quite a large extent, on this demonstrable fallacy, one is [DOT] led to look with the greatest of suspicion on all of the conclusions that are drawn from that basic fallacy. Particularly, one is bound to look with the greatest possible doubt on the estimate of what the gross national product will be for this present year and therefore on the estimate of government revenues which will be produced.
As a matter of fact, the poor crop in 1954 will make itself felt in this coming year, 1955, and will cause the western farmers' income to be greatly reduced both because of the fact that the crop was low in number of bushels and because it was of poor quality and will therefore bring a low price. The result of the combination of these factors is that the farmers in the west are going to have considerably less money in their pockets this year than they had last year, rather than more, and less money to put in the general stream of the economy. Unless a great deal more wheat is sold this year than was sold last year, the western farmers' income just cannot help being greatly reduced, with all of the consequent general depressing effect on the economy which the minister spoke of in his budget address.
In view of all this and in view of the poor prospects at the present time for a large increase in wheat sales this year, I think the minister's estimate of a gross national product of $25J billion for this year-rising, as a matter of fact, to a rate of $26 billion by the end of the year-is quite unrealistic. Similarly I think that the estimate of his deficit as being only $194 million is equally unrealistic. It is extremely difficult to see how this deficit will not be much more than $194 million. It seems to me that in his budget the minister would have been much more honest had he taken account of what the actual economic situation is at the present time and what it is bound to be as far as the western wheat farmer is concerned instead of saying: If we have a good crop our gross national product will be up, our revenues will be up and so on, and therefore I am budgeting for a deficit of $194 million. The easiest thing in the world to do is to make yourself look foolish a year from now by making predictions about what the deficit is likely to be or not to be. However, barring a war or something of that sort, I shall be greatly surprised if the minister does not have a much greater deficit than $194 million.

As the amount of grain produced and marketed, together with the price at which it is sold, has such a marked effect on the Canadian economy and therefore on government revenues, I propose to go into the present wheat situation in some detail. At this point I may say that I find that it is hard to get at what the wheat situation is at any particular time. There is a terrific mass of statistics which more or less overwhelm one when one starts trying to wade through them. In addition to that fact, the wheat board will not give out the sales figures for the current year. Hence all you can do is make your own estimate in connection with those figures, on the basis of the disappearance of wheat-figures for which are given out-and things of that sort.
Again, in addition to that, the statements issued by the government and by the wheat board from time to time seem to vary in order to make the situation appear better than it is or to make the situation appear to be what the government wants people to believe it is. An example of this sort of thing has occurred quite recently. I refer to Hansard for Friday, January 21. On that day the hon. member for Prince Albert (Mr. Diefenbaker) asked the Minister of Trade and Commerce (Mr. Howe) why it was that Canada's share of the over-all wheat market had dropped while the share of three other countries had increased. As reported at page 403 of Hansard the Minister of Trade and Commerce replied as follows:
They may be in the records, but my hon. friend is looking at shipments rather than sales . . . It is really the sales that count.
In other words the minister at that point was maintaining that the thing that was important was the sales of wheat and that the fact that exports had dropped was a matter of no importance. He was maintaining that you really must base your calculations on the sales. Last year, when the sales of wheat were quite low, in the committee on agriculture I tried to make that very point, namely that in order to get any idea what the return to the farmers was likely to be or what the general grain situation was likely to be, we must look at the picture of sales. But, Mr. Speaker, if you look at the minutes of proceedings and evidence of the committee on agriculture and colonization for last year at page 139 you will find what was said by Mr. Mclvor who was then giving evidence, and the Minister of Trade and Commerce was sitting beside him. After I had tried for a considerable length of time to impress upon him this point that sales were important and so forth, Mr. Mclvor said this:
A. Mr. Harkness does not agree, but I think the figures we should look at are the exports figures. Once you get the sales you get into a variable thing that does not give a true picture.

In other words, last year when exports were better than sales, the only thing that was important really was the exports; sales just gave you a false picture. This year when the minister says that sales are much better than they were at this time last year-but we do not know what the figures are because the wheat board will not give them out-he says that sales are the important thing and that we should not pay any attention to exports. All these things merely serve to confuse the picture and, as I say, make it difficult to find out what the situation actually is.
Subsequent statements by the Minister of Trade and Commerce and by the acting minister, in answer to questions asked by members of the house, were to the effect that the sales this year are expected to be as good as or better than they were last year. It will be necessary for them to be much better. That is, if we get a reasonably good crop this year, it will be necessary for them to be much better. Otherwise our carry-over of unsold wheat will reach a new record and farmers will be able to deliver little, if any, of this year's crop; I refer to the 1955 crop. Sales for the 1953-54 pool period-that is the last pool period, the one from August 1, 1953 to July 31, 1954-were only 271-5 million bushels. The carry-over in 1954 rose at one time to a high of 740-7 million bushels. That was in March a year ago. At March 31 this year, that carry-over had been reduced but it was still 621-5 million bushels or nearly double the average carry-over for the period from 1945 to 1953. In other words, we still have an extremely large amount of unsold wheat. We have a big carry-over. A reasonably good crop in the present year of 1955, a crop of 400 million to 500 million bushels, will mean an increase in the carryover. At a sales rate of 270 million bushels a year, which is what the minister hopes we will reach, and provided we have a reasonably good crop of 400 million to 500 million bushels, the carry-over will increase to over 900 million bushels. If we get a crop of over 600 million bushels such as we had in 1952 and 1953, it will bring the carry-over up to over a billion bushels.
Every farmer naturally hopes he will have a good crop this year. He dares not hope otherwise, but having in mind the present carry-over, the prospect of what a good crop will do to that carry-over, plus of course the fact of the very large carry-over in the United States, he is very apprehensive as to the price he will receive for the wheat he will grow this year and the wheat he still has on his farm from the crops of last year 50433-207
The Budget-Mr. Harkness
and the year before. He is also very apprehensive as to how much of this year's crop he will be able to deliver.
Without any question, it is a very serious situation and the government deals with it simply by turning out soothing statements. That is all they do about it. They make statements which really give a wrong impression as to what the situation is. At the same time they talk about anyone who attempts to state what the actual situation is as being unpatriotic. They say he is going to spoil our markets abroad as though the people who are buying our grain do not know the situation far better, I suppose, than anyone in this house. In other words, the government says: Oh, you should not mention our large carry-over; it will discourage foreign buyers from buying. Such talk is completely ridiculous.
What the government should do is to face the situation and make greatly increased efforts to dispose of our wheat. They should also be doing something about increasing storage space, a matter I have mentioned several times during the past three or four years when we were having big crops and there was a storage problem.
I should now like to turn to another aspect of the wheat picture, and the most important one in a way as far as the individual farmer is concerned. I refer to the amount of money the farmer actually gets into his hands, which of course goes from there into the general stream of the economy through payment by him for food, clothing, machinery and so on. The amount of money received by farmers was very materially reduced during the 1953-54 pool period compared with the 1952-53 period. I should like to note what the figures were. In the 1952-53 pool the farmers received, by way of initial, interim and final payments, a total of $940.5 million. In the 1953-54 pool they received by way of initial payments $535.8 million. The only way I can get at what they are going to receive in addition is by making estimates from the wheat board reports, and on the basis of these estimates I think the amount will be approximately $50 million. It will certainly not be very much more or less than $50 million.
When the farmers get the final payment, about which the Minister of Trade and Commerce (Mr. Howe) has promised to make a statement shortly after he returns, they will have received $585-8 million, or a reduction of $364-6 million in one year. It is no wonder that sales of farm machinery, machines, trucks and all sorts of other things are very considerably reduced. The farmers have received that much less money to spend. For

The Budget-Mr. Harkness the sake of accuracy, I should mention that these prices are basis Fort William. Therefore the farmers' freight costs would have to be deducted from these figures so that instead of the amount being $364 million it would perhaps be $350 million. The farmers have received that much less than they did the year before.
With respect to payment to farmers for wheat delivered, settlement has of course been made for what they delivered in previous years, but for 1953-54 they received an initial payment of $1.40 a bushel, less freight of course, and an interim payment of 10 cents a bushel. The interim payment of 10 cents a bushel means that they received another $39-8 million. Therefore out of the estimated figure of $50 million to complete payment there now remains only a little over $10 million which means, as far as I can see, that the final payment, which has been looked forward to with a great deal of eagerness and anxiety, is likely to be between two and three cents a bushel. Unless I have completely misread the wheat board report

 and I am fairly sure I have not-unless some money is to come from the government in the form of an advance or wheat remaining on hand is taken at a price considerably above the current market price, the final payment, as far as I can see, would only amount to between two and three cents a bushel which, rather than being welcomed with open arms, is going to be welcomed with great gnashing of teeth.
To turn to the future, the prospects for the 1954-55 pool period are much worse. That is the period we are in right now. In other words, it is the pool period in which the poor crop grown last year is being marketed plus, of course, wheat from the other crops still unsold. The estimated western wheat crop in 1954 was only 274 million bushels. Most of it was of low quality. As a matter of fact, a good deal of it was No. 5, No. 6 and feed wheat. This wheat would bring the farmer an average of less than 90 cents a bushel as far as the initial payment is concerned. That is all the cash he would actually get in his hands. Some would get quite a bit less than that depending on their distance from the head of the lakes.
Thus it is easy to see that the cash received for wheat in the 1954-55 period will be much less than last year. It just has to be a great deal less because the amount of wheat is small, it is of low quality and the price is down. This of course will have a consequent effect on the general economy.
I should also like to say something about a fairly general misconception which exists that the price of wheat is reasonably good.


This is certainly not the case as far as returns to the farmer are concerned, particularly compared with the cost of the things he has to buy. The average price received for wheat sold in the 1953-54 pool year, the one just ended, was $1.75 a bushel, basis Fort William. But what did the farmer get? That is quite a different story. I calculate that the carrying charges on the 1953-54 pool wheat sold were 21 cents a bushel, according to the wheat board report. One can calculate that the charges would be around that figure because most of this wheat was in storage about 18 months. The elevator charges would come to about 15 cents a bushel and as the wheat was bought from the farmers with borrowed money the interest charges would come to another 5, 6, or 7 cents a bushel. Therefore, taking elevator charges and interest charges, you get a cost just for carrying the wheat of something in the neighbourhood of 21 cents a bushel. This will bring the price down immediately to $1.54. From this, of course, has to be deducted the freight which would average probably 17 cents a bushel. In my own case I think the freight from my shipping point is 22 cents a bushel. The freight from some points in Manitoba would be much less than that, but I believe the cost of freight would average about 17 cents a bushel. This brings the price down to $1.37.
Now, in terms of the 1935-39 dollar, this means that a farmer is getting not more than 65 cents a bushel at the most for this wheat. This price was considered so ruinous in the thirties that as a matter of fact the Bennett government, which receives so much abuse from hon. members to your right, put a floor under wheat of 90 cents a bushel in 1935. This would be equal to a price at the present time, basis Fort William, of $2 per bushel. In other words, the price the farmer is getting in terms of real purchasing power is less now than it was in the period so frequently referred to as the dirty thirties. This is a point which I believe most people, particularly in the eastern part of this country, have failed to realize.
The returns per bushel on wheat for the 1954-55 pool, that is for grain grown last year, show an even grimmer picture. The result will not be anything like this price of $1.37 per bushel. For example, I delivered two loads of wheat from my last year's crop which made up the 300 bushels I was allowed to deliver last fall to the elevator. One load was No. 5 and it netted me 85-5 cents per bushel. The other load was No. 6 and I received 83-5 cents per bushel. This was my initial payment. On the basis of the final payment made last year I would say we are going to be very fortunate if it comes to

15 cents a bushel this next year. In other words, I think I will probably be lucky if I get a total return of $1 per bushel for that wheat. A great deal of last year's wheat crop was No. 5, No. 6 and feed-in other words very low priced wheat. The people closer to the head of the lakes, of course, will receive a few cents more.
In any event, I do not think there is any question but that the returns to the farmers on a great deal of last year's low quality crop will not be sufficient to cover expenses. Under these circumstances how much prospect is there of the farmers buying large quantities of new machinery, trucks, automobiles and such things, thus boosting the general economy of the country and improving government revenue for the year 1955? There is just no prospect of that. If we get a good crop this year, and everyone hopes we will, it will not help the cash position of the farmers in 1955 very much. The elevators are filled with grain, and they will be filled when this new crop starts to come off. Thus, the farmers will be able to deliver only an extremely small amount which will not enable them to cover their harvesting expenses. The cash position in 1955, therefore, will not be benefited to an appreciable extent even if we get the best crop we have ever had.
Well, Mr. Speaker, I am not preaching blue ruin. I am quite certain that western agriculture will come through these difficulties and that the grain farmers of the west will continue, as they have in the past, to be one of the mainstays of the Canadian economy. However, the economic picture for this year is anything but the rosy one which the Minister of Finance (Mr. Harris) painted. I believe he would have been better advised to take this picture into account, rather than base his budget on vague hopes, and base his estimates on those hopes.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
Mr. A. B. Weselak (Springfield):: Mr. Speaker, I listened with considerable interest to the remarks of the speaker who preceded me, the hon. member for Calgary North (Mr. Harkness), and particularly when he pyramided figures of wheat board costs of operation per bushel. He stated he was not too sure of some of his figures; but if he had examined the wheat board report for the crop year 1953-54 he would have found that 50433-207J
The Budget-Mr. Weselak the receipts of the board were 398,031,819 bushels. He would have found that the cost of operation, including carrying charges, terminal storage, interest and bank charges, handling stop-off and diversion charges, drying charges and administrative and general expenses totalled $35,767,299.77. It would have been a simple matter of mathematical calculation to arrive at a figure of less than nine cents a bushel as the total cost chargeable to farmers in that pool.
In entering this debate I propose to restrict my remarks in the main to aspects of the budget which relate to our international position in the matter of trade. Before doing so I should like to comment generally upon the budget as a whole and to congratulate the Minister of Finance (Mr. Harris) upon the responsible approach he has taken in preparing his first budget and the capabilities he displayed in presenting it.
The past year has seen a drop in the gross national product of 2 per cent, which has reflected itself in loss of national revenues and a resulting deficit in the past year. This drop, as has been stated, was mainly due to a poor crop in western Canada which has resulted in a slowing down of economic activities by reason of the fact that farmers curtailed purchases last year when they saw their crop deteriorate owing to the weather. To help accelerate recovery from this situation, which in the past few months has shown signs of improvement, the tax reductions in the budget are welcomed; and while their effects may not immediately be obvious they will no doubt have the effect of encouraging economic expansion and stimulating business activity in this country.
I see nothing seriously wrong with limited deficit financing in times when a lift is needed to stimulate activity and relieve unemployment. Every prudent person believes in accumulating for the time when he may be short. From 1945 to 1954 substantial surpluses had accrued, when times were buoyant. Now it is only common sense if necessary within a limited degree to budget for deficits when economic conditions warrant such action. We have heard the criticism that we are borrowing on the future. It can be just as well said that we are cashing in on the past, when surpluses were budgeted for and did accrue to the treasury.
As to the relief given, income tax reductions will provide additional purchasing power. Added stimulus will be given to corporate investment by the slight reductions in corporation taxes. The reduction of the excise tax on automobiles will leave further purchasing power available and assist the automobile industry. Reductions in tariff items on agricultural items will also reduce
3263	HOUSE OF
The Budget-Mr. Weselak
the cost of farm operations. These concessions were well placed, and all will help the expansion of economic activity in the country and so promote employment.
In the amendment proposed by the official opposition we find the charge that the government has failed to recognize the serious position in which the Canadian farmer and other producers find themselves. I stated at the outset of my remarks that I intended to direct my remarks to our trade situation, which I presume is the item of government activity at which this charge is levelled.
In the course of this debate and others we have heard from opposition benches charges to the effect that Canada has lost her British market, and also to the effect that this government has callously ignored the difficulties of certain industries in which unemployment exists, and that it has failed to provide adequate work for these people and their employees.
The reduction of our sales to Great Britain has been the result of many factors. In the debate in reply to the speech from the throne I drew attention to the fact that the comparative prices of agricultural products laid down in England by other countries were substantially lower than prices existing in Canada for the same products. I expressed the opinion that this competition could only be met by export subsidies or substantial reduction in domestic prices.
There is however another reason for the drop in our exports to England, and this applies not only to England but to all countries with which we have trade relations. And that is the practical problem of balance of trade.
Our goods can only be paid for by buying the goods of others, in the field of international trade. The hard fact is that we either take goods in payment or cease to exist as a trading nation. We cannot eat 400 million bushels of wheat, consume $915 million worth of pulp and newsprint, or our mineral production. Unless we can dispose of this production we cannot pay the producers of these commodities and they in turn cannot pay those employed by them and those who service them and supply them with equipment and materials.
We have repeatedly heard the argument in this house "Let us bar foreign goods and make work for Canadians". This would be all very well if we were a self-sufficient nation and independent of world trade; but we are not and therefore must be realistic in our approach to the problem. And it is my observation that this government, in spite of most pressing demands from the opposition and many industries, has resisted,


in the interests of our Canadian economy, these demands for more protection which would have the effect of barring foreign imports and of increasing prices to con-sinners.
In specific cases and on particular merit, adjustments may be necessary and. advisable; but any broad blanket advocation of higher protection is certainly not in the national interest.
Particular reference in this debate has been made to the textile woollen industry and to the unemployment resulting from British competition, and the inference has been left to the effect that the government has given no consideration to this problem.
In all fairness, I believe that the record of this government in this regard should be brought to the attention of the public and in the limited time available I propose to deal with this matter.
On May 12, 1954, as a result of numerous representations from the woollen industry and those dependent upon it, the former minister of finance directed the tariff board to make a study under the Tariff Board Act of item 554b of the customs tariff, which provides for a tariff on woven fabrics composed wholly or in part of yarns of wool or hair n.o.p. a British preferential tariff of 20 per cent, and 12 cents per pound but not to exceed 50 cents per pound.
As a result of this direction, hearings were held in Ottawa and a number of plants were visited by the board and their economists. Appearing before the board were representatives of the Canadian industry, of the British wool industry, boards of trade of communities affected, agricultural associations, manufacturers, consumers and others. In all, 58 associations, companies and organizations submitted evidence or made representations.
The evidence indicates that those appearing before the board realized the seriousness of the woollen textile situation, sympathized with the workers who had lost their jobs, with the communities affected and with those who had invested their savings in the plants which have been closed. Nevertheless, it was the belief of many that the practice of helping a languishing industry by increased tariff protection, when other causes were the main contributing factors, was not sound.
In the direction to the board, in addition to requesting all relevant information concerning the woollen industry, the minister also requested all relevant information concerning as well the implications for the Canadian economy of imports of wool fabrics from the United Kingdom.
In the evidence submitted it was shown that our imports from England in 1952 were

roughly $360 million; in 1953 $453 million, and the latest information indicates that in 1954 they had dropped to $392 million. Of these amounts, in 1952 woollen textiles accounted for $29 million; in 1953 for $38 million and in 1954 to a lesser amount averaging in recent years about $33 million a year, or about 12 per cent of the total earnings from sales of British goods in Canada. Our exports to the United Kingdom fell in 1954 to $652 million from $665 million in 1953.
The board therefore had two directives: first, to determine whether tariff item 554b was the cause of the difficulty in the wool cloth industry and, secondly, to inform the government regarding the implications a tariff increase might have on our trade relations with the United Kingdom.
In the hearings before the board, the industry and its supporters including suppliers of material, technicians, labour unions and some municipal authorities, argued that the real cause of the disaster that had overtaken the industry lay in the devastating effect upon prices in Canada of competition from British producers and the increased volume of their shipments to Canada. On the other hand, opposing parties, particularly the national council of clothing manufacturers of Canada, the United Kingdom wool textile delegation, the Canadian Federation of Agriculture and the interprovincial farm union council contended that although there were other causes, the major cause of the difficulty in the industry was the declining total demand in Canada for wool cloth, and that the import of British wool cloths, as such, was not the main cause of their difficulty.
The board report discloses that since 1948 there has been a drastic decline in the total consumption in Canada of wool fabrics, a drop from 47.5 million linear yards in 1948 to an estimated 31 million in 1954. In the war years and to 1948, demand was strong and the industry thrived, but by 1949 the demand began to decrease. The outbreak of the war in Korea, however, led to increased production and prices and by March, 1951, wool prices had risen three times higher than in June, 1950. This was followed by a drop in price by September of the same year of 64 per cent. Large inventory losses were sustained, weakening the financial position of the industry. In 1952 demand dropped still further, plants were forced to shorter time and employment declined considerably. In 1953, some improvement was noted which carried into 1954.
The report then proceeds to discuss the factors which contributed to the decline in
The Budget-Mr. Weselak demand, such as changes in type of demand, production of worsteds, cloths, woollens and blends.
In their reference to the 17 closed mills, the board expressed the opinion that their closing was probably due to a combination of factors, stating that there was no doubt that the management of some of the older mills, of which there were 11 closed, were not as alert and efficient as they should have been. Old machinery had not been replaced as it depreciated; often no salesmen were employed to meet competitive markets in recent years and, finally, they had failed to adapt production to changing demand.
The findings of the board regarding wages and employment were to the effect that in the industry labour is a substantial item in the cost of production. They found that despite substantial increases since the end of the war, wages were comparatively lower than those paid in other manufacturing industries, the average wage being 111.7 cents per hour in the industry as compared with 141.7 cents per hour for manufacturing generally. To meet the problem of high labour costs, production must be efficient. Manufacturers must take advantage of latest improvement in equipment to make possible considerable reduction in labour costs. The report indicates that full advantage has not been taken by the industry of technological changes which would have a marked effect in making the industry competitive.
The brief of the Canadian Federation of Agriculture points out that productivity in Canada per man hour over the past 30 years has increased about 2 per cent per annum compound rate. On this basis, the production per man hour in the woollen industry should have reached an index of 132 in 1953 instead of 111. It is significant to note that while the productivity per man hour in the woollen industry stood at 111 in 1953, the real wage index for the industry stood at 155.
In examining the financial position of the industry, the board found that from 1939 to
1950	the industry had been profitable. In
1951	and 1952 severe losses were evident in the companies examined and it was evident that a substantial portion of the industry was in serious difficulty. The closing months of 1954, however, showed an upswing in activity and it appeared that this trend would continue.
The report discloses that approximately 1,450 workers had lost their jobs as a result of closed mills, and estimates that 2,800 had been laid off in the period 1949 to 1953, many of whom had found other employment.
After examining conditions in the industry, the board report proceeds to cite and examine

The Budget-Mr. Weselak the causes of its present difficulty and classifies them under the following headings:
1.	Decline in the demand for cloth containing wool.
2.	Competition from synthetic fabrics.
3.	Expansion of production facilities in relation to markets.
4.	Merchandising policy of the industry.
5.	Competition from British wool-cloth exporters.
The board expressed the opinion that the decline in the demand for cloth containing wool had been the most important single factor contributing to the present state of the wool cloth industry, demand having dropped in 1952 by 42 per cent of the 1948 peak and risen in 1953 to a drop of 36 per cent. They attributed this drop mainly to competition from synthetic fabrics, which in many cases have replaced woollens, generally are less expensive and not subject to wide price fluctuations.
Regarding the third item, "expansion of production facilities in relation to markets", the board found that following the war, plants were in a run-down condition. Demand was still heavy, with the result that surpluses previously accumulated were used up to reequip and expand plant facilities in order to meet a market starved by war restrictions. When in 1948 demand decreased it was found that production facilities exceeded the market, competition for available markets increased, prices fell and only the most efficient producers could carry on, and some plants were compelled to close their doors, or operate on part time.
As to the styling and merchandising policy, the board report indicates that considerable criticism was levelled at the industry by manufacturers and consumers for their failure to change styles rapidly enough to meet changes in demand. Apparently, there has already been considerable improvement in the quality and style of many lines of Canadian production as a result of this experience, but markets were lost in the meantime.
Regarding merchandising, the criticism was -that the industry had failed in their promotional campaign of Canadian-produced woollen goods, particularly in making Canadian consumers aware of the quality and good -value of Canadian wool goods and in following up this campaign with a system of labelling to prevent misrepresentation. The report in all fairness indicates that until 1951 this was a minor problem, and that the Canadian manufacturer now realizes that he must ally quality production with an active sales policy if he is to hold his market.

The linal important cause of the industry's trouble, "competition from British wool fabrics", was the main reason for the inquiry since, in its final submission to the board, the wool cloth industry had maintained that, owing to price competition from the United Kingdom industry, its continued existence was in jeopardy.
Of the total decline in the market from 1948 to 1954, which is estimated to have been about 16 million yards, Canadian production was decreased by 11-5 million and British imports by 4-6 million. In all sections of the market British imports had gained ground, but not to the extent that had been generally the belief, namely, 7 per cent in blends, 10 per cent in woollens, and 23 per cent in wool worsteds. This bore out and confirmed the board's deduction that much of the present difficulty was not the result of British competition but rather owing to the general shrinkage in demands for woollen cloths.
In examining the effective rate of duty, the board found that in 1954 the percentage of value for duty was three-tenths of 1 per cent lower than 1948, despite reductions in price, which would indicate that the 50 cent maximum tariff had become the governing rate in most cases, resulting in effect in a specific duty on the commodity. In view of these and other considerations, the board arrived at the conclusion that the effective rate of duty, per se, could not be considered as a cause of the industry's present difficulty, but on the other hand they did not deny that the competitive position of the British and Canadian industry had not changed since 1948.
As a matter of fact, the report points out that Canadian labour costs are 50 per cent higher than those in the United Kingdom, putting the Canadian manufacturer at a disadvantage whioh requires him to reduce labour costs by increased use of laboursaving machines, higher work loads and more efficient planning and operations. The industry is to be commended on recent reports to the effect that cognizance has been taken of this aspect of the problem and that it has been met in many ways.
The report concludes with the observation that rising wage rates and shrinking production have combined to increase the unit costs of Canadian cloth in recent years, with the result that in spite of a corresponding rise in British costs our competitive position has deteriorated.
In summarizing their report, the board had this to say on page 47, which I think is worthy of record, and I quote:
From the board's inquiry into the state of the wool-cloth industry, the following salient facts have emerged:

1.	The total demand in Canada for cloth containing wool has fallen drastically since 1948. The effects of this decline in demand, per se, appear to have been more severe on the woollen than on the worsted section of the industry.
Among the factors contributing to this shrinkage of the market have been:
(a)	the rise in wool prices, 1950-51, causing later inventory losses to the industry and, by the same token, initiating consumer resistance to increasing prices of wool clothing;
(b)	the growing competition of the domestic synthetic industry, which competition seems to be impinging more on woollens than on worsteds;
(c)	the competition of consumer durable goods for consumers' dollars, resulting in consumers spending a decreasing proportion of their income on clothes and personal furnishings.
2.	As a result of the fall in demand, the Canadian market for cloth containing wool has become increasingly competitive; moreover, in recent years British competition has been exerting a strong influence on the level of prices for wool cloths. This influence appears to be stronger in the worsted section of the market.
3.	Rising wage costs and shrinking production have combined to increase the unit cost of Canadian cloth in recent years. In spite of rising British costs this is still considerably higher than that of British exporters.
4.	The effective rate of duty on wool cloth has shown little variation since 1948 and, per se, cannot be considered a cause of the wool cloth industry's present malaise.
Three of the four facts above stated-the shrinkage in total demand, the downward trend of prices, and the rising costs of Canadian producers -when taken together constitute the background to the picture that presented itself as the board's inquiry progressed. They help to explain two further and resultant facts; that employment has fallen, and that some sections of the industry have been and still are in financial distress. Equally, however, they suggest at least that some mills which are responding to the challenging situation will continue to hold their own; and that among those which appear unable to do so further mortalities would seem inevitable.
Hon. members will recall that in December of 1953 Bill No. 29 passed through this house to prevent end of line dumping in Canada, particularly of textile goods. It passed against the vocal protest of some members and with considerable concern on the part of others. Many thought that this was a retrograde step in our efforts to increase our international trade upon which we are so dependent. Recognizing the fact, however, that this type of competition was almost impossible to meet and that the industry was in difficulty the bill went through and became law. The industry, however, felt this was not enough and the result was the reference I have referred to and the board's subsequent report which attributed the difficulty to internal competition in the main rather than to imports.
The Budget-Mr. Weselak
We have heard complaints in this house and in the country of United States nonadherence to the principles of GATT in its establishment of quotas and import restrictions. Usually the United States has good reason for these actions, and a great deal of consideration by their tariff authorities is given to each problem as it arises. The practice in Canada of referring these matters to the tariff board is to be commended and should be continued. Tariffs should not be imposed merely as a result of political pressures to the detriment of the country as a whole and this report is a classic example of the inadvisability of accepting the principle or theory that tariff protection is the only solution to a problem of this nature. This item is also bound by GATT and only the most serious considerations should result in its disturbance.
Hon. members may often wonder why western representatives, be they farmers, business or professional men, are and always have been advocates of low tariffs. The answer lies in the fact that we recognize our dependence on exports. We recognize the fact that this is not only a prairie problem but a national problem. We know that, if we are not able to find remunerative markets for our surplus production, the farmers' and primary producers' purchasing power is cut down. The effect in the cities, towns and villages in these communities is immediately apparent but it does not stop there; it moves to eastern Canada where much of the industry of the country is concentrated, and they too feel the pinch.
It can be said without hesitation that most of the economic difficulties experienced in this country today can be attributed to the decline last year of grain exports to England of almost $300 million and to a loss of crop value this year as a result of weather of a sum similar in amount. Our economy depends upon export of primary products and to a limited extent of raw materials and toward this end this government has done a tremendous job of saving GATT, which has served us so well in restraining other countries from indiscriminately imposing import quotas and prohibitive tariffs against entry of our products. The attitude of the United Kingdom may be gathered from a report in the Winnipeg Tribune of April 13 of this year, which states:
British Labour party leader Clement Attlee said today his party would favour Britain's re-entry into the international wheat agreement but only under certain conditions.
Mr. Attlee hinted that one of the conditions would be for the countries that sell Britain wheat to buy more goods from Britain.

The Budget-Mr. Weselak
And he is directly quoted as saying:
But we also want to sell goods. It depends on whether the people who want to sell us wheat are prepared to buy our goods.
Here we have one of the answers by a responsible statesman from the United Kingdom giving an indication of what an increase in tariff may do to our British market.
The woollen textile industry has asked the government of Canada to abandon its liberal international trade policy which it has been attempting to establish before and since the inception of GATT in 1948. They have asked that protection against British woollen cloth be increased so that British imports will be reduced, hoping that more Canadian wool cloth would be sold in Canada and less British and that more employment would be created in Canada for workers in woollen goods factories. They have asked for what appears to be a simple solution to a difficult problem.
The problem, however, is not that simple. The granting of protection, while it may have temporarily eased the difficulty, would not have provided the solution, and the report so indicates. The real problem to be faced by the industry is the decreasing demand for the product, resulting mainly from competition with synthetics and the need for increased efficiency to levels higher than those achieved in recent years.
Supposing this government had acceded to the request of the industry for a prohibitive tariff, what would have been the results? In the first place the price to the consumer would have increased with the result that there would have been a further swing to synthetics, a swing which was experienced when woollen fabrics reached their high early in 1951. Any decline in the consumption of woollen goods would affect the Canadian industry to a greater extent than it would affect imports. Earlier in my remarks I pointed out that from 1948 to 1954 the market declined by 16 million yards; of this decline the Canadian industry lost 11-5 million yards and importers 4-6 million yards. It is therefore doubtful whether an increase in tariff would help the industry. On the other hand, it might well have the effect of further reducing consumption to the extent that the industry would be in far more serious trouble.
Secondly, granting higher protection to the woollen industry would lead other industries to consider such action as a strong precedent and pressures would be exerted by many industries experiencing difficulty for further tariff protection. Canada has been a leader

in more liberal international trade policies, and any change in our position would strengthen the force in countries which seek to reverse the trend toward greater freedom of international trade.
And, finally, the problem of shortage of dollars which at present limits British purchases in this country is not an academic one, as is well illustrated by the British Labour party leader's remarks which I have just quoted. It is a cold hard fact and something which is well known by the farmers of Canada and other producers who look to the British market to sell their surplus products. A reduction in British exports to Canada as a result of higher tariffs would put into reverse a policy which aims at bringing the day nearer when the pound sterling would be freely convertible and British import restrictions removed. It might be of interest to members to know that the textile industry in England is also in difficulty. I have here a Reuters dispatch which appeared in the Winnipeg Tribune on April 22, which is headlined:
Lancashire Mills Fight to Survive.
Fewer wheels are spinning in the mill towns of Lancashire, where Britain's industrial revolution was born a century ago.
Unemployment is mounting.
Cause of the trouble is increasingly stiff competition from India and Japan, who learned many of the techniques of mechanized textile production from Lancashire.
Their goods, produced with a lower labour cost, are underselling Lancashire textiles overseas and even on the British home market.
Extended stoppages which began before Easter affected nearly 40,000 textile workers and there are widespread fears the unemployment will increase.
Many workers are leaving the industry fearful that unemployment will be chronic. The cotton board disclosed recently that in two months this year 4,000 textile workers left to find more secure jobs.
Indications are that many more plan a switch, even if it means taking lower wages.
The industry as a whole is critical of the Conservative government for not taking action on proposals by employers and trade unions to counter the effect of foreign competition.
But some relief was afforded this week in the budget which cut purchase tax on household textiles.
Walter Lee, secretary of the Oldham operative spinners' association trade union, said: "Confidence in the trade is lacking. Buyers are holding off placing orders except on a hand-to-mouth basis".
Here we have the type of criticism levelled at a Conservative government which a Conservative opposition in Canada sees fit to level at the Liberal administration.
In concluding, Mr. Speaker, I would draw the attention of the house to the closing remarks of the Canadian Federation of Agriculture contained in their brief to the tariff board, which I believe touches the root of

the problem and suggests a possible remedy. I quote now from pages 27 and 28 of the brief:
As we said in our opening remarks, we fully realize the seriousness of the present woollen textile situation. We sympathize with the distress of workers who have lost their jobs, of small towns which have felt the loss of business from unemployment and of businessmen who have invested their savings in these plants which have been closed. In spite of this we do not believe it is sound to attempt, by increased tariff protection, to restore the industry to its post-war high volume of activity.
Up to this time the usual way to help a languishing industry has been to increase its tariff protection. However, we believe that it is time a completely new approach is made to problems of this nature. We believe that where it can be shown that due to fundamental and rather rapid changes in economic conditions an important industry is in serious distress, then the government should accept some responsibility to aid the industry, and especially the employees and communities adversely affected, to reorganize on a sound basis to meet the problems of the changed situation.
There' are probably a number of ways in which this responsibility can be discharged. We will suggest one possible line of approach here.
It may well be that careful examination will show that some of the plants now closed would be able to re-establish themselves in the same towns by producing products in which they have a greater comparative advantage than in woollen cloth production.
We would point out that there are precedents for government assistance in the reorganization of industries which face fundamental and permanent changes in economic conditions. An example of one is the re-organization of the apple industry of the Annapolis valley of Nova Scotia, which we have cited.
Higher tariffs are a burden on consumers every year. Government financial assistance for reorganization on a sound economic basis need only be provided once. Such a policy we believe would be in the national interest and very directly in the interests of the employees, the employers and the towns which are presently in distress.
We put this suggestion forward for consideration believing it to be a more reasonable and sounder solution to the problem than either the proposal of higher protective tariffs or a policy of allowing the economic law of international comparative advantage to take its full toll of an ailing industry.
A lesson might possibly be taken by industry from a Chicago industrialist who appeared before the ways and means committee of the United States congress, which comment appeared in the Winnipeg Tribune on April 8, 1954, as taken from the Globe and Mail. The comment reads:
A Chicago industrialist who has found a stable market for his products against Japanese competitors who pay only one-eighth of his labour costs, Charles H. Percy, laid bare for the ways and means committee of the congress at Washington the story of his company's progress in cost-cutting, product improvement and maintenance of profits, in the face of severe competition from Germany, Japan, England, Switzerland, Austria and Belgium. In one instance his company's competitive bid on tenders open to the world for camera lenses still would have been lowest-and profitable-without the allowance made for tariff protection.
The Budget-Mr. Regier
As a manufacturer of photographic equipment, Mr. Percy's firm has had to meet all the post-war hazards to international trade in their most severe form. It has not been content with revolutionary reforms in production techniques at home. It also has engaged in a form of capital export which shares with foreign collaborators the advantages of those reforms. Annual sales of the company are in excess of $40 million-and he still wants congress to go all the way in the Eisenhower freer trade program.
The climax of Mr. Percy's statement was that these results arose directly from the influence of severe competition, and that it is doubtful whether the new techniques of his firm ever would have been developed without that spur. He now frankly welcomes the opening of the United States market to all comers in his field. If he cannot compete in a certain line, he will abandon its production and let the foreign producer have the market. He did just that in one instance, after taking a loss of a million and a quarter dollars. He holds that this course is good for his industry, for the national economy, and for the promotion of profitable foreign trade in general.
Mr. Percy's all-out advocacy of President Eisenhower's program for freer world trade is thus the result of practical experience as a successful world trader in one of the most competitive of all international industries. His story is one of the most impressive documents in the contemporary economic record. It is recommended without reservation to academic and practical economists, government planners of trade and fiscal policies and to industrialists generally. It is a complete answer to the problem of successful competition.


Erhart Regier: Mr. Speaker, I had prepared a talk on the contents of the budget. However, after hearing what to the people in my area is an announcement of such great importance this afternoon, I am pleased that a little bit of leeway is usually allowed in this debate to enable members to express a few opinions on other matters.
I should like to take this opportunity to express the appreciation of the people of my riding-and I think I also speak for the people of a goodly number of other ridings in the area-when I express our gratitude to the Acting Postmaster General (Mr. Pickers-gill) for his statement this afternoon with regard to the four-cent letter rate in the Vancouver metropolitan area and also with regard to the Burnaby postal services. We therefore are now at the beginning of obtaining an equal deal as compared with the people of the metropolitan areas of Toronto and Montreal. We feel that there are other services which these two older metropolitan areas are receiving; and in time I have no doubt that the members of parliament will be asking for those other privileges.
The four-cent rate means a great deal to the people of the immediate lower mainland. I spoke to one official of an organization that does not send out many letters. I refer to the New Westminster local of the International Woodworkers of America. Their

The Budget-Mr. Regier office management informed me that the four-cent letter rate would, if implemented, save them in the neighbourhood of $300 to $400 a year. This action means actually hundreds of thousands of dollars in savings to the people and the commercial concerns of the lower mainland. It is therefore no mean announcement that we heard this afternoon.
I realize that the decision was made only very recently, and I believe that the Acting Postmaster General has neglected to include in the area that he designated such smaller points as Port Moody, and Port Coquitlam. I have no doubt that he will see fit to include those points in the four-cent letter zone very shortly.
We have received something that is as important to us in Burnaby as is the four-cent letter rate. We have received recognition of the name of Burnaby. We never found much to complain about with regard to the postal services in our area. We feel that the administration has been good, considering the problems that have had to be met. We have every confidence that the administration will continue to be at least as good as it has been in the years gone by. In fact, the Postmaster General (Mr. Cote) assured us some time ago that no changes would be made that would make any less efficient the postal services that we have been getting. It is now up to the deputy minister and his staff, as responsible civil servants, to see to it that the policy announced this afternoon by the Acting Postmaster General is carried out as efficiently and as speedily as possible.
I have not a doubt in the world that the mayor of New Westminster would have a good deal of advice to offer to the deputy postmaster general on how he is to administer the new set-up. However, in view of the deputy's experience during the past several weeks, I would advise him not to pay too much attention to the head of the city government in New Westminster. He might ask for the advice of the elected municipal officials of Burnaby which, after all, has almost three times the population of New Westminster. When the Acting Postmaster General was answering a question of the hon. member for New Westminster (Mr. Hahn), I think he was not aware of what happened last year when the postage rates were changed. At that time the rates of postage for the rural routes were not raised, and 1 hope I am safe in saying that the rural routes will also be getting the same four-cent letter rate. If he will look at last year's amendment to the postage rates I think he will agree with me.
I should like at this time to pay a heartfelt tribute to the role played in obtaining what we were after by the hon. member for


Bumaby-Richmond (Mr. Goode). Even though he recently threw a little bit of political mud at me back home, I nonetheless feel that he has rendered unique service as a Liberal member of parliament and I should like to hold him up as an example to a lot of other Liberal members of what a forthright rank and file member of the Liberal party is able to accomplish if he is willing to stand on his own two feet and not obey the dictates of the party machine.


Tom Goode: May I interrupt my hon. friend to say that is most kind of him and I appreciate it very much.


Erhart Regier: Here was a case where a political machine, whose spokesmen were the mayor of New Westminster and, I regret to say, an hon. member of the other place, was doing its utmost to undo the worthy efforts of the hon. member for Burnaby-Richmond. I know that the people back home are not going to forget easily how the hon. member for Burnaby-Richmond finally won out after hewing honestly to the line on this matter. I think a great deal of credit is also due to the South Burnaby board of trade who have worked in very close co-operation with the two members of parliament from Burnaby. I know that the North Burnaby board of trade will also be happy about the institution of the metropolitan postal system. In my view Burnaby, as an entity in Canada, has at last been born. It is a new Canadian baby, if you like, and you will be hearing a lot about it in years to come.
I think I should also thank the hon. member for New Westminster for his co-operation and in return offer him my co-operation in some work he is attempting to do. At least, I hope he is attempting to do it. I refer to the cleaning up of the nest of Liberal corruption that exists in his city and has existed for quite a long while. In my opinion one reason why the Liberal party in British Columbia is rapidly going the way of the Liberal party in Saskatchewan is that the people there are fed-up to the teeth with the old type of pork barrel politics that has been responsible for keeping this government in office for so long. I only hope the day is not too far distant when the people of central Canada will also be thoroughly fed up.
I notice that the Minister of Transport (Mr. Marler) is in his place. I know he is considering an auxiliary airport for the lower mainland of British Columbia. Someone has advocated that my riding might be the site of such an airport. I have the advice of the Coquitlam municipal council when I say

that I do not want an auxiliary airport in my riding. I shall be very happy if the Minister of Transport will agree to the demands of the member for New Westminster and see that such an airport is established in the riding of New Westminster.
Discussion so far in the budget debate has largely revolved around the subject of income tax. I believe the income tax was first introduced in Canada as an emergency measure during the first world war. However, after that war was over the income tax was not removed. That was the time I began to hear about such things as income tax, and I still remember the explanation given to me of what an income tax is. I was told that an income tax was a means whereby the federal government took money from those who had more than enough to meet their needs and used it in order to help that section of the population that had less than enough to meet their needs. I always looked upon that as a great thing and a worth-while measure.
When the second world war came we of course used the income tax for various other purposes. We used it to reduce the amount of consumer spending. We lowered the exemptions greatly in order to pay for the war effort as far as possible. However, when a single man earning $1,000 a year has to pay income tax today or a married man earning as little as $2,000 has to pay income tax, the tax has lost its original intent. It is no longer a tax taking money from those who have more than enough in order to help those who have less than enough. When you tax the below average wage earner in Canada you cannot say it is a tax used for the distribution of wealth in the nation. It is taking money out of one pocket of the taxpayer and, minus the cost of administration, placing the net returns in his other pocket. It is robbing Peter to pay Paul. I do not favour that type of income tax, and in levying it I think we should get back to its original intent.
I should like to say a few words about the reductions that have been announced. I fail to see why some people with incomes in the neighbourhood of $7,000 or $8,000 a year should receive a tax reduction of $100 or more whereas other people receive a mere $3, $4 or $5. I think the people who need a tax reduction most, who need the greatest number of dollars in their pockets, are the people in receipt of low incomes. I think the method adopted whereby much help is given to those who do not need help and very little help, if any, to those who need help has done nothing to add to the purchasing power of the Canadian people. If people with incomes of $7,000 or $8,000 pay $100
The Budget-Mr. Regier less in taxes next year they will not use the $100 to add to their purchasing power. If they do anything at all with it, they will add it to their savings. In my opinion raising the basic exemptions would have been much more equitable and would have served a much more useful purpose. All income tax payers would thereby have received an equal tax reduction and the purchasing power of the Canadian people would have been enhanced.
What about the tax reductions that have been given Canadian corporations? I maintain that the tax reduction granted is not going to help any plant or industry facing difficult times to remain open. After all, when corporations make no profit they do not have to pay income tax at all and when you reduce the taxes only for those corporations whose net income is over $20,000 a year, you are not helping one single industrial enterprise to remain in business. You are not supplying a single unemployed man with additional employment. You are not protecting the employment of any of those who are now employed.
These tax reductions to corporations also cause me at this time to protest as vigorously as I can the wholesale robbery that has been occurring on the Canadian scene as a result of what some people fondly call the plough-back method. You look at the financial statements of Canadian corporations, Mr. Speaker, and you will see that time after time corporations making a certain amount of profit will retain a half, or very often over half, of the net earnings. They pay out less than half to the shareholders. I feel that this is outright robbery of the rights of the short-term shareholders in Canadian corporations. The company says it is not paying dividends out as earnings would indicate it is able, but is withholding half the net earnings for the good of the enterprise. However, those who this year own that enterprise will not necessarily be the ones who will reap the fat earnings that may be dished out in later years because of this ploughback.
I feel that if it is not robbery of the shortterm shareholder in those companies, it is robbery of the consumer of the products the company has made because it is obvious the consumer has been charged more than he needed to be charged for the goods. If it is not robbery of the consumers of Canada, it is robbery of the workers who have worked in that enterprise and who have really, by the sweat of their brow, earned those profits and who have received wages that were much less than they might have received. I think that money for re-investment in Canadian business should be honestly
3276	HOUSE OF
The Budget-Mr. Regier obtained by anyone planning either expansion of existing business or the opening of a new business.
I should like also to express my opposition to the false belief that some Canadians seem to have that we can expand ourselves into prosperity. For a while many of us in British Columbia had the notion that as long as there was new investment capital coming in, we could expand ourselves into eternal prosperity. It is about as ridiculous a notion as a wheel of perpetual motion. It reminds me of the individual who is living beyond his means, and month after month has to add to the money he owes in order to meet his ever-increasing debts until he finally winds up in bankruptcy.
How could the little man have been helped on April 5 last? I should like to endorse what the hon. member for Regina City (Mr. Ellis) said yesterday when he said he would have preferred to see some easing of the onerous sales and excise taxes. I believe the little man would have been more than happy if he had heard an announcement that the sales tax on clothing had been removed. I believe the tax on all forms of material needed for the construction of houses should also have been removed. I think the government might have helped the little man who has a modest home and who finds the real estate tax on his home is climbing year by year. It would have helped if the government had announced a policy of low interest rates to municipalities, thereby removing the need for loading homes with the necessary debentures to cover such social needs as paved roads, water works, sewers and so on.
I was pleased to note that at the meeting of provincial premiers with our Prime Minister (Mr. St. Laurent) the governments of British Columbia and Saskatchewan both called for federal aid and participation in a public investment program to meet the rising social needs of the Canadian people. Unless this government is prepared to embark on a public investment program in co-operation with the lower levels of government, we shall find our provincial governments having to resort to ever-rising sales taxes. We will find our municipalities and educational authorities having to continue raising the taxes on our homes.
We in this group, Mr. Speaker, are sound money folk. We do not believe that money can be taken out of the hat or out of a printing machine. We are firmly convinced, and we have the highest regard for the rights of ownership. We believe that all the unsold goods in Canada are owned by somebody, and it is wrong to say we will make more 

money available unless we are fully aware of where we are going to get that money. You cannot add anything to the net purchasing power of the people by simply increasing the amount of currency in circulation. I think that is very simple economics, and has always been endorsed by the Canadian people. However, we do believe the purchasing power of the Canadian people can be vastly extended by having every Canadian who is willing and able to work at work turning out the goods that are necessary. We may think that we can ill afford the necessary $300 million or $500 million that a national health insurance program would cost us. However, having over 600,000 unemployed costs the nation far in excess of the cost of a national health insurance program.
We are also a party that believes in rigid economy and efficiency in government. Because of Liberal propaganda, word seems to have got around that the C.C.F. is a party that does not believe in economy in government. We in the C.C.F., who have such a great social program to offer the Canadian people, are keenly aware that if we are going to meet this obligation to the Canadian people, then the utmost economy and efficiency on the part of those who are handling public funds is necessary.
I should like to mention one other thing that I do not like about our income tax. I do not like this business of some Canadians paying at a different tax rate from other Canadians. Here again I was pleased to note that the premier of British Columbia, when he spoke at the opening of the conference, endorsed a resolution passed last winter by the C.C.F. national council, in so far as it relates to any provincial government that does not want to sign a tax-rental agreement. In that resolution he advocated, as we have done in this house, that the income tax rate should be the same throughout the nation. We feel that the citizens of any province that does not want to sign a tax-rental agreement should be permitted to deduct the full amount of their provincial tax from the federal tax, provided they are willing to admit that such a thing as the national interest exists, and that the over-all control of monetary and fiscal policy at the national level is necessary and that they will not exceed the limits of taxation imposed on other Canadian citizens.
Now, we feel that that is a policy that could have been sold to the people of Quebec. We think the people of that province want to be Canadians, and are just as good Canadians as any of the rest of us. We believe this policy would have been acceptable to them. However, in its wisdom this government chose to announce a unilateral decision

whereby it has now created two types of Canadian citizens, one of which is to have one set of income tax figures, and the other to have another set.
When I spoke in the house on January 12 some hon. members shouted the name of Maillardville. May I inform hon. members now that since that time I have held my finest public meeting at Maillardville, British Columbia. There were some 175 persons at the meeting which, I suggest, is an amazingly good turnout for a political meeting at this time. That meeting concluded in a most harmonious fashion, and I told the people there that as long as they were going to send me to Ottawa I was going to continue to fight, to the utmost of my ability, until I saw the day that their four and a half million fellow citizens, relatives and friends in the province of Quebec enjoyed just as high a standard of living as that of other Canadians. And I shall continue to do so, all misrepresentations notwithstanding.
In the few minutes left at my disposal I should like to speak about markets, because markets for our Canadian goods affect vitally our level of prosperity. I have here the daily bulletin released on April 26 by the dominion bureau of statistics, which shows a growing increase in our trading deficit with the United States and a growing increase in our trading surplus with the United Kingdom. I feel that this is a dangerous course, and that action must be taken to reverse the trend.
The United States buys from us only those goods they have to buy. I do not think the problem is any longer the simple one of free trade or high tariffs. I do not think that Canadians any longer can be classified either as high tariff or free trade citizens. However, if I were asked, I would say that so far as the United States is concerned I am a high tariff man; because I believe it is in the best interests of primary producers in Canada that we have a high tariff policy in our dealings with the United States. I am equally convinced that we should remove tariff barriers in our dealings with the rest of the world.
The rest of the world needs those commodities we have in surplus quantities- surpluses which are hampering our prosperity at the moment. I would like to see, if necessary, even an export tax on our shipments of raw resources into the United States. No longer can we afford to ship raw oil into that country to be refined over there and then sold back to us, thereby robbing Canadians of employment. I do not think that practice can long continue. While I am neither a free trade nor a high tariff man, I am a high tariff man when it comes to the
The Budget-Mr. E. Leduc United States and, if you like, I am a free trade man when it comes to the rest of the world, which requires these commodities we have in surplus.
I believe I have said about all I need to say on that subject. However, I would repeat my regret that the Minister of Finance (Mr. Harris) has not seen fit to raise the exemption levels for the payment of income tax. In my view the reductions he has given are badly distributed, in respect of both corporations and individuals. I feel he is making the rich richer and the poor poorer. He has made no tax concessions I can see that will help over half the population of Canada who pay no income tax. In my view, reductions in excise taxes on articles such as clothing would give at least some help to these people. I see no help for governments at lower levels, nor do I see anything to meet our growing need for social services in Canada. There is nothing for the unemployed- except relief, and the process of turning back to the miserable, hungry thirties. There is nothing to encourage trade so as to help the farmers of Canada, nor is there anything to encourage greater employment in Canadian factories. There is nothing to prevent growing economic enslavement of our nation to the United States of America.
Mr. Speaker, if this is a typical Harris budget, then I would advise the aspirant to the leadership of the Liberal party to apply for leadership in what I like to term the new, and yet so old, Liberal-Conservative party of Canada.
(Translation):


Mr. Edgar Leduc (Jacques Cariier-Lasalle):: Mr. Speaker, on December 15, 1952 when I spoke in this house I asked the Minister of Finance for a tax reduction and, in the spring of 1953 I was greatly pleased to note that the government had decided to lower certain taxes.
In that same speech, I also stated that we should, in the near future, provide assistance for invalid people. At the last session, the government deemed it advisable to enact legislation to that effect, legislation which must be accepted by the participating provinces.
In the last few months the revenue of the government has diminished somewhat on account of crop failures last year and the loss of foreign markets. If we succeed in selling our products on the markets of the world, and that is the problem at present, everything will be back to normal and our revenue will increase.
In spite of the gigantic works undertaken this year, the government has been able to
3278	HOUSE OF
The Budget-Mr. E. Leduc alleviate the burden of the taxpayer, thus leaving him more money for various purchases and giving him some encouragement.
Increased capital investments for the development of our natural resources will also alleviate unemployment-a problem which has been so often in the limelight during this session-and will endow the nation with new wealth.
In spite of this temporary unemployment situation we have reason to look to the future with confidence. Our confidence will increase with the lowering of taxes-of which I will speak-and the vanishing of gloomy pictures such as those that have been painted concerning the present situation.
The government is not wholly responsible for the present unemployment because it cannot alone remedy completely such a situation; economic forces must be favourable and everyone must be willing to co-operate toward its solution. With the help of Providence, which we should seek, we will succeed, but without it all our efforts will be in vain.	,
The debate on the annual budget is an important event anxiously awaited by all taxpayers. The budget can bring about an improvement or a lowering of the standard of living, according as to whether taxes are lowered or increased.
During the previous years when inflation was a major consideration in daily life, the government had looked to compulsory savings and even increased taxes as a means of controlling it. In this way inflation was satisfactorily brought under control, while surpluses were accumulated in order to reduce the national debt in such a way as to deserve general admiration throughout the world.
In the last three years this country has had to go to considerable lengths to organize its defence and fulfil its obligations under the North Atlantic treaty.
These efforts must no doubt continue, but at a somewhat reduced pace, due to suspension of hostilities in Korea, which is such as to provide us with reserves out of our war production. The latter must of necessity be limited, as is evidenced in the budget.
At this moment I am showing my interest in the budget by bringing forward a few suggestions based on several years' experience in the preparation of municipal budgets, smaller in size and simpler than that of the government of this country, but large enough, nevertheless, to convey a general impression of its practical application.
I will draw upon my experience in this field to talk about this question and should my humble suggestions appear worthy of


implementation, I will feel that I have contributed in some degree to the elaboration of measures which cannot fail to bear fruit.
First, a few words on the preparation, adoption and implementation of budgets.
Estimates are prepared by the officers of the various departments which submit them for approval to their respective ministers who, in turn, bring them to the attention of treasury board. In most cases the ministers involved assume that these estimates are necessary to administration.
It is to be expected that those officials whose duty it is to submit the items make sure that the amounts are sufficient, and in order to avoid any deficit they may submit estimates in excess of actual needs.
The taxation rates, which are based upon the total of the estimates, cannot therefore be reduced or can be reduced but little unless our national production increases. Since the increase will be very slight this year, the only way to lower our taxes was through deficit budgeting and a reduction in expenditures.
A perusal of public accounts for 1953 shows that no appropriation has been exceeded and that expenses in many cases have been far less than the amount provided. That is an indication in itself that appropriations were excessive.
A brief look at some items will support my contention. If we take for instance the Department of Agriculture we find the following:
Appropriation
Operation and
Maintenance ... $ 456,586.00 $ Animal pathology 469,246.00
Dairy research
Bacteriology . .	456,586.00
Expenses
450,993.83
435.065.00
450.993.00
Botany and Plant
pathology	
1,233,231.00	1,156,959.00Chemistry	
641,705.00	607,690.00
Entomology,
Operation and
Maintenance . . . 1,814,150.00	1,708,168.00

Excess of
appropriations	$1,105,974.00
To obviate the difficulty created by the fact that no appropriation can be exceeded, only the total amount of the appropriations of a particular service could be taken into account; it would be in order to make transfers from one item to the other provided that the total amount of the estimates for a particular service is not exceeded.

Thus, officials would not be tempted to try to get approval for larger amounts on each item for fear of a possible deficit on any of them, if it were possible to make transfers from one account to another.
Such a policy would reduce the estimates and would have every department control and administer funds on a scale much smaller than the present one.
These suggestions are made in a constructive way and in the light of practical experience gained in another administrative field which has been fruitful and which could not be but fruitful also in this field.
I make them in the hope that they may be used to ease the income tax burden.
On the other hand, if it is not advisable to spend more than the amount of the appropriation, with the difference to be made up through a transfer from another item of the same department which could have the amount provided reduced or from the total appropriation, and if it is deemed advisable to keep the present system, I think that, as far as taxes are concerned, the means of previous surpluses could be used to reduce taxes.
It will be said that these surpluses have been used to cut down our debt. Very well, but we must remember that this generation has been called upon to pay for three wars as well as for the cost of unemployment relief in the years 1933-39.
Therefore, would it not be fitting that the next generation, which will be more numerous and which will know a better standard of living, should look after that debt?
The coming generation and those that will follow will profit more than those of the last two or three decades from the benefits of social welfare available to them. So I think that they could very well look after the gradual reduction of that debt.
I am one of those who believe in the future of this country, and the present generation, which has toiled so hard, should get some respite; we should grant it that respite as far as it is possible to do so.
I expect that the federal-provincial conference will bring about a discussion which may dispel any misunderstanding or erroneous concept of the part to be played by the administration in the best interest of this country.
The Quebec provincial income tax was imposed as a result of a lack of understanding and we must try to find a basis for agreement.
If we are unable, in this country, to reach such an agreement, how can we hope to
The Budget-Mr. E. Leduc pacify hostile nations and bring about a world-wide peace?
The leaders of a country must trust each other, and it should be possible to smooth out or even avoid any difficulties that might arise by mutual, fair and reciprocal concessions and providing that the advancement of this country is put above all other considerations of a personal or purely regional nature.
A spirit of conciliation has arisen that should be beneficial to our country; the clouded horizon of yesterday is clearing up and a more enlightened optimism prevails. Let us consider our problems without acrimony and prejudice and we shall get to understand each other better and deserve the title of Canadian citizens who have at heart the progress and the interests of this country which should gain in stature and importance as well as in moral and material greatness.
Considering the 1955-56 budget that has been brought down, the hon. Minister of Finance (Mr. Harris) is counting, for this fiscal year, on an increase in business and on a reduction of administration costs.
I congratulate him on this; it made possible a reduction of personal and corporate income taxes and he will probably avoid the expected deficit if conditions get somewhat better.
I am of the opinion that the reduction of certain appropriations would help to impress upon the officials of the various departments concerned the principle of thrift which would enable them to run their respective branches on their estimates, or thereabouts.
The most efficient means at our disposal to manage the country economically would be, I think, to try to reduce all appropriations that could be reduced, and there must be several of them, according to the statement I referred to a moment ago.
(Text) :
During the course of the debate on the act to amend the [DOT] Municipal Grants Act, I listened attentively to the speech of the hon. member for Assiniboia (Mr. Argue), who stated that 99 per cent of the municipalities were not in a position to meet their expenditures and look after their administration properly owing to lack of funds. I was astonished to hear such a declaration, knowing that it is far from the truth. I desire to remind him that this percentage of 99 per cent comes from his own imagination, and is not borne out by the facts. As I look over the different municipalities in my own county and neighbouring counties, I can state to the hon. gentleman that this year Lachine has reduced its taxes 20 cents on the $100;

The Budget-Mr. Nicholson Dorval has reduced its taxes by 30 cents again this year. The municipality of Ville St. Pierre closed its financial year last year with a surplus of $20,000. Ste. Anne de Bellevue had a surplus. All the municipalities on the island of Montreal, except one, have had a surplus. The city of Montreal, according to the comptroller of finance of that municipality, had a surplus of over $1 million last year.
Looking at the provincial records for the year 1952, I find that in 1951 the revenues of the municipalities, that is the cities and towns, totalled $112,081,000, and for 1952, $114,902,000. Expenditures for 1951 amounted to $106,601,000, and for 1952, $113,358,000.
We have to take into account that capital expenditures were made amounting to $6,140,000 in 1951 and $5,641,000 in 1952. Had these expenditures not been made the surpluses would have been much higher. I have a clipping from the Montreal Gazette of March 24 which states:
Quebec's municipal corporations reported an increase in both revenue and expenditures during 1953 and a $35,000,000 increase in debenture debt.
The 1953 edition of municipal statistics, released today by the Quebec bureau of statistics, lists 1953 revenues at $163,503,000 compared with $146,315,000 in 1952 and expenditures at $157,063,000 compared with $114,896,000 in 1952.	.
(Translation):
To sum up, Mr. Speaker, I suggest that in the preparation of the estimates the items be more closely related to the contemplated expenditures.
The various departments would then endeavour to stay within the estimates, because if they ask for 10 per cent more than what is strictly needed, for fear of incurring a deficit, they would be tempted to spend the whole amount, whence the difficulty of avoiding expenses, that might be necessary in certain cases, but are superfluous in many others.
(Text):


Alexander Malcolm Nicholson: Mr. Speaker, as the Minister of Finance (Mr. Harris) represents part of the county in which I was born, Bruce, I studied the budget most carefully in the hope that I might be able to find a number of virtues in it. However, I think the only commendable feature that I have been able to discover is the venture into deficit financing which he has made, and before I conclude I hope to have time to say a little more about deficit financing.
I am afraid that I cannot go along with the hon. members who have congratulated the Minister of Finance upon having given some relief in the field of income tax. With the
[Mr. Leduc (Jacques Cartler-Lasalle) .1
majority of Canadian families being in a position where they do not pay any income tax, this is not the time to consider easing the burden of those who do pay income tax. I realize that members of parliament with their sessional indemnities will have a sizeable reduction, but believe me this reduction is not going to solve the problem that faces many this year.
A married man with two children receiving $2,500 a year will have a reduction amounting to $4 or approximately 8 cents per week. That really is not enough to get excited about. But I have examined four other groups. First, the position of those who receive $50,000 a year is going to be improved by $954 per year. We have not a very large number in this group, but the 1,840 who receive incomes of $50,000 or more receive a sizeable total income of $143 million. The income tax payer receiving $50,000 a year is going to have an additional $954 per year to spend. How sorry should we feel for the poor chap who has to pay $20,145 to the income tax authorities and must get along somehow or other on only $29,855 per year. That means that he is 50 cents short of having $100 per day for 300 days in the year. It seems to me that we should not shed any crocodile tears over a person who has that amount left to spend. Giving that person an additional $954 to spend is not going to help the unemployment problem at all.
Those receiving $100,000 a year are going to be better off to the tune of $1,954. After they have paid their scheduled income tax somehow or other they will have to balance their budgets on $163.60 per day. Those in the $200,000 per year group are getting relief to the tune of $3,904 and will have left after taxes $261.50 per day for 300 days in the year. The last group mentioned in the table, those receiving $400,000 a year, will be helped to the tune of $7,854. After paying their income taxes they will have left $419.38 per day.
I do not think that any member in this chamber can suggest with a straight face that people in these income tax brackets who are getting such substantial assistance are really in need of special legislation. I think this budget is going to be remembered for what it fails to do rather than for these minor changes.
I cannot think of any good reason why relief should have been given to corporations. While they do pay a sizeable amount in corporation taxes, the Bank of Canada in its most recent statistical summary shows in a chart that representative Canadian corporations-manufacturing, mining, finance, insurance and so on-are in a very healthy position.

This chart shows that after paying taxes their profits in the years since 1950 ranged from a high of $455 million to a low of $290 million. At the last of 1954 the profits after taxes were up to $337 million.
I submit that the minister should not bring in a budget without facing the fact that the net farm income in Canada has been declining at an alarming rate since 1951 in particular. I have the details of national accounts, income and expenditure, put out by the dominion bureau of statistics. The 1951 net income received by farmers amounted to $2,108 million; in the next year it was down to $1,860 million; the next year $1,616 million; and in 1954, $1,109 million. I submit that this alarming decrease in farm net income is having a most serious effect on all sectors of our economy and before I conclude I shall make some suggestions on which I feel the minister must act.
Over the week end I spent some time in a study of "Distribution of non-farm incomes in Canada by size 1951". I suggest to hon. members that they study this booklet showing the distribution of non-farm incomes. I have prepared a little table from this and these figures have been confirmed by Miss Podoluk, of the dominion bureau of statistics, who worked on this study.
I have arranged this table, an analysis of the distribution of Canadian family annual non-farm income among 265 representative families of two or more persons, according to the income groups. As to the income group from nothing to $2,499, 34-2 per cent of the families fall in that category. Out of 265, there would be 91. The average for the group would be about $1,500. The exact amount is $1,530. As to the second group, $2,500 to $9,999, 63-8 per cent fall in that category, or 169, with an average yearly income of around $4,200; or, to be exact, $4,176. As to the third group, over $10,000, 2 per cent fall in that category, or 5 out of 265, with an average annual income of $17,907, or nearly $18,000.
Hon. members might be interested in knowing just why I took the figure 265. That happens to be the number of members there should be in the chamber tonight if they were all here. I should like those who are here to forget the indemnity or any other income that members might have. I should like the members to picture themselves as being in the position of the average Canadian family. Here is how we would proceed to distribute that family non-farm income, two or more persons in the family. I might say that if we had the figures for the farm income, the picture would be worse, but this is bad
The Budget-Mr. Nicholson enough. If we could divide the chamber, we would take a block from just this side of the Minister of Justice (Mr. Garson) and of the government members in that row down to this side, 91 in the group, with an average income of $1,500 a year. Then the next group would, of course, comprise the majority. There would be 169 in that group and the average income would be roughly $4,200. That would leave us five down in the section where the independent members are. There are only five in that group getting $10,000 a year or more. The average would be $18,000 per year.
Mr. Speaker, here is one of the fundamental problems confronting the Canadian economy at the moment. If this government cannot find ways and means to get more purchasing power into the pockets of 34-2 per cent of the families in Canada who have an average income of $1,500 a year, I think they have failed to discharge their responsibility. If these figures were broken down to show those who had under $1,000, under $1,500 and under $2,000, you would have a more shocking picture still. But any family in Canada today getting $1,500 is in the position, if they pay rent, of not having enough money left to pay for their groceries, shoes, clothing or health services.
Coupled with these figures that I have just given, I should like to present the figures in connection with the consumer credit outstanding in Canada as recorded in the Bank of Canada's statistical summary. This is the issue of March, 1955; it is the one that has just been released. I think it is fairly obvious that with a third of the families in Canada receiving an average income of $1,500, with so many tempting advertisements urging us to buy radios, televisions, automobiles, fur coats and everything under the sun, there is bound to be difficulty. As a matter of fact, when you go into your grocery store now in Ottawa, you must decide whether you want a Plymouth car or a Pontiac car, trip to Hollywood or what-have-you. Most of the large grocery chains are engaged in a competitive give-away program in order to get people into their stores to get a car along with an order of groceries. In due course somebody will get a car. But while just Pontiacs and Plymouths are being offered now, if other storekeepers are going to keep in the running, they will be obliged to offer a Buick or Cadillac.
These charts at page 81 showing the consumer credit outstanding present what to me is an extremely disturbing picture. Charge accounts have increased from $370 million in March 1951 to $503 million in December,

The Budget-Mr. Nicholson 1954. As to instalment credit, retail dealers have increased their accounts from $166 million to $315 million and finance companies from $216 million to $480 million. Cash personal loans through the banks, the small lending companies and credit unions have increased from $394 million to $665 million. The totals have increased from $1,146 million in March, 1951 to $1,963 million in December, 1954. Taking the two things together, Mr. Speaker-with one-third of the families in Canada in the lower income brackets with an average income of $1,500, with living costs as high as they are, and with this alarming increase in consumer credit outstanding-I believe they suggest that there is trouble just ahead.
Unfortunately the bureau of statistics did not compile this sort of information before the war or prior to the depression in 1929 and 1930. But, as I recall it, one of the danger signals prior to the serious crash in 1929-30 was the large amount of consumer credit that was outstanding. As long as people receiving $1,500 can get storekeepers and small loan companies to extend them credit so that instead of spending at the rate of $1,500 a year they are able to spend at the rate of $2,000 or $2,500, it is fine so long as they can continue to increase their borrowings. But a time will come when those who are trying to live on a $3,000 income when their cheque is only on the basis of $1,500 will find that there is trouble ahead.
I therefore think it is only fair to ask what should be done. I commend the minister for introducing deficit financing. I think it is a subject that should be developed. I am sorry that there will not be enough time to present the sort of development this particular case deserves. However, I want to make it clear that I am not asking this government to adopt a socialist program. I am merely asking them to carry out a program which a capitalist government developed and practised during the war crisis. Let us see what was done in the war period. I have before me "Statistics and Information on Dominion Government Public Borrowing Operations from September, 1939 to December, 1945". I find that our total war requirements in 1939 amounted to $23 million; in 1940 they amounted to $246 million; in 1941 they amounted to $1,413 million; in 1942 they amounted to $2,402 million; in 1943 they amounted to $4,177 million; and in 1944, the all-time high, they amounted to $4,923 million. But hon. members will tell me this: Oh yes, but we were fighting for our lives then; we would do anything to save the world from nazi tyranny. That is quite right.


But I submit that in peacetime, if given a lead by this government, the Canadian people will put forth in the year 1955 the same sort of effort they were able to put forth in the year 1944.
These two fundamental problems are obvious to every Canadian. It is a tragedy that farm income should be down approximately 50 per cent to what it was four years ago and that 600,000 Canadians should be in the position where they cannot find jobs and are going to be receiving relief from municipalities, provinces or the federal government, or a combination of all three, when we consider the great resources of Canada, the achievements of the Canadian people during the war years, and the hungry people all over the world.
During that same period we managed to keep our non-war expenditures at fairly low levels. However, I was interested in noting that we did find money for unemployment and agricultural relief. We spent $49-9 million in 1939, $57 million the next year, then $34 million, $8-5 million, $5-3 million and $3-9 million. All through the period we were required to put aside some money for unemployment and agricultural relief. It is also interesting to note that the war saved the Canadian National Railways from a continuous record of deficit financing. Before the war the publicly owned railway was running in the red over $1 million a week, but come the war we were able to change the deficit to a very substantial profit.
Therefore I think the job that the minister should undertake now is to face the fact first of all that 600,000 Canadians want work and cannot find it and, second, that the Canadian farmers want to continue to produce maximum amounts of food for our own people and for hungry people all over the world. In a little pamphlet prepared by our national office I note that in 1952 stolen property apparently accounted for losses of something over $6 million, business failures $32 million, automobile accidents $77 million, wages lost through illness $159 million, salaries and wages lost through strikes and lock-outs $15 million, but losses of production through unemployment amounted to $1,235 million.
Here are some of the constructive, desirable things that we in Canada could and should do. If we would do them there would be no unemployment problem and no difficulty at all about getting the people to consume adequate food. I think it is as plain as A, B, C that if one-third of the families of Canada have an average income of $1,500 they cannot possibly consume desirable quantities of milk, butter, eggs, cheese, cereals and other

products. We should undertake to build
500.000	new homes. We should speed up construction of the trans-Canada highway. We should build more hospitals, schools, parks and recreational facilities. New industries should be established in depressed areas. Two million furnaces are required and a similar number of refrigerators. We need about 2 million electric vacuum cleaners,
1.500.000	telephones, 1 million washing machines, and about 2 million homes, rural and non-rural, need water and modem conveniences.
I have gone through government budgetary expenditure and have made a note of some of the politically popular and socially desirable increases the minister should include in the budget with a view to alleviating unemployment and winning the battle in which Canadians should be engaged. First of all there are our veterans. We have had previous discussions in the house regarding the position of the veterans of the Boer war, even the Riel rebellion, world war I and world war II. We are proposing to spend $234 million for those who have served this country. I suggest that an extra $200 million be placed in their hands because these people are in the lower income third who are not able to buy the things they would like to have.
The next item I should like to mention is the Colombo plan. I should like to see the Secretary of State for External Affairs (Mr. Pearson) in the position where he will eventually have as much money to spend as his colleague the Minister of National Defence (Mr. Campney). I have been very careful not to suggest any reduction in our national defence expenditures. We have been told that the very large amounts we have spent on national defence have been a major factor in preventing a third world war. No one can prove that is right or wrong, but I am not going to argue about it. I think Canada can continue to have as many people in the armed services as we now have, continue to spend as much money on national defence as we are now spending and do these other things as well. We would still have a budget a good deal less than we had during the war years, and we would be in the position where we would have a million of our youngest and strongest people available to help with the constructive program I have suggested.
Then there is the question of grants to universities. This is one way the federal government can assist education without opposition from any of the provinces. Since we cannot get agreement with respect to general aid for education, I see no reason why we should not spend $100 million a year to aid
The Budget-Mr. Nicholson our universities. Since it costs the Minister of National Defence $65,000 to train a jet pilot, surely $100 million to train university students would not place any strain on us.
With respect to family allowances, I could not agree with the hon. member for Temis-couata (Mr. Pouliot) when he suggested this afternoon that the Canadian economy will not stand a doubling of family allowances. The argument he advanced today certainly applied when the family allowance legislation was before parliament in the first place, because at that time we were concerned about our war effort, but I submit that the family allowance expenditures of $383 million have been a major factor in making it possible for a great many people in the lower income brackets to have some money every month with which to buy food for their children. Therefore I suggest an increase of $400 million in family allowances.
As to old age assistance, here is a group who really must have additional help, and I suggest another $100 million. The next matter is health. I should like to be most generous to the Minister of National Health and Welfare (Mr. Martin). I think he suggested at one time it would require $600 million to carry out the sort of program he had in mind back in 1945. I think we should have another $600 million to introduce an over-all national health program. This would not be in addition to what we are now spending for health but would merely mean that there would be comprehensive health services for all Canadians and our people would not have to worry about meeting such costs at a time when they are sick and unable to earn.
I have suggested an extra $100 million for the Minister of Labour (Mr. Gregg). Some concern was expressed this afternoon about the cutting off of the vocational training program that has been so popular throughout the country. The amount of $100 million would more than cover that. I do not have in mind pouring money into labour, to deal with the unemployment problem, but if the sort of program I have proposed is carried out Canada will not have any unemployment problem.
The Minister of Agriculture (Mr. Gardiner) needs more money. I notice that the net operating loss of the agricultural prices support board was only $3-5 million in 1950-51 and $1-7 million the next year. In the next two years the foot-and-mouth disease resulted in the amount increasing to $32 [DOT] 5 million and $37-8 million, but in 1954-55 the amount was down again to $3-2 million. There is nothing for the Minister of Agriculture at all in the proposed budget for 1955-56 for

The Budget-Mr. Nicholson his agricultural prices support. The Minister of Agriculture certainly should have $100 million in connection with his program for agricultural prices support. This leaves me with housing, and for the Minister of Public Works (Mr. Winters) I put down $200 million. It must be recognized that in our slums in our cities and on our farms we have a large number of people living in housing conditions which are a disgrace to Canada in this year of 1955. We must not regard expenditure on housing as being money down the drain. Investment in housing is a permanent investment that people will enjoy for 20, 30, 40 or 50 years.
I have not left very much time to discuss the interesting problem of financing this sort of program. The total of these figures which I have run over very quickly is only $2 billion.


An hon. Member:: What is a billion?


Alexander Malcolm Nicholson: What is a billion? That is a very good question. This amount is still less than half of what the Canadian people were able to raise and spend on our war effort alone in the years 1943 and 1944. If I had the figures available of the amounts of money we gave away during those years as mutual aid and assistance to the United Kingdom and our other allies, it would make the money which we are spending now under the Colombo plan and specialized agencies look very insignificant. I do not argue, Mr. Speaker, it would be possible to increase our income tax and our corporation tax to meet this particular type of budget. I believe the policy of deficit financing which the minister has introduced in a very mild way is quite sound. I think we need not worry about the amount of money that we owe to ourselves.
I notice that we have planned this year to spend $474 million for servicing our debt. Fortunately, most of this money is paid back to Canadians. At some time no doubt we will have to consider what we are going to do about the very sizeable national debt that Canada does carry. But so long as the percentage of the spendable money paid to service our national debt does not get out of hand, really we have nothing to worry about. Canada is in a very strong position to undertake a deficit financing program now. Wisely

enough, I believe, during the years immediately following the war the government put aside sizeable sums to reduce our national debt. There was some criticism from the Conservative party about maintaining very high tax levels when all the money was not being spent. I feel it was a sound principle to have substantial taxes and make substantial payments on the national debt when money was plentiful and goods were scarce. Now that we have unemployment on our doorstep, we need not have any worry about deficit financing in Canada getting out of control. I believe we could secure more money by imposing higher taxes on the higher income groups. But then again, there is not enough money left in that particular pocket to solve all our problems. By carrying out a policy of orthodox financing, as demonstrated during the years I have mentioned from 1939 to 1945, the Minister of Finance could introduce a budgetary program that would make him the real hero of our particular period. But the budget that he has introduced, with tax reductions for a very small percentage of the Canadian people, very small amounts for the people in the lower income brackets and sizeable amounts for the people in the higher brackets, contains nothing spectacular.
I submit, Mr. Speaker, that with the two problems which stare us in the face, the problem in our own country of so many of our elderly people, the invalids, the war veterans, our farm people in a position where they just cannot get their hands on sufficient dollars to enable them to meet their reasonable responsibilities and enjoy a reasonable standard of living; when we think of the two-thirds of the people in the world who look at us maintaining 600,000 people in the ranks of the unemployed, I feel that Canada should and must give better leadership in solving our own problems and helping to solve world problems.
On motion of Mr. Gauthier (Portneuf) the debate was adjourned.



BUSINESS OF THE HOUSE

Walter Edward Harris: Tomorrow, Mr. Speaker, we shall take estimates, beginning with citizenship and immigration; northern affairs; then post office and justice.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Friday, April 29, 1955