1955-04-19

PRIVILEGE


Mr. Colin Cameron (Nanaimo):: Mr. Speaker, I rise on a question of personal privilege. I have in my hand a report from the Toronto Telegram of Saturday, April 16, 1955 which I should like to place on the record. It is headed "Trotskyites among M.P.'s says Harris", and reads in part as follows:
There are Trotskyites among the C.C.F. members of parliament at Ottawa, finance minister Walter Harris told Liberals attending the annual meeting of the Toronto-York Liberal Association at the King Edward today.
He said expulsion of Toronto members of the C.C.F. party charged with being Trotskyites should not be taken as an unusual happening. He suggested some C.C.F. M.P.'s might be expelled on similar grounds.
The finance minister called his recent budget "a plain, ordinary Liberal budget", not "a fantasy of imagination or a stand-pat budget".
From consulting Hansard, Mr. Speaker, I understand that the minister has denied the accuracy of this report and of course, without hesitation, I accept his assurance on that score. Nevertheless, I cannot refrain from expressing my regret that he did not take advantage of the first opportunity he had to correct this false statement. When he was approached, I am told, by the man who reported the meeting, immediately following the meeting, and asked if he would care to elaborate on his statement that there were Trotskyites among the C.C.F. group, I think it is regrettable that the minister failed to take advantage of that opportunity to deny this false report and that for nearly 48 hours he permitted it to wend its slanderous trail back and forth across this country. I may say that I find it rather curious. I have been in public life for many years longer than has the Minister of Finance. For over 20 years, sir, I have spoken in public on every controversial question that has come before the country. My speeches have been widely reported. I have yet to be misquoted. It appears to be an occupational disease of Liberal cabinet ministers.
In the house yesterday, when challenged on this statement, the Minister of Finance 50433-186J
took occasion to read extracts from a letter which I had written on behalf of a man called Stanton who was later expelled from the Ontario section of the party to which 1 belong, on a charge of being a Trotskyite. It is perfectly true that I wrote that letter on behalf of Paddy Stanton. I wrote it because I had known him for many years on the Pacific coast. I have in mind one particular occasion that I am going to call to the attention of the house because I think it will explain why I wrote such a letter.
The occasion to which I refer was one during the 1945 federal election campaign in the city of Prince Rupert when a gang of communist thugs attempted to break up my meeting. At that time, Mr. Speaker, you will recall that they were supporting the Liberal party, their leaders having been released on the unfortunate Canadian electorate by the Liberal government of that day for their own purposes. When this gang of communist thugs attempted to break up my meeting, this man Paddy Stanton, fool that he was, attempted to settle the matter with his fists.
It was such things that I had in mind when I acceded to his request that I would speak on his behalf before the Ontario convention of the C.C.F. or write on his behalf, as I was obliged to do. If, as it now appears, Paddy Stanton has, since the time I knew him on the Pacific coast, become a Trotskyite, and if, on account of that fact, he has to some extent betrayed my trust and delivered me to my enemies, I am still not sorry that I wrote that letter because, when you reach my time of life, you realize that such things as requital of past favours, loyalty, decency and honesty are more important than are even the most glittering political prizes. I want to say this now categorically, Mr. Speaker. I am not nor have I ever been a Trotskyite; I am not nor have I ever been a Trotskyite sympathizer; and anyone who states that I am is an unmitigated liar.
The C.C.F. is the only political party to which I have ever belonged. The democratic socialist principles of that party are the only political principles I have ever endorsed or supported. I want to say this. If anyone, by a combination of statements outside this chamber and references within this chamber, should ever impute to me the charge of being a Trotskyite or a Trotskyist sympathizer he

Inquiries of the Ministry would not only be an unmitigated liar but he would be an unprincipled scoundrel and a contemptible coward.



PRIVATE BILL


[Stage Direction]
Bill No. 349, respecting Sharp & Dohme (Canada) Ltd.-Mr. Mcllraith.


[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinion):: May I
ask the Minister of Citizenship and Immigration what right Premier Smallwood of Newfoundland has to say, as he is reported to have said on March 29, that certain persons giving certain information would get "the bum's rush" and if they were Germans they would be deported for things said in Newfoundland?


Hon. J. W. Pickersgill (Minister of Citizenship and Immigration):: I do not know whether or not this is a proper question, but I do not happen to have seen the newspaper report to which the hon. member refers and I would not presume to interpret something I have never seen.



REPORTED REDUCTION IN CANADA'S SHARE OF WORLD MARKET

[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: I should like to direct a question to the Acting Minister of Trade and Commerce. Would the minister comment on the latest dominion bureau of statistics report which shows an alarming drop in Canada's share of the world wheat market? What action is the government taking to correct this serious situation?


Hon. Robert H. Winters (Acting Minister of Trade and Commerce):: I thank the hon. member for giving me notice of his question and also for sending me a copy of the Wheat Review. The situation is that Canadian export sales in the present crop year have been substantially higher than during the last crop year. These increased sales will, in due course, be reflected in higher export figures. Canada has been retaining her place in all her established markets and has indeed got an increased share in many of them. The United States has been exporting increased quantities of wheat as a result of special programs of subsidized exports, including sales


for local currencies, and this is one of the reasons for the change in the relative proportion of world export business. Nevertheless, Canada is retaining her place in commercial markets, and there is every reason to believe that we will continue to do so.


Hazen Robert Argue: I wonder whether the minister is aware that each of the main exporting countries of the world, other than Canada, has increased its exports of wheat during this period?


An hon. Member:: Gloom caster.


Robert Henry Winters: I know the hon. member is referring to the figures in the Wheat Review to which I have already referred. They are figures for some time back. I refer to the current situation in which Canada's sales are higher.



REQUEST FOR MOVEMENT BY RAIL AS RESULT OF STRIKE

[Stage Direction]
On the orders of the day:
Mr. D. S. Harkness (Calgary North):: should like to direct a question to the Acting Minister of Trade and Commerce. In view of the lakehead grain handlers' strike, have any plans been made to move eastward by rail the large number of box cars that are sitting there loaded with grain?


Robert Henry Winters: I have no direct knowledge of any such arrangement being made. All I can do is emphasize what the Minister of Labour has already said, that is that every effort is being made to settle the strike at as early a date as possible.



REQUEST TO MAKE SELKIRK WHEAT AVAILABLE

[Stage Direction]
On the orders of the day:
Mr. William Bryce (Selkirk):: I should like to direct a question to the parliamentary assistant to the Minister of Agriculture. What steps are the government taking to enable farmers with surplus Selkirk wheat to sell it immediately, thus making it available for seeding this spring?


Mr. Robert McCubbin (Parliamentary Assistant to the Minister of Agriculture):: Complaints along the lines of that just mentioned by the hon. member came to the attention of our department last week. As hon. members know, there is no restriction on the sale of Selkirk wheat in Canada, but it cannot be sold outside of Canada. The department immediately got in touch with the provincial departments of agriculture in Manitoba and Saskatchewan. They, in turn, through their agricultural representatives are endeavouring to help along the sale of this

wheat by getting in touch with the seller as well as those who wish to buy this wheat. I would tell my hon. friend that if he has received complaints of this type he should write to the complainants and tell them to get in touch with their agricultural representative immediately and the wheat will be made available to those who wish to buy it.



AIRPORTS


[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. Will the minister say if work has commenced on the proposed new civilian airport for Halifax? If not, when is it likely to get under way?


Hon. George C. Marler (Minister of Transport):: No work can be started on the new airport for Halifax until the necessary land has been acquired by the city. It is understood that the city is at present acting on this matter. Meanwhile certain preliminary survey work is under way, and included in this year's estimates is an amount which would permit the department to initiate at least land clearing work when advice has been received from the city that the land has been acquired.



TAXATION


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Prince Albert):: should like to direct a question to the Minister of National Revenue. Has he received representations from the federation of automobile dealers and also from various provincial automobile dealers associations asking for reconsideration of the decision announced by the Minister of Finance in his budget speech that no rebates would be granted to automobile dealers in respect of automobiles on hand? In view of the fact that the loss to automobile dealers will be some $3,150,000, would the minister give reconsideration to this question to the end that the dealers should not have to absorb such a loss?


Hon. J. J. McCann (Minister of Nalional Revenue):: It is not the intention of the Department of National Revenue to make any refunds consequent upon the budget changes. While I have not personally received any representations from the automobile dealers, I do not doubt that, as is usually the case, representations have been made to the department. The section of the
19. 1955	2941
Inquiries of the Ministry budget speech referring to the practice of not accepting claims for refund is one of long standing. Prior to the time that this notice was given in budget speeches, manufacturers were in considerable doubt whether they could take back goods on which the higher rates of tax had been applied and either ship the goods out again at the reduced tax rates or replace them with other goods on which the lower rates would be applied. The notice given by the Minister of Finance is given in order to prevent the return of great quantities of goods merely for the sake of benefiting from the lower rates of tax applicable after the budget. No similar situation arises when taxes are increased because those persons having goods on hand at lower rates or where no taxes had hitherto been imposed are quite satisfied not to raise the question.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. J. Wilfrid Dufresne (Quebec West):: should like to direct a question to the Minister of Justice.


Some hon. Members:: Oh, oh.


J.-Wilfrid Dufresne: Was the Department of Justice granted permission by the Supreme Court of Canada to intervene in the case of Chaput v. Romain et al.? If so, is the department intervening to protect or deny the rights of the provinces to administer justice in accordance with article 92, sections 14 and 16, of the British North America Act?


Hon. Stuarl S. Garson (Minister of Justice):: If my hon. friend will look at the recent back copies of Hansard, he will see that a question almost identical with that which he has just asked was asked by the leader of the C.C.F. party and has already been replied to.


J.-Wilfrid Dufresne: I have referred to the question asked by the hon. member for Rosetown-Biggar and the answer given does not answer the question I am asking today. I should like the minister to give me a better answer than the one he has just made.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. Alistair Stewari (Winnipeg North):: Is the Minister of Transport in a position today to answer the question I asked yesterday about lay-offs in the C.N.R. shops at Winnipeg?


George Carlyle Marler: No.

Inquiries of the Ministry



REPORTED LAY-OFFS AT LEASIDE

[Stage Direction]
On the orders of the day:
Donald Methuen Fleming: May I
ask the Minister of Transport if he is now in a position to answer the question I asked yesterday with regard to the closing of the C.N.R. car repair shops at Leaside?


George Carlyle Marler: I regret to say that the answer is no.



INQUIRY AS TO SUPER CONTINENTAL SERVICE STOPPING AT BRANDON NORTH

[Stage Direction]
On the orders of the day:
Mr. W. G. Dinsdale (Brandon-Souris):: should like to direct a question to the Minister of Transport. Can he indicate whether the Canadian National Railways Super Continental service going into operation on April 24 will stop at Brandon North?


George Carlyle Marler: Canadian National Railways advises that the Super Continental will not stop at Brandon North. As has been announced by the railway, the schedule of this new train was drawn up to provide a faster transcontinental service and at the same time arrange convenient arrival and departure hours at intermediate stops to the extent possible under the new schedule. I might add that the Continental Limited will continue to stop at Brandon North.



REPORTED LAY-OFFS AT BROCKVII.LE

[Stage Direction]
On the orders of the day:
Mr. Hayden Stanton (Leeds):: I should like to direct a question to the Minister of Transport. Is the minister aware that there are 38 men about to be laid off at the Brockville railway divisional centre, and does he not think this is a very inopportune time for these men to be laid off-


Some hon. Members:: Order.


Hayden Stanton: -when already more than a thousand men are reported out of work in Leeds county?


George Carlyle Marler: I received notice of this question just before entering the house, and I shall try to give the hon. member an answer as soon as I can.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I ask a question of the Minister of Transport. When he prepares his answer to the questions that have been asked regarding C.N.R. lay-offs at Winnipeg and other places, will he take this

as a supplementary question. How does he square the lay-offs now taking place with his statement in the house on February 7 that no further staff lay-offs were anticipated?



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
John George Diefenbaker: should like to direct a question to the Minister of Labour in connection with the grain handlers' strike. Has he had any report from Mr. Taylor, the negotiator, and what is the present position? Has a settlement been reached between the strikers and the employers?


Hon. Milton F. Gregg (Minister of Labour):: I have no further report than that given yesterday, except to say that Mr. Taylor is meeting both parties to the dispute today.



REPORTED UNEMPLOYMENT CONDITION AT SEVEN ISLANDS, QUEBEC

[Stage Direction]
On the orders of the day:
J.-Wilfrid Dufresne: Has the Minister of Labour received word from C.I.O. authorities of the serious situation now existing in Seven Islands where more than 500 immigrants have to beg their daily bread?


Mr. Gauthier (Portneuf):: Where were you?


J.-Wilfrid Dufresne: If so, are any steps being taken to help these immigrants to find work or give them some assistance?


Mr. Speaker:: Order. This question was answered yesterday. While I am on my feet, and since I suppose we are at the end of the question period and are about to embark upon the orders of the day, may I say that after a few days of recess and recognizing that there were several questions in which members were interested, I have been rather lenient yesterday and today. However, I shall have to return to my old habits. I want to say now that, starting tomorrow, I will not allow hon. members to make speeches under the pretext of asking questions.



PUBLIC SERVICE SUPERANNUATION ACT


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Finance? Have the Public Service Superannuation Act regulations

been amended to provide for the retirement of civil servants at the age of 60 at the discretion of deputy departmental heads? If so, can the minister say whether representatives of the civil service organizations were consulted before such an amendment was made?


Hon. W. E. Harris (Minister of Finance):: I will cover that eventually when we get into the budget debate.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Douglas Scott Harkness: should like to direct a question to the Secretary of State for External Affairs. In view of the recent return to Canada of Brigadier Sherwood Lett, the head of our commission to Indo-China, is the minister in a position to tell the house to what extent our mission there has been permitted to carry on its work, what progress has been made and what still remains to be done?


Hon. L. B. Pearson (Secretary of State for External Affairs):: I have already dealt with that subject in the statement I made on external affairs in which I covered to some extent the work of the commissions in IndoChina. There may be another opportunity when the external affairs debate is resumed when I can add to what I said on the earlier occasion.



REPLY OF UNITED STATES GOVERNMENT


[Stage Direction]
On the orders of the day:
Hon. George A. Drew (Leader of fhe Opposition):: I should like to ask the Prime Minister if he is yet in a position to answer the question of which he took notice yesterday. In repeating the question I would point out that there is a statement in the press today from Washington which definitely refers to the voluntary control of the movement of oil into the United States. This report, issuing from the state department, indicates their acceptance of a definite plan of voluntary control from companies here. For that reason I do think we are entitled to the information in this house which is apparently accepted as a matter of course there.


Lester Bowles Pearson: Possibly I might say a word in reply to this question. As the hon. gentleman knows, and as the house knows, a note
Inquiries of the Ministry was sent to the United States government on this question and that note was tabled in this house. There has been no written reply from the United States government to that note, though we have been pressing for such a reply almost daily and have expressed to the United States government, through the state department, our anxiety to get it without delay. We have had an expression of regret from the authorities in Washington that they have not yet completed their reply.
As I indicated before the Easter recess, we have received an oral reply from the United States government pending the receipt of a written one. So, Mr. Speaker, I can say that the state department, in reply to our representations of March 8, have informed us orally that the executive branch of the United States government does not favour legislation to implement the findings of the cabinet committee on energy supplies and resources policy on the level of oil imports. This was made clear in the testimony given by the secretary of state to the Senate finance committee in Washington last month. With regard to the recommendations of the cabinet committee in Washington we have been told, orally again, that the state department is hopeful that the policy enunciated in the report of the cabinet committee can be implemented in such a way as to give recognition to the factors which the Canadian government regards as important in this situation. That is all I can say now, Mr. Speaker, but I still hope to be in a position, tomorrow or the next day, to table a written reply to our earlier representation.


George Alexander Drew: No one is more anxious than I am to avoid anything that would embarrass us in our relationship with the government of the United States, but I would point out that the press report from Washington gave the very information which the minister has now given to us in the first part of his statement, that is the reference to the voluntary control of oil which is used as a basis for the argument by the state department that there should not be legislation establishing a formal restriction. This information is contained in the press today as coming from the state department.
Now, since the government thought that it was sufficiently important for the Minister of Trade and Commerce to read the note in full and explain the action of the government in regard to their concern about this voluntary restriction, it does seem to me that matters that are being placed in the open by the state department in Washington might well be available to us here in this house quite as
2944	HOUSE OF
Inquiries of the Ministry early as they are to the public of the United States and to ourselves through the channel of the press.


Some hon. Members:: Order, order.


George Alexander Drew: I simply repeat that this is a
subject that has been raised by the government and I think, consistent with the high degree of co-operation we wish to establish with the government of the United States, we should seek their co-operation in obtaining information which is not being held back in Washington.



POSTAL SERVICE


[Stage Direction]
On the orders of the day:
Mr. Erhart Regier (Burnaby-Coquitlam):: should like to ask the Acting Postmaster General whether he has seen fit to reverse the decision of the Postmaster General concerning the new postal service in Burnaby and, if so, has he done so after consultation with one or both of the members of parliament for that area?


John Whitney Pickersgill: I have reversed no decision. The matter has been drawn to my attention, and I am giving it consideration.



PRAIRIE FARM ASSISTANCE


[Stage Direction]
On the orders of the day:
Robert McCubbin: should like to answer a question asked yesterday on the orders of the day by the hon. member for Yorkton concerning when farmers may expect payment under the Prairie Farm Assistance Act. In reply I may say that to date approximately 100,000 farmers have been paid over $23 million in awards with respect to the 1954 crop. There has been some delay in making payments due to the fact that the crop damage was more widespread than at any time in the past, a late harvest, and in a number of cases applications were received late. The largest number of awards ever paid in one year in the past was slightly over 85,000 as compared to 100,000 to date for the crop year ending July 31, 1955, which would indicate that the administration is doing everything possible to expedite the payment of awards on receipt of applications.



FERRY SERVICE


[Stage Direction]
"bluenose"
On the orders of the day:
Mr. T. A. M. Kirk (Shelburne-Yarmouih-Clare):: Mr. Speaker, may I ask a question of the Minister of Transport. Will the minister say what steps are now being taken to improve upon the tentative date of the end of July which he announced in the house on April 6 for the inauguration of the scheduled run between Yarmouth and Bar Harbor of the ferry Bluenose. If so, could he now say what probable date might be anticipated?


George Carlyle Marler: Mr. Speaker, every effort is being made to accelerate the program for putting the Bluenose into service, including arrangements with the shipbuilder to operate overtime and night shifts. But I would not like to make any more definite statement at this time than I gave on April 6 with regard to the inauguration of the service.



THE BUDGET


[Stage Direction]
The house resumed, from Tuesday, April 5, 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.
Mr. J. M. Macdonnell (Greenwood):: Mr. Speaker, it is two weeks today since budget day. The tumult and the shouting have pretty well died down, and I think people have had a chance to see what the budget really does amount to. I feel that in a sense it has been weighed in the balance and found wanting. I hope the minister enjoyed the applause while it lasted. It must be very pleasant to be acclaimed as the little friend-I was going to say of all the world, but I do not mean that. I mean a very fractional amount of the world, namely those who were benefited by the budget. Everyone's heart seems to respond instinctively to tax reductions; but it is only as people have looked further and have found the real situation that they have realized how thin it all is.
They are gradually realizing another thing, too, and that is that the origin of it is unsound, namely that it is borrowed. It does not come because the government has been

making savings. It comes because the government has borrowed money, and thus laid a greater burden on the backs of the taxpayers.
I think that the first joy and enthusiasm of the married man with two children and $2,500 a year must have been chilled a great deal when he found that, so far as this year is concerned, he would have four cents a week more to take home to his family. Well, there will not be much excitement over that.
And so far as the corporation taxes are concerned, the reduction from 49 per cent to 47 per cent is of course a move in the right direction; but it is only a trifling move. And neither shareholders nor consumers can hope to get much benefit from it.
But the thing that puzzles me and continues to puzzle me about this budget is that I cannot understand it. I cannot understand the minister's reasoning. The minister certainly puzzled me very much by the speech he made in Montreal last November; but during the last two weeks he has puzzled me still more, because it seemed to me that he gave reasons for doing one thing, and then did exactly the opposite.
I wish to support that by quoting from what the minister said. These were his words;
I am sure that all will agree that when employment and incomes are high and the economy expanding at a normally healthy rate, we should fully balance our budget with a modest amount for the reduction of debt.
I think everyone will agree with that. He then went on-and I call attention of hon. members closely to this:
Conversely when the rate of economic advance slackens and the economy as a whole is not fully employed, a moderate budgetary deficit should be no cause for alarm.
I call the attention of hon. members to that phrase "when the rate of economic advance slackens". Now, the minister spent some considerable time in underlining the fact that the economy was not slackening, but that it was quickening. His whole budget was based upon a big pickup, a pickup that seems extravagant. His whole argument was that the economy was quickening and not slackening. Therefore, having said that, how could he turn around, with a quickening economy- a very substantial quickening, with almost extravagant hopes-and nevertheless indulge in this deficit.
The only reason I can give-and while the minister denies it and I shall read his denial in a moment-the only reason I can give is that in spite of the fact that he did not like to mention the unpleasant word, he really did this because of the hope that he might in some way help unemployment. He did not 50433-187
19, 1955	2945
The Budget-Mr. Macdonnell say that, because it was not down his alley to say that things were not good. His whole line was to say that things were good.
According to the Canadian Press he said, in an interview after the budget, that "he had not cut personal income taxes and sliced 2 per cent off corporation taxes to stimulate the economy, indicating he did not feel the economy necessarily needed stimulating". That is quoted from the Canadian Press.
Now, taking the minister's speech, and subsequent interviews, as I say the matter to me is a complete puzzle. It is inevitable I think to assume that the cuts were made, among other reasons, to help unemployment by stimulating the economy. But the minister denies that. He says that he just felt "taxes were too high." Of course they were too high. But there is a proper way to reduce taxes, and there is an improper way. And he took the improper way, rather than the proper one. The proper way is to reduce expenditure. But of course that sort of thing is not dreamed of in the philosophy of this government.
There is another way; but I repeat he reduced taxes because he felt they were too high. In other words, it was a popularity measure. According to the minister's own statement, his only reason for doing so was to please the people. It was just a popularity measure.
Now, is it possible that he felt that, if he gave any other reason for it than his desire to please the taxpayer, he would lose their gratitude because they might feel it was not being done for them? However that may be, we have this curious situation, what someone has called an ambidextrous budget. Certainly I felt that the right hand did not know what the left hand was doing. I was glad to find this statement made by a responsible journalist, because it expressed my feeling and gave me further justification for my own belief.
I wondered if something was wrong. I have often wondered if there was something wrong with my head, and I wondered if there was something wrong with me, that I could not understand. But when I found that many other people held the same views as I do I came to the conclusion that my views were justified.
However much kindness there was in the minister's great heart when he reduced taxes, we cannot ignore the fact that a deficit has results. Whether he knew that or not, a deficit has results. And we cannot get away from that fact. One of those results is to provide some stimulus, a very tiny stimulus, but some stimulus, by increasing purchasing

The Budget-Mr. Macdonnell power. But apparently the minister cannot lace admitting that, because to admit that the economy needed a shot in the arm was all against what he had said earlier-that there was a substantial pickup. I am glad to say it looks as if there was; but you cannot have it both ways.
No serious person can ignore the fact that there are fiscal, financial implications; and we taxpayers who carry the load are entitled to ask the minister some questions. Let me set out here an imaginary conversation between the minister and a reasonably intelligent taxpayer.
The taxpayer asks: How much money did you take last year?
The minister: About $4,107 million.
The taxpayer: And how much money did you spend in addition?
The minister: $194 million.
The taxpayer:	That means that you
borrowed $194 million which we shall have to repay.
The minister: Yes.
The taxpayer: And how much are you going to take from us this year?
The minister: About $4,202 million.
The taxpayer: And how much of a deficit are you expecting?
The minister: $160 million.
The taxpayer: Will that be borrowed, too?
The minister: Yes, unless there is a very pronounced pickup.
The taxpayer: Tell me about this deficit. Does this mean that $160 million is borrowed and put into circulation which will have to be repaid, and has it the effect that the money is spent twice; that is, the government spends it and the taxpayer spends it, because tax reduction does not come from government savings but from borrowing?
The minister: Yes.
The taxpayer: Well, then, as I see it, you are trying to give the economy a shot in the arm by reducing taxes.
The minister: I made the tax reduction because I thought taxes were too high.
I have used the minister's own words, and I hope it will affect others as it does me, that he is evading the whole issue. In so far as I am concerned I have to confess to the minister that it leaves me completely puzzled. He left me puzzled in Montreal last November, and I have been puzzled ever since, and the speech which he made two weeks ago did not take away that puzzlement; it really added to it.


Douglas Scott Harkness: Probably he is puzzled himself.
fMr. Macdonnell.]	'


James MacKerras Macdonnell: I have wondered whether that was so, but I prefer to put it in this way, that the minister is just teasing us because an intelligent child really could not accept this view. And of course, the other thing is that the minister is really in an impossible position. He cannot admit there is any need of improving the economy. So apparently, according to the interview which he had, he just said it had nothing to do with that because that was not necessary.
What are we to say about the claims that we have had from so many ministers that everything is all right when you have the Minister of Finance sneaking in behind their backs and doing something which torpedoed all the things which they have been saying? Of course, Mr. Speaker, if the relief had come from government economies how differently we would have felt. We would have felt that perhaps at long last the spending spree was over. We would have hoped that some of the economies that we have been so generously suggesting all these years could be made. But the minister tells us no, that the tax reduction comes out of borrowings, or that only a miracle could prevent the borrowings and that would be such a pickup in the economy as no one has a right to expect. In other words, it is just a deferred tax.
I have referred, Mr. Speaker, to the thin gruel which is given to those who were the beneficiaries under this generosity of the minister. It is a popularity budget. I suggest, by the way, that this popularity may have implications inside the Liberal party as well as outside.


John George Diefenbaker: Somebody is preaching for a call.


James MacKerras Macdonnell: There is another point which enters into this and that is that there are a lot of people who do not benefit from this. That is not the whole story either.


Mr. Rowe:: It may be the last budget.


James MacKerras Macdonnell: You will observe, Mr. Speaker, that this budget divides the Canadian taxpayers into two groups. First of all, there are the beneficiaries, but secondly there are the people who are not beneficiaries but who are going to pay. Everybody is going to pay. Not everybody gets a handout but everybody is going to pay, and the people who are less well off and who get nothing are going to pay for the relief of the others. That strikes me as an odd idea. I do not know whether the minister thought of that; I was rather pleased when I thought of it. Maybe it was thought of; maybe they just decided to let the poor people tough it out. They have had it tough enough, anyway; perhaps they can tough it out further.

Let me recapitulate. The minister says that in an expanding economy we should have a surplus, and then he tells us that the economy is expanding. He says further that in a slackening economy we may have a deficit. But as I have pointed out already, he has made it clear that the economy is not slackening, and, ignoring his own reasoning so far as I am able to follow it, ignoring the clear reasoning he has given us, he then plunges into a deficit. I shall have something more to say about that.
You cannot face both ways forever. You may be able to do it on budget night and get away with it, but it catches up with you.


Mr. Nowlan:: They have been doing it for a long time.


James MacKerras Macdonnell: I said "forever". None of us thinks they are going to be there forever, though they have been there a long while.


Donald Methuen Fleming: Too long.


James MacKerras Macdonnell: The press is catching up. It is interesting to note that a loyal, stouthearted supporter of the government-I think I am describing them correctly-the Toronto Star, ignores the minister's exhilaration and evidently feels, indeed it calls, the outlook uncertain. It is apparently not filled with optimism as the minister is, but it has a good deal of hesitation and doubt, and it says this:
Mr. Harris' maiden speech will come as a disappointment to the many Canadians who hoped it would stimulate production and reduce unemployment.
You see, the Star is apparently bold enough to believe that everything is not quite perfect and would like to see the economy stimulated. It is not like the minister. He does not want to stimulate it. It does not need stimulation, but the Star apparently thinks it does. I continue to read from the Star:
Taken as a whole it is really an unimaginative stand-pat budget that in itself will provide little relief from our present economic problems.
You see, the Star is not convinced; it does not regard it as a simple reduction in taxation; it does not think that it is nothing but vote-catching, whatever others think. Whether the minister thinks it or not, whether the minister admits it or not, it has other results as well. As a matter of fact, the Star pays the minister the compliment of taking him seriously and it says, if things are really in a bad way-and I feel there is something in this-if things are in as bad a way as the Star thinks they are, then there might be an argument for their suggestion of a much larger deficit, though I do not agree with it. Nevertheless, if the minister started out with the view of the situation that the Star has he 50433-18"i
19, 1955
The Budget-Mr. Macdonnell might quite probably have reached their conclusion. However, the minister can comfort himself with the Free Press of Winnipeg. They really have come through in grand style. I remember very well reading this because I have a great respect for the Free Press, when they are right, and I think this was right. I read this with great respect last December. The Free Press said:
The fiscal discipline of balancing the budget cannot be abandoned. To urge anything of the kind is the very depth of Conservative irresponsibility.
That was said in December, and now we are in April, Mr. Speaker. The Free Press swallows the dose. It troubles them a bit. They are not too enthusiastic about the budget. They have little postern gates left open where they can get through later on if it turns out to be not a great success; but nevertheless, by and large, the Free Press gives it a kind of qualified blessing. They think it is not a bad budget. As a matter of fact, they do a little twisting and squirming and they make themselves believe it is not a deficit budget at all. I do not know how you can do it. It is in some kind of higher synthesis that I have not been able to reach.
The Star's words of course underline a very important question of fiscal policy which ought to be most seriously considered, particularly from the point of view of two groups in the community: first of all, all those on fixed incomes who cannot protect themselves against rising costs; and secondly, and perhaps at the present moment particularly, the agricultural community who are squeezed between the upper and nether millstones. Their costs are certainly not going down. I am afraid there is every reason to believe that it will require an effort to keep their prices where they are now.
If we are going to be serious people we must face the fact that there is no doubt whatever about the tendency of a deficit. The tendency of a deficit, indeed the actual effect of a deficit, is to create additional purchasing power through borrowed money. The minister cannot play fast and loose with hundreds of millions of dollars and say that it is going to have no effect on anything. Something is going to happen. Deficits mean higher purchasing power with a tendency toward higher prices.
The minister will say, in fact the governor of the Bank of Canada said the other day, that the tendency will be for unemployment to offset this tendency, and no doubt that is true. Nevertheless the tendency is there. This business of borrowing money is like taking the

The Budget-Mr. Macdonnell first drink, although I know the minister has not done that yet. You never know quite where you will stop.
We are at the end of what might be called fifteen years of boom times during which the government came along year after year and told us about the buoyant economy. How pleased they were to tell us of that. How good it has been for all of us that it was buoyant. Of course it was inevitable that they should take the credit for it. They were carried along on the crest of the wave and perhaps they hardly realized what was happening. But they took the credit and now it may be that they are going to have to have a reckoning. It may be that they are going to have to give a real accounting. Certainly it is relevant to ask how it is that after fifteen years of the kind of times we all remember, after the scores of billions of dollars that the government has taken from us, why after all this is it that with the economy quickened the picture is given to us by the minister of hundreds of millions which we will now have to pay by way of deficit. That is a question which I hope will be answered. I do not think the minister has answered it yet.
Reference has been made to the gross national product. The government has pretty nearly reached the stage when it almost holds itself able to control the gross national product, and I shall say a word about that later. If the gross national product does not behave as it is supposed to, then it is unfortunate, as the deficit could easily grow quite a lot.
I wonder what the Minister of Trade and Commerce (Mr. Howe) and the former Minister of Finance would say if they were here. They had some strong things to say a couple of years ago about deficits when our party was proposing to reduce taxes, not through deficits, although we were accused of that by the Minister of Trade and Commerce. He said that we had deficits in mind and it was natural for him to say that because after all there was nothing in his experience which would suggest that you should reduce taxes by making economies. In his experience you only reduce taxes when you are on a rising economy, when prices are high, when you have hundreds of millions of dollars more than you expected by reason of these high prices, and you are able to make certain tax reductions. As my colleague says, they were made on the eve of an election.
It is natural for the Minister of Trade and Commerce to feel that anyone who was going to reduce taxes was not going to do it by saving, but would do it by some other method. So the minister who did not think much of deficits accused us, quite unfairly, of having it 

in mind. As reported in the Globe and Mail of June 25, 1953, the minister said:
Deficit financing was just as dangerous for countries as it was for families who spent more than they earned.
Our good friend the former minister of finance also said in a broadcast, referring to borrowing money and running up the national debt-it was natural perhaps that he should say this because he had the delightful experience of being in office during a rising price economy and was able to show surpluses-and I think this is quite interesting:
This is in a very real sense buying your votes with your children's earnings for quite obviously your children will be paying that extra debt.
What a pity that those two ministers did not tell the present minister that his tax reductions should come from economies. It is too bad that the Minister of Trade and Commerce is not here today so that we might know just what he thinks about it. Perhaps we might get a judgment from the supreme court bench on it.
Is the government so bankrupt that in the face of difficulties that we all know we are facing now its only expedient is the old-fashioned one of debasing the currency? Borrowing is so seductive, and is a practice which should be closely watched, particularly, as I say, by the fixed income group and by farmers.
I think it is important to look behind the minister's words for a moment. He has not really taken us into his confidence. I am afraid that from the way he speaks we have had a sort of brushoff. Let us look for a moment at the gross national product figures on which he bases his calculations. Incidentally we should remind ourselves that the gross national product is a funny figure; it does not mean business done, it merely means goods produced. Conceivably you might have a terrific gross national product and still be very badly off if you could not sell it and deal with it. Of course it is a rough and ready guide because we do sell most of what we produce. But do not let us forget that the gross national product figure may contain, as it does now, millions of dollars of goods which remain unsold.
In 1953 the gross national product was $24-4 billion; in 1954 it had come down to $24 billion; and in 1955 we find the minister basing his budget on $25-25 billion, and he hopes it will reach a rate of $26 billion by the end of the year. That hope of course will be based on a bit of pump priming, if I may use that phrase in the minister's hearing.
We have a brand new way of setting taxes and making our estimates. We are doing it

The Budget-Mr. Macdonnell which Mr. Henley represented before the reform bill more than a century ago. The letter reads as follows:
Gentlemen:
I received yours and am surprised at your insolence in troubling me about the Excise. You know what I very well know, that I bought you, and by God I am determined to sell you. And I know, what perhaps you do not think I know, you are now selling yourselves to somebody else. And I know what you do not know, that I am buying another borough. May God's curse light on you all.


Lester Bowles Pearson: Would the hon. gentleman
read the last two lines of that letter?


James MacKerras Macdonnell: I will leave that as a special perquisite of the Secretary of State for External Affairs (Mr. Pearson). It becomes somewhat personal and I do not think it is suitable for this house.
I want to repeat again that the minister went out of his way to underline the fact that his budget was not intended to stimulate the economy. Oh, no; no nonsense of that kind; it did not need stimulating. Therefore that is equivalent to saying that the minister was not taking steps for the unemployed. I believe that he was not taking us into his confidence, that they were somewhere in his mind but that he did not feel quite free to talk about it. When I say this I have in mind these figures, and particularly the last figures which are worse than ever and which seem to me to be just a disgrace to us all, particularly the fact that we should have seven times as much unemployment as there is in England.
The unemployed are not forgotten citizens, but I am sure they must sometimes almost feel themselves to be rejected citizens, casualties of the industrial army, frightened men and women with cold bodies and hungry stomachs, as my colleague from Hamilton West said, who are afraid of what is going to happen to them.
Let us look back to what this government has done and has not done. We all remember the brave words of 1945 and the spring of 1946. They were words of hope; they were words not merely of economic significance but words of hope, sympathy and understanding. But apparently today the expression of real concern is left to us in the opposition. The government apparently is concerned with one thing, namely to try to slide from under. That is the only way 1 have been able to explain to myself what is happening. It is true that last September the Prime Minister (Mr. St. Laurent) used words which were the absolute antithesis of that. Indeed, they went so far that I cannot help wondering whether perhaps, being in his own
[Mr Macdonnell.]
bailiwick at that time, he may have had a little bit of, shall I say, adventitious enthusiasm which prompted him to go a little bit farther than he would have gone in more serious moments. The Prime Minister said this:
We have a country where there should be work for everybody and if we are not smart enough to organize the economy of the nation to provide work for everybody, we are incompetent.
Those are extremely strong words. Since then I think it is true to say that there has been nothing but ignominious retreat. The attitude of the government since then, as compared with that statement, is as far removed from it as the east is from the west. It is hard now to remember the clarion call of last September or even to think that it was made. Since then we have had nothing except a feeble little toot.


Douglas Scott Harkness: We have had increasing
incompetence.


James MacKerras Macdonnell: We have had an attitude of detachment. The unemployed are our fellow citizens. While we here in this house cannot deal with things in a sentimental way, regardless of business and regardless of financial considerations, nevertheless there is such a thing as an attitude of mind which I am sure will have its effect on our unfortunate fellow citizens. It has this effect, I know, on those who work most closely with them, namely, the social service workers. While they are often regarded as too sentimental, in my own family and elsewhere I happen to have close contact with them and I would say they are a very intelligent, wise group of men and women who do not deal only in sentimentality. When I read their memorandum on unemployment in greater Toronto I read something which it seems to me must be gall and wormwood to the unemployed. This is a memorandum which I received from Toronto and it has to do with the attitude of governments. I cannot help feeling sure one of the things that affect the unemployed most is that they are the unwanted people. They are tossed from one area of government to another. The memorandum reads:
The federal government maintains that it has met the main need through unemployment insurance; that constitutionally the responsibility for any residual program rests with the provinces and there is no evidence that the problem is beyond the capacities of the provinces.
The provincial government tells us that assistance to the employable unemployed is a federal responsibility. They refer to the proposals made by the federal government in 1945.
I shall also have occasion to refer to them.
They also contend that they lack the financial capacity to meet the problem. The government of

Ontario stresses the value of centralizing in one administration responsibility for both employment and unemployment.
The municipalities take the view that municipal revenues from property are unsuitable for meeting this need. They feel that it is unfair to the property owner to carry a responsibility which should be shared by all citizens. However, the city of Toronto has recently stated its willingness to share the cost of relief assistance and the services necessary in connection therewith with the federal and provincial governments on a 40-40-20 basis. There are twelve other municipalities in the greater Toronto area, some of which may not find it financially possible to enter into such an agreement.
As I said, and I do not wish to say this in any personal way, the question of real concern for the unemployed seems to have been left to us. When we talk with the government we seem to get into a world of statistics. Human beings seem to be remote shadows. How different it would be if the government were able to make real savings and to assist the provinces and the municipalities. After all, unemployment insurance is only a very partial solution. As we watched the government earlier in the session, as we noted the blank face they turn to all requests regarding unemployment, as we noted the ever more and more rapid retreat of the Prime Minister, as we listened to the Minister of Trade and Commerce (Mr. Howe), we all thought that action was being saved for the budget. We felt that the government would not dare to leave things as they were, that the budget would grapple with the situation. Well, we were wrong.
Here we have the budget and there is no report or explanation on this aspect of our affairs at all. As I said a moment ago, we have roughly seven times the proportion of unemployment in Britain. Why have we this plague, this disease? Is it want of flexibility? In the pioneer days people were free to go and expected to go across the country, if necessary, looking after themselves. But we have made it difficult, if not impossible, by our complicated machinery to move from one place to another. If a man goes to another municipality he may deprive himself of his rights to assistance.
Are we going to have to wait for the report of the new commission to be set up? Is that to be the intellectual answer to this intellectual bankruptcy that faces us so far? I am not going to sneer at the commission. I think there is a good deal to be said for having an outside view come and explore situations which are being handled by civil servants, however good they may be. I think there is an argument for that. On the other hand, I remember that a most high sounding
19, 1955
The Budget-Mr. Macdonnell committee was set up at the beginning of the war which was never allowed to do much. I think its days were numbered from the first day it was appointed because I doubt very much if the civil servants ever intended that the committee should be effective.
What about the younger people? As I said a moment ago, it is much more difficult for them to move about the country as they could in simpler and more pioneer days. We have the bitter complaint, which I myself believe, that there is injurious overlapping between the citizenship and immigration and labour departments in respect of placements. I believe this is true, and I put it up to the ministers concerned to tell us the whole story frankly.
I can find no sense in the government's attitude of wait and see. Have they dug down into the basic causes? Have they probed maladjustment city by city, industry by industry? I know of no evidence. We have not had it in the house.
In the house we have really had irrelevant generalities. The Minister of Trade and Commerce says that business is good. The Minister of Labour (Mr. Gregg) hopes for the best. The Prime Minister, at the national Liberal federation meeting, spoke of "woes" that were "temporary". That will not comfort the unemployed. They may very well say that life is temporary too. No reasoned hope has been held out. Various questions enter the mind. Do we need higher skills? I talked last night to a manufacturer who pointed out to me the extraordinary need of increasing the number of people with higher skills if we are to meet competition. The suggestion has even been made that, as a temporary measure no doubt, we should keep children in school longer in order to give them higher skills. There would be difficulties of accommodation there and maybe it is not practical.
I am just throwing out these suggestions because when we have such a situation confronting us it seems to me that everything should be tried. If everything is being tried, all I can say is that the House of Commons has not been advised. I might refer to the debate on unemployment long enough to say that I was amazed by the negation on the government side. Even the little things have not been done. Why could the minister not have remitted the sales tax on municipal corporations? It is not a new point to raise but I wonder whether it has been fully explored whether we cannot do more processing of raw materials at home. I know that is as old as the hills, but has it been fully explored? Of course we have got to

The Budget-Mr. Macdonnell export a lot of iron ore and other things, but is it not possible for us to make the best of both worlds to some extent and manufacture more of our raw materials here?
Just the other day I heard of a case where a hardboard factory was set up and at the time it was established the United States tariff was 6| per cent. The factory was doing very well and making a very superior product when suddenly the tariff was raised to 16J per cent. That seems to me an unfriendly way for neighbours to carry on. That seems to me a case where there ought to be some possibility of compromise and accommodation. As we all know, in the province of Ontario real progress was made in respect of the export of raw wood. If these things have been done, if the situation has been fully explored, the house should know. I certainly am not informed as I should like to be. There is one special thing that I mention as I come to the end of this part of my speech. We seem to have made a sad mess in respect of one possible source of substantial employment. I refer of course to the pipe line. It seems that there we have just messed the thing up completely and lost for this year what might have been a very substantial source of employment.
A dominion-provincial conference is at last being grudgingly called. It is only an agenda conference, I understand. It is to get ready for the conference. It almost makes one despair when one wonders whether this is again a case of this year, next year, some time, never. I was present in the Senate chamber when the dominion-provincial conference was adjourned sine die around the 1st of May, 1946. At that time it was interesting, almost pathetic, to observe the desire of some of the provincial representatives, notably our friend Angus Macdonald who is no longer with us, to have the conference adjourned to a specific date. But no, it would not be conceded.
Now, it is hard to find any sign of enthusiasm on the part of this government in the preparations for the forthcoming conference. It seems to me their attitude has been one of twisting and squirming and trying by every means to avoid responsibility. Where are the brave days of 1945? The vision apparently has passed away. I know what has been said. It will be said that since then we have had to step up our defence expenditures. I know that very well, and a lot of other things have happened. The government is taking a couple of billion dollars more out of the taxpayers than they were at that time.
We go back to 1945. As I say, the vision has passed away like the snow in spring.

Let us remind ourselves of what was talked about seriously back in 1945. There were to be efforts directed to a high degree of employment; efforts directed to (1) export trade, (2) to private investment, (3) consumption, (4) expenditures and public investment. Governments then thought they could regulate the economy. I imagine now they would like to forget some of the brave words. I know that a gentleman not renowned for his opposition to the Liberal party, Bruce Hutchison, says that the minister is now on white fly paper, by which I understand he means that the minister is more or less stuck with some of the promises that were made in the past.
Now, let us consider for a moment what has happened since 1946. In his budget speech of 1946 Mr. Ilsley said that owing to the failure of the conference, which I described a moment ago, several of the major objectives must be held in abeyance for the time being. Then he added that "they remain, nevertheless, an essential part of the program of this government". On July 15,
1946,	that was just after Mr. Ilsley's speech, Prime Minister King wired to the premier of Saskatchewan that the federal government was "ready to explore mutually satisfactory arrangements in regard to the whole or any part of our earlier public investment and social security proposals." In 1947 Premier Hart said that Mr. King had assured him- I think this was when the British Columbia agreement was signed-that as soon as a sufficient number of provinces had signed agreements he would call another dominion-provincial conference to discuss various matters, including unemployment.
In his budget speech of 1947 Mr. Abbott said that "the government of Canada looks forward to the day when the agreement of all or substantially all the provinces will make possible the achievement of the great national purposes which impelled the dominion to make its comprehensive proposals of August 1945." He said that this included "the development of an efficient and flexible tax system designed to permit the expansion of employment and income." That was in
1947,	and those were brave words; but what about actions? Well, as I said a few minutes ago, the government seems to me to have been squirming and wriggling ever since to evade responsibility.
Perhaps there is one thing I should mention. I discovered to my surprise, and to the surprise of a lot of other people, a clause which is in the dominion-provincial tax agreements and which looks to me like a bit of slick legalism. I shall read it:
Nothing contained in this agreement shall be construed as an admission by either party to this

agreement that the said party is responsible ior the whole or any part of the cost of the relief of unemployment, either during the operation of this agreement or at any other time.
Now, Mr. Speaker, I do not know whether it is fair to call that a joker. I have met some people during the recess who certainly thought it was a joker. They had not known about it. They thought it was a curious place to have this matter of social policy introduced. Of course, it should be apparent to everybody that the effect of that was purely to benefit and protect the dominion. So far as the provinces are concerned, their responsibility comes under the British North America Act. They could not be relieved by this clause, so that we can take it this was what I call a slick legal device to protect the dominion. I do not think very highly of it because it would seem to me extremely likely that it was obtained under what might be called a mild amount of duress. The provinces were getting money at the moment and unemployment at that time was not a very serious matter. A bird in the hand was worth a good deal. However that may be, they signed that agreement.
Now, what do we find? I have read the memorandum from the social workers in Toronto pointing out that all governments were claiming they were not responsible. It is a sorry record. We had the visit of the Toronto board of control here, and they were told to go back and talk to the province. We had the request from British Columbia, and they were told that they had not established the fact they were unable to take care of the situation. It is a sorry record and the federal government cannot camouflage its half-hearted contribution.
Of course, as I said some time ago, these things come back, and usually to the purse. If the government had made savings, if they were able to do more, then the situation might be different. This brings me to the question of expenditures, savings and extravagance, on which I shall say a very few words. It is an old story and a sad story. We have had the new Minister of Finance (Mr. Harris) compared to Hercules, but the reductions which have been made, on balance, are trivial, except in defence and finance. The finance reduction I understand is more or less temporary and accidental. The old sink holes are still infinitely capacious: professional and special services, telephones and telegrams and all the other things with which we are so familiar.
There is just one thing I am going to mention. It has already been mentioned in this
The Budget-Mr. Macdonnell house but seems to me to be so fantastic I am going to mention it again. It is the case of the C.B.C. The C.B.C. has been made a little empire. It has taxes of its own. This takes us back past the days of the consolidated revenue fund when all taxes were earmarked for special purposes and when infinite inconvenience was caused thereby. As I say, the C.B.C. has an empire of its own and taxes of its own. In their last report we have the astounding situation that they had a surplus of $6'5 million. Of course, it was not a surplus at all but a combination of circumstances that had prevented them from making some capital expenditures which they had intended to make.
The best comment I can make on their situation and the way they carry on business is to read what the Auditor General had to say in his report. He had made suggestions to the C.B.C. as to their method of doing business. When you have an empire of your own, and taxes of your own, and when you do not have to come each year to have your estimates approved in this house, I suppose you do become pretty uppish. And evidently the C.B.C. at any rate took precious little stock of what the Auditor General had said, and caused him to make this comment:
Subsequent action by the corporation-
This is subsequent to his suggestion of change, which was ignored.
Subsequent action by the corporation not having been of a nature to remedy the situation, the manner in which the accounts were kept during the fiscal year ending March 31, 1954, was not found to be conducive to satisfactory auditing.
Mr. Speaker, I ask you and I ask myself if anything more conducive to abuse and more contrary to common sense in dealing with large sums of money could be imagined. I suppose someone had the bright idea that there would be a certain narrow logic in letting the users of radio and television carry the burden of the C.B.C., as we were doing away with licence fees. This was a bright idea. I suppose it was thought that it would be painless. Of course anyone who looked at the realities would see there was no reason whatsoever, no reason in the world, to expect that the tax would be the right amount: and there was even less reason to expect that if it was too large there would be any complaint from the C.B.C.
But even now when the foolishness looks so self-evident, and when as I say they have a phony surplus of $6,500,000-even now, apparently there is no disposition to change. Indeed, the answer that is given to us is that this year the C.B.C. will be able to spend the full amount. I do not know how they figure what it will be, because that would

The Budget-Mr. Coldwell depend upon the amount of sales. But whatever it is, they will do their best-and I think probably we can rely upon them for that.
I can only repeat that when the government deals with money in this way, to use the Prime Minister's expression, it is not smart enough. And this is what caused some newspapers, I think, to call this an irresponsible budget. It is neither one thing nor another. It does little enough for its beneficiaries, and nothing to ease the burden of the lowest income groups in the community, who get no reduction of any kind, and who will have to help pay the taxes to repay the borrowed money.
Notwithstanding the optimistic predictions, we have deficit financing. I have read to the house the criticisms by other ministers with regard to deficit financing. We have tax reductions which are to come from borrowing. It is so much easier to borrow, and so we have set out on the slippery path of inflation, notwithstanding the fact that the minister tells us that times are good-and it is likely he would add that they are to be almost unimaginably better.
As for the real problem, that of unemployment-well, the budget virtually ignores it. They are looking to a dominion-provincial conference, as, if and when it takes place. We can only hope that the lukewarm and indifferent attitude of the government will be changed. That can come about only through the efforts of this house, supported by public opinion.
Mr. Speaker, I move, seconded by the hon. member for Eglinton (Mr. Fleming):
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 incomes 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."


Mr. M. J. Coldwell (Roselown-Biggar):: Mr. Speaker, rising to discuss the minister's budget I would say at first that, despite the able manner in which he delivered it, it was a most deceptive document, for it failed utterly to suggest any remedies for the situation that has arisen as a result of the drop in farm income and the serious level of unemployment-which are the real factors behind the latest recession in the Canadian economy.
One excuse, that the 1954 drop in the gross national production and of farm income is

due to a poor western crop last year, is both misleading and fallacious. The poor crop has had relatively little influence yet, because of the small quotas of deliveries that have been permitted from it. There is-and I do not think this fact is generally recognized-a very substantial amount of good wheat lying on the farms of western Canada.
I have a letter which illustrates that point. It comes from the co-operative farm in my constituency on the Matador ranch, which is operated by some 17 veterans from the last war, and their families, on a co-operative basis. After referring to the distribution of cars at local elevators and protesting against being compelled to deliver grain at non-pool elevators-and may I say this is a very real grievance among our farmers in western Canada who wish to deliver their grain to the pool elevators system, their own organization-the writer goes on to say this:
As far as our farm is concerned, we have about 14,000 bushels of 1952 wheat; 15,000 bushels of 1953 wheat and several thousands of bushels of 1954 wheat, so don't let the government in power get away with the idea that the poor 1954 wheat crop is the reason for the present farm plight. There is plenty of 1952 and 1953 wheat besides our poor grade 1954 wheat.
He then goes on to say this:
We had hail damage of 43 per cent in 1953 and also some damage in 1952. As I regretfully say- here we are more fortunate than several of our neighbouring farmers who were not hailed. We were able to get hail insurance on wheat we would never have been able to sell or build storage for. Some have welcomed the hail so as to collect hail insurance as they have no faith in the way the present government in power has lost markets.
To identify the letter may I say that it was written by Mr. E. P. Monson of the co-operative farm at Matador; and of course this letter is available to the house, if it wishes to have it.
Thus, the minister's excuse regarding one aspect of the fall in our economy is, as I have said, quite fallacious. Nor should we allow it to be said-and I wish to make this point clear-that the policies of the pool, of the wheat board and the farm organizations are responsible for the loss of our overseas markets.
At no time was Canadian wheat held off the market to claim higher prices from Great Britain or from other overseas customers under the international wheat agreement. Great Britain, for example, was free to buy wheat from Argentina, Turkey, the Danubian countries, or any non-member of the agreement. Nor can the surplus of Canadian wheat be caused by this agreement or the operations of the wheat board. Wheat acreage in Canada has declined over three million acres between 1949 and 1954. Importing countries increased their own production not because

of the international wheat agreement but because they wished to increase and subsidize their domestic production. Wheat in Britain, France and Italy has always been higher in price than under the international wheat agreement. When No. 2 northern wheat on the farm in my constituency in Saskatchewan was $1.60 a bushel, the British farm price rose from $1.99 to $2.28 a bushel. That happened between 1950 and 1953. I may say that these are the latest figures available to me. Prices in France rose from $2.01 to $2.83 a bushel in exactly the same period. Only the bringing into relationship of the sterling price with that of the dollar will bring about a change. This desirable convertibility, as it is called, will come only when North America imports more commodities from our potential customers and thus improves the trading relationship. Government policies to promote this alone can improve our wheat exports. May I say that I saw no such policies foreshadowed in the budget.
Those who would destroy commodity agreements in order to restore speculative marketing are offering no solution to the Canadian farm people or that of agricultural producers anywhere in the world. Therefore, the budget speech of the minister fails completely to recognize the real fall in the economy when it suggests that it is in large measure owing to the poor wheat crop of 1954. In my opinion, the budget fails to meet national needs in respect to two problems: the fall in farm income and the tremendous rise in unemployment, which I believe are not really two problems but are two sides of one problem. If we wish to be at all alarming, today's news of the latest dominion bureau of statistics unemployment figure of
633.000	people registered for work should alarm us. It is the highest figure for many, many years. I did not quite get the other figures of those actually out of work which were also broadcast, but they were well over
400.000	on March 19.
The minister's estimate of the gross national product seems to me altogether too optimistic. Even the Minister of Trade and Commerce (Mr. Howe) does not do more than estimate the capital expenditure program which, while somewhat higher than in 1954, will still be lower than in 1953. The Minister of Finance believes that we shall not only recover our loss in production of last year but in this year we shall add to it and make what is in effect a very abnormal gain in the gross national product. Upon that assumption he bases his estimated deficit of $160 million at the end of the present financial year.
I want to say again that there was no reference in the budget to the 600,000 who
The Budget-Mr. Coldwell were unemployed at that time, 633,000 now. These are the unplaced applicants for work. The only reference is to be found in this one sentence of the budget speech. The minister said at page 2728 of Hansard:
In recent years we have become so accustomed to big improvements in production, that even a minor reversal of the trend is apt to cause more concern than the situation warrants.
Surely, 10 per cent or more of our entire labour force seeking work, or unemployed, should not be regarded as a minor reversal. Certainly, that is not the opinion of the workers, and above all it is not the opinion of an unemployed person.
The minister persuades himself that production levels for last year were next to the record. It is true that because of the growth in population and the monetary inflation during the post-war period, the absolute figure of gross national production has been increasingly satisfactory to the minister when presenting the budget. However, the present minister and the government should follow the example of the government's own bureau of statistics and express the gross national product in terms of constant dollars and then examine Canadian production today and compare it with the previous years to get the comparable per capita figure.
The gross national product per capita, in terms of constant dollars, that is the value of a dollar between 1935 and 1939, which is the base period that the dominion bureau of statistics takes, was in 1954, not just lower than in 1953, as appears to be the case when we consider only the absolute figures, but in constant dollars it was actually lower than 1953, 1952, and 1951, and it is indeed the lowest since 1950, when the Korean war broke out and we got a boost in production.


Walter Edward Harris: I do not want to interrupt my hon. friend, but I take it that he has worked it out. I have just looked at the white paper and it does not appear to be that way.


Major James William Coldwell: These are the constant
dollars on a per capita basis.


Walter Edward Harris: That is in the white paper.


Major James William Coldwell: I obtained it from the statistical review of the dominion bureau of statistics.
If we go back farther we find that the gross national product per capita, in constant dollars, was in fact higher in 1943, 1944 and 1945, than it was in 1954. I think that is right. Indeed, these figures underline the contention that I have made over and over again in this house that the Canadian production machine functions best during times of war or of post-war defence preparation. Of course, that is not the fault of the machine. Productively, our scientists, our engineers and
2956	HOUSE OF
The Budget-Mr. Coldwell our workers have increased their productivity year by year, but our economy has been unable to adjust itself to consuming all of which it is capable of producing except, as I have said, during heavy wartime or for defence preparedness. Therefore, there is really no overproduction. The unplanned economy fails to move the wealth of the nation to those who need it, and accordingly, there is waste and poverty in the midst of world-wide actual or potential plenty.
Now, this is where the budget has its part to play. There are two things which the budget could do, two related things which the minister failed to do. First, tax relief should be given in such a way as to most effectively stimulate consumption. Second, the budget should plan to enable the government to initiate large public investment programs to fill the gap when private investment fails.
Now, with regard to the stimulation of consumption, the budget does very little in this respect. We welcome even the parsimonious tax reductions that are to benefit the lower income groups. We welcome the reduction in the excise tax on automobiles and the abolition of the tax on tires and tubes. With the rapid growth in suburban living and the distances between our farms and their sources of supply, the automobile has become an absolute necessity rather than a luxury for large sections of the population.
I am disappointed that the minister did not reduce the rate of sales tax or even make wide exemptions from the tax of commodities like clothing and household effects. The sales tax, including the social security tax of 2 per cent, is 10 per cent at the federal level, but because it is pyramided as it passes from the manufacturer to the consumer, the increase in cost to the consumer is considerably more than 10 per cent. Indeed, in some circumstances it may even be 20 per cent or more than 20 per cent, though of course it is not always that amount.
One of the ways of increasing the purchase of consumption goods would have been to reduce the sales tax. The minister made some reductions in income tax which are expected to reduce the federal revenues by some $85 million in the current fiscal year. These reductions will, of course, not assist those who are unemployed nor those who do not pay income tax.
May I say to the minister that this was done in a most misleading manner. When we heard the minister we jumped to the conclusion that the reduction in the tax was more substantial in the lower brackets than in the higher income brackets. What the minister actually did, in spite of any impression to the contrary which was contained in the table which I looked at the night the 

budget was placed before us, was to reduce the tax rate by two percentage points in all personal income brackets. This means that the married taxpayer with two children receiving family allowance and earning $3,000 a year gets a tax reduction of $7 for the whole of 1955, or an average of 58 cents a month. In other words, slightly less than two cents a day. I do not think that anyone will argue that that will stimulate consumption substantially.
The married man with two children receiving family allowance with an income of $100,000 a year will receive a tax reduction of nearly $1,000, or to be precise, $977. The higher the income the more rebate that is received. This is a reversal of what the table included in the budget seemed to indicate when I looked at it the night the budget was placed before us.
Now to achieve the maximum of benefit to the economy, benefits should have been higher in the lower income group than in the higher. The best way to have done this would have been to have increased the basic exemptions to say $1,500 for single persons and $3,000 for married persons, with of course corresponding exemptions in relation to dependents. Had this been done the married taxpayer with two children earning $3,000 a year would have received a reduction of $105 instead of the $7 he will receive this year.


Walter Edward Harris: And the deficit would have
been?


Major James William Coldwell: I shall come to that in a
moment. In all the higher brackets increases should have been made to compensate to some extent for the loss of revenue due to the higher exemptions. While I cannot go into it as I would like to if time permitted, this could have been accomplished by the imposition of a capital gains tax. People in this country who have been dealing in stocks over the past several years have made huge incomes and those incomes have not been taxable.
The minister could have helped the small man too by the removal of the 3 per cent floor on medical expenses. The House of Commons expressed itself in favour of its removal some years ago and the government I think should be censured for having failed to carry out the recommendations of the representatives of the people of Canada so clearly expressed in this parliament at the time. If the minister is able to reduce the income tax on the higher income groups and on large corporations then he certainly could afford to adopt this proposal which would benefit primarily the low and middle income groups.

The government is by slow degrees introducing what is in effect a more regressive personal income tax structure, ignoring more and more the basis of ability to pay. Recent budgets have whittled steadily away at this principle. Let me make my point clear by comparing the tax rate for 1956 with that in effect in 1949 when the present scale of exemptions was established.
In 1949 a married man with no children earning $3,000 a year paid a tax of approximately $150; in 1956 a married taxpayer earning the same amount will also pay approximately $150. In 1949 a married taxpayer with no children and earning $5,000 paid a tax of approximately $510; in 1956 he will pay $510. In 1949 a childless married taxpayer earning $10,000 paid an income tax of approximately $1,660; in 1956 the same taxpayer will pay a tax of about $1,560, a reduction of $100. A person earning $100,000 paid a tax in 1949 of $50,360, but in 1956 he will pay $48,460, a reduction of $1,900.
The minister may say that this is due to the operation of the old age security tax. That is true very largely and that is my point. This situation arises because of the $60 limit on the old age security tax. A person with a taxable income of $3,000 will pay $60 just as the man with a taxable income of $10,000, $20,000 or $100,000 will pay the same $60. This means that at the lower income the old age security tax is 2 per cent, but in the $10,000 bracket it is six-tenths of 1 per cent and in the $20,000 bracket it is three-tenths of 1 per cent. This illustrates what I mean when I say that our income tax structure has become more and more regressive. If we must have a special old age security tax of this type, then remove the ceiling. Make it 2 per cent all the way through, which would help to get the fund out of the red.
I should say immediately that I am glad that the government has abandoned the fiction that old age security will be paid for by this tax. We never supported the proposal to set up what is in effect a separate fund to meet this special need. There was no more logic in that than there would have been in setting up separate funds to meet
Income tax (at 1956 rates)	
Old age security tax	
Surtax of 4 per cent on investment income over $2,400	
Total tax	
Tax credit, 20 per cent of $11,133.33	
Tax payable	
The Budget-Mr. Coldwell such things as veterans' pensions, family allowances or even defence expenditures which would result in endless confusion and administrative waste for checking and crosschecking. Better abandon the 2 per cent special old age security tax and pay for it out of general revenue with an income tax imposed in the higher brackets as well as in the lower to meet the need.
According to the estimates for the 1954-55 fiscal year the old age security fund today is made up of 20 per cent sales tax, to which everybody contributes-the larger the family the larger the contribution-7 per cent personal income taxes and only 4 per cent corporation taxes. This again illustrates my point.
I made a comparison between the personal income tax in effect in 1949 and that which will be in effect in 1956. In 1949 the tax credit allowed receivers of dividends from Canadian corporations was first introduced. At first 10 per cent of what was received in dividends on shares was deductible from the income tax otherwise payable by a taxpayer. In 1953 this tax credit was increased to 20 per cent producing, as I pointed out at the time, the fantastic result that a married man with no children who received all his income from clipping coupons could receive up to $9,760 free of personal income tax. That was the position in the 1954 taxation year.
As a result of the taxation changes proposed by the minister this year the results are even more fantastic. The government has been most lavish in benefiting this group of coupon clippers. As a result of the tax concession for 1956 when the tax changes will have their full effect the minister will have increased the $9,760 free of income tax to $11,133.33 which the coupon clipper may receive in dividends before paying any personal income tax. To my mind this is personal income tax evasion, quite legitimate but on a mammoth scale, marking an addition of almost $1,400 to the income which this group may receive tax exempt.
The following table indicates exactly what I mean:
Coupon clipper (Gross unearned income	Salaried person
from Canadian corpora-	(Earned income of
tions of $11,133.33, married	$11,133.33, married with
with no children)	no children)
$1,817.33	$1,817.33
60.00	60.00
349.33	nil
$2,226.66	$1,877.33
2,226.66	nil
none	$1,877.33
2958	HOUSE OF
The Budget-Mr. Coldwell
This seems to me entirely inequitable when we consider that an earned income of $3,000 will pay $150 in income tax, while someone who receives his income from Canadian securities may receive $11,133 and pay no personal income tax at all. To argue, as the minister may, that corporations are taxed is entirely beside the point. I might just as well argue that because the Canadian Pacific Railway pays corporation taxes, then its wage earners should pay no income tax. I could just as well argue that proposition. Surely when we consider that corporation taxes are being reduced and that the income earner is of more use to society than is the coupon clipper, this iniquitous differential should be wiped out.
My second criticism was that the budget has failed to perform a second important function, namely preparation for a vast program of public investment. The minister was much concerned about the impact of corporation income tax. That he feels more concerned in that regard than in regard to individuals is evidenced by his decision to make the corporation income tax reduction retroactive to January 1 while the personal income tax changes will not become effective until July 1.
Concern for corporations no doubt is, in the minister's opinion, designed to stimulate investment. The first thing that must be pointed out is that the nature of corporation investment is changing. For instance, the 1954 preliminary figures indicate that gross business savings, presumably available for investment, and depreciation allowances were almost four times as large as were what might be called undistributed corporation profits. Accordingly the importance of the size of corporation profits is not as significant as it once may have been. Business has often refused to invest regardless of what its total profits may be. Consequently, reductions in corporation tax at this time, instead of going into new investments, may be paid in large part in the form of dividends, swelling the tax exempt status of certain people and providing them with what may be regarded as the guaranteed annual wage for coupon clippers. May I add that these same coupon clippers are often those who oppose most strenuously the idea of a guaranteed annual wage for the workers in industry.
It seems to me that the minister should have left the corporation taxes as they were, and should have diverted the revenues and capital gains into social investments of many types. That course indeed would have stimulated the economy. It would have demonstrated that the government was more


concerned with social investment than with the financial interests. This revenue, as I suggested, plus an unearned capital gains tax, could have been used to assist the provinces to build hospitals and schools, to provide local amenities, to establish a vigorous national housing plan and, indeed, perhaps even a national health plan and so on. It might have helped in a national highway aid program, although this is considerably less potent in the economy in terms of employment than is the construction of houses and institutions such as those I have mentioned.
In order to emphasize the point I am going to move the following subamendment, seconded by the hon. member for Cape Breton South (Mr. Gillis):
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."
I think that subamendment points up exactly what I have been saying. Some of our banks, it will be observed, notably in a recent monthly review of the Canadian Bank of Commerce, recognize the need for social investment of this kind to meet the needs of our people and to build a more prosperous Canada. The need for a public investment program has been underlined, of course, because of unemployment in recent months.
Municipalities have been forced, by the failure of the federal government to act, to adopt makeshifts. A short time ago the Toronto city council announced a work program which would enable unemployed men to earn $20 a week. This program reminded me of similar relief programs during the early days of the depression, which programs members of the Liberal party in common with some of the rest of us denounced from one end of this country to the other.
Of course this program will be of some help to those who are unable to find work, for it will assist them in obtaining food and a minimum of lodging, but can this be regarded from any angle as satisfactory? Is this a stimulus to purchasing power and our national economy? Is this indeed to any degree the honouring of promises that were made during the war by the federal government-particularly following the Rowell-Sirois commission-to assume responsibility for the unemployed employables? How can it be regarded as just and right that failure to plan our economic system should first deny to the unemployed the right to perform useful work that they are capable and trained to

perform, and then force them to work at substandard wages-$20 a week-in order to exist?
Hence, rather than the reduction in corporation income taxes I should like to have seen at least a start on a vigorous public investment policy to provide opportunities for full employment. When private enterprise finds that it cannot profit by expanding its investment and production programs, the government is obliged to resort to promises and concessions.	This is like enticing a
donkey by holding a carrot before its nose. If private investors are unwilling to accept risks without government guarantees such as were demanded recently in the proposed building of a trans-Canada gas pipe line, a government investment board should fill the need. When large corporations fail to justify their oft-repeated faith in the future of Canada with deeds, then we should have a national investment board to meet the need for social investment.
That has been clearly demonstrated this winter. Instead of making concessions to corporations the federal government should be doing the job that corporations fail to do, and instead of guaranteeing them regarding future profits or the safety of their bonds, it should take whatever profits may accrue for the benefit of the Canadian people.
In connection with this pipe-line discussion, may I add once more-as I did when the matter came before the house some time ago-that it is intolerable that the head of a United States corporation, in this instance Gulf Oil Company, should refuse to have anything to do with a project in which the people of Canada might have some control, which the government demanded quite properly because of the financial risk the government of Canada was requested to take. I hope the government will remain firm in refusing to accept the dictatorship of any powerful corporation, whether it be Canadian, commonwealth or foreign. It is this parliament and this parliament alone which should make decisions affecting the welfare of Canada and its people, and not profit-seeking corporations, domestic or foreign.
We welcome the proposal to set up a royal commission to examine prospects for the future development of Canadian resources and the Canadian economy, but it can do little in the way of immediate help. What we need is immediate action and a continuous program of economic development conscientiously and intelligently planned in a democratic way by the people as a whole, to meet the needs of the people. That surely should be a function of this parliament.
The Budget-Mr. Coldwell
I cannot go into other matters of great interest to the Canadian people, inasmuch as my time is drawing to a close. An opportunity will probably present itself to discuss the unusual type of tax reduction which applies only to one province. Let me say at once that some people have said that in attacking this concession to the government of Quebec we are attacking either the province or the people of the province to which it happens at the moment to apply. That is not so. As a matter of fact I would be as much concerned about this type of tax concession if it applied to my home province of Saskatchewan. To my mind the new law which is to come into effect this year introduces into the Canadian tax structure the dangerous precedent that federal income tax may vary from province to province.
I do not think that can be denied. No matter what the government may say, that is the effect of the proposal. The minister may say there is a provincial income tax in the province affected. Certainly there is. But the provincial income tax is levied on a different base, with higher exemptions than the federal tax, and there need be no necessary relationship between the two. The fact is that there is a unilateral reduction in the federal income tax that applies to one province which is, I may say, of special advantage to the high income groups in that province. That the reduction for Quebec was coupled with an invitation to any other province to break the tax rental agreements and enter into a similar arrangement is an invitation to undermine the whole basis of the tax rental agreements. These agreements are needed, and I believe everybody in the house thinks they are needed, particularly when broad fiscal powers of the national government are urgently needed to be exercised.
When the economy is threatened with recession, as indicated by falling farm prices and unemployment, that is the time when broad federal fiscal powers are most necessary; yet it is at this very time that the federal government itself has, in my opinion, weakened the national power to deal effectively with the national economic situation. However, I must leave this problem to some future debate.
A federal-provincial conference is pending. I hope this matter will be placed high on the agenda, and that ways and means will be found to strengthen rather than weaken the tax rental agreements because in many of our provinces, particularly those that are underprivileged through lack of natural resources, these tax rental agreements are of vital importance. If we are to have an even
2960	HOUSE OF
The Budget-Mr. Low
basis of opportunity for Canadians who live in various parts of Canada to enjoy the social services and other amenities of life which are their due, then we must have some method of spreading over the whole country the result of the productive enterprise of the country. The tax rental agreements were an attempt to do that, and I think they were successful to a remarkable degree. I am very disturbed to see what I consider to be a retreat from those agreements, indeed an undermining of them.
Of course I understand that when the conference meets, settles the agenda and meets again, tax rental agreements or some agreements must be negotiated or re-negotiated, let me add, with due regard of course to the rights and responsibilities of the provinces. But the provinces must also recognize that the welfare of all Canada is dependent upon the ability of this parliament and the government to meet successfully economic and social problems that are national in scope and importance. When confederation was established in 1867 the economic problems of the country were very different from what they are today. Yet the fathers of confederation in their wisdom saw to it that while the provinces were given the right to levy direct taxation all forms of taxation, including direct taxation, were to remain within the scope of the federal parliament.
In other words the fathers of confederation recognized, even in those days when the problems were few and simple, that this parliament must have the right to raise revenues in any way it saw fit to meet national needs. The tax rental agreements were a recognition that, while we had that right, nonetheless we were prepared to negotiate with the provinces with regard to a form of tax-income tax-which some of them had used, some only very recently, including the province of Quebec. Because of that it seems to me at this time, with the economy in its present condition and having in mind what may face us in the near future, that it is essential that we shall have tax agreements that will guarantee to all Canadians equality of opportunity from one end of the country to the other. Anything which tended to undermine that or to prevent this parliament handling national economic problems would, in my opinion, be fatal to the welfare of Canada and would bring about national disunity to a greater extent than we have known in the past.
We hope most sincerely that the federal government will not retreat from the right to organize the economy to meet the needs of the people of the country in whatever province they may live. Therefore we must have the necessary power, the necessary funds, to meet 

successfully economic and social problems that are national in scope and importance.
I see that my time has expired, but before I sit down let me say once again that in our opinion the budget and the proposals contained therein are unsatisfactory and fail completely to meet the conditions of falling farm prices, falling farm income, unemployment and other pressing needs of the country at the present time.


Mr. Solon E. Low (Peace River):: Mr. Speaker, the rules of the house do not permit this group to move a subamendment; consequently there will be only the two already moved, one by the Progressive Conservatives and the other by the C.C.F. I looked over these amendments when they were handed to me on being moved by the hon. gentlemen, and because of the fact that each draws attention to the need for censuring the government on the various points mentioned we feel we must give our support to both.
I should like to say at this point that, in addition to censuring the government for its failure to meet the needs of the present situation, as was mentioned by the last speaker, the federal government should now be giving very careful attention to its plans for the dominion-provincial conference which is to convene shortly. Certainly if the provinces of this country are to discharge fully the responsibilities placed upon them by confederation, they must have the wherewithal with which to do so, and every effort will have to be made to see that they do have the finances. Otherwise I see no way in which the municipalities of the country, which have been carrying an undue burden of taxation during the past several years, can possibly be relieved.
I certainly join with the hon. member for Rosetown-Biggar (Mr. Coldwell) in his appeal to the government to make certain that sufficient finances are made available to the provinces through some equitable means, tax agreements if you like, such as may be devised at the forthcoming dominion-provincial conference. It is because these things have not been provided for in the past that I feel I must support the subamendment and the amendment criticizing the government's lack of action.
Now, Mr. Speaker, the central message of my hon. friend's first budget is a half-hearted apology to the Canadian people, as if this budget were saying to them: the opposition in parliament have done so much talking about a business decline and serious unemployment during the past several months that we have come to half believe it ourselves. Consequently we are making some

changes in our financial policy for the coming year to help meet whatever these foolish people on the other side seem to think is wrong. There is no evidence, however, in the minister's budget to indicate that the government has come to fully realize just exactly what the situation is, and how serious it is.
The provisions of the budget do represent some change from the government's position of a year ago or even six months ago, but it is not enough to be able yet to call it repentance. Repentance, in my judgment, involves restitution. I have searched carefully through my hon. friend's budget and I can find only an indication here and there of half-hearted restitution to those who have been caused serious loss and worry, perhaps even extended suffering, as a consequence of government policies that have been allowed to carry on much longer than they should have been. I do think that budgeting for a deficit is exactly what the economy needs at the present time to help it pull out of the slump, and perhaps help to stimulate a higher economic activity so that unemployment can be abolished. I am afraid I cannot agree with the hon. member for Greenwood (Mr. Macdonnell) on that point.
I must give the Minister of Finance credit for having recognized that necessity at least. I might say right here that when the minister recognizes the necessity of budgeting for a deficit now, he recognized the necessity of seeing to it that more purchasing power was left in the hands of the people so they could buy some of the goods that are available. It is not with his proposal to budget for a deficit that we quarrel. Our criticism is that the tax cuts he made were not well distributed, and they were not designed to give relief to all the people who deserve to have relief at this time. It is clear that the Minister of Finance knew, perhaps as a consequence of the talk of unemployment and business decline from this side of the house, that the economy did need some sort of a shot in the arm.
I have noticed that quite a number of newspapers in the country since April 5 have called the minister's budget a shot in the arm. Well, I dispute that very strongly. About the best anyone could possibly say in that regard is that the budget does provide a very mild hypodermic, but I am afraid it has nothing more than milk in it. I would say the minister realized he had to provide the economy with a balance wheel, but our criticism is that he failed to equip the balance wheel with the proper loads. The minister must realize, I think, that unless you keep a balance wheel well loaded with those very interesting little well placed weights on the rim it
Private Bills
does not work smoothly, and it does not do the job it was designed to do. So it is with our economy. If you are going to provide it with a balance wheel you have to keep your balance wheel loaded. I shall talk about the the loads I have in mind just a little later.
Inasmuch as today is private members' day, Mr. Speaker, from five o'clock until six, may I ask you at this stage to call it five o'clock and I shall resume after the dinner hour.


Mr. Deputy Speaker:: It being five o'clock, the house will proceed to the consideration of private and public bills.



PRIVATE BILLS


[Stage Direction]
Bill No. 307, respecting the Fredericton & Grand Lake Coal & Railway Company. 

Mr. Murphy (Westmorland).

[Stage Direction]
Bill No. 308, for the relief of Isidore Tremblay.-Mr. Hunter.
Bill No. 309, for the relief of Doris Lydia Kimber Keller.-Mr. Hunter.
Bill No. 310, for the relief of Letitia MacDonald Lanz.-Mr. Hunter.
Bill No. 311, for the relief of Kurth Sauer. -Mr. Hunter.
Bill No. 312, for the relief of Marie Blanche Dionne Krysko.-Mr. Hunter.
Bill No. 313, for the relief of Edna Florence Helen Dawson Smith.-Mr. Hunter.
Bill No. 314, for the relief of Eldora Mary Mills Pope.-Mr. Hunter.
Bill No. 315, for the relief of Roberta Margaret Gilpin Chadsey.-Mr. Hunter.
Bill No. 316, for the relief of Anne Wahl Ryshpan.-Mr. Hunter.
Bill No. 317, for the relief of Marian Toba Wolfe Cohen.-Mr. Hunter.
Bill No. 318, for the relief of Bernice Elizabeth Lunan Day.-Mr. Hunter.
Bill No. 319, for the relief of Ross Harold Becker.

Mr. Hunter.
Bill No. 320, for the relief of Marie Anna Migneault Cloutier.-Mr. Hunter.
Bill No. 321, for the relief of Maria Camko Kowalew.-Mr. Hunter.
Bill No. 322, for the relief of Martin Yvon Blais.-Mr. Hunter.
Bill No. 323, for the relief of Margaret Moffatt Wilkie Johnson.-Mr. Hunter.
Bill No. 324, for the relief of Winnifred Herbert Chapman.-Mr. Hunter.
[Stage Direction]
The Budget-Mr. Low
Bill No. 325, for the relief of Rocco Aldo Amaedeo Mastrocola.-Mr. Hunter.
Bill No. 326, for the relief of Marie Mae Seguin Le Moyne.-Mr. Hunter.
Bill No. 327, for the relief of Amy Joyce Markham King.-Mr. Hunter.
Bill No. 329, for the relief of Maureen Demers Kezber.-Mr. Hunter.
Bill No. 330, for the relief of Eva Levine Shapiro.-Mr. Hunter.
Bill	No.	331,	for	the	relief	of	Rejane
Plamondon Levine.-Mr. Hunter.
Bill No. 332, for the relief of Marie Irma Marquette Lalonde.

Mr. Hunter.
Bill	No.	333,	for	the	relief	of	Marion
Tannenbaum Rabow.-Mr. Hunter.
Bill	No.	334,	for	the	relief	of	Walter
Williamson.-Mr. Hunter.
Bill	No.	335,	for	the	relief	of	Eileen
Beatrice Sloan Douglas.-Mr. Hunter.
Bill No. 336, for the relief of Madelyn Jane Picard Gilbert.-Mr. Hunter.
Bill No. 337, for the relief of George James Marshall.-Mr. Hunter.
Bill No. 338, for the relief of Luigi Martel-lino, otherwise known as Louis Martellino.- Mr. Hunter.
Bill No. 339, for the relief of Bernice Balinsky Friedman.-Mr. Hunter.
Bill No. 340, for the relief of Rose Marie Lescarbeau Deschenes.-Mr. Hunter.
Bill No. 341, for the relief of Florence Aleatha Geraldine Hamilton Gardner.-Mr. Hunter.
Bill No. 342, for the relief of Mary Veronica Hamilton Campbell.-Mr. Hunter.
Bill No. 343, for the relief of Aba Awner.- Mr. Hunter.
Bill No. 344, for the relief of Grace Elizabeth Sinclair Peterkin.-Mr. Hunter.
Bill No. 345, for the relief of Sybil Lavine Markowitz.-Mr. Hunter.
Bill No. 346, for the relief of Gabriel Boisclair.-Mr. Hunter.
Bill No. 347, for the relief of Betty Weiner Schwartz.-Mr. Hunter.
Bill No. 348, for the relief of Lili Gourd Lajeunesse.-Mr. Hunter.
Mr. Deputy Speaker:: The items on the
order paper under private and public bills having been exhausted, the house will resume the business which was interrupted at five o'clock.



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Hon. W. E. Harris (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of

ways and means, and the amendment thereto of Mr. Macdonnell, and the amendment to the amendment of Mr. Coldwell.
Solon Earl Low: It has been suggested that hon. members went through the business for private members' hour quickly in order to have the privilege of hearing my speech. I hardly believe that is true. However, we are very grateful that we can carry on without too much of a break.
I have mentioned already that we think the Minister of Finance did the right thing when he budgeted for a deficit this year. But the important thing for hon. members to keep in mind is the manner in which he intends to finance that deficit. If he is going to run the country into debt by the issuance of bonds, either to the general public or through the chartered banks of the country, then we feel that is wrong. We contend that in any action the circumstances call for this year, if the minister is going to budget for a deficit then he must be prepared to finance that deficit without running the country into a further burden.
He can do that, as we have pointed out time after time. But we say he has used the proper method in attempting to meet the situation, at least partially, this year. We do think if he had really intended to give the economy the shot in the arm, the effective one that the newspapers have talked about, he should have gone further than he did. A deficit of $160 million in a $25 billion economy is a pretty weak hypodermic any way you want to look at it. We think the minister could very well have gone as far as $300 or $400 million of a deficit with perfect safety this year at least, until Canada returned to a high level of economic activity.
There are good reasons for taking that attitude. The government is depending almost entirely upon tax reductions to pull Canada out of the business slump and to cure the serious unemployment problem. At least that is the way it looks to us, unless they bring in some rather substantial supplementary estimates in June providing for much greater government investment than any of us have seen or suspected thus far. And so, as I say, tax cuts of only $148 million in a $25 billion economy, under such circumstances as we now face, when business has been somewhat depressed and unemployment in various sections of our country is very serious, are entirely inadequate to meet the needs. That is one of the reasons we propose voting for the amendment and the subamendment.
We do congratulate the minister upon the tax cuts he did make. We think it was wise to reduce income tax rates. But the minister

must realize that when he confines his reductions to the rate structure only he leaves out a great many people who deserve consideration, because there are many thousands of people in Canada whose incomes are below the income tax exemptions. What has the budget done for them? What has the budget done for old age pensioners, for those who are on superannuation, for the veterans on pensions and the like? Perhaps the minister felt that it was impossible to make any substantial change in exemptions under the Income Tax Act. I am inclined to believe that it was better not to try to do it this year. But we do think it would have been much more effective as a budget if, in addition to the income tax reductions the minister made, he had provided for some cuts in the sales tax. That would have made it possible for people in lower income groups to have at least some relief, and would have spread the favours at least more evenly. That is exactly where the purchasing power is most needed, among those people in the lower income groups.
I think perhaps the most serious criticism I can offer of the whole budget is that the minister failed to make any reduction in sales tax. I say this for a number of very important reasons. In the first place I think I have already mentioned that with the reduction in income tax rates he will not help the people who are not in income tax brackets- and in this I include old age pensioners, recipients of war veterans allowances and of veterans pensions, low wage earners-of whom there are many thousands. The reduction in the sales tax would have made it possible for them to retain a bit more of their already too meagre purchasing power, so they could do their share toward buying the surplus of goods that has accumulated throughout the country, and at the same time of course increase their own enjoyment of life to a certain extent. That would have been considerably more like real justice to all parts of the Canadian population than has been brought about by the minister in his budget.
There is another important reason, too, why I think the minister should have brought in some reduction in the sales tax at this time. We have developed a high price economy which is making it much more difficult than before for Canada to compete successfully in world trade. Anything, I contend, that will help to adjust consumer prices downward would stimulate trade and help to move more of our surplus goods to foreign markets. A reduction of the sales tax would be one means of helping to bring down some consumer prices to that end. We think the minister and the government lost a golden
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opportunity right here and, as I say, in our judgment this is the most serious criticism we make of the financial proposals in the budget.
There were some slight excise tax cuts provided, but they were only slight, and they touched only a very restricted portion of the goods upon which the tax is imposed. We are glad to see the reductions, of course, the reduction from 15 per cent to 10 per cent in the excise tax on automobiles, and the abolition of the tax on truck and automobile tires no matter for what purpose they are used.
These are all to the good, and I am sure the Canadian people generally will welcome these tax reductions. But right here I do wish to voice serious criticism of the method the government has of handling some of these excise tax cuts. I think their method is quite unfair to retailers, such as automobile dealers. Taxes are payable at the factory, which means that when the automobile dealer takes cars from the factory into his storeroom or storage lot, he pays the tax before he can take them out. When the government announces in its budget, as it did on April 5, that there will be absolutely no refunds on taxes already paid at the factory on automobiles taken out by retailers, but remaining unsold, I say it is acting unfairly.
I remind the government that they have gotten into a very bad practice in the past number of years, namely the practice of making everybody but the government tax collectors for the government. Anyone might think the government would be rather grateful to have these people performing this gratuitous and difficult service. But how does the government show its gratitude? Well, in the case of automobile dealers, at least, they show it by dispensing a fairly substantial measure of unfairness and injustice, causing many of them serious loss.
I know of one dealer right in this city of Ottawa who had paid $8,000 in taxes at the factory in respect of cars he had already put into storage by budget day and that had remained unsold. But when the announcement of the tax cut was made he could expect no refund, and had to sell his cars in competition with other businesses in the city. Consequently he is suffering a considerable amount of injustice. I would think it would be possible for the government to find some means of preventing this kind of unfairness. I repeat that the method of handling the tax cut, particularly the cut in the excise tax, is very unfair to some of our retail dealers.
Since April 5, when the budget was brought down, there has been considerable discussion about whether Canada will be able to achieve

The Budget-Mr. Low
the $26 billion rate of gross national production this year. That was the aim set by the minister in his calculations. The official critic of the Progressive Conservative party has called the budget an excursion into unreality, I suppose because of the $26 billion figure as well as for some other reasons. Well, we should ask ourselves what chance the government has of achieving the $26 billion rate.
In the first place let me point out that we do have a great many unemployed in this country, and if the government will get busy and bring in policies designed to get them back to work they will contribute substantially toward the gross national production that we need to reach if we are to realize the plans in our present budget. Certainly by adopting policies which will put them back to work the government will have a better chance of realizing that $26 billion rate.
Another point to keep in mind is this. The minister has provided in the budget certain incentives to business to expand operations and to plow back into business more of the profits. Well, I agree with the need for providing those incentives. I think the minister was wise to make a reduction in the corporation income tax this year. Whether the 4 per cent reduction in corporation income tax will provide sufficient incentive to cause allout production, I would not be able to say. And when I use the figure "4 per cent" I mean that the amount of the reduction will be 4 per cent of the present rate. I understand the reduction is from 49 per cent to 47 per cent, which would be about 4 per cent over all.
I am rather inclined to believe that this will not be enough. It will be some stimulus, but I do not think it will be enough. We have kept business generally in this country on a very high rate of income tax for a long time. Whenever you impose a burden of tax that takes from the corporations every year about half of their profits you leave them very little with which to carry on the necessary expansion and new development to keep pace with a growing economy- perhaps I had better say to give impetus to the economy, to make it grow; for it is entirely through private and corporation investment that our economy is expected to grow and expand.
I am not going to argue at this point that the amount of corporation income tax reduction was too small. I am inclined to believe that it could have been a bit more without any serious dislocation in the government's plan, and certainly something more than the 4 per cent would have produced considerably

more incentive for expansion and development toward the $26 billion rate of gross national production which we hope to reach before the end of the year.
There is a third point to consider in this matter. If we get a good crop this year throughout the farming areas, and I sincerely hope we shall, then I believe we can reach the rate mentioned by the minister. But the greatest weakness of the budget, in my judgment, is its failure to provide adequate markets for our production. If we do reach the $26 billion rate of gross national production, what are we going to do with it? That is the big question. It seems to me that is the thing the government must face squarely sooner or later, and I suggest that now is the time to face it. What shall we do with all the production, if through incentive we spark an all-out effort and succeed in reaching the $26 billion rate of gross national production in 1955? I am not going to labour the point; I shall have something more to say about this matter of internal markets and balance wheels and loading the balance wheels just a little later on, but I do sincerely hope that we reach the objective that has been set by the minister.
The government has loaded its budget with a heavy burden of fixed charges which leaves it very little elasticity to meet the ups and downs of economic fluctuations. This fact increases the responsibility of the Minister of Finance and the government generally. It must eventually use more skill, managerial skill, than it ever used before in its history. It must become more conscious of the role which government must play in these times; otherwise, the fluctuations in the economy will become so violent as to make it impossible for the government to meet that burden of fixed charges without plunging the country into an impossible burden of public debt.
The minister said in his budget speech that two-thirds of all of the civil or nondefence expenditures provided in the budget were for public welfare, social security measures, for servicing the public debt and for paying provincial subsidies and tax rental payments. This does not leave very much elasticity, as I said, and it does impose the very heavy burden of fixed charges on everybody. With that in mind, it seems perfectly clear to me that the government in the future must pay very careful attention to ways and means of bringing our economy into equilibrium and keeping it there.
The government must come to realize that if they are to play their part, the part that government should play in this matter of

bringing and keeping the economy in a condition of equilibrium, the main problem will be that of adjusting purchasing power to production. I think that problem of adjusting purchasing power to production is our most important problem even today. That problem will become even more important tomorrow. I ask hon. members to think what it will be tomorrow with atomic power in industry, with electronics and industrial food production and all the other advances in farming and industry which we are only beginning to realize today. Under these new circumstances of the future the problem of the adjustment of purchasing power may become a matter of life or death for this civilization, rather than just the most important problem that we face. I impress that upon hon. members and recommend it to their study.
It is trite to say that we have solved the production problem which, Mr. Speaker, I point out was at one time by far the most difficult one, both as to toil and as to mental effort. The next step, in my judgment, is much easier. It can be summed up in a single sentence. It is a careful statistical survey and bookkeeping balance of currency and book entry money in relation to the value of production. That is putting it in a nutshell. When it is put that way it seems almost too trivial to deserve serious attention; yet it is of tremendous importance, because without it all the heroic efforts that have been made in the past to achieve our present status of industrial power in this and in some other countries of the world may prove to be of little benefit to mankind.
On the other hand, if we accomplish this balance or adjustment of purchasing power to production, both the national and the international situation will be well under way to effective and just solution. Nationally we shall be able to achieve all the material progress that would be technically possible so that we can continue our advance toward more freedom, harmony and happiness amongst our people. Increased leisure, increased community activity and cultural development will by and by add to our enjoyment and our sense of completeness. Internationally, we would be able to balance imports with exports and get rid of all that incitement of the past to export in excess of imports; to try to get a favourable balance of trade, in other words. This, as hon. members can readily see, will improve our relations with all other people.
As for our less fortunate nations, the ones we are talking about here in connection with the Colombo plan, we shall be able to wait until they can afford to pay in goods and
The Budget-Mr. Low
services without embarrassment or hardship to ourselves in any way, because by using the Social Credit financial proposals the exports can be financed without hurting us in any way. I say the greatest problem that we have to face today is this problem of adjustment of purchasing power so that it is brought into equilibrium with our production.
But if the government are going even to begin to bring our economy into equilibrium in the light of all the facts I have mentioned, including specifically the very heavy burden of fixed charges we now have in the budget, there will have to be a change in their thinking; they will have to lay down for themselves and follow some very scientific ideas. I cannot take the time here to mention many of them, perhaps just one or two. I shall depend on my colleagues to follow up with a careful examination of some of the others which are of tremendous importance. However, for a few moments I should like to deal with one of those ideas which I think the government must attend to, and which I think is very pressing. It has been mentioned to some extent by both the speakers who preceded me today. I refer to ways and means of keeping farm cash income in balance with total factory salaries and wages, and along with that ways of making effective use of the total market that is possible within our country.
Some months ago I was attracted to a short pungent statement by Carl H. Wilken, who is a successful Iowa farmer and a specialist in economic research in the United States. He said:
It is foolish to think we cannot have just as much prosperity in times of peace as in wartime. With the greatest productive system in the world, the American people ought to be smart enough to find out how to keep it working at its full rate. It can be done. All that is necessary is to make use of the total market that is possible in this country. The key to such a prosperity and the total market on which it depends is farm income.
This is the end of Mr. Wilken's quotation. I was attracted to it and I did some research work, gathering as many statistics as I possibly could from the dominion bureau of statistics and from other places, to see if it applied to our own country. In my judgment, we in Canada have neglected this key far too long. It is the key to the total use of our internal market. Farm cash income has been allowed to decline seriously, especially during the past year. This decline has been variously estimated at between $300 and $500 million. Second, farm income has not been able to play its important part in the total Canadian market. Our industrial output has had to be cut off in various lines and serious
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The Budget-Mr. Low
unemployment has resulted, as has been discussed already at length in this house.
So there are good reasons why farm cash income holds what I call a key position in our Canadian economy. A look at the record will reveal this important fact. Under normal peacetime conditions the total national cash farm income runs at an almost exact level with total wages and salaries paid out by the factories of the country. The two hold to an approximate ratio of $1 of farm cash income to $1 of factory payrolls. During the long peace period from 1921 to 1938, whenever farm cash income declined for any reason, factory payrolls had to be adjusted downward to meet it; and when farm income rose factory salaries and wages rose in the same ratio. But there were always very serious shocks to the economy when factory payrolls did have to be adjusted downward to meet a reduced farm cash income.
This balance was upset soon after world war II broke out. Wage costs and industrial employment rose with the great demand for arms while farm prices were held down under price control policies. This landed us into 1944 with an abnormal situation, namely total factory salaries and wages of $2,209,621,370 and total farm income of $1,828,825,000. It will be seen that there was nearly $400,000,000 of a disparity.
Many economists had predicted that we would go into a depression by 1946 after the end of the war, but we did not. Several things prevented it, but none was more important than the restoration of the balance between farm cash income and factory wages and salaries. Farm income rose in 1946 by $150,000,000 to a total of $1,742,440,000; factory payrolls in that year totalled $1,740,000,000 in round figures, a reduction from 1945 of over $100,000,000 because the end of hostilities had cut back our war needs.
This provided a sound foundation for the period of general expansion which followed. The normal dollar for dollar ratio continued through 1947 and 1948. In 1950 farm cash income suffered a decline of $300,000,000 and unemployment was beginning to show itself when the Korean war broke out in the late spring of that year. As a result factory payrolls shot up to the highest levels in our history, reaching $2,771,267,000 for 1950 and $3,276,280,917 for 1951. Again we saw a period of unbalance. When we came to 1954 we saw a tapering off of defence spending, but because farm cash income sagged seriously there was no market in rural areas for the products of the factories; therefore unemployment appeared in very serious proportions. That was in 1954.


At the present time there is an unbalance between farm income and factory payrolls, and that I think is the most critical spot in our whole economy today. When the farmers of the country cannot buy the goods which are being made by the factories the only thing the factories can do is shut down temporarily and turn people out of work. This is a shock to the whole economy. We have to come to realize the vital importance, therefore, of farm cash income to industry and labour. I am convinced that for practical purposes the total dollar income of industry and labour is limited, if not completely determined, by the existing level of farm cash income. I think that is something worth studying by our economists here.
It should be borne in mind that the demand for factory goods that is created by farm cash income is not something that is limited to the farmers alone. An examination of all the facts will show that at least 50 per cent of Canada's total population live in small cities and towns and on land around those towns. Most of those towns and villages are really service centres between the factories and the farms, and they derive their support from farm income almost entirely. That farm cash income is distributed among the dealers and service people in those towns and small cities and villages, and it creates good business everywhere. Competent investigators have found that when a farm dollar starts its course from the farmer who receives it for his product it results in an average of approximately $1 in wages for the factory worker; and in addition-and this is the surprising thing-$7 in national income by the time it completes the full economic circuit that it makes through all the service centres of these towns and villages and small cities. That is a startling fact.
That may give you some idea why farm cash income is the key to the total market that we must have in our country for peacetime prosperity. I am convinced that we can have peacetime prosperity only with farm cash income levels in proper balance with manufactured goods, prices and factory wages. Otherwise we cannot have the total market that industry requires to operate at full capacity and thus to keep our people gainfully employed.
The government must come to realize this, too, and to understand that the key to the use of the total market within Canada is farm cash income.	I point out here that the
most important market that Canada has is its own people; fully 85 per cent of all that we produce is consumed by our own people. That is why we in the Social Credit movement have placed such emphasis upon the

proper use of the home market by urging the government to make certain that this market is constantly supplied with enough purchasing power to buy the goods that Canada produces if it wants them. That is what we mean when we speak of keeping our economy in a state of equilibrium. It should be possible for our people to buy our total production if they want it.
I think the government and businessmen and industrial leaders and the labourers of the country should be just as much concerned as are the farmers in making sure that farm prices and farm income are restored to a parity level as soon as possible. We all have a stake in how much the farmer is able to obtain for his efforts on the farm, because all of us depend upon that basic farm income for our own incomes. When I speak for the farmer, therefore, I am speaking also for the industrial people as well as for ourselves. I think this is the key to our economic situation in Canada. I think also that the general public should be correctly informed about this whole very important matter of farm cash income.
This brings me to my conclusion in connection with this criticism of the budget. As I said before, I think the greatest weakness of the budget is that it has failed to do anything for the farmer, and certainly has failed to take any steps whatsoever to bring the total of farm cash income once more into balance with total factory salaries and wages, something which is absolutely essential if we are to have peacetime prosperity.
We in this group are firm in our belief that the country and the government will have to adopt a well-conceived and comprehensive program of marketing and price supports for agriculture. The adoption of a proper price support program is the only way by which the total of farm cash income can be kept in fair equilibrium with the total of factory salaries and wages in Canada. I know there are many newspaper people and businessmen who today are expressing their opposition to the adoption of farm price supports, and they point to the experience of the United States as a horrible example to deter the Canadian people from going further in their demands for a program of this kind.
But I am going to say that I am convinced that the general public are not being properly informed about farm price supports and the kind of program that can be made to succeed. At the present time most of our people are being told only how much it costs to maintain farm price supports. Some newspapers in the country and other critics are pointing out
The Budget-Mr. Low
that the cost would be too high. In my judgment the cost of agricultural support prices would be far less than the cost of widespread unemployment, and farm price supports would be effective in keeping a balance and equilibrium in our economy. I am convinced that some such price support program as was recently suggested by the Canadian Federation of Agriculture would be of tremendous help in doing the kind of job that must be done if we are to have this peacetime prosperity of which I have spoken on several occasions.
I think we should do everything we can to help our people understand what happens when farm income is kept at a reasonable level; that is, how it increases factory payrolls and opportunities for a higher standard of living for all Canadians. Let us sincerely hope that the Minister of Finance and the government will, in the next few months, make a thorough study of the possibilities in this proposal of a system of price supports for agriculture, and that they will soon thereafter-at least by the next budget-come prepared to lay before parliament a price support program that will do the kind of job that must be done if purchasing power is to be adjusted to equal our production. We know this system can help to do the job.
But I warn the government that they will have to have a change in thinking. Unless they pull those dollar signs off their eyes and begin to see the realities beneath the dollar signs they will never be able to adopt the kind of policies that will help us to make use of the total market available in this country. They will have to adopt some better financial proposals as well, and we recommend to them the proposals which Social Crediters have been making over the years as a means of bringing our economy into equilibrium and keeping it there.
Mr. Speaker, in closing I repeat that the adjustment of purchasing power to production is the most important problem facing the Canadian people today. It is the answer to the economic problem, and I say there is no question in our minds about that matter at the present time.
I should like to be able to deal with other phases of the budget but time will not permit me to do so. I should like to have said something about the royal commission. That is exactly the kind of thing we have been proposing for the last 15 years in this house. Certainly ever since I came here in 1945 my colleague the hon. member for Acadia (Mr. Quelch) and others have been pleading with the government to appoint a royal commission to examine into all phases of our economic activity and bring in proposals that
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The Budget-Mr. Balcom will help us to achieve the high standard of living that we can achieve in this great country, to make the wisest possible use of our economic possibilities, and particularly to keep our economy in a state of equilibrium. Some of my colleagues will have something to say about this matter in the course of the debate.


Samuel Rosborough Balcom: Mr. Speaker, we have heard, in this house and outside of it, a great many speeches about this great country of ours. We congratulate ourselves on our great size, our natural resources, our hydro power and other physical assets. But I suggest that our greatest asset is stable government. Great wealth is of little value to the world, and of not much satisfaction to ourselves, unless it is properly used. In his first budget the Minister of Finance has shown his acceptance of responsibility and has maintained the high tradition of courage and progressive action so vital to our continued growth.
At the outset I should like to commend the tariff changes contained in the budget which will be of benefit to our farmers. Of particular interest to Nova Scotia, where the poultry industry has grown by leaps and bounds, is the reduction or elimination of tariffs on poultry eviscerating equipment. Similar assistance is afforded to the fisheries in the reduction of duty on fish meal plant and fish cooking equipment. Also of interest is the elimination of duty on fishing vessels over 100 feet in length.
It would be even more satisfactory if, by action in this house, we could reduce the duty on our fish entering the United States market. That is, to be sure, something that is outside our power, but there is a problem on which action could be taken.
1 refer to the restriction on trawlers operating off the shores of Nova Scotia. By international agreement United States trawlers can come within three miles of the coast, but our Canadian trawlers must stay outside the 12-mile limit. The obvious solution is, perhaps, to change the law respecting Canadian trawlers, but there are several objections to this course. The government has recognized the interests of the inshore fishermen in the recently announced restriction on trawlers inside the famous St. Margarets bay. Furthermore, in the interests of conservation the 12-mile limit may be the more desirable.
Would it, Mr. Speaker, be possible to have this problem reviewed by the northwest Atlantic fisheries council? Its primary purpose is conservation, and it has had marked success in obtaining regulation of the fisheries


off the New England coast. It may be that the United States industry would respond to a proposal from the council which was based on a sound conservation policy. Our objective might then be accomplished without furnishing ammunition for higher tariffs on our fish products entering the United States market.
Apart from tax and tariff matters, there is in the budget speech a great deal that is of importance to all Canadians. As a Nova Scotian I was most interested in the minister's remarks on dominion-provincial relations, particularly the references to the tax rental agreements. I find it rather difficult to become greatly concerned over whether or not we achieve formal reallocation of financial powers and responsibilities as between the dominion and the provinces for, as the minister has said, it is not easy to visualize an arrangement which will meet all future contingencies.
The division of powers and responsibilities established by the British North America Act was practical for many years after 1867. After the turn of the century the rapid geographic expansion and the industrial development, proceeding at vastly different rates in different areas, changed the face of this country, but our constitution remained as it was in 1867.
Then came the depression of the thirties, under the stress of which our federal system began cracking at the seams. As in the maritime provinces, the obvious weaknesses which appeared in the thirties were only the exaggerated symptoms of unhealthy conditions which had existed for a quarter of a century. They were only soothed, not cured, by subsidy arrangements such as, for example, the Maritime Freight Rates Act, and so on.
The tax rental approach, while not without disadvantages, has brought substantial benefits to all the people of Canada and the various provincial governments. That the proportionate advantage varies among the provinces goes without saying, for otherwise such agreements would be unnecessary. I want to illustrate my point with some figures.
The federal tax rental agreements provide varying proportions of the revenue of the provinces. These proportions ranged from 22 per cent for Alberta to 47 per cent for Manitoba in 1953. In that year the proportion for Nova Scotia was 39 per cent. In this comparison we therefore find ourselves in the upper brackets but the advantage, I fear, is illusory. Such a comparison does not take into account the number, variety, and cost of services which may vary from one province to another. It does indicate, however, the importance to our revenue picture

of the federal grants. The withdrawal of these funds would create serious problems in the provinces with a small tax base. In the event of a return to pre-war arrangements we in Nova Scotia would be faced with a prohibitive tax level or a reversion to inadequate or substandard services.
That is why I was so heartened by the tenor of the minister's remarks on this subject. Some members may disagree with the details or even the methods of approach, but I doubt if anyone would stand in his place and deny the validity of the objective of these agreements, which was stated so aptly by the minister on another occasion when he said:
That objective is to make it financially possible for all the provinces, whatever their tax base, to perform their constitutional functions themselves, and to provide a reasonable level of provincial services without an abnormal burden of taxation.
I believe, and many Nova Scotians agree with me, that this objective can be attained without threatening our provincial autonomy. Indeed, this could easily become a meaningless shibboleth without some measure of redistribution of the wealth which has been accumulated in part at least on the basis of a national market. I am reminded here that "the law, in the majesty of its equality, forbids rich and poor alike to sleep on park benches."
My interest in the varying economic positions of the provinces is not confined to taxation problems. The announcement of the intention to appoint a royal commission to examine Canada's long-term economic problems is welcome. The outline of this proposal indicated a very broad approach, including a study of our productive capacities as well as our external markets. It will include an examination of our population growth in both its regional and age distribution aspects. In his speech the minister said, as found at page 2740 of Hansard of April 5:
X am sure our provincial and municipal governments, our businessmen and producers, management and workers, would like to have comprehensive and carefully documented analyses of our various potentialities.
To that I say "hear, hear". I would add that I hope the regional analysis will not be confined to population studies but will extend to the relative economic positions of the various regions. Specifically, could the minister have the commission examine the possible value of having an agency of the federal government perform services for the Atlantic region similar to those provided by the Federal Reserve Bank in Boston for the New England states?
As I said before, we in the House of Commons should do more than work for the 50433-188
The Budget-Mr. Balcom redistribution of national wealth through tax agreements. We must also work on the more positive line of reducing the economic gap between the provinces. The first step in such a procedure is to know just where we stand, and a thorough-going report on our economic prospects is just such a first step. I would go further, however, and say that a continuing scrutiny is necessary, particularly in the region where both chronic and shortterm problems are the most serious.
Related to the general problem of dominion-provincial relations, Mr. Speaker, is the matter of federal grants to universities. I trust hon. members will bear with me, for they have heard me before, and others as well, urging a more equitable method of distributing these grants among the universities. I make no apology for raising this question again because I feel there has been ample time to correct the very obvious shortcomings of the present arrangement. With the permission of the house I shall quote the per student payment in each province provided for in the 1954-55 estimates. British Columbia receives per student $105.41; Manitoba, $99.26; New Brunswick, $122.59; Alberta, $157.57; Saskatchewan, $162.96; Ontario, $140.98; Prince Edward Island, $214.29; Newfoundland, $394.06, and Nova Scotia, $85.23.
The distribution of the money on the basis of population instead of at a per student rate has the effect of penalizing the province with the highest proportion of students in relation to population. The royal commission on national development in the arts, letters and sciences in recommending financial assistance stressed the importance of the universities in the life of Canada. Because their service is national in scope rather than regional, the commission recommended that the universities receive support from the federal treasury. In the light of this, would it not be more logical for the government to set a uniform national rate per student, irrespective of the location of the university, rather than the present system? In the post-war training of service personnel the Department of Veterans Affairs was able to administer such a scheme without any undue criticism of federal interference in university affairs.
An alternative suggestion is to deal with the professional schools separately and I think the suggestion merits immediate action. I am told that the conference of Canadian universities, in its brief to the commission, assumed that all universities doing the same kind of work would receive the same rate of assistance and proposed a per capita grant ranging from $150 to $200 per student registered in professional faculties, and a single

The Budget-Mr. Balcom grant of $100 per student in other faculties. This was a recognition of the higher costs in particular faculties.
In Nova Scotia we have a university with professional faculties in medicine, dentistry and pharmacy serving the four Atlantic provinces. This means that much of our student body comes from the other Atlantic provinces as well as from farther afield, and of course we welcome them all to Nova Scotia. I think all members will agree that a single institution in these fields for that area is the most desirable set-up. Yet the concentration of students in these professional faculties at Dalhousie has the effect of reducing the financial assistance going to all universities in the province of Nova Scotia.
In this connection will you please note the following figures showing the cost of these professional faculties to the university. The proportion of the operating costs borne by student fee, not including capital charges, for arts and science is 44 per cent, for medicine 23 per cent and for dentistry 33 per cent. The balance has to come out of endowments, gifts or grants. It is true that we must recognize the differing outlooks among the components of our nation. I would be the last person to advocate the promotion of the mass mind or putting a premium on uniformity among our people. Let us accept the fact that we must be oversensitive as to provincial jurisdiction over education. But could we not separate financial assistance for professional training and put that on a per student basis? Then the assistance to the arts and science faculties, which are the heart of any university, would be distributed on a more equitable basis.
Before leaving this subject I should like to have it distinctly understood that we are not suggesting for a moment that the grants to other provinces be reduced. Students in all professional schools could be put on the same special per student rate. The grant for straight university education could then be on a per capita basis with more equitable results.
A tariff change which I feel sure will commend wide support is the elimination of duties on the articles and materials designed for the training of mentally retarded children. This is in line with the constructive policy of rehabilitation which is part of our program for assistance to the disabled. It is very gratifying that efforts are being made to round out that program. Now that allowances are being paid experience has shown some shortcomings, and I should like to urge that immediate consideration be given to the carrying out of the spirit of the act in a sympathetic and understanding fashion.


The Canadian Welfare Council, which appreciates the difficulty in administering and carrying out the provisions of Bill No. 462, made several essential suggestions in their brief to the Prime Minister in May, 1954. If more of these suggestions had been incorporated in our act I believe that we might not now have so many misunderstandings in the provinces. Unfortunately there are people thoughtless and cruel enough to take political advantage of the disabled and handicapped by telling the latter that they are entitled to full pension as disabled persons, at the same time knowing full well that such persons could not qualify under the act. Perhaps in many cases this was done through ignorance or inability to recognize the distinction between "disability" and "handicap".
Total disability can be determined on medical evidence and is so determined for war pensions and workmen's compensation. However, the handicap resulting from a disability is more difficult to ascertain. Total handicap is generally accepted as "unemployable", and unemployability is dependent on many factors such as physical and mental condition, personality, education and training. It is dependent in addition upon the economic and employment possibilities in the locality, plus the attitude of the public and the availability of rehabilitation services.
At this juncture I should like to point out to the minister that in Nova Scotia we have not the variety of jobs for disabled and handicapped persons that are so often readily available in industrial centres. Some applicants should, therefore, be, considered eligible for the pension if suitable work is not available near at hand. A danger stressed in the Canadian Welfare Council brief was the fact that allowances for total or permanent disability, divorced from rehabilitation services, should be granted only when it is definitely proven a person cannot profit from rehabilitation.
Before leaving this subject, Mr. Speaker, I should like to respectfully and humbly suggest to the minister, a man who has a full understanding and appreciation of the dependent position of the disabled and untrained handicapped person, that after a full year of operation the act and regulations be given a complete overhauling. In the meantime I suggest, (1) that no applicant be turned down without being personally interviewed by the medical board; (2) that provision be made for an appeal from the finding of the medical board; this would give the applicant the same right as an applicant for old age assistance or a war veterans pension; (3) that consideration be given to classifying as permanently disabled those patients with arrested tuberculosis who, while living at

home and able to care for personal needs, are unable to perform any kind of work and are dependent on their family; (4) that paraplegics able to stand only with the help of braces or crutches be considered as qualifying for this pension.
These suggestions, and I have more, are given constructively in the hope that the disabled program may be broadened and that disability allowances will be made part of a comprehensive plan providing for the economic needs of all disabled persons, as recommended by the Canadian Welfare Council.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
Mr. J. H. Blackmore (Lethbridge):: Mr. Speaker, it is my purpose tonight to outline in some detail how Stalin of Russia conquered China, Stalin and his friends in America. I began speaking on this subject on April 6. On that occasion I said President Roosevelt of the United States while at the Yalta conference in February of 1945 threw Chiang Kai-shek to the dogs by giving Stalin pre-eminent rights in Manchuria, the workshop of China, and in north China-


Mr. Speaker:: Order. 1 am sorry to interrupt the hon. member. I suppose all I can do at this stage is appeal to him, because there is now pending on the order paper a motion to refer estimates to the standing committee on external affairs, and it is my understanding that the debate is to be resumed some time this week.


Walter Edward Harris: Thursday.


Mr. Speaker:: I am informed it is to be resumed on Thursday of this week, and I understand the hon. member is to be the first speaker when the debate is resumed. At that time I assume he will debate external affairs. I would hope, and I am sure hon. members would agree with me, that now, when we have entered the budget debate during which, by practice, one may discuss all affairs pertaining to the government of the country, we might not have a debate on external affairs, and have another on Thursday on the same subject.
As I say, I cannot enforce any rule at this time. But it may be that if, upon resuming the debate on external affairs, the hon. member were to discuss at that time the same topic, he would be found guilty of breaking a rule which has to do with the repetition in 50433-188J
The Budget-Mr. Blackmore another debate of arguments already used by him. So I think it must be quite clear, between the hon. member and myself, as to the exact position with regard to the discussion on external affairs.
We all know that a great share of our attention is directed toward the difficulties in Asia, and the situation as it affects Asia and the west. I believe the hon. member would agree that there could be only one speech on that subject. Perhaps with that in mind he would decide to direct his attention more specifically to matters connected with the budget, when speaking on this occasion. If he were to make his external affairs speech now, perhaps he would by-pass his opportunity to speak on external affairs when that debate is resumed on Thursday. I think the hon. member and I should have no difficulty in reaching an agreement on that point, because he is always very reasonable and I am sure would have no wish to take advantage of the rules.


John Horne Blackmore: Mr. Speaker, I have no desire to displease Your Honour or to fail to take the kindly and gentle hints which help us to get on the right track, without displaying too much harshness. But I would like to tell Your Honour that this particular subject is so big and requires such thorough study that there will be plenty of information to occupy all the time at my disposal tonight as well as the time I can use in the debate on external affairs, and a good deal more beyond that. Because, contrary to the ordinarily accepted idea concerning the fall of China the whole story is almost exactly the opposite of what the Canadian people have been told This has been brought about by the way iri which news and information in America has been managed so as to produce false impressions.
,, . "	matter 1 wish to discuss is
that of the strategic importance of Formosa which, at this moment, could mean the very existence of our race and all we hold dear By the time I have finished discussing those two subjects I am sure all my time would be exhausted in this debate and in the debate on external affairs.
If Your Honour insists that I desist from discussing this matter further, then I bow to your ruling. But I may say that in the 19 years I have been here it has always been understood that a member could discuss anything he chose in the budget debate, and also in the debate in reply to the speech from the throne.


Mr. Speaker:: First of all I wish to thank the hon. member for indicating his comprehension of the problem and of my position

The Budget-Mr. Blackmore in this instance. He is quite right when he says that in his many years here it has always been understood that one could discuss almost any subject in the budget debate. I do not want to change that now. But it may not have occurred very often in those 19 years the hon. member has been in the House of Commons that, concurrently with the budget debate, there has been an appointed debate on external affairs. It happens that at the moment there is listed on the order paper such a debate, and the announcement is that it is to be resumed on Thursday of this week.
The hon. member has said that he will take advantage of his opportunity to speak at that time. If the hon. member says that, because he needs more time, he is going to discuss that subject now and pursue it further on Thursday, would not his action defeat the purpose of standing order 37 which says that every hon. member is entitled to speak for 40 minutes on any one topic? Would it not also defeat the other rule as set out in standing order 43, which says that a member cannot speak twice to any question?
So there we are. The hon. member may speak for only 40 minutes, and he is not permitted to speak twice. I will tell the hon. member this, that in my view, although I do not wish to enforce it, because of the very fact that a debate on external affairs is already listed on the order paper I would be perfectly within the rules-certainly within the spirit of the rules-if I were to say that no debate on external affairs could take place in this budget debate until the debate on external affairs has been disposed of.
I would not wish to make that kind of ruling, and while the hon. member wishes to protect his position in the debate and keep it as wide as possible, perhaps he would not force the Chair to make a ruling which I would not like to make, which indeed I would be very reluctant to make at this time.
The hon. member has said that if I insist he will desist, and it would seem that he and I are in complete agreement. I welcome the fact that he has accepted my decision, even before it is rendered. I have to inform him that I do insist, and hope that, with good grace, he will desist.


John Horne Blackmore: Your Honour, the things I was going to say tonight are of the utmost importance to be said in Canada at the present time. I am going to leave it to Your Honour's responsibility, and I am going to leave the responsibility right on Your Honour's shoulders. I shall do just exactly what you say, but at the same time I feel very strongly that the information which I have all ready to give to the house is of the


very first importance to this nation right now, especially in consideration of the fact that on March 24 the hon. member for Rosetown-Biggar (Mr. Coldwell) made a speech which was very injurious to the morale of Canada.
I am going to leave it to Your Honour. I shall go on with this subject on Thursday, realizing fully that it will be impossible to cover the material thoroughly. It is an easy enough matter for a person to tell a lie, for he can do it in half a minute, but to reveal that lie sometimes takes half a day and more.


Mr. Speaker:: The speech the hon. member refers to was made by the hon. member for Rosetown-Biggar during the debate on external affairs, was it not?


John Horne Blackmore: That is right.


Mr. Speaker:: Does the hon. member intend now to reply to the speech made in that debate in the confines of another debate?


John Horne Blackmore: That is correct.


Mr. Speaker:: Then we are at cross-purposes here. The hon. member will recall no occasion when this has taken place. We are confronted with an overlapping of debates. It is an impossible situation. As I say, I hate to make a ruling, but I feel that at this moment I may be called upon to do so because the hon. member, after indicating that he would desist, does not seem quite prepared to do so.
I do not see how we can allow a debate on external affairs within this debate at this time when we all know that on Thursday we shall resume the debate on external affairs. As we all know, the hon. member will be taking the floor first on that occasion.


Stanley Howard Knowles: Might I say a word on the point of order? I believe everyone knows that I am not likely to agree with the remarks which the hon. member for Lethbridge wishes to make. At the same time I feel that I must defend his rights if I believe they are under attack.
I think what Your Honour has most recently said is beyond question, namely that the hon. member for Lethbridge cannot in this debate attack a speech made by my leader, the hon. member for Rosetown-Biggar, which was made in another debate. On that point I do not think there can be any doubt, but I do feel a bit unhappy at Your Honour suggesting that because there is a debate on external affairs before the house on another motion, that rules out any debate on foreign affairs during the time the budget is before the house.
I feel that if the hon. member has a speech on external affairs that does not relate

specifically to speeches that were made in the other debate, he should not be denied the right to make that speech.


Mr. Byrne:: What has it to do with the budget?


Stanley Howard Knowles: Someone is asking, what has it to do with the budget? Not only is it traditional that the budget is a debate in which any matter can be discussed, but the reason for that tradition is that it is under the budget that money is raised for all sorts of affairs and some of that money, quite a good deal of it, is raised for external affairs, national defence and so on.
The only point I wish to make, Mr. Speaker, is one that perhaps 1 have already made. I have no objection to Your Honour ruling that the hon. member for Lethbridge must not in one debate refer to speeches made in another debate; but I believe careful thought should be given to the suggestion that there is any restriction on the subject matters that can be raised in a debate on the budget. After all, it is a pretty ancient and honourable tradition around here, and I do not wish to see it curtailed even for one who proposes to make remarks with which I will probably disagree. That, of course, is beside the point. What is at issue is that although members should not transgress the rules, they should nevertheless be given whatever rights and privileges the rules accord to them.


Mr. Speaker:: I have been trying to find a citation in Beauchesne which says it is false to think that anything under the sun may be discussed during the budget debate. There is such a citation. I am trying to put my finger on it. After having made this general statement, the citation goes on to say that of course by usage for many years it has become so, that even after an amendment has been moved anything may be discussed. See citation 226, Beauchesne, third edition.
We have an amendment here that has nothing to do with the situation in China, and although by practice, even after an amendment is moved, hon. members have been allowed wide latitude in the discussion of the affairs of the country during the budget debate, do we not agree that it is merely a matter of common sense and looking at the spirit of our rules to the effect that members cannot speak twice on the same question?


Stanley Howard Knowles: What is the same question, Mr. Speaker? Is it the subject matter or is it the motion?


Mr. Speaker:: Well, the hon. member of course will agree that we cannot anticipate a debate which has been put on the order
The Budget-Mr. Blackmore paper for consideration at a later date. There is on the order paper the resumption of a debate on external affairs. That is the question.


Stanley Howard Knowles: He may speak only once to that motion.


Mr. Speaker:: Yes. And of course at this moment, because of this general latitude which is given in a budget debate, there is the situation where a member says, "I need more than 40 minutes to develop my speech on external affairs; therefore, since I am given wide latitude on the budget I shall speak on external affairs, and then when the appointed debate on external affairs is resumed, I shall speak on it again, and if I have another chance I shall speak on it again." That has been the purport of the remarks of the hon. member for Lethbridge.
If the house wishes between now and Thursday to allow hon. members to speak on external affairs, if they wish to do so, when we resume the debate on external affairs they may speak again on external affairs only. If the latter debate is interrupted and we come back to the budget and have external affairs debated again, the latitude thus afforded certainly will not agree with the general principles of procedure to the effect that one should not duplicate arguments already used in other debates.
As I said, I do not want to rule on this because I wish to preserve what has been acquired by many years of tradition and custom, whereby hon. members have wide latitude in the discussion of the budget even after specific amendments have been moved. But I am pleading with the hon. member. What brought me to my feet was his last remark, in which he said he was going to reply to a speech made by an hon. member in a debate which is specifically known to be the debate on external affairs. If he wishes to do only that, that is another proposition.
As I said, on the other point I am not going to rule; but if the hon. member wishes to reply to the hon. member for Rosetown-Biggar I think he will have to wait until the debate on external affairs is resumed. There is a very good additional reason for that. The hon. member for Rosetown-Biggar does not happen to be here tonight. If it had been announced last evening that today we would proceed with the debate on external affairs he might be here expecting that some counter-arguments to his own speech might be presented; but as it is now, he does not expect external affairs to come up today, and it would be taking him by surprise. Would he reply to the hon. gentleman in

The Budget-Mr. Blackmore this debate, or would he reply to him if he had another opportunity when we resume the debate on external affairs? That does not seem to agree with our general practice.
I think I have said enough on this point, and I would ask the hon. member to co-operate.


Mr. Quelch:: I presume that so long as the hon. member does not reply to the speech of the hon. member for Rosetown-Biggar he will be in order. I take it that we are not going to consider external affairs in a manner different from the manner in which we would consider any other department. Otherwise I can see a situation arising where an hon. member might want to discuss agriculture on the budget and also intend to speak on agriculture on the first item of the estimates of that department.
I am in that position myself; I want to discuss agriculture, and I should like to discuss it on the budget. I also intend to speak on agriculture on the first departmental item. You are now suggesting that in view of the fact that external affairs will be coming up shortly the hon. member should not speak on external affairs now and then again on Thursday. If that is so surely that would apply to every other department.


Mr. Speaker:: It does not because the debate on external affairs is a specially prearranged debate. It is not a debate on the first item of the estimates of that department. The first item will come later before the committee of supply and at that time hon. members will be entitled to have a general discussion about external affairs and the estimates as studied by the committee on external affairs. But we are referring now to a specifically prearranged debate. Working through the usual channels hon. members agreed to have a debate on external affairs, and a certain date was set on which that debate was initiated. It is to that particular debate that I am referring, and not to any other debate to which the hon. member may be referring.
I do not remember an occasion when we had a budget debate during which an hon. member could speak about anything pertaining to the affairs of the country, and at the same time a specifically prearranged debate on a wide sector of our activities such as external affairs appearing on the order paper.


Stanley Howard Knowles: There was a comparable situation earlier this session when we had the debate on the address in reply to the speech from the throne and the debate on the NATO protocol running concurrently. I recall that some hon. members who spoke in the debate on the address in reply spoke on the NATO matter.


Walter Edward Harris: Mr. Speaker, on the point of
order, I think Your Honour is quite right that this debate should be limited in so far as it can be to budget matters. As you have recognized, however, almost unlimited scope is traditionally given in this debate.
It occurs to me that if the hon. member for Lethbridge desires to make more than a 40-minute speech, as he has stated he has in mind, one part of which would be by way of an answer to the hon. member for Rosetown-Biggar in connection with the external affairs debate, he might be running counter to the rules by pursuing that course tonight. I wonder if he would accept a suggestion from me that if he thinks this portion of his remarks ought to be made first rather than second, he postpone it until the debate on Thursday and then make his answer to the hon. member for Rosetown-Biggar. Then I think the house would agree that what has happened now would not stand in the way of his joining in the budget debate after that and continuing any remarks he might like to make with respect to external affairs.


John George Diefenbaker: Mr. Speaker, on the point of order, there would be nothing to prevent the hon. gentleman discussing external affairs during the budget debate, but I think a proper objection has been taken to his referring specifically to what was said by an hon. member in another debate. If the hon. member wishes to discuss external affairs he can do so, and the only restriction upon him would be that he cannot refer to what has been said in another debate during the present session.


Major James William Coldwell: That is too bad.


Mr. Mclvor:: Mr. Speaker, on the point of order, I think this time should not be taken from the time allowed to the hon. member for Lethbridge, and he should be permitted to start all over again.


John Horne Blackmore: Mr. Speaker, all these kind considerations on the part of hon. members are certainly appreciated and they make me think that probably I had better defer this part of my speech until the external affairs debate. The hon. member for Rosetown-Biggar has now come into the chamber, and I am giving him warning that I will have him in remembrance when external affairs come up again on Thursday.
I shall just change to another subject, and I really think I should have my full 40 minutes because I certainly have not used many minutes since eight o'clock.
I am glad in a way to speak on another matter tonight, because I had made a promise that on the first occasion available I would

deal with a question which was raised some time ago by the Minister of Mines and Technical Surveys (Mr. Prudham). Your Honour will remember that I said I was going to deal with the question of Alberta defaulting her bonds, and Your Honour suggested in your usual kindly way that I might defer that matter until some time later in order that the debate which was then in progress might be finished within the specified time. I agreed with you, and I think I shall use this opportunity to deal with the question raised by the Minister of Mines and Technical Surveys.


Major James William Coldwell: You cannot quote him.


John Horne Blackmore: I am in some difficulty about quoting.


Stanley Howard Knowles: What debate was that in?


John Horne Blackmore: The speech from the throne. The Minister of Mines and Technical Surveys is reported on page 825 of Hansard of February 3, 1955, as having asked me why I did not tell the people about Alberta defaulting her bonds. I am not using his words, so the hon. member for Rosetown-Biggar can be at ease. Later on he again asked me why I did not tell why Alberta had defaulted her bonds. Again I am not using his words. I propose now to tell about Alberta's so-called defaulting of bonds.
I said on a previous occasion that Alberta had no alternative. Alberta did not default on her bonds, she was forced into default by a series of circumstances which I now intend to present to the house. In doing so I think I am perfectly in order in this budget debate.
Let us recall that as of March 31, 1936, Alberta owed $167,037,144 carrying an average interest rate of 4 [DOT] 95 per cent. The annual revenue which Alberta was able to gather was only $15,000,000, so about 49 cents out of every revenue dollar had to be used to pay interest on the debt. I think today anyone will realize that a province like Alberta would have serious difficulty giving anything like the services to which the people were entitled with just slightly more than half of $15,000,000, and at the same time pay the cost of government.
This provincial debt had been contracted during years of relative prosperity, considering the prices for goods which were then prevailing. That was when much of the debt was contracted, except what was contracted during the depression in respect of relief. As I say, it was contracted when prices were fairly good and there was a measure of prosperity.
Up to that time Alberta had been largely an agricultural community. Agricultural prices were very low when Social Credit
The Budget-Mr. Blackmore came in. Let us get the picture clearly. In large measure the debt had been contracted while times were relatively good, we will say in the twenties and in the years preceding the twenties, from 1905 on. During that time prices were fairly high. Then prices went away down to an all-time low. Conditions were such that it was next to impossible for farmers to pay their taxes.
Under those circumstances the Social Credit government was called upon to service a debt which had been contracted at a time of high prices for agricultural products and to do so with revenues which were being collected from farmers when prices were very low. This is the first important thing for everybody to get straight who wishes to understand the defaulting on Alberta's debt, or at least the so-called defaulting.
The master question that had to be answered when William Aberhart took office in 1935 was this: Could the Alberta economy at that time, in the depression, carry $167 million of debt at an average interest rate of 4-95 per cent? Premier Aberhart seriously doubted that it could. Premier Aberhart therefore employed R. J. Magor of Montreal, the best expert he could learn of, to come to Edmonton to examine into every pertinent fact with regard to Alberta's economy, particularly having reference to the people's capacity to pay taxes and the government's consequent capacity to pay interest and at the same time provide its people with the reasonable minimum standard of services.
After a thorough study Mr. Magor presented a comprehensive report. I am glad that the hon. member for Peace River (Mr. Low) is here beside me. He was at that time in the legislature, and shortly thereafter, if not up to that time, had been charged with the responsibility of acting as provincial treasurer.
As I was saying, after a thoroughgoing study Mr. Magor submitted a comprehensive report in which he gave it as his opinion that Alberta simply could not pay 4-95 per cent on $167 million of debt. Let it be borne in mind that under the U.F.A. government which held office between 1921 and 1935 the province had incurred a debt of $10 million in the form of what were called Alberta savings certificates. An Alberta savings certificate was a demand promissory note bearing interest at 4 per cent.
So that people out in the country who may read this speech and who may not have the ability to comprehend that the members of this house would have, may I make this explanation. If a citizen had $100 and felt that he would like to put it on deposit at 4 per cent interest, he could go to the appropriate officials of the Alberta government,

The Budget-Mr. Blackmore turn in the $100 and obtain from the officials of Alberta a promise to pay, bearing interest at 4 per cent; that was a promise which the province agreed to make good on demand. In other words the individual could deposit his $100, obtain his certificate, leave his $100 there for six weeks, or six days, then go and demand his $100 and the province had to give him back his $100, no matter in what condition the province happened to find itself. Such was the Alberta savings certificate debt.
Hon. members will realize that with $10 million of indebtedness in the form of Alberta savings certificates, any provincial government whatsoever would have been in an extremely vulnerable position in case any considerable number of people holding these certificates should come and ask for their money at one time, especially if there was no reserve to take care of such a contingency. This is the first all-important thing to be borne in mind.
The next one is this. Let it be borne in mind that the inability to service these demand certificates had, on August 27, 1935, precipitated Alberta into the loss of her credit at least five days before the Social Credit party took office on September 3. All those who have any desire to be fair in appraising Alberta must bear this fact in mind. Considerable propaganda was circulated all over the country, much of it just downright lies, which purported to blame the Social Credit administration for the loss of Alberta's credit. It was all completely fallacious. The inability to service these savings certificates had caused the province to lose its credit, technically, five days before the Social Credit administration took office, although five days after the election. Let us remember that the election was on August 22, 1935, but the inability to service-


An hon. Member:: Oh, oh.


John Horne Blackmore: Please get this exactly
straight. The government was elected on August 22, 1935. Technically the U.F.A. government, which was still in office on August 27, had to default on these savings certificates. This was five days before the Social Credit government took office. So no blame could possibly be attached to the Social Credit government for the defaulting on Alberta's savings certificate debt.
The hon. member for Peace River reminds me that the previous government, that is the U.F.A. government, had left no reserve whatsoever. I do not want to be too harsh on the previous government. I have no particular complaint against the U.F.A. government which preceded the Social Credit government, because that government was obliged


to take Alberta through the terrible depression years in which the costs of relief and other expenses were so great that they were forced into a tremendous increase of debt, a thing which they did not in any way desire to be forced into. However, those were the circumstances.
I think probably what I have already said is enough to show the Minister of Mines and Technical Surveys that, on the score of defaulting on Alberta's debt, he has an extremely poor case against Social Credit, and no honourable man would press that case. I hope he is honourable enough to go out all over the country and tell the absolute truth. Then everybody will be much happier.
Because of the things I have already mentioned, it was impossible for Alberta to borrow in the world's money markets. Just as soon as the province technically defaulted on August 27 it no longer could go into the world's markets and borrow money. This is an extremely important fact. But this one also is important. The U.F.A. government had been unable to borrow money on the world's markets since the early spring of 1935; it seems to me it was some time in April. Premier Reid, who was then acting premier of the province, came to Ottawa endeavouring to get $750,000-I can remember quite distinctly reading about it-and found himself unable to get a cent. This fact is extremely important. It indicates that the province of Alberta had been really forced into default months before the Social Credit government was elected or took office.
Unfortunately malicious, adverse propaganda all over North America had so poisoned people against Aberhart and Alberta that conditions had been rendered extraordinarily and most unjustly difficult. It is important for people who did not live through those days to know that there was an outburst of adverse comment and criticism all over the country closely resembling the kind of thing that has burst out against Chiang Kai-shek, and engineered by the selfsame people.
Political opposition to Social Credit made it impossible for Alberta to borrow from the federal government of Canada. The prime minister in those days, the late William Lyon Mackenzie King, before the election was quite enthusiastic in his remarks about hands off Alberta. But just as soon as he got in power he had hands on Alberta, restraining her in every move. In addition the Bank of Canada failed to come to the aid of the province, though shortly afterward they did recommend substantial help to both Manitoba and Saskatchewan.

I hope the Minister of Mines and Technical Surveys tells everybody about that. That is important. When a province like Alberta, no matter what the government is, goes to the Bank of Canada for assistance after she has done her part the very best she could and is denied assistance, it constitutes a scandal against the Bank of Canada. I wish the minister were here. However, I am sure he will read what I am saying and I hope his friends will point it out to him. I should like to ask him to tell the house some time what his solution for the problem would have been, what he would have done if he had been in Mr. Aberhart's position as premier of Alberta. And I hope he will take the trouble to document what he tells us so we shall have some evidence that he knows what he is talking about.
This was the situation. Premier Aberhart was positive that a rate of 4'95 per cent was too high and could not be borne. The bondholders and dealers in Toronto, Montreal and New York could not possibly understand the economic problem in Alberta. They could not see how it could be that if a farmer contracted a debt of $1,500, let us say, with wheat at $1.50 a bushel, and then when the time came to repay the debt found wheat was down to 25 cents a bushel, there would inevitably be reasons why the farmer could not pay the debt. It seemed impossible to make them understand that.
The bondholders hoped and believed that Premier Aberhart could and would be defeated in the 1940 election. They were not a bit desirous of being fair. But what did Aberhart do? He communicated with Alberta's bondholders asking them to refund Alberta's debt at a rate possible for Alberta to bear. In a general way he put the case to them much like this. Now, we know we owe you a good deal of money, but this administration does not owe it. In the legislature of Alberta there is not one single man who was there when the debt was contracted. They are not in any way to blame. We are desirous of being honourable with the bondholders, but it is simply idle for us to go on trying to pay an interest rate which we cannot pay, thereby accumulating more and more debt until we get to the point where you will lose everything you have invested in Alberta. We suggest that you be fair about this matter and agree to an interest rate we can carry. We will then pay the interest rate and we will pay off the bonds.
That was something like the proposition he offered them, but the bondholders paid little heed to Aberhart's request. The bondholders sent into Alberta a team of experts to study the situation and report. In this team the key 50433-189
The Budget-Mr. Blackmore man was Courtland Elliott. I do not wish to suggest anything against Courtland Elliott. As far as I know he is a very honourable and capable man. This team believed its findings had proved that Alberta could pay 5 per cent. The bondholders therefore sternly refused to refund Alberta's debt at a lower interest rate. Alberta then offered the bondholders one-half of the interest rate then carried by her bonds, pending further efforts to convince them that the cut was justified. The bondholders forthwith declared Alberta to be in default on her bonds.
Let me pause a minute to restate the situation so hon. members can understand just what happened. Alberta had been pointing out to the bondholders that she simply could not carry this heavy rate of interest, and finally she got to the point where she offered them one-half of the interest rate, whereupon they immediately declared her bonds in default. Probably when the Minister of Mines and Technical Surveys gets around to the subject he will justify the action of the bondholders in doing that, and will explain how in the world under circumstances like that he can honestly say that Alberta defaulted on her bonds.
It looks as though we are going to have the filthiest election in the history of Canada, judging by the way the Liberals are behaving in Alberta and British Columbia. I think, therefore, it is fitting that we should warn ourselves beforehand that there is not going to be very much honour on one side in the coming election. Let us get the facts straight, and I do hope there will be enough Liberals who will tell the truth about the whole matter so as to keep it from being misrepresented. I am giving them the opportunity to do so by putting the facts on the record, with the man who was provincial treasurer during those trying times, the hon. member for Peace River, sitting right beside me.
The Alberta government announced that the government itself had cut the interest rate by one-half on all outstanding bonds. That was not defaulting by any means. That was simply refusing to pay a heavy rate of interest in consideration of the fact that the prices of everything Alberta was producing and marketing had fallen to such a low level as to render it impossible for her to carry out her commitments previously made.
Let it be borne in mind that the fall in prices had resulted not from Alberta's action, but had resulted, if it resulted from anything, from the actions of men in Ottawa and in the United States who represented the very governments with which Alberta was dealing. We have gotten away from those

The Budget-Mr. Blackmore terrible times now and are able to look back, and we know that the depression with which we were struggling in 1935 was brought on directly by the United States of America and spread its devastating effect all over the world. Then we had bondholders in the United States of America and their friends in Canada blaming Alberta because she had been so sorely hit by a depression which was engineered and put into operation in the United States.
Now we come to what was to be done about this defaulting. If Alberta had left the situation just as it was without undertaking to do anything it would have been a different matter, but she was desirous of doing what was right. The hon. member for Peace River, then the provincial treasurer of Alberta, who is here to testify if I err in any way, in the spring of 1938 set about for the provincial government to recover Alberta's credit, and the province was behind him fully. He administered the treasurer's department for the provincial government with the utmost care, skill and economy. That was all he could do. He organized the government's financial affairs with the strictest wisdom. In fact, I think one of the greatest things he has ever done was that very job he did then.
He husbanded every dollar with the utmost frugality and used it with the utmost wisdom, dealing equitably with the Alberta savings certificates problem and with preparations for possible refunding. He put away a little bit here and there, at the same time trying to take care of those who were suffering, quite unintentionally, because they were unable to get the money they had lent the government in return for Alberta savings certificates. He paid off a part of the debt each year.
I hope the Liberal enthusiasts who go all over western Canada will remember to tell that Social Credit Alberta started to pay off the debt immediately. It was not because of oil that she started to pay off the debt. The large discoveries of oil did not occur until 1947. Alberta had made great progress in reducing her debt by that time, showing that she was getting herself on her feet and would have done so probably without the oil, although it would certainly have taken much longer.
The provincial treasurer then set out to visit the bondholders and others personally. He sought and obtained an appointment with the bondholders' protective council. It was adamant. It would not even listen to him, much to its disgrace. He then went to Ottawa and conferred with Dr. Clark, the deputy


minister of finance, first to enlist Ottawa official's support in his refunding project, and second to ask that the dominion scale down the $8 million of treasury bills Alberta owed Ottawa. Either one of those things could have been done, but Dr. Clark was much more adamant.
He asked also that Alberta be given the royal commission's natural resources award, which would have amounted to over $10 million. This was a sum that was really coming to Alberta. It was compensation for the amount of money that Alberta had not been able to obtain during the many years Ottawa maintained control of and administered Alberta's resources. Ottawa controlled these resources from 1905, when Alberta became a province, until 1932 when they were finally handed over to Alberta.
Now, that $10 million could have been advanced to Alberta and would have enabled Alberta to deal completely with the savings certificate problem and, technically, to restore her credit. However, this $10 million was refused. He went to Montreal, Toronto, New York, Chicago and Los Angeles to confer with the bondholders and try to convince them that they should negotiate with Alberta. Among those he visited were the Kuhn, Loeb Company, Brown, Harriman and Company, the Mayflower Association, Wood, Gundy and Company, and Dominion Securities. Everywhere he found it almost impossible to make men believe-in most cases even to listen- that any Social Credit official could be sincere and honourable. This illustrates how far the lying propaganda had gone. He got nowhere.


An hon. Member:: He is still there.


John Horne Blackmore: Very likely, but I would rather be in his position than in yours.
Finally he decided to talk with Courtland Elliott, the man who had assured the bondholders that Alberta could pay 5 per cent on her bonds. Mr. Low obtained an audience with that key man and prevailed upon Courtland Elliott to go over the various conclusions Mr. Elliott had arrived at which had satisfied him that Alberta could stand 5 per cent. He got Mr. Elliott to examine and talk over with him the evidence upon which Mr. Elliott had based his conclusions. They went into the details concerning the many elements that combine to make up Alberta's highly complex economy as they are set out in a very fine book called "The Case for Alberta" which Mr. Low was largely instrumental in having prepared in preparation for the Rowell-Sirois conference on dominion-provincial relations.
Gradually Courtland Elliott apparently came to see-it is impossible to tell exactly-that

probably certain things had been overlooked and it would be reasonable to review the whole situation in respect of the amount that Alberta could pay. At length he apparently saw that Alberta had a real case, one that any honest man must allow. Mr. Elliott became a supporter of Alberta's case, much to his credit. Apparently Mr. Low with Mr. Elliott's help convinced Mr. John Hope, a representative of Dominion Securities, and Dominion Securities moved in behind Alberta, much to its honour and credit. Wood, Gundy and Company followed, and those two Canadian companies brought the United States companies into understanding sympathy with Alberta's refunding program, which was finally accomplished on an average coupon rate of 2-78 per cent. Alberta's credit was restored, both at home and abroad.
Probably I have gone far enough and said all that the Minister of Mines and Technical Surveys desired me to say. There is much more that I could say, but I think probably I have said sufficient on this occasion concerning this matter, which is very important.
It is important for another reason, Mr. Speaker. Every member, except two, who sits in this house comes from some province. Each of those provinces is having great difficulty in dealing with its financial affairs. If there is any man in this house who thinks that is not the case, I suggest he obtain permission to attend the dominion-provincial conference which is to convene before very long, and he will very soon find out. There is not a province in this dominion that is not in a relatively vulnerable position financially.


An hon. Member:: Ontario.


John Horne Blackmore: Ontario, too. I was here during the depression, and I heard sad tales about the way people were being treated in various Ontario cities and towns. They are beginning to suffer now in Ontario cities and towns. If the unemployment problem gets three times worse the strain that will be placed on Ontario will be unbearable, even with Ontario's wealth. Especially will this be so if the agricultural income referred to this afternoon by the hon. member for Peace River does not increase. Then the factories in Ontario will find themselves unable to sell enough of their goods to make their industries pay. They will be in serious difficulty.
Even if Ontario should not be in this difficulty, that is no reason why Saskatchewan, Newfoundland, Nova Scotia, New Brunswick and at least three-quarters of the provinces of this dominion might not be in an impossible position within a year. Let us bear that in mind. They will be in that position, not 50433-189J
The Budget-Mr. Rowe because of any measures taken by them but because of measures taken right here in Ottawa. No one is blaming the provinces today for the unemployment problem. The unemployment problem developing today is a result of the policies adopted right in Ottawa in this house. Let us bear that in mind. Remember that any province, put into a sufficient number of difficulties, ultimately will be forced to default its bonds or to put its people under circumstances which no civilized people ought to endure.
Now, Alberta was just one example. She was hit harder, and there were three or four reasons why she was hit harder. In the first place, Alberta paid a higher railway rate on everything she bought coming from the east than any other province in Canada. She paid more on goods she shipped east and west than any other province in Canada. In addition to that, Alberta was in the Palliser triangle and consequently she had to deal with droughts, seed grain relief and all that sort of thing. Only two other provinces had anything like that. Another thing was that when the land was given to the Hudson's Bay Company and the Canadian Pacific Railway, to compensate them for certain considerations in the west, that land was taken out of Alberta and Saskatchewan. It was taken in such a way that the population of Alberta has had to spread out over a wide area, making the costs of roads, schools and telephones greater than they should have been.
These were just a few of the difficulties under which Alberta laboured. I think probably I have said as much as is necessary at the present time. But I would just tell the Minister of Mines and Technical Surveys that any time he wants to enter into a further discussion of this matter, all he needs to do is let me know, and I shall be right here.


William Earl Rowe: Mr. Speaker, I have listened to the budget speech this year as I have on many other occasions. One has to search his imagination in order to understand what the Minister of Finance (Mr. Harris) had in mind. The hon. member who replied this afternoon for the official opposition said that it confused him, and I am sure it has confused many people in this country.
It seems strange, after so many years of sin-pluses, so many years when we were told that we should not reduce taxation even though we were not spending as much as we were collecting, that now, at a time when we are spending more than we are collecting, we are told that we should collect less. This is not in keeping with the Scottish instincts of the Minister of Finance. It seems to me that in delivering this budget he either

The Budget-Mr. Rowe had a subtle inclination to popularize himself throughout the country, or else he was copying what someone else had done; because it does not sound like him at all.
Coming from almost the same district in Ontario as the minister, and he and I having had to struggle during our lives for our very existence in that district, I cannot help thinking that he must have had some other idea in mind.
I do not know whether this is a cyclical budget or a sickening budget, or just what type of budget it is. Someone intimated this afternoon to the hon. member for Greenwood (Mr. Macdonnell) that it might be a cyclical budget. He spoke with that dry, Scottish humour of his; and those of you who do not like him, simply because you belong to the other side of politics, would do well to read his speech tomorrow, where he pointed out the inconsistencies of the Liberal party in the last number of years. I am sure if hon. members will read that speech they will realize that even the hon. member for Greenwood, with his enlightened mind, was still confused. He did mention, however, that it might have been a speech that was not intended to solve the economic problems of the country, but rather that it might have been one intended to solve the political problem of the Minister of Finance himself who, I see, shakes his head.


Walter Edward Harris: I have none.


William Earl Rowe: The hon. member for Prince Albert (Mr. Diefenbaker) interjected this afternoon that the minister might have been preaching for a call. Well, those of us who belonged to the old Methodist church used to listen to preachers who were preaching for calls. I remember my mother saying to me, "That fellow won't do. I heard him this afternoon, and I know he won't please the people around here". I said, "No, we had better not call him". When I listened to the sermon, the speech on the budget, I thought probably it was one of those calls. But when I looked at the Prime Minister he looked so healthy that I had to conclude that his seat is not vacant yet.
But let me say this, that if this budget does not serve that purpose then certainly it will serve no other. There are a lot of other eligibles over there, some of whom are young enough and some who are old enough, if they had been wise enough. But I doubt if there is one who can take the place of the man who is there now.


Walter Edward Harris: Hear, hear.


William Earl Rowe: No matter whether the Prime Minister stays there or not, I am satisfied

there is a change coming. After being here for a number of years one has the feeling that he can sense things, and I can now hear rumblings in the mulberry bushes. I can hear discontent in the sidelines and by-lines across this country. I can hear them saying, "600,000 unemployed!".


James Joseph McCann: It is the frogs you are listening to.


William Earl Rowe: You have been listening for the last ten years, and you should know. But you are so close to the bushes you cannot see the trees. I have noticed that those who are in the cabinet know least about what is going on out in the country.


James Joseph McCann: Just sour grapes with you.


William Earl Rowe: And sour grapes with you, too, after the next election. I can tell you that.


James Joseph McCann: That's what you have been saying for the last 20 years. For 20 years I have heard you saying that.


William Earl Rowe: I can tell you this, that if you would drive out one of these spring days and listen in the mulberry bushes of Renfrew county, you would find out something you have been ignoring about the textile plants in your riding, and the unemployed there.


James Joseph McCann: There are not many.


William Earl Rowe: You say there are not many?


James Joseph McCann: Just wait for a month or two and you will see where they are.


William Earl Rowe: If I had been a cabinet minister as long as you have, and-


James Joseph McCann: Ask the hon. member for Greenwood how many went to hear him. There were only 18.


William Earl Rowe: You haven't even called a meeting for a while.


James Joseph McCann: He had only 18 people there when he went up to address a meeting.


William Earl Rowe: You have not called a meeting for a while, either.


James Joseph McCann: I have had lots of them, one of them only ten days ago, and there were 300 at it. Don't get into a racket with me, or you will get the worst of it.


William Earl Rowe: No, no, I am not at all afraid of getting the worst of it. I was here before you were, and I shall probably be here long after you are gone.


James Joseph McCann: And you didn't get far, either.


William Earl Rowe: I know about the Renfrew
county unemployed, whether you know it or not.


James Joseph McCann: There are fewer unemployed in the Ottawa valley than in any other part of Canada.


William Earl Rowe: Go down and talk to the textile people and tell them that. What about the
8.000	unemployed in the cottons section of the textile industry alone?


James Joseph McCann: That is not in my constituency.


William Earl Rowe: Oh, you don't care much about them, when they are in any other part of the country. But you are a minister for the whole country.


James Joseph McCann: That is right.


William Earl Rowe: But you are just representing Renfrew. You must be getting nervous, if you are only representing one riding, and you are a minister for the whole of Canada.


James Joseph McCann: Get on to the budget.


William Earl Rowe: Oh, yes, you want me to leave you now.


James Joseph McCann: Oh, no.


William Earl Rowe: You want me to leave you.


James Joseph McCann: I am delighted when you are with me.


William Earl Rowe: When you are getting the worst of it-


James Joseph McCann: I shall never get the worst of it with you, boy.


William Earl Rowe: I never have yet.


James Joseph McCann: I thought you had learned that by this time, surely.


William Earl Rowe: Let me say to my genial friend from Renfrew that a man can be here so long and he can get so smug that he does not even know how many are unemployed in Canada. I listened to you not long ago when you said there were very few unemployed in Canada. I listened to you, when I was making my speech in the debate on the speech from the throne, when you said I was exaggerating things when I said there would be 600,000 unemployed in March. By March there were
613.000	unemployed, and there are more unemployed today.


James Joseph McCann: I didn't speak in the speech from the throne debate at all.


William Earl Rowe: No, you don't speak, you-


James Joseph McCann: You said you heard me.


Donald Methuen Fleming: You speak from your seat.


William Earl Rowe: You always show more brains in your seat than you do on your feet. You never rise to speak.
The Budget-Mr. Rowe


James Joseph McCann: 1 will match them against yours-


William Earl Rowe: You just heckle.


James Joseph McCann: I will match them against yours any time.


William Earl Rowe: Mr. Speaker, I have listened to Liberal apostles for the last 30 years in this house. They do not disturb me for a moment, Mr. Speaker. I say again you will hear it in Renfrew; you will hear it in Lanark, and you will hear it down through the Ottawa valley. You will hear it down in Cornwall and along the St. Lawrence valley. You will hear it in every industrial riding in Canada and in the agricultural ridings. You will hear the rumblings in the mulberry bushes. My friend the hon. member for Fort William (Mr. Mclvor) has quite a few unemployed in his riding.


Daniel (Dan) McIvor: On a point of order, there were 800 fewer unemployed in Fort William last week than there were a year ago. That is from a source that does not tell a lie.


William Earl Rowe: Yes, Mr. Speaker, but there were many unemployed last year and more expecting to go on strike this year. 1 tell the hon. member for Fort William that I know something about the Fort William district, and I shall have something to say to him a little later on. I am not going to enlarge upon that. If there are 800 fewer unemployed I am sure the hon. member can tell me that there are still several thousand unemployed at the head of the lakes, which is a small part of Canada.
My, how this government boasts. It boasts of a country with such resources that no similar number of people in the world has ever enjoyed. It boasts about the $300 million railroad into Labrador to bring out the iron ore in that district. It boasts of the Kitimat development and the development of the resources up there. It boasts of a prairie land that is richer than land which any other people in the world enjoy. It boasts that no other 14 million people in the world have ever had the resources that we have at hand. Yet it says in one small district there are 800 fewer unemployed now than there were, but several thousands are still unemployed. We now have more people unemployed than any other important country in the world.
Stop and think of it, Mr. Speaker. What is wrong? We have a government that has sat idly by. It has been in power so long that it has become sleepy at the switch. As this budget indicates and as the Minister of Finance suggests, now that we are spending more than we collect we are going to start to collect less. When we were spending less

The Budget-Mr. Rowe than we collected, we collected more. Is it cyclical budgeting? I am not sure what the term is. If I were not in parliament I could give it a term.
The Minister of Finance laughs. He himself does not have a description for it. What is the plan of this government? They have no fiscal policy; they have no immigration policy; they have no financial policy. Why do we have a gunshot prescription along the line of reduction in taxes which means so little, as was exemplified by speakers who preceded me today? Is our development sound today? Ask the farmer. My hon. friend might ask the farmers of Renfrew county. Perhaps he has not met many of them for some time. He might ask them if they think the dairy industry is healthy; he might ask them if the poultry and egg industry is healthy; he might ask them if the beef cattle industry is healthy. There is nothing in this budget that will help the farmer.
I was amazed that the Minister of National Revenue would even venture to challenge the argument that the textile industry of this country is not in a healthy condition today. Surely no one who has worshipped at the shrine of the late Sir Wilfrid Laurier as he has, can now say that our textile industry is flourishing. The late Sir Wilfrid Laurier fashioned the policy of those who sit to your right, Mr. Speaker, a policy that half of them have never followed since because we have more mongrel stripes of fiscal policy across there than have ever been in one group since confederation. We have the hon. member for Waterloo North (Mr. Schneider) who is a higher protectionist than the highest protectionist on this side. We have some hon. gentlemen in the other corner in the house who are lower protectionists than the late Sir Wilfrid Laurier ever proposed to be, and we have those in the centre who do not say where they are going because they do not know. The ones on the left of Mr. Speaker have no fiscal policy whatsoever.
I wonder whether they ever pause to wonder, if it were not for the expenditure on defence, if it were not for the expenditure on expansion of industries that hope they will get a square deal in this country later on, what would happen to our development at the present time? Does the Minister of Finance not pause to realize that Canada with 14 million people imports more finished products representing the labour of foreign countries than the United States with 160 million people? We import more in actual dollars, not percentage-wise, than the United States. I would ask my hon. friend to take off that old dusty halo of free trade which is around his head and look the issues 

squarely in the eye and realize that if we are to expand industry we must find a home market in this country.
This budget, Mr. Speaker, proposes to reduce corporation taxes by some 2 per cent. That may help a little bit. I am one of those who believe that if you give corporations a chance they will give employment. If you increase depreciation, they will do their part. I do not agree with some of my friends to my immediate left. I am not sure at times where my friends to my extreme left are going. My friends to my immediate left suggest that all these things should be taken over by the government. I wonder who would be left to pay the taxes.
I am convinced, Mr. Speaker, that when you tax corporations you tax the shareholders of the corporations and you tax all along the line. You milk industry of most of the incentive that gives employment to greater numbers; therefore I am bound to agree with the Minister of Finance in his slight, modest gesture to encourage industry by reducing corporation taxes by 2 per cent. You are still taking almost half of everything the corporation makes. The Minister of Finance, or his colleagues, are criticizing industry for not running their business right. They say we need more efficiency in order to pay more wages. I do not know any machinery that needs more efficiency than the cabinet right there in the front row.
Independent of politics, Mr. Speaker, I would suggest that they employ-and I shall vote for it-an efficiency expert and pay him far more than any of the present cabinet is worth to show them the fallacy of some of their politics.


Douglas Scott Harkness: He would recommend the dismissal of practically all of them.


William Earl Rowe: I think he would recommend the dismissal of about seven-eighths of them; in fact I would join him on at least half of them.
The present budget does not propose to do anything. The Minister of Finance said he did not intend to propose that. He said we did not have hard times, and that this year promises to be a good year.


An hon. Member:: Hear, hear.


William Earl Rowe: My hon. friend says hear, hear. It is to be a good year. It is always a good year for the fellow sitting in the back row who has not much responsibility.


Mr. Mcllrailh:: Some of the members on the front row have a great deal of responsibility.


William Earl Rowe: I do not know; I have never noticed the hon. member demonstrate an awful lot of responsibility around here.


George James McIlraith: I was looking at the front row.


William Earl Rowe: Who is it going to help? The minister did not reduce taxes to stimulate business, because business did not need stimulating. He did not reduce taxes because we were collecting more than we were spending. He reduced taxes because of a deficit. Without wanting to be facetious I could not help wondering why the reduction. He says that if we have $26 billion of income, if we sell all our wheat which has been grown this year and what we have not sold for the last two years, everything will be all right. If that does not happen, well it will still be all right. I am wondering if he expects to be minister of finance at that time. I would much rather see him promoted than demoted.


Stanley Howard Knowles: Explain.


William Earl Rowe: I am afraid if I did the hon. member for Winnipeg North Centre might doubt my motives. I think if the hon. member wanted to please a lot of people he might have reduced the sales tax. I can remember the late Right Hon. William Lyon Mackenzie King almost weeping in this house when he ridiculed the Conservative party for putting on a 6 per cent sales tax. He said that it was the most iniquitous tax ever imposed on the people of any country. The poor pensioners, the war widows, the veterans and the crippled people would have to pay 6 per cent on everything they bought. He was going to remove it immediately; he threatened to remove it, but he got into power and added 2 per cent more, and we are now paying about 10 per cent. These apostles of economy now suggest that they have reduced the income tax for those who pay income tax, but the sales tax stays as it was.
It seems to me that is a strange type of procedure. If the Minister of Finance had said that things look a little dangerous, that there was a chance that the $26 billion revenue would be reduced to $22 billion; if he had said as he said in Montreal that taxes are too high-the minister shakes his head, indicating that he did not say that.


Walter Edward Harris: No.


William Earl Rowe: Misquoted again.


Walter Edward Harris: Pretty high, not too high.


William Earl Rowe: Why did you lower them if they are not too high? I think you said they were dangerously high.
The Budget-Mr. Rowe


Mr. Fraser (Peterborough):: How high is pretty?


An hon. Member:: How high is up?


William Earl Rowe: I do not want to reflect upon the press, but I must say that I have never seen so many misquoted people as those who make up the present cabinet. I would not want to embarrass the minister. Whether they were pretty high, too high or still high, I suggest to him that over long years we have suggested that they were very high and this year we find them reduced for a rather conspicuous lack of reason.


Walter Edward Harris: The hon. member should ask the hon. member for Greenwood, who heard me use those words in Montreal.


William Earl Rowe: He heard you use the words, but from what he said this afternoon I thought those were the words you used. That statement seems to be just as mysterious as the budget itself. I shall not enlarge on that further. I say again that the budget is a most difficult document to understand. After listening to the Minister of Finance I am convinced that this government has no definite and fixed policy. The Right Hon. William Lyon Mackenzie King, formerly prime minister of this country, stated in 1919 that they had what was more or less a chart. It was just like the chart you use when you go to sea. If there is a storm you forget the chart. He forgot it shortly after he was elected. He never followed the chart. The present government have not even a chart. They are drifting on the ebb and flow of good times.
For ten years this government have drifted on the crest of a prosperity which was more or less abnormal and unnatural. They have no policy with respect to fiscal matters; they have no fixed policy with respect to taxation; they have no fixed policy with reference to the development of our resources for our own people. I shall not go into that tonight in detail, but I say that no government since confederation has been so lucky. We are a people blessed with great resources, but the fact is that with 14 million people we sold more unfinished goods with less labour content in them than any other similar number of people in the world. Are we to remain more or less hewers of wood and drawers of water for other countries? I think it is time to stop, look and listen.
What we need in this country is a sound fiscal policy. We need a sound taxation policy. There is very little in this budget that means anything for the municipalities. Canada is a large country, and Canada needs transportation. Canada needs a four-lane highway from

The Budget-Mr. Rowe east to west. Canada is especially adapted to co-operation between the provinces and the dominion. I can remember that election campaign when the billboards were filled with posters depicting the happy family of Liberalism. Never have the provinces in this dominion been more divided than they are today. Unity-how this party carried the olive branch of unity in one hand with the sword of division in the other. In order to keep in power during the last 25 years they were ready to see one province build a highway to the border of the next province.
What have you done? You have robbed the provinces and you have robbed the municipalities. You have taxed the people; you have taken a greater percentage from the people in taxation than any other government since confederation. You have done the least for the provinces of any government since confederation, in the light of our development. We should have had a trans-Canada highway as part of our transportation system.
I can well recall when we were discussing the deepening of the St. Lawrence waterway which is now being undertaken. I compliment the government on doing it at long last. The deepening of the St. Lawrence waterway and the development of power on that great system will provide one of the greatest inland water systems in the world. I well remember when I was the leader of the Progressive Conservative party in Ontario in 1936 and suggested that we should do everything we could to bring about the deepening of the St. Lawrence waterway. I remember some of my hon. friends who sit to your right, and some who are not here today, saying that was childish prattle, that we would never need to deepen the St. Lawrence waterway. They are now the champions of the deepening of the St. Lawrence waterway. How they have climbed on the bandwagon.
The hon. member for Spadina (Mr. Croll) will remember when they said I was talking childish prattle when I suggested that we needed the St. Lawrence development. As the comedian said, that was a few years ago. We now see some of these hon. gentlemen championing great causes to'which they were opposed just a few years ago. My opposition at that time said that we would never need power from the St. Lawrence. They figured that we could get power just like you would buy buns off a shelf. Rather than talk about the deepening of the St. Lawrence waterway-


Some hon. Members:: Oh, oh.


William Earl Rowe: I certainly can get better advice back here than I will ever get over there; don't worry about that.


Robert Henry Winters: Start on a new subject.


William Earl Rowe: Yes, Mr. Speaker, what a difference a few years make.


Robert Henry Winters: Is that the new subject?


William Earl Rowe: My hon. friend from Winnipeg laughs. He did not even belong to your party in those days. He was just of neuter gender politically at that time. He was a coalitionist. I am glad he has graduated even into Liberalism. But even that is the next nearest thing to neuter gender in Canadian politics today. On no issue has the Liberal party had a policy. On the St. Lawrence waterway the Liberal party had no policy, and I say that advisedly.


Mr. Fulton:: They have not changed over the years.


William Earl Rowe: Mr. Speaker, I do not know now why they boast so much about what they are doing. However, I compliment the government today on being at last shoved into a position by the policies of those in our party and by the pressure of the public generally, where they have at least given their O.K. for the development of the great St. Lawrence waterway. I believe the great St. Lawrence waterway, the greatest inland water route in the world, will be the greatest boon to Canada to happen since confederation. I think the development of power in that district, along with the power that will be developed in the extreme west and the extreme east, will mean a great deal to our future development. I think the transportation of iron ore from Labrador to the inland sections of Ontario, and the transportation in connection with trade and commerce generally through the great St. Lawrence waterway system when it is completed, will be looked upon in the next 25 years as one of the greatest steps in the development of the world.


An hon. Member:: A good policy.


William Earl Rowe: Yes, a good policy; and your party opposed that policy when we were suggesting it. But, Mr. Speaker, I am also one of those who believe that this country has a great future. I am not at all depressed. All these passing phases in our history are just like shadows at night. The government who sit to your right, Mr. Speaker, have been in power for a long time. Now that they are rapidly, conspicuously and awkwardly approaching the twilight of their career, I can see that this country shall go on. It has been very strong to endure even the weaknesses of the policies they have enunciated. They may laugh but had they not had the advantage of fortunate circumstances in

the world the policies they have enunciated or their lack of policies would have caught up with them long before this time.
They are now catching up with them. Just the other day I was wondering how the present government could endure another Easter holiday, in view of the statements that have been made by the Minister of Finance and by the Minister of Citizenship and Immigration. Usually when you see a government starting to fall to pieces the leading lights of that government start to make mistakes, and they make clumsy statements.
I am one of those who believe that we need in Canada many millions more people. I have a keen regard for those men and women who come to this country and who are ready to work. The great Professor Einstein, who died the other day, had a formula involving X, A and B, where X meant one thing, B another and A was work. We need people who are not afraid of work. There is dignity in work, in hard labour.
There are not many members of this house who, one way or another, have not done some hard labour. In fact most members did some hard labour to get here at all, to say nothing of what they have done on the farms or in other places. I think I was happier in the hayfield than I was in election campaigns, as far as work was concerned.
Mr. Speaker, I have great regard for these new Canadians. I have great regard for these men who come from all parts of the world, these Czechoslovaks, these Hungarians, these Polish people, these German people. I have great regard for all these people who have come to this country because they saw here the greatest heritage that has ever been enjoyed by any similar number of people. I feel sympathetic toward the Minister of Citizenship and Immigration with regard to the remark he made. It probably was a slip of the tongue. I always feel sympathetic towards young men. As you know, Mr. Speaker, and as my hon. friend points out, some men are born to greatness, some achieve greatness and some have greatness thrust upon them. But after you have greatness thrust upon you, you sometimes get confused as to whether you were born to it or whether you achieved it.
As I say, I have great Sympathy for the minister. I have made mistakes, and many of them, in the past; most of my friends over on this side have done so also. I would not want to be too critical of the hon. member for Bonavista-Twillingate (Mr. Pickersgill). I realize that this is his first experience in the cabinet. I hope it is not his last. But, Mr. Speaker, I could not help thinking about what happened when he travelled out to the west. He is one who with his colleagues had been so
The Budget-Mr. Rowe zealous to make sure that we dispensed with the word "royal" in the royal mail and with the word "dominion" and everything that had the slightest reference to the British connection.
As he rode out to western Canada in a private car called the "Dominion of Canada" car, I could not help wondering. I was rather proud of the fact that he still used the word "dominion" even though his colleagues did not like that word. They did not like the word "dominion"; they did not like the word "royal". They did not like even the Canadian train to be called the "Royal Canadian". They would rather have it just "Canadian", whether it is any faster or slower. They do not like these things. I was therefore glad that the Minister of Citizenship and Immigration still clung to the word "dominion" and had it on the side of his private car. I was glad he had it called the "Dominion of Canada" car.
But despite his zealousness to preserve the name "dominion" I wondered if, when he made his famous speech out there, he had in mind the children of the hon. member for Coast-Capilano (Mr. Sinclair). I know the hon. member for Coast-Capilano has lovely children. I saw those little girls. If ever I was charged with anything it would be for kidnapping such beautiful little children. My grandchildren are like them, although they are not any better looking than are the children of the Minister of Fisheries. I am a great lover of children myself; I could adopt any number of them.


Edmund Davie Fulton: But you have not a private car.


William Earl Rowe: No, but if I could get enough children I would buy a private car. I am extremely fond of children. I am glad to see these young cabinet ministers so proud of their children that they think they are better than any other children, or better than children born any place else. There is nothing like local pride. I know my wife often says to me, "Oh, stop talking about your grandchildren; other people also have grandchildren". I know how the Minister of Citizenship and Immigration and the Minister of Fisheries feel about the matter.
After seeing these children I can understand how they could say there are no other children like them. I can appreciate that they are some of Canada's best. But, Mr. Speaker, I sometimes wonder whether the minister made that statement because the Minister of Trade and Commerce has gone to Australia and is far away. In view of his record since, I think the Hon. C. D. Howe-


Robert Henry Winters: Right honourable.
2986	HOUSE OF
The Budget-Mr. Rowe


William Earl Rowe: Right Hon. C. D. Howe; thank you. In view of his record he must have been a lively looking baby at one time, but still he was not born in Canada. I wonder whether it is because he is away in Australia that the Minister of Citizenship and Immigration thought it was fair to take a sideswipe at him and say that if he had been born in Canada he would have made a better minister of trade and commerce. If he had been bom in Canada he would probably never have said, "What's a million?" If he had been born in Canada he would never have had that American recklessness, and he might have been a much better minister altogether.
Then I wonder whether the Minister of Citizenship and Immigration forgot Sir John
A.	Macdonald, the greatest statesman Canada has ever had, bar none. Next to him is the Right Hon. Sir Wilfrid Laurier, and away down the line are some of these satellites. But if Sir John A. Macdonald had been born in Canada what a great man he would have been. An Irishman once said that he was born in Ireland but he could have been born in Canada if he had liked. I think it was too bad Sir John A. Macdonald was not born in Canada. Even those who sit to your right, Mr. Speaker, would have thought more of him than they have demonstrated in their memories of everybody else but him.
Then there is the late Hon. Humphrey Mitchell. He was quite a character and quite a good man. I had a very warm affection for Humphrey Mitchell, as did many people in the house. I knew him very well for many years, and had much to do with him on labour matters. He was a most delightful man, but poor Humphrey would have felt very badly if he had thought there would be any reflection on him because he was not born in Canada, especially from one of his colleagues. Then I think of the hon. member for Rose-town-Biggar (Mr. Coldwell).


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


Some hon. Members:: Go ahead.


Mr. Deputy Speaker:: Has the hon. member unanimous consent to proceed?


Some hon. Members:: Sure.


William Earl Rowe: Mr. Speaker, I am not going to take much more time of the house.


Stuart Sinclair Garson: The hon. member may score a goal in overtime.


William Earl Rowe: Well, if I have not scored a goal by now I had better not go on.


James Joseph McCann: We will take out the goaler.


William Earl Rowe: It is sometimes difficult to score a goal if the referees are not watching. I remember that in the old Methodist church they used to say there were not many souls saved after 20 minutes. I have never saved many Liberals in the house after 25 minutes, so I do not know whether I should go on. However, even though I do not agree with the philosophy of the hon. member for Rose-town-Biggar and everything he says, I think it is generally agreed he is one of the outstanding debaters in the house, but unfortunately he was not born in Canada and has to bear the brunt of it. Then there is the hon. member for Niagara Falls (Mr. Houck). Unfortunately he happens to have been born in Buffalo. The Minister of Fisheries (Mr. Sinclair) was not born in Canada either. My dear friend who interrupted me earlier, the hon. member for Fort William (Mr. Mclvor), was born in Ireland, and it is obvious he was born there. Then I find that I was not born in Canada.


Robert Henry Winters: That is the reason for the speech.


William Earl Rowe: As I have gone down the corridors and met my friend the Minister of Citizenship and Immigration, whom I have known unparliamentarily for some time as Jack Pickersgill, I have often wondered why he has not been more friendly to me. I thought it was because I was a Conservative but now I find it was because I was born at Hull, Iowa, in the United States. I cannot help that now, at this late date. I cannot help thinking, as a further example of his thoughtless expressions probably arising from his inexperience and exuberance, of another quite prominent debater and wondering whether he forgot him. I have listened to this hon. member often in the house and have come to admire him. I refer to the hon. member for Winnipeg North Centre (Mr. Knowles), who was not bom in this country either. He must have felt the minister's statement very keenly.
Indeed, Hon. Alexander Mackenzie, one of the first prime ministers of Canada, was not born in Canada either, and he was a prominent Liberal. I believe Hon. George Brown was bom outside of Canada, as was the late Right Hon. D'Arcy McGee. If D'Arcy McGee were here and in his usual form he would describe in a much better way than I can what the minister's statement means so far as making two classes of citizens in the dominion is concerned.
Then I sometimes wonder if the Minister of Citizenship and Immigration realizes that

he represents the constituency of Bonavista-Twillingate. I have not been in that section of the country-


An hon. Member:: Neither has he.


William Earl Rowe: -but he has not been there very much either. I wonder whether he realizes that none of the electors who elected him to parliament were born in Canada. He must have more affection for children than I have, because evidently the only people he really loves in Bonavista-Twillingate are the babies. All those who elected him were born before Newfoundland was a part of Canada at all. I could not help thinking of that song, "Oh, What a Beautiful Baby".


James Joseph McCann: Sing it.


William Earl Rowe: He may have been a beautiful baby but, baby, look at him now. I wondered whether the Minister of Citizenship and Immigration realized he was not contributing very much to the development of this country by distinguishing these babies as he has. I have imposed on the hospitality of the house for five minutes and there are a lot of other things I should like to say.


Robert Henry Winters: Go ahead.


William Earl Rowe: But I always feel-
The Budget-Mr. Rowe


Robert Henry Winters: You will not have a more appreciative audience.


James Joseph McCann: We will give you until ten
o'clock to score.


William Earl Rowe: It is the first thing you ever gave me.


An hon. Member:: He is better at taking things away.


James Joseph McCann: There may be other opportunities.


William Earl Rowe: You have taken quite a bit from me at different times. I always feel it is not good sportsmanship to impose upon the hospitality of the house when one is given extra time. I think it would be particularly unethical and not showing courtesy to my colleagues on both sides of the house if I were to proceed to say the things I should like to say, because the things I should like to say and should say would not be as unanimously accepted as the extension of time to which you so generously agreed. So I thank you, Mr. Speaker, for the time you have given me.
On motion of Mr. Zaplitny the debate was adjourned.
On motion of Mr. Harris the house adjourned at 9.54 p.m.

Wednesday, April 20, 1955