1955-03-23

HOUSE OF COMMONS DEBATES


[Stage Direction]
BEING THE 97™ SESSION FOR THE PERIOD 1867-1955

[Stage Direction]
Wednesday, March 23, 1955

[Stage Direction]
Third report of standing committee on railways, canals and telegraph lines.-Mr. McCulloch (Pictou).


[Stage Direction]
Right Hon, C. D. Howe (Minister of Trade and Commerce): I wish to table the text of a note which the Canadian ambassador in Washington delivered to the United States government on March 8 to protest against measures that have been proposed to restrict the imports of crude oil into the United States. I shall read the text of this note for the information of hon. members. It is as follows:
The Canadian government is greatly concerned about legislation being considered in the United States to restrict imports of crude oil. Legislation of this kind would have unfortunate and damaging effects to which the Canadian government wishes to draw attention. The Canadian government would be equally concerned if the objectives of this proposed legislation were to be carried out by administrative action or if the United States oil industry were to be led to believe that the policy of the administration is to discourage imports from Canada.
Resulting from the development of the oil industry in western Canada in recent years, there has been a development of refinery capacity and marketing plans in the United States to make use of the increasing availability of Canadian crude petroleum. Two refineries have already been constructed in the Pacific northwest to operate on deliveries from the Trans Mountain pipe line. A refinery is now being built in East St. Paul to make use of Saskatchewan medium gravity crudes. There is notable concentration of refinery capacity in the Detroit-Toledo area which can benefit from access to oil carried eastward by the Interprovincial Pipe Line. Reference is made to this refinery capacity already in existence because of the Canadian interest and, as we think, the interest of the United States, in making sure that nothing be done to impair the usefulness of these facilities. Both economic and strategic factors point to the desirability of increasing pipe-line and refinery capacity to enable Canadian crude to find markets in the United States. The Canadian government wishes /to emphasize the importance of avoiding restrictive measures in the United States which might frustrate or prevent the continuation of these desirable developments.
Attention should be given also to the efforts in which the United States government has taken a leading part, along with the Canadian government, fi0433-146
through the general agreement on tariffs and trade and otherwise, to promote the growth of worldwide multilateral trade on an economic basis and unhampered by restrictions. For the United States to embark upon a restrictive policy with regard to oil would be directly discouraging to these larger efforts.
From the point of view of strategic considerations, it should be borne in mind that western Canadian oil fields are internal to the North American continent. Nothing could be more discouraging to exploration for oil and development of this strategic industry in western Canada than the adoption by the United States of a restrictive import policy. It will be remembered that the United States navy on strategic grounds gave support to the construction of the Trans Mountain pipe line and for the construction of additional refining capacity in the state of Washington. If the United States government should conclude, in its best judgment, that its defence interests require that imports of crude oil from countries overseas should be limited to the proportion they bore in 1954 to domestic production, it might be difficult for anyone outside the United States to question such a conclusion. This thesis based on defence interests would certainly not be valid, -owever, if applied to imports from Canada. The Pacific northwest is at present served by pipe lines from Canada, the existing alternative being to transport crude to that area by tanker, whether from United States sources or from overseas. Tanker ships and ports are so much more vulnerable in wartime than overland transport that the Canadian government would be unable to understand any decision by the United States to restrict imports from Canada for reasons of defence.
On economic grounds the oil industry itself has established a pattern of development which clearly envisages an increasing use of Canadian crude oil in the north-central and western areas of the United States. The continental marketing pattern would seem to permit Canadian oil to enter these markets without impairing the interests of the United States petroleum industry, because it has been traditionally difficult and costly to move United States oil into those areas which can be supplied most efficiently from Canada. Canadian oil is equally unlikely to affect the interests of the United States coal industry in these areas.
The United States oil industry should regard Canada not merely as a competitor but also as a market as is made clear by the statistics of trade between Canada and the United States in oil and refinery products. In 1954, Canada imported in excess of $130 million worth of crude oil and refinery products	from	the	United States	andexported only about $7 million worth of crude oil and products to the United States. With the great growth of the Canadian oil industry, it is apparent that its products will be increasingly utilized in Canada if export markets are to be restricted. As far as the United States oil industry is concerned, therefore,	it is	very	doubtful that	any
increased markets would be gained on a net basis by implementation of the proposed recommendations in relation to Canada. A great deal would certainly be lost in terms of continental efficiency if both countries were to develop their respective oil industries along purely national lines.
Having referred	briefly to	the strategic	andeconomic interests	of	both	Canada and	the
Oil-U.S. Import Restrictions United States in this matter, the Canadian government wishes to draw attention to a related problem based upon the trade agreements of the United States government. If it should be decided to impose restrictions upon crude oil imported into the United States, it might be concluded, as in 1951, that quotas should be allocated to supplying countries. If the recent and projected growth of the Canadian oil industry is taken into account, it is obvious that any allocation of quotas on past trade would be completely inadequate for Canada. This latter consideration leads again to the conclusion, on the part of the Canadian government, that Canada at least should be exempted from any restrictive policy which might be adopted for reason of defence.
I should go on to say that the Canadian government has been following this situation very closely. The current proposals for restrictions on United States imports of crude oil were first launched by the cabinet committee on energy supplies and resources policy, whose report was made public in Washington on Saturday, February 26. The committee suggested that imports should be restricted voluntarily by the United States industry, for patriotic reasons. The legislation which is being considered in congress would give the proposed restrictions a statutory basis. Either method would be damaging to our Canadian interests.
I find it difficult, if not impossible, to believe that the United States will adopt a policy of limiting imports of Canadian crude oil for defence reasons, or any other reasons. In the Pacific northwest region of the United States, for example, the Americans are as aware as we are of the importance and urgency, for economic and defence reasons, of tying on to Canadian sources of supply. This is in their own interests.
After the outbreak of war in Korea, a concerted effort was made by the United States and Canadian governments to maintain a high level of exploration and development in the Canadian west. As recently as two years ago, the United States petroleum administration for defence was still urging the Canadian petroleum industry to strive for new goals in exploratory drilling. It was also recommending priority treatment in the allocation of steel and other scarce materials for the establishment of new transmission and oil refining facilities. The Canadian and United States governments cooperated in the pursuit of these objectives and succeeded in diverting to western Canada large quantities of the drill pipe and other equipment necessary to carry out this program.
Against this background, I was perturbed to hear that the president of the Socony-Vacuum Oil Company had testified before the Senate finance committee in Washington

that his company would voluntarily reduce crude oil purchased for its Ferndale refinery from Canada.
I got in touch immediately with Mr. Brewster B. Jennings, president, Socony-Vacuum Oil Company Inc., and just before coming into the house I received the following telegram from him:
Understand my statement before Senate finance committee March 18 has been interpreted as indicating reduction importation Canadian crude oil for our refinery at Ferndale, Washington. Such an interpretation quite erroneous. We plan no change in Ferndale crude supply and shall accomplish all of reduction mentioned east of the Rockies from sources other than Canada. Copy of my statement before committee being mailed you today. Kindest personal regards.
This is signed by B. B. Jennings, president of the Socony-Vacuum Oil Company.
Mr. Donald M, Fleming (Eglinlon):	Mr. Speaker, I am sure all hon. members in the house will recognize this as a very important matter. Any proposal on the part of the United States to impose the type of restrictions contemplated on the importation of Canadian crude oil into the United States is bound to be deeply deplored in Canada, and protests of this kind-vigorous protests-are bound to earn the approval of all hon. members in the house.
Actions of this kind could not be more unhappily timed than at present. Just after agreements have been entered into to extend, perhaps in limited form, the general agreements on tariffs and trade, proposals of this kind from Washington are bound to shake very deeply the confidence this country and others may have in the future of their trading relations with the United States.
I think I might say that this is the type of matter to which hon. members in this house will hope the government will apply continued and vigorous protests. We hope the minister will be able to give some report to the house soon on replies from the Washington government indicating that these protests have been successful in warding off this proposed action on the part of the United States.
Mr. E. D. Fulton (Kamloops):: May I ask the
Minister of Trade and Commerce a question arising out of the statement he has just made, having reference especially to the position which would confront the operations of the Trans Mountain pipe line if the policy under consideration in the United States were implemented. Perhaps I may be permitted to say that I am not quite able to follow the implications of the situation, in the light of the telegram received by the minister from

the president of the Socony-Vacuum company. If the policy under consideration there were to be implemented, would there in fact be a substantial reduction of the present volume of oil being put through that line? If so, does the minister have any information available as to approximately what percentage and what the amount would be in dollar value?
Mr- Howe (Pori Arthur): The Daw-Jones
ticker put out a message yesterday which was copied in the newspaper. The hon. member will find it in this morning's Gazette. It indicated a sharp reduction in the deliveries to the refinery in the state of Washington through the Trans Mountain pipe line. However, the telegram that I have just read from the president of Socony-Vacuum states that he was misquoted; that the voluntary reduction that he was proposing to the Senate committee would take place in countries on the eastern seaboard, and that the take from the Trans Mountain pipe line would not be affected.


Edmund Davie Fulton: If this policy were to be implemented in the United States, would he then be forced to curtail the importations from the Trans Mountain line?


Mr. Howe (Pori Arthur):: I do not know that they would pick out a particular pipe line. There is certain legislation before congress, and a certain program has been announced by the executive. Whether either of them would affect the situation of the Trans Mountain pipe line, I would not care to say. Not being a shareholder, I am not very much concerned.


Hon. George A. Drew (Leader of the Opposition):: I should like to direct a supplementary question in relation to the subject which has been raised and which is of such vital importance. Will the Minister of Trade and Commerce give consideration to the possibility of pointing out to the government of the United States, in addition to the specific subjects already mentioned, the possible effect on confidence in the investment of funds from the United States in Canada if any policy were followed not only in relation to oil but in other products, whereby under voluntary arrangements restrictions were imposed that would be just as effective as if there were actually barriers between the two countries?


Clarence Decatur Howe: Mr. Speaker, the Leader of the Opposition has put forward a good suggestion. I thought we had covered almost every reason why the threatened action should not be taken, but I shall be 50433-1464
Oil-U.S. Import Restrictions very glad to suggest to our ambassador that he keep this suggestion in mind as well.


Mr. Erharl Regier (Burnaby-Coquitlam):: I should like to ask a supplementary question of the Minister of Trade and Commerce. In view of the serious representations which he has made to the United States government, may I ask him whether any representations were made to his department on this subject matter by United States oil companies, Canadian oil companies or the oil workers' union of Canada? If so, which of these three organizations made representations?


Clarence Decatur Howe: To the best of my knowledge the department has been proceeding entirely on its own initiative. No representations have been made to me personally from any source. I would have to have a search of the department made to know whether representations were made to the department.


Mr. M. J. Coldwell (Roselown-Biggar):: Do
I understand the minister to say that representations were made on March 16? This is March 23 and I should like to know if he received any word since then as to how those representations were received.


Clarence Decatur Howe: I have not the
documents before me, as I gave them to the Hansard reporter. I think representations were made somewhat earlier than March 16 but no official reply has been received.


Mr. Fleming:: With reference to the question just asked by the hon. member for Rosetown-Biggar (Mr. Coldwell), the minister in his statement did say that it was on March 16 that the Canadian ambassador had made these representations or had submitted his note to the United States authorities. In the copy of the aide-memoire which I have now seen it is indicated that it was presented by the Canadian ambassador to the state department of the United States government on March 8, 1955. Is the minister in a position to say anything further about the response?


Clarence Decatur Howe: I think that is
correct; I think it was presented on March 8 and my memory perhaps was at fault in giving the later date. There has been no formal reply to the note. My hon. friend will appreciate that the matter is being discussed in a committee of the United States Senate and we would hardly expect to get an early reply under those circumstances.
2300	HOUSE OF
Freight Rates-Turgeon Report FREIGHT RATES



REPORT OF ROYAL COMMISSION ON EFFECTS OF AGREED CHARGES

Hon. George C. Marler (Minister of Transport):: Mr. Speaker, I wish to table copies in English and in French of the report of the royal commission appointed to conduct an inquiry into the application and effects of agreed charges as authorized under part IV of the Transport Act. Copies of this report, which I do not doubt will be of great interest to all who are concerned in railway rates, have been made available for distribution.
I should like to take the opportunity to express the thanks of the government to Hon. W. F. A. Turgeon and to his advisory and secretarial staff. The long experience he had in the field of transportation as chairman of the royal commission on transportation eminently fitted Mr. Turgeon for this further task, and the government feels a particular sense of gratitude to him in that though fully occupied by his important duties as Canadian ambassador to Ireland he consented, at great personal inconvenience, to undertake the inquiry.


Mr. Green:: May I ask the Minister of Transport whether it is expected there will be legislation arising out of this report at the present session.


George Carlyle Marler: I might say that matter is under consideration at the present time.


Mr. Hamilton (York West):: Were the contents of this report made available to the press before the tabling in the house?


George Carlyle Marler: Copies were handed to the press this morning at eleven o'clock in order to facilitate their making the report public this afternoon.



QUESTIONS


Mr. Knowles:: 1.	What proportion of the capital necessary to build its all-Canadian gas pipe line does Trans-Canada Pipe Lines Limited propose to raise (a) by the sale of shares of common stock; (b) by the sale of shares of preferred stock; (c) by the sale of bonds?
2.	Is Trans-Canada Pipe Lines Limited now contending that it cannot build its gas pipe line without a government guarantee of its bonds?
3.	If so, what other ways of building such an all-Canadian gas pipe line are being considered by the government?


Mr. Benidickson:: 1.	No information.
2.	No.
3.	Not applicable.


C.N.R. VICE PRESIDENTS
Mr. Stanton:: 1.	How many vice presidents are in the Canadian National Railways, (a) as of this date; (b) on the 1st of January, in each of the years 1945 to 1954 inclusive?
2.	What is the name, and date of appointment of each of the present incumbents?
3.	What are the total salaries of the combined vice presidents?


Mr. Langlois (Gaspe):: The Canadian National Railways advise as follows;
1.	(a) 10; (b) January 1, 1945, 8; January
1,	1946, 9; January 1, 1947, 11; January 1, 1948,	11;	January	1,	1949,	11;	January	1,1950,	12;	January	1,	1951,	13;	January	1,1952,	13;	January	1,	1953,	11;	January	1,
1954, 10.
2.
Headquarters
S. W. Fairweather, June 18, 1943; M. A. Metcalf, Jan. 1, 1947; E. A. Bromley, Aug. 1, 1948; N. J. MacMillan, Sept. 1, 1949; S. F. Dingle, Feb. 1, 1950; W. H. Hobbs, Feb. 15, 1950.
Western region
J. R. McMillan, Oct. 1, 1950.
Central region
W. H. Kyle, Mar. 1, 1953.
Grand Trunk Western Railway
S. J. Massey, Apr. 1, 1953.
Atlantic region
R. Hayes, July 1, 1954.
3.	It is not the practice of the company to make public information pertaining to the salary arrangements with its officers.


TRANS-CANADA PIPE LINES  GUARANTEE OF BONDS
Mr. Knowles:: 1.	Has Trans-Canada Pipe Lines Limited made application to the federal government for a guarantee of its bonds in connection with the financing of the said company's gas pipe line?
2.	If so, what is the dollar value of the bonds for which such guarantee is sought?
3.	Has the said company asked that such guarantee cover (a) principal; (b) interest?
4.	If such an application has been made to the government, has the government considered it?
5.	If so, what is the result of such consideration?
6.	If government underwriting of the project is being regarded as necessary, is the government giving consideration to the desirability of the proposed all-Canadian pipe line being government owned?


Mr. Benidickson:: 1.	Yes.
2.	$275 million.
3.	The request was that the guarantee take the form of a payment to make up any

deficiency required to pay interest and sinking fund until, for two consecutive years, the earnings of the company had equalled or exceeded one and one-half times the interest requirements after providing for depreciation and income tax.
4.	Yes.
5.	The government advised the company it could not agree to the proposal.
6.	Not applicable.



DEFENCE PRODUCTION


Mr. Zaplitny:: 1.	During the fiscal year 1953-54 did the Department of Defence Production purchase cloth from the following companies: (a) Verney Corporation of Canada, Ltd., Montreal; (b) Montreal Cottons, Ltd., Valleyfield, Quebec?
2.	If so, what was the quantity and grade of cloth so purchased in each case?
3.	What was the total amount paid to each of the companies, noted above, for such cloth?
4.	What was the per unit price paid to each company?


Mr. Dickey:: 1.	(a) No. (b) Yes-2 contracts.
2.	(i) 131,335 yards of cloth cotton drill 8-5 oz. in accordance with Department of National Defence specification and sealed sample; (ii) 62,000 yards of cloth cotton twill 4-2 oz. in accordance with Department of National Defence specification and sealed sample.
3.	(i) $81,428.20; (ii) $26,970.01; total $108398.21.
4. (i) $0.62 per yard, sales tax exempt delivered to Montreal, P.Q.; (ii) $0,435 per yard, sales tax exempt delivered to Montreal, P.Q.



INCOME TAX


Mr. Knowles:: 1.	In each of the last three years for which records are available, how many income taxpayers required by law to make quarterly payments during the year had failed to do so?
2. What steps does the government take to inform such taxpayers that such quarterly payments have to be made?


Mr. McCann:: 1.	Information not available.
2.	Form T7B Individuals is made available by the taxation division to persons required to make quarterly instalment payments of individual income tax.
Where a taxpayer has failed either to pay instalments of tax when due or in the proper amounts and, for such deficiency in respect thereof is charged interest, form T1218 is mailed to the taxpayer. This latter form directs attention to the requirement to pay instalments of tax and advises the taxpayer
Questions
to use form T7B in the future. A copy of form T7B is supplied to the taxpayer concurrently with each form T1218 mailed.



C.N.R. SECTION CREWS-LAY-OFFS

Mr. Hodgson:: How many maintenance of way employees of the Canadian National Railways will be laid off on account of the recent change in section crews?


J. G. Léopold Langlois: The Canadian National Railways advise as follows:
Section crew requirements vary from time to time and it is not possible to answer the question in the form in which it is asked.



BUREAU OF STATISTICS UNEMPLOYMENT FIGURES

Mr. Knowles:: 1.	How are the monthly unemployment figures of the dominion bureau of statistics obtained?
2.	How many persons are engaged as canvassers in connection with any surveying or sampling done for the purpose of obtaining such figures?
3.	What are the qualifications of the persons doing any such canvassing?
4.	In what ways is such canvassing done?
5.	How many persons are canvassed or surveyed each month in connection with the obtaining of such dominion bureau of statistics unemployment figures?


Mr. Dickey:: 1. The estimates of labour force characteristics which are published by the dominion bureau of statistics are based on information collected from a sample of households in Canada. The samples of areas in each of the ten provinces are designed so that each area has a known chance of selection which is dependent on the size of its population. From this survey an estimate can be prepared, within a known degree of accuracy, of what a complete census of Canada would show.
The design of the labour force sample recognizes a basic division between the very large urban centres and those areas which are predominantly rural.
Within each of the large urban centres, areas, with differing potential for development, are sampled separately. The samples consist of a number of blocks where the chance of selection of any one block is dependent upon the number of dwellings within it.
In the predominantly rural areas of each province, municipalities or groups of contiguous municipalities form the sampling units. The objective in the formation of these units, which contain on an average 15,000 persons, is that in each unit the distribution of farm households, urban households, and the type of industry should be similar to the provincial distributions. The practical impossibility of obtaining such comparability necessitates the grouping of these

Questions
units into different classes or strata such that all units within a stratum have basic similarities though they may differ from stratum to stratum. The selection of the sample in the rural areas is made in successive stages. From each stratum one unit is selected on the basis of its population size and within each selected unit a sample of census subdistricts is chosen. The next stage is the selection of a sample of groups or clusters of households within the chosen subdistricts while the final stage is the selection of a sample of households within the chosen clusters. At each stage, the relative size of the population provides a measure of the chance of selection.
At present the sample for the labour force survey comprises 76 rural units and 40 large urban centres. In these areas the labour force data for the members of over 30,000 households are collected by a staff of interviewers. These interviewers are trained and supervised by members of the full-time field staff of the dominion bureau of statistics.
The basic principle in estimating totals from the labour force survey is to determine from each provincial sample the proportion of persons, classified by age and sex, who have specific labour force characteristics. These proportions, when applied to independent estimates of the provincial populations, provide estimates of the aggregate numbers in each labour force category.
2.	586 enumerators in February, 1955.
3.	The government employment services are asked to submit a list of persons of reasonable education and presentable appearance. They are then interviewed by the field representative, who explains the duties to them. According to their comprehension of the work and their ability to conduct such interviews in accordance with instructions, they are employed.
4.	The enumerator interviews a responsible member of each household of the predetermined group of households using a form which specifies the questions to be answered.
5.	Approximately 80,000 in February, 1955.



SALES TAX APPEALS


Mr. Knowles:: 1.	Is the opinion of the Minister of National Revenue as to when machinery and apparatus are to be considered as used directly in the process of manufacture for sales tax purposes subject to appeal?
2.	If so, what body hears such appeals?
3.	If not, is consideration being given to the tariff board being granted such authority, or to the setting up of a sales tax appeal board to deal with questions of this nature as well as other questions relating to the administration of the sales tax?

4.	What is the ministerial definition as to when machinery and apparatus are considered as used directly in the process of manufacture for sales tax purposes?
5.	What is the basis for this definition? Is it under review?


Mr. McCann:: 1.	No.
2.	Answered by No. 1 above.
3.	No. Section 57 of the Excise Tax Act already makes provision for appeals to the tariff board on certain questions.
4.	It is thought that the words of the statute are clear, viz., that the machinery or apparatus must be used directly in the process of manufacture or production of goods.
5.	The statute. No.
MISSION CITY, B.C., POST OFFICE Mr. Patterson:
1.	How many tenders were submitted for the remodelling and extension of the post office at Mission City, British Columbia?
2.	By whom were these tenders submitted?
3.	What was the amount of each tender?


Mr. Bourgel:: 1.	Four.
2 and 3. C. J. Oliver, Ltd., Vancouver, B.C., $91,641; Sorenson Construction Co., Ltd., Vancouver, B.C.,	$107,475; Commonwealth
Construction Ltd., Vancouver, B.C., $111,311; Stange Construction Ltd., Vancouver, B.C., $111,789.



CANADIAN NATIONAL RAILWAYS


Mr. Knowles:: 1.	Has the Minister of Labour been asked to establish an inquiry commission for the purpose of inquiring into the relations between the Canadian National Railways and the R. F. Welch company, with particular reference to the bypassing of a collective agreement between the Canadian National Railways and the brotherhood of maintenance of way employees?
2.	Has it been decided to establish such an inquiry commission?
3.	If not, is such request being considered?


Mr. Gregg:: 1.	Yes.
2.	No.
3.	No.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Johnston (Bow River):: 1.	(a) What was the amount of money received from the import duty on United States' coal, (i) anthracite; (ii) bituminous, coming into Canada? (b) How much of this was returned in the form of a drawback?
2.	(a) How much coal was shipped from Alberta to (i) Canadian markets; (ii) United States' markets, upon which a subsidy was paid? (b)

What was the amount of money paid in each case, and what was the amount of money paid as a drawback in each case?
3.	(a) How much coal was shipped from the Crowsnest pass, British Columbia, to (i) Canadian markets; (ii) United States' markets, upon which a subsidy was paid? (b) What was the amount of money paid as a subsidy in each case?


Mr. Prudham:: Mr. Speaker, I have spoken to the hon. member and my understanding is that he agrees to some changes; first, that the information requested be limited to the calendar year 1954.
In the third part of the question it is agreed that the name "British Columbia" be dropped and the word "area" be substituted therefor.
As the first part of the question relates to information that will have to come from the Department of National Revenue, I would request that this be made an order for return.


Mr. Speaker:: Is the question as amended agreed to?


Some hon. Members:: Agreed.


Mr. Speaker:: Order for return.



GOVERNMENT BUILDINGS, ONTARIO    USE OF NOVA SCOTIA COAL

Mr. Balcom:: How many tons of Nova Scotia coal have been purchased for use of government buildings in Ontario during; (a) 1952; (b) 1953; (c) 1954?



BLUEBERRIES


Mr. Gauthier (Lake St. John):: 1. Has the federal government ever held a conference with the government of the province of Quebec for the purpose of (a) determining the respective jurisdictions of the federal government and of the province over the picking, marketing and processing of blueberries; (b) regulating the inspection, freezing, conservation and storage of blueberries, within the limits of federal responsibility; (c) establishing a policy of price support with respect to blueberries, for protecting the exportation thereof?
2 If not, is the federal government considering the advisability of meeting the provincial authorities in order to study the above-mentioned question?



MOTION FOR PAPERS


Mr. Girard:: For a copy of all telegrams, letters, memoranda and other communications in the possession of the Department of Transport, relating to the application for a television station at Jonquiere.
(Translation) :


George Carlyle Marler: I have no objection to this motion, as long as it is understood that privileged documents and letters shall not be produced.
(Text):


Mr. Speaker:: The motion is carried with the reservation made by the minister.
Inquiries of the Ministry ADMINISTRATION OF JUSTICE



CHAPUT CASE


[Stage Direction]
On the orders of the day:
Major James William Coldwell: Mr. Speaker, I should like to direct a question to the Minister of Justice. I am sorry I have not given him notice. Has the government received notice that the Chaput case will be heard at the next session of the supreme court? If so, does the federal government intend to intervene in this case as it did in the Alberta press act case to defend the basic and fundamental right of Canadian citizenship to enjoy freedom of worship, assembly, speech and person?


Hon. Stuart S. Garson (Minister of Justice):: Mr. Speaker, we are aware that the Chaput case will be heard at the next sitting of the Supreme Court of Canada. But since my hon. friend has given me no notice of his question, and I am under the impression that in the Chaput case we have received a notice from the supreme court itself, I should like to make a statement tomorrow covering this point.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. H. B. McCulloch (Pictou):: I should like to direct a question to the Acting Postmaster General or his parliamentary assistant, arising out of the recent withdrawal of certain scheduled trains in Nova Scotia. Will the minister give consideration to the position of mail couriers where contract rates paid are related to the frequency of train service with a view to avoiding reductions in rates during the term of the contract because of the withdrawal of trains?


Hon. J. W. Pickersgill (Aciing Postmaster General):: Mr. Speaker, if I caught the hon. member's question correctly it has to do with the reduction in the schedules of trains carrying mails in certain parts of Nova Scotia. This matter is already being considered by the department, and every endeavour will be made to work out arrangements which will be fair to the rural mail couriers.



DELAY IN DELIVERY OF LETTER TO UNITED KINGDOM

[Stage Direction]
On the orders of the day:
Mr. G. K. Fraser (Peterborough):: I should like to direct a question to the Postmaster General or, in his absence, to the parliamentary assistant. Should it take 25 days for a

Inquiries of the Ministry letter from Ontario to reach the United Kingdom? I have had complaints from the United Kingdom in regard to this matter, and I wonder why there should be this delay.


Mr. T. A. M. Kirk (Parliamentary Assistant to the Postmaster General):: Will the hon. gentleman be kind enough to produce the cover to see whether or not the letter was mailed on the day it was supposed to have been mailed.


Gordon Knapman Fraser: It was mailed on February 8 and delivered there on March 5.


Thomas Andrew Murray Kirk: Will the hon. gentleman be kind enough to let me have the cover so that the department can look into the matter.



AIRPORTS


[Stage Direction]
On the orders of the day:
Mr. John Pallet! (Peel): Mr. Speaker, I should like to ask the Minister of Defence Production if he has any information that he can give to the house today as to the cause and the effect of the fire which took place yesterday at Malton?
Clarence Decatur Howe: Mr. Speaker, I have not received a detailed report on the results of the fire. 1 do not know what was the cause of the fire. We lost four aircraft, a considerable amount of test equipment and a hangar. However I am told that the loss will not delay the new program in hand, although it will delay some adjusting work on planes presently being produced.


Mr. D. S. Harkness (Calgary North):: should like to ask the Minister of Defence Production a supplementary question. Were any of the planes that were lost the property of the crown in the right of Canada or had they been secured with funds advanced by the government to A. V. Roe Canada Limited?


Clarence Decatur Howe: I may say that the planes belonged to the crown. Certain of the test equipment was also the property of the crown and other of the test equipment was the property of Avro. The Avro equipment was insured, but the crown property, following the normal practice, was not insured. I had a quick estimate made of whether the department would have been ahead had we made a practice of insuring crown property and I find that that would not have been the case, that we have saved a great deal of money through the policy of government carrying its own insurance on its own property.


Douglas Scott Harkness: Did the government adopt any fire protection methods to safeguard that equipment when it was not insured?


Clarence Decatur Howe: We take all reasonable precautions. That fact may be the reason why this is the first serious fire we have had in the history of the department. I suggest that in the end lightning strikes almost everywhere.


John Borden Hamilton: Mr. Speaker, I should like to ask the Minister of Defence Production a supplementary question arising out of the question asked by the hon. member for Peel (Mr. Pallett). Can the minister inform the house if the fire damage at Malton will have any effect upon the employment situation at the A. V. Roe plant?


Clarence Decatur Howe: The A. V. Roe
company is a privately-owned company which has its own employment program. So far as I am aware the fire should have no serious impact on employment at that plant.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Minister of Labour arising out of the answer he gave today to a question of mine on the order paper? Can he indicate why the request for an inquiry commission to inquire into the relations between the Canadian National Railways and the R. F. Welch company is not being considered?


Hon. Milton F. Gregg (Minister of Labour):: The reason the request has not been favourably considered is that my department feels the complaints made in that request are not such as could properly be handled under the federal Industrial Relations and Disputes Investigation Act.


Stanley Howard Knowles: Has the minister suggested at any time to those who made the request any alternative way of dealing with the matter?


Milton Fowler Gregg: Yes, but it would take me too long to go into it at this particular time.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. W. M. Hamilton (Notre Dame de Grace):: Mr. Speaker, I should like to ask the Minister of National Revenue if he has

received any protests over the C.B.C. television program "Scope" on Sunday last which associated the product Habitant pea soup with French Canadians in a most unfortunate manner?


Hon. J. J. McCann (Minister of National Revenue):: Mr. Speaker, no protests have been made to me personally, but I shall inquire from the officers of the Canadian Broadcasting Corporation as to whether any have been made to them.

The house resumed, from Tuesday, March 22, consideration of the motion of Mr. Harris for committee of supply, and the amendment thereto of Mrs. Fairclough, and the amendment to the amendment of Mr. Regier.



UNEMPLOYMENT

Mr. R. R. Knighl (Saskatoon):: Mr. Speaker, when I moved the adjournment of the debate last night I was dealing with the subject of unemployment. The fact that there is one more point which I wish to cover must be my excuse for continuing the debate a few minutes longer. Before I go on perhaps I might recapitulate the points I had made already.
First, I had said that it was a disgraceful situation that in a country such as this we should have an unemployment situation at all. Second, I had said that the government admitted there was a state of unemployment and assumed some responsibility for it but they had done nothing about it. Third, I said that times of periodic employment were inherent under our present economic system, but I contended that even though one recognizes this the government should do something to provide a solution and should offer a long-term plan of public investment to counteract it.
I warned the government too that the unpopularity of the Conservative party in my own province of Saskatchewan during the last number of years has been due, at least in part, to the bungling of the last Conservative federal regime in regard to unemployment. It seems to me that people of my province have never forgotten or forgiven that, rightly or wrongly. I did wish to make the point that I am warning this government that in the event of similar bungling they might encounter the same political fate.
If this government is dilatory in dealing with the unemployment situation, I point out there are other governments which are not dilatory in that regard. I am thinking of the British people, for whom I have the greatest 50433-147
Unemployment
admiration. They are people who do not appear to be influenced by whether in doing the thing they do they are making concessions to certain "isms" of one sort and another, but who tackle a problem when it arises and do the thing which they ought to do.
Purely by accident I have picked up this little paper called the Ulster Commentary, which is put out by the government of the part of Ireland in which I was born. I would suggest that my Conservative friends to the right might read it with some profit, because while it is a Conservative government it is a government to which the title "Progressive Conservative" might be suitably applied.
Owing to the shortness of my time I shall not quote from it, but I shall tell you one or two of the things that are being done. The government is in the process of building 47 factories. Our problems here are somewhat different, but over there they depend upon their manufactures for export. Further, legislation will be introduced to extend the powers for dealing with slum property and the improvement of housing to provide additional facilities for prospective home owners.
Another thing that government is doing that comes close to my own heart is that it has built 76 new schools, among other things. They have even gone so far in relation to the textile industry about which all of us are concerned and have actually launched an educational program among 12,000 young textile workers. The Ulster Commentary states: A good proportion of young men who have had a sound practical education must be attracted to the trade if it is to maintain the essential high degree of skill and efficiency.
That is a statement issued by the committee appointed by the ministers of education and commerce.
I wish this government would take its policies from the needs and necessities of the day and the needs and necessities of the unemployed. One might suspect that sometimes this government takes its policies not from the needs of the day but from the advertisements of United States and Canadian private industry which extol the benefits of free enterprise and deplore taking any measures which might be said to smack of socialism. Indeed, I have been wondering if this government, like some of its friends, does not actually welcome a certain amount of unemployment in this country. I read an interesting statement in a financial paper the other day and although I do not have the paper here it said, and I certainly recall reading it, that a certain amount of unemployment is a good thing in our economy. Well, sir, I do not know what your opinion is, but I cannot conceive of any man in his right mind making a statement of that sort.

Unemployment
In the few minutes left at my disposal I wish to make another point and that is the apparent assertion on the part of this government that the provinces are not too anxious concerning whether or not the subject of unemployment is included in the agenda of any future dominion-provincial conference.
We in this group have pressed upon the government the need for such an inclusion in the agenda. We have been met with that characteristic shrugging of shoulders and the shaking of the head. The Prime Minister (Mr. St. Laurent) has gone so far as to say he has no doubt that someone will raise the point and it will be discussed. But the assumption, as I have gathered it from government statements, is that no province in particular has been very interested in the matter. Rather, we have been told that the provinces and municipalities have a good deal of responsibility in this unemployment. I am certain the provinces and municipalities will do what they can but this is quite a contradiction of the original statement made by the government which led us to believe from away back between 1940 and 1945 the government definitely assumed responsibility in regard to the employment of employable unemployed.
I know that my time is short and I must hurry along. As to the suggestion that it is only a matter of probability that any province would want to have the matter of unemployment discussed, I would like to read from clippings from my home paper, the Star-Phoenix, which I have gathered in the last few days. While I cannot quote at any length I shall read the headlines of articles on this subject.
The first headline reads:
Premier Douglas again-
-and I emphasize "again"-
Premier Douglas again asks St. Laurent to call federal-provincial conference on farm costs, unemployment problems.
The next headline appeared in the March 10, 1955, issue of the paper and it reads:
Douglas urges St. Laurent call meet on unemployment.
I think, Mr. Speaker, I have time to quote from this next article:
The Saskatchewan provincial federation of labour, T.L.C., and the Saskatchewan federation of labour, C.C.L., have forwarded to me-
-that is, to Premier Douglas-
-a joint brief urging the calling of a federal-provincial conference to deal with the problems arising out of increasing unemployment.
This request is in keeping with a suggestion which I have made several times that a federal-provincial conference be convened for the purpose of implementing and co-ordinating a public investment program throughout Canada and particularly in those areas adversely affected by unemployment.
[Mr. Knight.l
Now, as to the province's own suggestion that the federal government meet in order that the province might take action, he continues:
This year the government of Saskatchewan will undertake the largest capital expenditure in its history with a view to stimulating construction and providing as much employment as possible. A number of our municipalities are also undertaking heavy capital commitments designed to provide increased employment opportunities.
However, there is a limit to the amount of money which provincial and municipal governments can borrow for the purpose of financing public projects.
Then, to clinch the matter, I have this further article the headline of which reads:
Province has been asking for talks on unemployment since 1949, Douglas avers.
And in a statement which Premier Douglas issued to the press he says:
As far back as July 15, 1949, I wrote Prime Minister St. Laurent requesting a federal-provincial conference to discuss responsibility for ablebodied unemployed. On September 22, 1949, I repeated this request and in August, 1950, I submitted to the Prime Minister a proposed agenda for the federal-provincial conference covering such questions as unemployment and national health insurance.
That is the only point which I shall have time to make. I simply wish to say that any suggestion that the premiers of the provinces are not anxious to have the subject of unemployment raised or included in the agenda of any future dominion-provincial conference is totally and completely false.
In taking my seat I wish to urge once again that this government take some immediate action and at the same time work out some long-term arrangement which, despite the difficulties with which our economic structure is afflicted, might at least stave off unemployment for a period of years and provide the comfort of assurance of work for the working people of this country.


Mr. A. B. Patterson (Fraser Valley):: Mr. Speaker, I propose to make my intervention in this debate as brief as possible. Of course, I hope hon. members will not become too optimistic, because brevity to one person might not be brevity to another. However, what I have to say will be in the way of emphasis rather than information because it appears to me that the situation has been covered thoroughly. Figures have been quoted, and even although there is a wide difference in those figures, it has been brought to our attention clearly that there is a serious problem existing with regard to our employment situation. Not only that, but we have been reminded that the number of our employed does not make too much difference; the difficulty lies in the fact that there are

some who are unable to find employment and to provide for the needs of their families.
Recriminations have been hurled against past and present governments for failure to take measures that would promote full employment. Various fields have been crossed and crisscrossed in an attempt to discover the factors contributing to the situation existing today. Discussions have tried to establish the nature of our problem, as to whether it is regional, frictional or what-not. It would therefore appear that practically every angle of the problem has been discussed during the debate.
I do not think that the government can say that no solutions have been suggested by the members of the opposition. I think it was implied, at least on one occasion yesterday, that the opposition members have not as yet submitted any proposals designed to meet the situation. Many proposals have been advanced. Some have been perhaps conventional and orthodox while others may appear to be somewhat unorthodox. On March 2, suggestions were made by the hon. member for Bow River (Mr. Johnston) with respect to this matter and they were further emphasized by the hon. member for Acadia (Mr. Quelch). On March 15 and 16 the hon. member for Lethbridge (Mr. Blackmore) outlined monetary reforms or, should I say, methods of financing which in the past have been used to good advantage in times of emergency, and he suggested that those measures that were used to finance war could be used to finance peace.
As all hon. members know, I am a comparative newcomer in the house, and I should like to hear some responsible member of the government give his views with respect to the procedures outlined by the hon. member for Lethbridge, or, in other words, the suggestions that have been made by this group time and time again in the past with regard to financing. I know there have been those across the way who have hurled taunts at this side. There are those who have been critical. But since I have come into the house we have not heard any responsible member of the government give his views with respect to those suggestions and proposals that have been made. We are facing a crisis. I think even the government acknowledges the fact that we are facing a crisis. We must therefore consider every proposal which promises a solution to the problem.
A number of members have referred to the dominion-provincial conference on reconstruction that was held several years ago. I understand that at that time the dominion
50433-147J
Unemployment
government proposed to accept full responsibility for assistance to able-bodied unemployed persons. The suggestion or the charge has been made that, up to the present time, the government has not seen fit to implement that proposal. On the contrary, I think the government have rejected and have refused to fulfil that proposal which they made back at that conference.
The premier of British Columbia made an appeal for assistance for the unemployed employables but we all remember how that request was rejected and how the implication, if not the plain statement, was made that the federal government did not accept responsibility and that the provincial government had not proved that it was unable to solve the problem and to meet the financial responsibilities involved.
On February 25, as reported at page 1501 of Hansard, the hon. member for Broadview (Mr. Hees) directed a question to the Prime Minister (Mr. St. Laurent) with respect to the matter. He asked if the premier of British Columbia had made a request that a dominion-provincial conference be called to deal with unemployment. The reply of the Prime Minister on that occasion was that the premier of British Columbia wrote on July 14 with respect to this problem and stated:
The wisdom of holding a federal-provincial conference may commend itself to you.
The Prime Minister went on to say that he could not construe that letter as being a request. I would suggest that the question was there and the request was involved; it was included. But yet on that occasion, as we know, the request was not acceded to.
As to the unemployed employables, the British Columbia government responded to the challenge presented by the failure of the federal government to assume their responsibilities in this respect and agreed to an 80-20 split with regard to the expenses involved. This was done in spite of the fact that the British Columbia government in the past and up to the present has been receiving rather shabby treatment from the federal government in some respects. We all recognize, of course, the fact that the federal government have the major source of revenue in the various provinces, and we expect them at least to assume the responsibilities that are rightfully theirs.
In this connection I could refer to various matters, but I am not going to do so at any length. However, I feel that these matters are closely allied to the problem of unemployment. May I refer to some of the treatment that has been handed out to the province of British Columbia by the federal government. For instance, may I refer to the

Unemployment
percentage of defence contracts awarded to British Columbia firms by the federal government. Of a total exceeding $300 million of defence contracts in the 12-month period ended November 30, 1954, approximately $15,500,000 was awarded to British Columbia. British Columbia contributes more than 9 per cent of the total income taxes paid to Ottawa, yet we are receiving less than 5 per cent of the defence contracts.
Not only is there the matter of defence contracts. The hon. member for Comox-Alberni (Mr. Barnett) some time ago asked a question with regard to the prefabricated houses that were being used at Comox in the project that was being erected there. He referred to the fact-or at least it was brought out in the reply-that these houses were being supplied by an outside firm and were being shipped from New Liskeard, I believe the place was. That means they were being shipped right from New Liskeard, Ontario, through to British Columbia and across to Vancouver island for use in the defence project there. I should like to ask why these prefab houses could not be supplied by firms in British Columbia? I want to refer to a statement by the manager of the British Columbia division of Canadian Manufacturers Association:
We are very appreciative of the care with which the provincial government insists upon local products and local technical assistance in connection with governmental projects.
I would suggest, Mr. Speaker, that just as the provincial government is careful to recognize and acknowledge the claims of local firms in this regard, so I believe the Department of National Defence should give some consideration to this matter and insist that these products be supplied by industries in the provinces concerned, if at all possible.
Now, there are other matters to which 1 could refer, such as works projects which have been turned down by the federal government. I could refer to the fact that time and time again I have requested assistance in regard to the erosion problems on various parts of the Fraser river, erosion problems which are caused by navigation and not just by the natural process of erosion, as engineers would claim. My request has been turned down very definitely and very clearly. All these things tie into the picture. I would suggest that some of these things, which would at least give some assistance in solving the unemployment problem as well as make British Columbia feel happier about the whole proposition, should be carefully considered.

We have heard a great deal of talk about public works, tax reductions and the necessity for increased trade. I do not believe that those things alone will provide a solution to the unemployment problem. I was interested in hearing the hon. member for Parkdale (Mr. Hunter) last evening refer to the fact that tax relief should be granted even if it meant a $400 million deficit in the budget. In considering his statement,
I wondered just how much that would increase our national debt, because we are reminded of the fact that even now the interest on our national debt is approximately $500 million. I do not know just how much more the people of Canada would be willing to accept in that particular respect.
I believe, as I have said, that these other things are good in their place but they will not solve the problem that confronts us at the moment. I feel that Mr. Reuther came very close to the crux of the matter when he was speaking last year, I am not sure of the date, in Vancouver. The title of this article is, "Reuther issues wide challenge". This article is by Here Munro, the Vancouver Province labour reporter. I should like to quote just briefly from what Mr. Reuther said:
People all over the world are looking to the people of the United States and Canada for leadership, and they will judge us as we ought to judge
ourselves.
"They will not judge us by the facts that we can turn out millions of tons of steel or millions of automobiles or that we build the highest buildings."
Then he went on to state that they were going to judge us by our ability to translate material wealth into human values, into human progress, into human happiness and into human dignity.
Again, I should like to quote from the article:
We have always been able to mobilize our productive economy and create full employment making the weapons of war and destruction, and the most basic unsolved problem that we need to find an answer to, is the question:
Can we find a way to achieve and maintain full employment in peacetime making the good things of life for the people.
Now, one of the problems that he presented was as follows:
One of the problems is that too many people believe in what they call the trickle down theory of economics, the theory that if you have a banquet table and you load that banquet table with more and more of the good things of life for a few wealthy people on top, they will brush enough crumbs off the table for the people down below.
That theory is wrong. You can only build prosperity, not from the top down but from the bottom up, by giving the great mass of people enough purchasing power to buy the things we

know how to produce in our factories, in our mines, and in our mills, and grow on our farms.
Finally he said:
What we need to do is to find a way to broaden the purchasing power base of our economic systems so that that purchasing power in the hands of people will balance our productive power in terms of these new tools that we are finding and science and technology is giving us every day in the year.
I believe Mr. Reuther was right when he referred to the necessity of placing purchasing power in the hands of the people, because if they have purchasing power they will purchase the things that are produced and industry will be thrown into high gear again to produce more goods. Unemployment will vanish and the needs of our people will be fulfilled. I would therefore, Mr. Speaker, request, as I have before, that some responsible minister explain to us why the government cannot or will not effect the necessary monetary reforms to produce the desired results. Increased purchasing power will create more jobs, and therefore as a member of a group that has offered suggestions and outlined a monetary plan that would solve the problem, I would ask the Minister of Finance (Mr. Harris) to state his views concerning the problem and concerning these proposals that have been advanced by this group.


Mr. J. A. MacLean (Queens):: The problem of unemployment from a national point of view has been covered thoroughly in this debate, and it is not my intention to deal with it in general terms but that is not because I do not recognize the importance of the problem. As a matter of fact the unemployment situation in the country is quite serious at the moment. In yesterday's Montreal Gazette I noticed a statement to the effect that 7 per cent of our labour force is now unemployed, which is more than double the normal percentage. This article also points out that even at the depth of the world-wide depression in the thirties there was never more than 12 per cent of our labour force unemployed at any one time.
I, however, do not intend to deal with the problem on a national scale. I should like to direct my remarks for a few moments to the problem of unemployment in the maritime provinces. I know that this is a problem with which the Minister of Labour (Mr. Gregg) is specially familiar because he too is a maritimer. Nevertheless I take this opportunity to bring the situation to his attention once again. Unemployment for us in the mari-times is not new. That is probably the reason we have not expressed the degree of alarm expressed by members from other parts of the country, when they find the unemployment figures reaching such high levels.
Unemployment
Over the years in the maritime provinces we have had chronic unemployment. Ever since confederation the maritimes have been unable to supply employment to the natural increase in the labour force. In that time they have not been able to keep employed the numbers who gained their livelihood in that area years ago.
I note that in my own province of Prince Edward Island the total population in 1951 was 5,000 less than it was in 1901, or 50 years before. The result of this depressed economic condition in the maritime provinces is that there has been a continuous exodus of our best people from those provinces during that time. I am not suggesting that it is not a good thing for groups of our people to be employed in other parts of the country, thus adding to the strength and the leadership of the newer sections of Canada. But the unfortunate effect, so far as the maritime provinces are concerned, is that most of this exodus has been, not to other parts of Canada only, but to the United States, and chiefly to the New England states where we find approximately the same basic economic conditions as are found in our maritime provinces, and where, owing to the similarity of natural conditions, the opportunities should be no greater than in our own maritime provinces.
Unemployment figures for the maritimes do not have great significance because they represent only those who are at the moment unemployed in that area and who have not as yet given up hope of eventually being employed there. These are the people who are unemployed but who have not yet left the area to go somewhere else in search of employment.
In this connection I should like to quote from the Labour Research bulletin, the monthly publication of the research department of the Canadian Congress of Labour. In the January-February issue they deal at considerable length with the economic situation in the maritime provinces, and say at page 2:
Taking the three maritime provinces together there ear be no question that the increase in employment since the end of the war has been very small, and of course far smaller than for the country as a whole.
Then it goes on to say:
For the three maritime provinces figures are available-
That is unemployment figures.
-for 52 dates, from February 23, 1946 to November 20, 1954. On every one of those dates the percentage of unplaced applicants to total supply in the labour market was higher than the national percentage, usually much higher. For 1946 it averaged over 50 per cent higher; for 1947 over 89

Unemployment
potential Canadian market, the city of Montreal. At the present time, and for years, United States potatoes come into Canada completely duty free except for six weeks during the summer. During this winter large amounts of Maine potatoes were trucked across the international boundary to New Brunswick, coming in duty free, and were then shipped to the Montreal market under the benefit of the maritime freight rate. They were sold there at an advantage of about $25 per carload compared to Canadian potatoes which were selling for the same price, due to the exchange on the United States dollar. Is it any wonder that we in the maritimes find it hard to compete under those conditions? Therefore I make the obvious suggestion as to how the situation might be improved.
Another thing we need in the maritimes in order to be able to compete as far as manufacturing is concerned is cheap power. There are a number of potential power sites in the maritime provinces, and encouragement should be given by the federal government to their development. In addition to these developments I should like to see an accelerated effort to devise some method of producing electrical power from coal by means of gas turbines or other methods. We have coal in surplus supply in the maritime provinces at the present time, and efforts should be made to bring about the development of electrical power from coal at a cost which would permit it to compete with hydro power.
I think it is fair to suggest that the federal government should see that a fair percentage of defence industries are located in the extremities of our country. I do not mean that industries should be dispersed, that existing plants should be closed down, uprooted and transplanted somewhere else, but I do mean that when new factories are required for the production of strategic war materials especially, serious consideration should be given to locating them in the more sparsely populated areas of the country. This would relieve the congested areas which are already tempting targets for bomber attacks.
In closing I want to say that given even reasonable encouragement we in the maritimes with our great resources, the size of which are only now being fully realized, can work out our own salvation but we must have a suitable economic environment so we can share fully in the fruits of our own endeavours.


Mr. Maurice Breton (Jolieile-L'Assomplion-Monlcalm):: Mr. Speaker, I do not propose
in this speech to minimize the importance
[Mr. MacLean.l
which must be attached to this unemployment problem. On the contrary I am convinced that it is one of the most important of those which face our governments. Therefore I believe it may be of some use in this debate to gauge as precisely as possible the volume of present-day employment by looking back on its incidence in the country over the past 20 years. I have before me some figures provided by the dominion bureau of statistics giving the number of persons without jobs and seeking work in Canada during the period 1931-1954. The figures are for the month of June in each case. I would ask permission to place this table on Hansard in order to relieve me of the necessity of reading it in full.


Mr. Depuiy Speaker:: Has the hon. member permission to place this table on Hansard?


Some hon. Members:: Agreed.


Maurice Breton: The table follows:
Persons Without Jobs and Seeking Work in Canada, 1931-1954
Thousands oi
Date	persons 14 years
June	of age and over
1931		 475
1932		 733
1933		 817
1934		 624
1935		 818
1936		 565
1937		 406
1938		 516
1939		 523
1940		 448
1941		 I83
1942		 134
1943		 75
1944		 62
1945		 72
1946		 123
1947		 91
1948		 80
1949	  100
1950		 136*
1951		 80
1952		 105
1953		 90
1954		 185
'Newfoundland included in estimates commencing 1950; but Manitoba is excluded for June 1950 only due to flood conditions.
Source of estimates:
1931-1945-D.B.S. reference paper No. 23, "Canadian Labour Force Estimates 1931-1950";
1946-1953-Monthly bulletin on "The Labour Force", April 1954;
1954-Monthly bulletin on "The Labour Force", June 1954.


Mr. Blair:: What is the source of those figures?


Maurice Breton: I obtained the figures from the dominion bureau of statistics, and I shall table the document I received from that source.

Mr. Speaker, it will be noticed that these figures are for June of each year. They are the only figures covering a period of several years which I have been able to obtain. Account must be taken of the fact that the trend for the period from June to March is generally constant. There is a rapid increase from January to March of each year, through the prevalence of seasonal employment. It will also be noticed that in 1931 the civilian labour force in Canada was 4,105,000 as against 5,345,000 on February 10, 1955.
These figures show that unemployment is nothing new, that we have never managed to do away with it entirely. If we look back to these figures it will be seen that if the situation has become somewhat worse since the end of the war, it is by no means comparable to what it was between 1930 and 1941 inclusive. On the other hand, taking into account legislation put on the statute books by the federal government since 1940 with a view to redistributing the wealth of our country, it must be admitted that a great deal has been done to eradicate poverty and misery.
I would like to put on record in this connection the amounts paid out this year by the federal government in social security and unemployment insurance benefits: $1,200 million in social security benefits and $200 million, approximately, in unemployment insurance, which gives a total of $1,400 million.
Some people seem to think the problem of unemployment is one for the federal government alone to solve. Still, by virtue of constitution and custom, the property, control and responsibility with regard to natural resources in this country are vested in the provincial governments. Therefore it would be abnormal for provinces which claim credit for the industrial development of this country to refuse to accept their share of responsibility for unemployment. It is true that unemployment insurance legislation is a federal responsibility. This has been brought about through the consent of the provinces. But such legislation is only a means of helping the unemployed and does not, by itself, create employment.
To my mind the federal government has the following means to combat unemployment: First, a financial policy directed to increasing credit in this country; second, unemployment insurance legislation; third, social security measures.
No one can deny the great amount of work accomplished by the government since 1940 in those three fields. To state that the federal government has done nothing to deal with unemployment is to deliberately ignore a great part of its legislation of the past several years. As examples of financial measures
Unemployment
this government has taken for the relief of unemployment I shall mention the extension of credit for house-building purposes, the effects of which have been felt already in 1954 and will intensify during 1955, as well as the reduction of interest rates. Can the government go any further in allowing credit expansion without risks of inflation? There is a question to which only experts can give an answer.
In the field of unemployment insurance a great deal has been done since 1941, and some new amendments to be adopted at this session will, I hope, bring a greater number of workers within the scope of this legislation and extend the duration of benefits to the unemployed. These questions will no doubt be discussed in detail when the amendments are introduced in the house.
As regards social security measures, I believe the government has made the fullest possible use of the share of the national revenue that it can earmark for this purpose.
In my opinion the federal government has assumed all its responsibilities as regards unemployment, but that does not mean it is the only one in a position to meet this problem. Foreign trade, agricultural prices, daring on the part of the leaders of industry, salaries, provincial initiative in the development of natural resources, are all factors which have a bearing on the level of employment. It is therefore impossible to single out responsibilities in this matter. Consequently it is the duty of all levels of government, of leaders in industry and of labour unions to co-operate toward the solution of this problem.
Many consider that the federal government is already assuming too many responsibilities. If the solution of the unemployment problem were entrusted exclusively to the federal government it would lead to greater economic and political centralization. In fact, one cannot seek to obtain rights and at the same time refuse to accept the obligations that these rights involve.
Unemployment is a chronic ill, the importance of which can only increase in peacetime with the development of automation in industry. Without for a moment exaggerating the seriousness of unemployment, I believe that the establishment of a permanent body to study this problem, which could consult with representatives of all interested groups, would be an efficient way of finding long-term solutions.
In the meantime I endorse the policy of the government.


Mr. F. S. Zaplitny (Dauphin):: Mr. Speaker, I want my first words in this debate to be words of sympathy. I have a great deal of

Unemployment
sympathy for the present Minister of Labour (Mr. Gregg). There is an old saying which goes something like this: "Uneasy lies the head that wears a crown". One has to remember how long the Minister of Labour has been patiently sitting in his place having extra thorns added to his crown every once in a while. It is not my intention to add to his difficulties today.
It is my intention to discuss briefly the two proposals which were set forth in the amendment moved by the hon. member for Burnaby-Coquitlam (Mr. Regier) on behalf of the C.C.F. party. On the 16th of March the hon. member moved an amendment which called for two specific lines of action by this government. The first part of the amendment called for the government to implement the pledge it made in 1945 in what are commonly known as the green book proposals, that it would take full responsibility for the care of the unemployed.
I shall not devote much time to that part of the proposal because it has already been well covered, except to point out that with regard to those who are not eligible for unemployment insurance there is certainly an urgent need for this government to come to the aid of the municipalities which are obliged to struggle with that problem. Before this debate winds up I hope some member of the government-either the Minister of Labour or someone else speaking for the government-will be able to tell this house what they intend to do with respect to this question. I have no doubt that it will be one of the questions which will be discussed at the dominion-provincial conference to take place in the next few weeks, and I hope that out of it will come something which will assure the municipalities that they will not be left in the position of having to take the responsibility of caring for those who are unemployed by virtue of the policies of the federal government.
I should like to devote a little time to the second proposition in our amendment, calling for a public investment program and for economic development. In order to make my remarks as constructive as possible, I should like to set out first of all that I believe the government is missing the boat by going along with the decision of Trans-Canada Pipe Lines Limited, which' apparently has decided not to proceed with the construction of the pipe line this year. According to a press dispatch of March 18, as it appears in the Winnipeg Free Press, we are informed as follows:
Decision by the directors of Trans-Canada Pipe Lines to bring the negotiations to an end was announced Thursday afternoon by N. E. Tanner, Calgary, president of the company.
[Mr. Zaplitny.l
Then it goes on to give the reasons:
A flat refusal by the world's second largest oil company to sell Alberta gas to Trans-Canada Pipe Lines brought the negotiations with the federal government's industrial development bank to an end. The oil company refused to be a party to supplying oil to a pipe line company,-
It should be "gas" there, I imagine:

which under the terms of the I.D.B. proposition could be controlled by the Canadian government.
Then it goes on to say:
The oil company, Canadian Gulf Oil, a subsidiary of the huge Gulf Oil Corp. of Pittsburgh, refused to sign as a supplier, despite a personal last minute appeal by Right Hon. C. D. Howe, Minister of Trade and Commerce. Mr. Howe reportedly intervened this week to try to persuade Gulf Oil to agree to supply oil but the appeal was flatly rejected and ended in bitter argument over longdistance telephone.
I have no way of knowing the accuracy of that report. Certainly it has not been denied. It appears that the government has now resigned itself to the position that if the pipe-line company in question will not proceed with building the pipe line, then the matter rests there. Certainly here is a clear case where the federal government could proceed on its own and build the pipe line as a public utility, if not the whole distance into eastern Canada then certainly as far as Winnipeg this year. There may be some doubt as to the readiness of consumers in Montreal, Toronto or other eastern cities to buy the gas that may be available. There may be some doubt as to whether the price can be made competitive with other sources of supply. But certainly as far as the situation east to Winnipeg is concerned, there is no doubt that the supply of gas would be welcomed by both the domestic users and those who are in industry.
I see no reason at all why the Canadian government should sit back and wait for a private corporation to proceed with a project of this nature when, in the first place, I believe the Canadian government should have taken the initiative to construct such a pipe line and use it as a public utility, making it available to private concerns, provincial governments and municipalities.
If we can foresee in the future a network distribution of natural gas, both in western and eastern Canada, in which the provincial governments and the municipalities are to participate-and I believe that is what is going to happen-then certainly it would be a protection to those provincial governments and to the municipalities concerned if the pipe line were a publicly-owned utility under the control of the federal government, free to be used by all those who wished to use it as a common carrier, and subject to the regulations of this parliament.

I believe the government of Canada would be well advised to proceed with this project on its own and build it this year as far as Winnipeg. Certainly I can hardly believe that the Minister of Trade and Commerce of Canada would have to make an appeal by telephone to the president of a privately-owned company in the United States, almost begging on bended knee that we may be able to use some of our own natural resources in western Canada by transmitting them farther east. Things have come to a pretty pass if we cannot do anything to alleviate our unemployment situation because the president of a United States company denies us the use of a resource which rightfully belongs to the people of Canada. Whatever protests this government has been making to the United States government with respect to other matters, I think this is one matter in respect of which a protest would be in order.
That is one of the major projects, but under the general idea of public investment there are many other things that could be done. We have suggested in the past, and I should like to place it on record again, that we believe this government should participate in the construction of a highway system from coast to coast. At the present time this matter is considered to be the responsibility of the provincial governments. The federal government has participated to the extent of assisting in the building of the trans-Canada highway, but at the rate at which highway traffic is increasing in Canada, not only in volume or the number of units but in the weight of the vehicles are using our highways, it can be easily seen that many of the existing highways are a wasting asset and are not going to last very long. It is certainly a legitimate project which would be for the general welfare of Canada, and it is one which would provide employment and bring about a general increase in activity from coast to coast.
Then we have suggested a low rental housing scheme, not only to provide extra housing units but also in order to alleviate the unemployment situation. There was also the question of level grade crossings, about which some discussion has taken place. A small amount is now available to municipalities that wish to participate in the construction of systems which would eliminate the level grade crossings; but certainly that figure of $5 million for a country like Canada, for a project of that nature, is a drop in the bucket. Here again is something which could be usefully done which would facilitate the convenience of traffic and contribute to the
Unemployment
safety of vehicles and of life, and it is something the federal government could use to boost employment.
I also believe the government could enter into an over-all national conservation plan which could include such things as irrigation, reclamation, reforestation and development of water power. All these things would be in a sense self-liquidating, in the sense that they would be bringing greater value to the nation, creating greater economic activity and development of our resources, and at the same time providing much-needed employment.
I would suggest also that the government proceed with the construction of storage facilities for farm products. It is true that owing to last year's light crop in the west the congestion in our elevator system has not been as great an issue in recent months as it was a year ago. But we are all hopeful, we are all optimistic in the west. We hope for a huge crop in 1955. If we do get a large crop, by next fall we shall be in exactly the same place we were a year ago. All the elevators will be filled; all the annexes will be filled; the terminal elevators will be filled, and the farmers will be left with grain lying in the field which they will not be able to move. Why not use a little foresight and start constructing storage facilities for this grain, as well as facilities for other farm products of a non-perishable nature which could be stored and used in a period of short supply, when the world demand for those products might be better than it is today?
All these things would add to the gross national product, would add to the value of our assets in Canada, and at the same time would provide useful and sensible employment. Those are some of the immediate things we believe could be done.
This afternoon I should like to devote a little time to the problem of unemployment from a national rather than a regional point of view. I feel it is time we devoted a little attention not only to the solving of the unemployment problem when it is upon us, but also to making long-range plans for preventing its recurrence. Evidently unemployment is not a new situation in Canada. The hon. member who preceded me has already placed figures on the record which show that the unemployment situation has been with us since 1930, and the only time it was temporarily solved was during the war and the years immediately following. According to the economic philosophy of this government, that was an abnormal situation.
Since it is a problem which has been recurring and which shows no tendency to solve itself, there must be a reason for it. At the

Unemployment
moment we have something in the neighbourhood of 613,000 persons registered as seeking employment, and I should like this house to consider the increasing helplessness of the unemployed as compared with previous years. Today it seems that the moment the ordinary wage earner in Canada loses his job, because of the high cost of living and the fact that the trend seems to be toward the displacement of labour, he finds himself in an almost hopeless situation where he is no longer master of his own destiny. This is not a trend which is likely to stop of itself, because we are told on good authority that the trend toward the displacement of labour by technological advancement, the development of new machines and new methods, is increasing not only year by year but month by month. I believe there is a new term for it, "automation", the process through which every new invention, every new technical advance has the effect of producing as much or more with less and less labour.
In spite of the fact that our gross national product may be increasing year by year- and certainly it should with the increase in our population-we could have the anomalous situation that in spite of the fact our production is increasing, the number of persons employed in the production of those goods and services is decreasing. As a matter of fact that is the situation now when you take into consideration the fact that our population is increasing and at the same time the numbers of unemployed are becoming greater and greater. It is not only the fact that men are being displaced, but the fact that this has been going on for a long time, that is causing concern. I believe we must trace the problem back to its root, because the whole nature of our economic system has undergone a tremendous change, even in the last half century.
We do not need to go back as far as the industrial revolution. Even going back 50 years we find that, so far as labour is concerned, the whole character and nature of our economic system has changed radically. There was a time when the system we commonly refer to as the free enterprise system had some practical characteristics wherein a man was the producer, the labourer and the owner of his own plant. Let us take, for example, the man who 50 years ago made shoes in his own little shop. He was the owner, employer, producer and salesman for his product. He was the master of his own destiny. If he were located in a certain town or village where business was not good, if fewer customers were coming into his shop or his product was not selling well, it was not too difficult for him to gather his tools together, take his [Mr. Zaplitny.l
work bench along and move to another location. He was, to a certain extent, the master of his own future.
But what has been happening? I have given that illustration, but the same picture is true if applied to construction or manufacturing in all its ramifications. What has been happening since the industrial revolution is that progressively the labourer has been separated from his tools. Today a man working in a big industrial plant in which things are produced under the mass production system, where the conveyor belt is the rule rather than the exception, is no longer the master of his destiny. If the management of the plant in which he is working decides that new machinery can produce the same amount of goods or more with less labour, he is notified his services are no longer required. What has he to pick up and take to another location? He is not even the owner of the tools with which he works. He has only his own two nands, his labour or his skill to sell. In other words he is not only being separated from his tools by advancement and scientific inventions; he has also been separated from his capital.
The man who used to produce and sell his own goods in his own shop used part of his money for his daily living, and the rest was invested in his own little business. It was used to improve his tools and equipment, or to try to turn out a better product. He used his wages both for living purposes and for creating capital for himself. Today the man who works in a huge industrial concern creates capital, that is the amount over and above his wages and the expense of running the plant, but that capital is no longer available to him. He has no share in it. He has devoted his skill, time and energy and has earned his wages, which have gone into his cost of living. When he is told his services are no longer required, there is nothing he can take away with him. The capital he has earned, that is the amount over and above his wages, and the expenses of the plant, is left in the hands of that particular industry.
I would like to quote a passage that appeared almost exactly a half century ago, in the first volume of Adam Smith's "Wealth of Nations" where, at page 32, he says:
Labour is the first price, the original purchase money that was paid for all things. It was not by gold or by silver but by labour that all the wealth of the world was originally purchased: and its value to those who possess it and who want to exchange it for some new production is precisely equal to the quantity of labour which it can enable them to purchase or to command.
These are very important words, because they bring us back to a realization that there is no such thing as relations between capital

and labour, in the theoretical sense, because capital is labour; and we cannot say that capital and labour must co-operate, although those words are often used, because as a matter of fact there is no capital apart from labour.
All capital was created by labour and is being created by labour every day. There is no other form of capital. The difference today is that capital which is being produced currently by labour, and which has been produced by labour for the last half century, is no longer in the hands of those who have produced it. They have become separated from the tools of their production and also have become separated from the very capital which they themselves have created. And having done that they are left in a position of helplessness where, once they lose their jobs, they have nothing else to fall back upon. That is the situation which must be faced and recognized.
Let me quote again from the same book, this time from page 35, where it says:
Labour alone therefore, never varying in its own value, is alone the ultimate and real standard by which the value of all commodities can at all times and places be estimated and compared. It is their real price. Money is their nominal price only.
There again, what is the situation? The real price of a commodity that has been produced or a service performed is the amount of labour which has been put into the production of that commodity or the performance of that service. That is its only real price; there can be no other. But under our present economic system that is not the price tag attached to it. Those who are the owners or the inheritors of that capital which has been created by labour are now in a position to place their own price tag on it, and that tag is padded with what we call surplus profit.
As a result of that combination of circumstances, the separation of the labourer from the tools of his trade and the separation of labour from the capital it has created but no longer controls, and the fact that he who contributes the labour in the production of a commodity or the performance of a service is not the one who puts the price tag on it- all these things have contributed to what we call a lack of purchasing power.
I would like to go behind the scenes on this question of lack of purchasing power, because it is on that question that a great deal of our debate has centred. Hon. members to my left, those who belong to the Social Credit party, have referred to it in every speech they have made, and have pointed to this lack of purchasing power as the root of our difficulties
Unemployment
today. As a matter of fact it is not the root of our difficulties; it is the result of the process of the separation of labour from its production.
What are some of the ways in which the lack of purchasing power can be emphasized or made clear? I hold in my hand a report which came to me recently concerning small loans companies and money-lenders. This report is issued by the superintendent of insurance for Canada and covers the period for the year ended December 31, 1953.
Normally if the price charged for goods and services were equal to the amount of labour put into them, then you would expect there would be a balance between the consumption and the production of goods. But we know there is no such balance. We know people are forced to borrow money to make up for that lack of purchasing power that has come about. This is only a small example, because it involves only one company. I am not picking out this company for any particular reason, but I believe it is a good illustration.
The company reported upon in this instance is Household Finance Corporation of Canada, which deals chiefly in small loans. This company was incorporated in 1928 with an authorized capital of $5 million and a subscribed capital of only $3,700,000. Its assets today are valued at $56,687,123. It is pointed out that its earned income on the loans outstanding, which in the last year amounted to $54 million, was $12,615,980.
This points up the fantastic way in which interest can draw away the purchasing power of the people. Here is a company that, on an investment of about $3 million, makes an interest profit in one year of $12,615,980. Even after all expenses, including operation expenses, taxes and the like are deducted, they have left a profit of $6,677,066. That is their net income. It represents a net interest profit of over $6 million in one year on an investment of $3 million and that is only one example by which the disappearance of purchasing power can be brought home. Recently I read an article in Maclean's magazine about one of the Asiatic countries-I believe it was Indonesia-in which it was stated that the money-lenders in that country were charging interest rates as high as 25 per cent. I was astonished, thinking this was surely fantastic and unbelievable, that no one would charge an interest rate of 25 per cent. But if we do some mathematical calculations we find that right here in Canada this company charges an interest rate of 22 per cent on small loans.
This means that every time a borrowed dollar is turned over four and a half times,

Unemployment
it disappears in the form of interest. One might multiply this example by the millions -perhaps the billions-involved, because the example I have taken is one of the smaller companies. For example, General Motors Acceptance Corporation is a much larger company doing the same kind of business. Traders Finance Corporation Limited and Trans Canada Credit Corporation Limited are two others. Multiply the borrowed dollar by two billion, and realize that every time it turns over four and a half times it exhausts itself by way of interest, and you can see how the present economic system contributes to the disappearance of the purchasing power of the Canadian people.
That is only one thing. We have in addition ordinary industrial profit making. Let me say here at once that I am not complaining about the making of profits by industry, nor do I complain about what is described as free enterprise, so long as it is free. But there is actual profiteering going on. These figures bear it out; and we know that every year, particularly since 1946 when price controls in Canada were lifted, there has been an increasingly greater rate of disappearance in the purchasing power of the Canadian people. That shows how our economic system works, and some of the disabilities under which the ordinary person in Canada has to live.
What are some of the ways in which that situation can be remedied? It has already been suggested by various hon. members that we should increase our social welfare payments as one of the methods of restoring purchasing power to the ordinary people of Canada. I am all for that. To the extent that we can increase such things as old age pensions, family allowances, war veterans allowances and other forms of welfare payments, to that extent we are helping to solve the problem by placing more purchasing power in the hands of the people. I note that in their submission to the government last fall the railway brotherhood suggested that family allowances should be increased a flat $2 in each category to make them $7, $8, $9 and $10, instead of $5, $6, $7 and $8, as they are now.
These things are all to the good, but I do not think it is the whole solution. Something will have to be done to restore to the hands of those who have lost it the management of and participation in the way the capital they created is to be used. There are two main ways in which that can be done. One of them, of course, is through public ownership. I have no hesitation in saying that any time we want to deal effectively with our monopolies and combines in Canada it will 
not be through the present Combines Investigation Act. It will be through public ownership of such monopolies.
The other method is the co-operative method. That is one of the finest ways in which we can restore to the hands of the people who create the capital, the management and control of that capital. I understand that in Nova Scotia some progress has already been made in that field. I would hope that whatever this government can do, whatever this parliament can do, to encourage and assist people to use the co-operative method of production and distribution, to that extent we shall be helping to bring back into the hands of the people who create the wealth the management and control of that wealth.
I realize that this would require a departure from the economic philosophy of the present government. It has always been a matter of regret to me personally that in the ranks of the Liberal party, among whom are many men I admire a great deal, there has been a tendency toward greater and greater conformity with the official position of the government. There was a time within my memory-and I have been a constant reader of Hansard for over 20 years-when there were a few rebels or left-wingers in the Liberal party.


Mr. Martin:: All progressives.


Frederick Samuel Zaplitny: I can remember the Minister of National Health and Welfare when he was a private member back in the early days. He used to rise quite often in his place in this house and agree with many of the things that were said by the former leader of the C.C.F. party, the late J. S. Woodsworth. I can remember the hon. member for Rosthern (Mr. Tucker) when he was a new member of this house, before he fell to the temptation of leading a political safari from Saskatchewan, when he was a great reformer in various respects. In some ways he was a bit of a monetary reformer in those days. For example, I can remember the hon. member for Spadina (Mr. Croll), before he came into this house. He played the roll of a Simon Bolivar at Queen's Park when he broke with Hepburn on the labour question. As a matter of fact he is one of the few left-wing Liberals in this house who came to scoff and remained to scoff. It seems to me that the others have submitted to the dead hand of conformity and are no longer willing to challenge the status quo.


Paul Joseph James Martin: That is not what the Montreal Gazette says about the Minister of National Health and Welfare.


Frederick Samuel Zaplitny: Of course I would not want to get my opinion of the hon. member from the Montreal Gazette. But it must be admitted that if the Liberal party is to live up to its early tradition of being a radical party in some respects, then it is necessary that there should be a left-wing group in that party. Instead of having a .left-wing group we have a group of people who are not willing to challenge the status quo; they are not willing to challenge the profiteering of monopolies in our midst. We find that that mentality is no longer in evidence. We find the dead hand of conformity has been placed upon the genial Minister of Citizenship and Immigration (Mr. Pickersgill) who, when he was in the rarefied atmosphere of Selkirk, where we are all very forward looking, even stated that so far as he was concerned the Liberal party was a party of human welfare.


John Whitney Pickersgill: So it is.


Frederick Samuel Zaplitny: The minister will have to do some convincing today right in his own government and in his own ranks.


Paul Joseph James Martin: Surely not.


Frederick Samuel Zaplitny: I say this deliberately, because we have been told in reply to all suggestions and proposals that we have made in this house, after all the verbiage has been stripped away, by the Minister of Trade and Commerce and to a lesser degree by the Minister of Labour himself, that after all this is a free enterprise economy and it is not up to the government to do these things that are suggested; it is up to private industry to do them. Is that the kind of human welfare the Minister of Citizenship and Immigration had in mind when he suggested that private enterprise was the trade-mark of the Tory party and the Liberals should never use it? I am afraid he is guilty of speaking out of both sides of his mouth at the same time. The stock reply is, this is a free enterprise economy and the people of Canada voted for it. They elected this government on that basis, and that is what we are going to have.
We are told that competition is the key to the whole thing. That is a point on which I want to take issue. I say that competition is not the key to the solution of our problems and never has been. I believe that co-operation is the key, and just to illustrate how quickly the people of this country can lose faith in competition when the crisis is on, I hold in my hand a Christmas card which was sent to 40,000 retailers of Canada. This folder has on its face a little cartoon. It is made up of five panels. These panels will be familiar to any western member who used to read it. It used to appear in the "Scoop
Unemployment
Shovel" and later in the Country Guide, a cooperative newspaper. It has often been used to teach the philosophy of co-operation.
I shall describe it briefly. Originally the cartoon consisted of two donkeys, but in this cartoon it is two reindeer to bring it in line with the Christmas season. The first panel shows two reindeer tied together with a rope. They are standing back to back, each one facing a bale of hay and each one wondering how to get at it. The next panel shows them struggling, each in his own direction toward the bale of hay, neither one being able to get a mouthful of it. Each is pulling the other back. The third panel shows them sitting face to face with a question mark between them, trying to figure out what to do about the competition. The fourth panel shows them standing together at one bale of hay, eating to their hearts' content, and then over at the other bale of hay eating together with a satisfied look on their faces.
In other words the 40,000 retailers of Canada are advocating what? What does this teach? Competition? No, the very opposite; it is teaching co-operation. The very people to whom this government has been trying for years to sell the philosophy of competition are now preaching co-operation.


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


Mr. Ambrose Holowach (Edmonton East):: Mr. Speaker, for several days now the pages of Hansard have been filled with the record of a long debate on the growing seriousness of the unemployment situation in Canada. I am sure we will all agree that if sincere words and concern alone determined the solution to any problem, then this house has been supplied with ample remedies for this problem which is now shameful. Unfortunately we know that mass unemployment is not solved that easily.
I understand there has been some criticism over the prolonging of this debate, but I believe such criticism is not justified. By investigating thoroughly the entire problem of unemployment in Canada we are focusing our attention on the seriousness of that problem. If we are able to establish the basic causes of unemployment and can apply effective remedies, then I do believe that unemployment can be solved. In my humble opinion unemployment, recessions and conditions under which men and women are without work are not beyond the control of parliament. Such conditions are not God-made, nor are they the result of supernatural forces. They are in fact the result of faulty man-made economic policies, with resulting psychological factors.

Unemployment
market as well as our export trade. Taxes go into the cost of production and decrease the amount the dollar can buy, with the result that many of the goods this country has produced are presently beyond the reach of most countries which would ordinarily buy them from us.
During the war and shortly thereafter, because of a depletion of their own resources and damage to their potential, many countries were obliged to buy from us; but that situation does not exist now. The artificial stimuli which spurred our economy shortly after the war no longer exist. Many of the countries who were formerly our customers have rebuilt their industry and are now selling their products at lower prices than ours, by reason of the fact that many of the hidden taxes our fiscal policy demands of production are not incorporated in their products. It seems to me that an intelligent man always benefits by the experience of others. For some reason or another we refuse to do that.
During the course of this debate reference was made to the extraordinary recovery of Germany. I am keenly interested in Germany's recovery because it was my good fortune to have spent many years studying in that country. In thinking of the recovery of Germany we must consider that on May 8, 1945, the country was divided into three areas, each independently occupied. Up until that time the territories were economically dependent upon each other. In order to have a complete picture of the chaos it is also necessary to consider that more than 10 million poverty-stricken refugees from other parts of Europe flooded Western Germany. Then we must also consider the war damage, the dismantling of industry, the general atmosphere of despondency and the lack of hope of a solution, and other conditions and attitudes that existed there.
I believe that an examination of the process of economic recovery there merits consideration, because we all know that today, surprisingly enough, Germany is one of the most prosperous countries in Europe and is, in fact, challenging in world trade the very countries that a few years ago had defeated it in war.
I have in my hand an extremely interesting book called "Germany Reports". It is a calm and objective review of the entire problem. It contains some 84 charts and 84 tables, and is published by the press and information office of the German Federal Republic. First of all I wish to read what I consider to be a succinct passage with

respect to the economic and social policies which were adopted in order to make economic recovery possible.


Mr. Blackmore:: Would the hon. member give the date?


Ambrose A. Holowach: This publication was printed in 1953. Speaking with respect to the years 1948-52, the following appears:
Two methods of economic reconstruction presented themselves. Both differed not only in respect of their external form of economic organization but above all in respect of the role of the government in the economy and the position of the citizen within the state and society. They were the planned economy and the free market.
At first sight the idea of directing economic reconstruction in accordance with a comprehensive plan might appear tempting. Actually, however, a planned economy policy could mean nothing more than the continuation of the previously existing course of directing economic activity by detailed bureaucratic regulation. Past experience, however, had shown that such an economic system stifles initiative, the desire for achievement, and the sense of responsibility, as the most valuable driving forces in economic activity. The individual's freedom of decision is replaced by orders of an almighty state and the subservience of its "subjects". Aside from the political significance of such a decision in favour of the planned economy, regulating man's relation to state and society in terms of dependence and subjugation, there can be no surrender in the purely economic sphere of those spiritual and moral forces which flourish only in an atmosphere of freedom. The poorer the country is in material assets, the less can it renounce these forces. For political and also purely economic reasons the economic council of the combined economic area and later the federal government therefore decided in favour of an economic system in which freedom of decision, initiative, achievement and sense of responsibility could once more become the dominant factors.
Then a little further on in this extremely important report this appears:
Now that undeniable success has been achieved, few realize the magnitude and gravity of the decision which had to be made in 1949 when West Germany was faced by the alternative of free market economy or planned economy. In view of the extent of economic disorganization, of devastation, dismantling, refugee distress and prevailing poverty, it was very tempting to believe that a state-controlled economy could provide an escape from this chaos. It required an extraordinary measure of confidence in the imagination and initiative of employers, employees and consumers to risk the decisive step of removing the responsibility for future economic development from the state and turning it over to the participants in the economy and to their unrestricted freedom of decision. However, previous experience with planned direction of the economy by the government made this choice considerably easier.
Furthermore, with respect to taxation I should like to read the following:
Tax policy of economic revival
True to the principle underlying its social policy that taxation must be bearable from an economic as well as a social viewpoint and must not be allowed to stifle private initiative, the federal government strove to adapt all necessary changes in the rates of taxation to the prevailing economic conditions.

A continuation of the earlier fiscal policy based on allied legislation, in which a bookkeeping viewpoint predominated, would have led to disaster in spite of the Marshall plan and the currency reform. Considering the existing shortage of capital, a continuation of such excessive taxation would have initiated a process of economic contraction resulting in growing social burdens to be met out of shrinking tax revenue and a declining national product ... It took the only possible way out of this situation it had been forced into, by making tax reductions the first step in its fiscal policy. This applied first and foremost to direct taxation in general and income tax in particular.
There may be those who claim there is no similarity in the conditions which face Canada at present and those existing in Germany at that time, but I believe there is. While their problem was one of having to induce production to quench the thirst of consumer demand, our problem is similar to the extent that at present it is one of having to make possible consumer demand on the productive capacities of this nation. I repeat, I believe that a serious approach should be made, with the thought of reducing some of the sales and hidden taxes on many of the commodities that are required by people.
Hitherto we have heard of most of the cures as being those that involve the government building suitable projects. I believe such a program will do much to brighten the economic picture, but I think that step alone will make only a scratch on the surface of the problem. I say that for one simple reason, namely that under our financial system the government must first extract from the people, by way of taxation, the money for these projects; whereas there is on hand evidence that even now what is lacking is present effective purchasing power in the hands of the people. Giving with one hand and removing with the other is no solution.
But should the government, after careful thought, embark upon such a program I would suggest that priority be given to that type of construction which generates and distributes wealth in our country. In this category I would say are the building of roads, the building of airports, the building of homes, the giving of inducements to the building of the trans-Canada pipe line. These are things that distribute and in themselves generate wealth.
On January 27 when I spoke in this house I drew attention to the need in western Canada for the building of a road from Winnipeg by way of Saskatoon, Edmonton and the Yellowhead route to the west coast. There is also the need for early commencement on the building of a new major airport in the city of Edmonton. I mention Edmonton because at the present time I understand
Unemployment
that the unemployment figure there is unreasonably high. There is also the federal building there that should be completed as early as possible. As I said before, these things in themselves are not the solution to the unemployment problem, but they can help to solve some part of it.
No discussion of the unemployment situation in Canada would be complete without some reference to the subject of automation. We know that technological advancement is progressing rapidly and, as is being done now, in the future machines and science will more and more replace the hands and the toil of men and women. This matter calls for careful study. It might be advisable for the Minister of Labour to set up within his own department a special study group with a view to examining this entire question of unemployment, its cause, its effect, the influence of technological advancement on unemployment and what portion of unemployment is due to overproduction of certain goods for which there is no market.
However, to me the word "automation" spells out a new economic era. I believe that once again science is forcing us to the realization that mankind was not destined to perpetual toil, but was meant to have leisure and to enjoy the blessings of life. In the future the ultimate challenge will be for governments to devise policies to make financially possible the distribution of those things which the purr of automatic motors and machines has made physically possible.
Perhaps all this may sound visionary. I think we should at this time entertain such a vision, for to do less might well mean that there will not be many of us around to judge that we would have been right in making that vision a reality.
Above all, Mr. Speaker, unemployment violates what I consider to be the rights of citizens. We know the people of Canada look to parliament for a solution. If we fail to solve this serious question at this time we may disturb the widespread confidence that the people of Canada have in parliament and in our way of life. It might well be a dangerous thing to fail at such a time in history, especially when we consider that there are many who are waiting to exploit uncertainty and fear.
I request that the government give an answer to the unemployed people of Canada. I trust that when the Minister of Finance presents his budget he will bear in mind some of the recommendations I have made and make his answer satisfactory to the people of Canada, who are anxious to see an early solution to this problem.

Unemployment


Mr. Carl O. Nickle (Calgary South):: I rise to take part in this debate, Mr. Speaker, mainly because of two recent developments which have had a real or potential major effect upon the level of employment in Canada. One of these developments was the recent collapse of the trans-Canada pipe-line project; the other was today's report concerning possible restrictions on oil imports from Canada by the United States. Both these events have some bearing, real or potential, upon the western Canadian oil and gas industry.
This industry, in eight short years, has gone from an infant to an industry which today in western Canada supports no less than 300,000 men, women and children. This figure includes, of course, not only the direct employees of the oil and gas companies but also those whose jobs have been created because of the activity in western Canada in connection with oil and gas development and exploration. These operations in oil and gas in western Canada involve the employment in all Canada of people in a great range of industries, from the steel industry in the east to many others, affecting a total of probably some half million men, women and children. Obviously it is an industry of very real importance to our country.
Before dealing with the two recent events I want to go back something over five years and quote very briefly from one of a large number of speeches I made from 1947 on in many parts of Canada and the United States, prior to the time I became a member of this house. I am going to refer back to this 1950 speech mainly because it sets out my basic policy, or is a statement of my beliefs, as to how to best serve Canada and Canada's interests through Canada's own oil and gas resources. This speech was made in two places during February, 1950; once before the Canadian Club in Toronto and again before the stockbrokers' associates in the city of Chicago. This is headed, "The Future Unitization of North American Oil and Gas Resources". Remember, this is five years old. It reads as follows:
The Alberta and western Canadian oil and gas industry now finds itself in the position where its rapid growth requires a broad, international understanding on the part of the petroleum industry of both the United States and Canada, and the citizens and governments of these neighbouring nations.
It is highly probable that within a few years Canada will become self-sufficient in petroleum, that western wells will be able to turn out enough oil to service the needs of Canada.
Now, self-sufficiency in oil can be achieved in two ways, either in fact or in balance. By "in fact" is meant the actual delivery of Canadian oil to all parts of the nation. That would be a costly procedure to producer and consumer alike. It

would mean a low well-head price for crude, imposition of tariffs to keep out American and other foreign oils from some parts of Canada, and a high price for refined products to Canadian consumers outside of the prairie provinces.
By "in balance", is meant an exchange of oil between the United States and Canada in order that the producers of each nation might serve the most economic area, regardless of international boundaries. Under this plan, Canadian oil would serve the prairie provinces, Ontario and British Columbia, and serve also part of the mid-western United States market and part of the Pacific northwest .states market. American and other foreign oil would continue, as now, to supply a large part of Canada's eastern market.
So far as natural gas is concerned, Canadians outside of Alberta must recognize that their chances of getting this highly convenient domestic and industrial fuel are dependent in large measure on their willingness to let the equally gas hungry accessible parts of the United States share in Alberta's resource. Albertans must be willing to share their gas resources as well as their oil.
If Canada and the United States are prepared to accept the premise that the two adjoining nations are a single great economic unit


Milton Fowler Gregg: Mr. Speaker, on a point of order, while I am sure the house will admit that a pipe line for gas or oil may be a means of providing employment, I do not think it is proper during this debate to discuss the ramifications of the industry as the hon. member is doing.


Carl Olof Nickle: As I stated earlier, Mr. Speaker, I am making a short restatement of a basic policy which I outlined some years ago. I should like, sir, with your permission, to complete that statement and then proceed to relate the real problem of unemployment in Canada to the oil and gas industry.


Milton Fowler Gregg: The hon. member has already done that. He has said, and I agree with him, that this undertaking, if it comes about in the future, will be a direct or indirect means of creating employment. I suggest that having made that point he should not go on to deal with the policies and difficulties surrounding the industry at this time. Those matters are not appropriate.


Carl Olof Nickle: Any problem related to any industry in Canada, whether that problem is created by industry or by government, that in any way affects the level of employment, creates jobs in Canada or destroys jobs in Canada, I believe is relevant to this debate. I shall continue with the last remaining portion of this 1950 statement:
If Canada and the United States are prepared to accept the premise that the two adjoining nations are a single great economic unit, at least so far as oil and gas are concerned, the Alberta industry will go on to a future dwarfing its status of today, and broad national and international benefits will accrue.
Canada and the United States are each other's greatest customer for goods and services. Like most other nations Canada is buying less now

from the United States than it desires, primarily because it is short of American dollars. Canada's self-sufficiency in petroleum would eliminate its greatest single drain of United States dollars, an item of some $300 million yearly, and make funds available for purchase of other American products.
Continued growth of Alberta's oil and gas industry will greatly strengthen Canada's economy, particularly in the prairie area which has long depended on a single industry, agriculture.
From the viewpoint of both nations-


Mr. Deputy Speaker:: Order. I understood the hon. member to say that he was going to complete this statement very shortly. I find that in a debate of this kind the question of relevancy is very difficult to determine because, as the hon. member who has the floor rightly pointed out, many factors enter into the subject of unemployment. Nevertheless, I must also find that there is considerable merit in the point of order raised by the Minister of Labour. Hon. members cannot use the vehicle of a debate on unemployment to institute a debate on another particular subject. I must therefore ask the hon. member to confine himself to the subject of oil, if he wishes to do so, but in so far as it relates to the problem of employment or unemployment.


Carl Olof Nickle: I trust I am doing just that.


Some hon. Members:: No.


Carl Olof Nickle: Very obviously, as I said in my opening remarks an industry which has grown from infancy to one supporting half a million Canadians is a vital part of the Canadian economy, and the employment provided by that industry is a matter which logically can be discussed before the house in all its phases at this time.
Then, Mr. Speaker, I would like to add the last two paragraphs of this statement. I do this now chiefly because of the development in the house this afternoon concerning the reported restriction by the United States on imports of crude oil from Canada which, may I say, will very obviously affect the employment level in western Canada immediately. This would be the result should there be any reduction by the United States of oil imports from this nation.
This is the balance of the 1950 statement:
From the viewpoint of both nations and the world-


Mr. Deputy Speaker:: I thought I had indicated clearly to the hon. member that I was prepared to extend some leniency to him when he quoted from his statement. I hope, however, that he will now relate his remarks to the unemployment situation.


Carl Olof Nickle: Mr. Speaker, in addition to discussing past developments of some industries in Canada, in the matter of employment or lack of employment, I think it
Unemployment
is also obvious that any suggestion that would create new employment in Canada logically becomes part of this debate.
I now proceed to get on with the main part of this quotation, and read the last two paragraphs of this statement of 1950.
From the viewpoint of both nations and the world, there is-


Mr. Deputy Speaker:: Surely the hon. member must realize I do not want to go any further in the matter, but I have indicated as clearly as I can that perhaps he should proceed to deal with another part of his subject.


Carl Olof Nickle: Mr. Speaker, all I am attempting to do is refer to the problem of oil and gas development and the matter of employment in that and associated industries, and to relate it to the problem of national security in this country. This is an industry which is directly related to the problem of employment. If it is your wish, sir, that I do not read directly from the 1950 statement then I shall try to paraphrase or summarize what I had to say then.


An hon. Member:: Who wrote it for you the first time?


Carl Olof Nickle: I do all my own speech writing.


Mr. Hees:: We have not any deputy ministers to write our speeches.


Carl Olof Nickle: To continue:
From the viewpoint of both nations and the world, there is another vastly important fact which cannot be ignored. Adequate deliveries of oil and gas to points of need, vital as they are in peacetime, can determine victory or defeat, life or death, in time of war. Tremendous amounts of time, money and effort are required to explore for and develop oil and gas reserves, and to provide the means of transporting and processing them to give products of usable form where needed. The task can best be done in peacetime, not when an emergency is at hand.
The security of North America, the ultimate outcome of the world struggle between democracy and communism, will in part be shaped by the attitude of Canadians and Americans towards unitizing of the continent's oil and gas reserves.
1 now come to the question brought before the house today, the problem of whether or not the United States is now going to curtail imports of oil from Canada which, of course, will very directly and immediately affect the level of employment in western Canada. Let me say at once that some of the reports which have circulated concerning the statement by Mr. Brewster Jennings, president of Socony-Vacuum Oil Company, may have been misleading. I think the Minister of Trade and Commerce today put the statement of Mr. Jennings in correct perspective when he indicated that this was not going to mean a reduction in imports of Canadian

Unemployment
oil in the northwestern United States market, served by Mr. Brewster Jennings' company.
However, there is now before the United States congress a proposal by one group of senators to add a rider to the reciprocal trade bill which would have the effect of placing legislative limits upon the importation of foreign oils into the United States from all countries, including Canada. Mr. Jennings, in his statement before the Senate committee considering the reciprocal trade bill, did make a statement last week end, part of which was reported today by the Minister of Trade and Commerce. Another part might well be read into the record at this time, because it gives a different picture from that given in some of the press stories this morning.


Mr. Deputy Speaker:: Order. The hon. member leaves me in considerable difficulty. He will recall that the Minister of Trade and Commerce made a statement earlier this afternoon with respect to the oil industry. Under our rules when a statement of that kind is made we usually allow a short reply from each opposition group. Advantage of that provision of our rules was taken by the hon. member for Eglinton (Mr. Fleming). The hon. member for Calgary South will realize that I cannot allow him now, in another debate, to do what was done earlier in another connection. Therefore again I must ask him to confine his remarks not to general observations about the oil industry but rather to the oil industry as it relates to unemployment.


Carl Olof Nickle: I am attempting to do that.


George Alexander Drew: Mr. Speaker, might I recall to Your Honour's attention that in this very debate which, because of adjournments, has taken some time, the Minister of Trade and Commerce, to whose remarks reference has been made, did give a review that dealt with various specific aspects of our economic problem. However, he did not deal with it in a way that offered much that was hopeful along the lines we have been suggesting.
Surely, Mr. Speaker, if it was appropriate in such a review to discuss the various aspects of the economy of Canada, it should be arguable now that it is correct to deal with a specific aspect of that economy and point out how employment can be increased in relation to it; and that I understand is the argument now being made.


Mr. Deputy Speaker:: Order. I thank the Leader of the Opposition for his assistance. He will recall that when I first rose to my feet some time ago I pointed out the difficulty of determining relevancy in a debate of

this kind. Hon. members will agree that considerable latitude has been allowed by the Chair in order that this very important subject may be fully discussed.
The problem I am faced with at the present time is that the Minister of Labour has raised a point of order with regard to the remarks of the hon. member for Calgary South, and I am of course obliged to make a decision. I pointed out to the hon. member for Calgary South that he was perfectly in order to discuss the oil industry in so far as it relates to unemployment, and I certainly have no intention of preventing him from doing so. But I think the Leader of the Opposition will agree that to use the unemployment debate as a vehicle merely for a debate on the oil industry would not be within the scope of this debate. We should try to confine our remarks so far as possible to any specific phase of the economy which we wish to discuss in its application to employment or unemployment.


Carl Olof Nickle: Mr. Speaker, those who are now engaged in the production of crude oil in western Canada may be a little fearful of their jobs and their security because of the reports emanating from Washington. The statement from Mr. Brewster Jennings, of the Socony-Vacuum Oil Company, will dissipate their fears and set them completely at rest, since they will have available to them the records of this house. In his statement to the Senate committee in Washington last week, Mr. Jennings said that legislative restrictions on oil imports would pose the risk of reversing the progress made in international trade and of imperilling the United States' foreign relations. The Socony-Vacuum president endorsed extension of the reciprocal trade act without crippling amendments, such as imposition of quotas on imports of crude and residual oil. That statement, I am sure, will be welcomed on all sides of this house.
Mr. Jennings then went on to give several reasons why it should not be in the United States' national interest to subject petroleum imports into the United States to any form of restrictive quotas. These are the four reasons he advanced:
(1)	The United States consumes 60 per cent of the oil used in the free world and, with only 21 per cent of the proved reserves, is consuming its own supply four times as fast as the rest of the world.
(2)	We have relied heavily in the past on oil from Venezuela and Colombia, and the development of reserves in these countries as well as Canada depends on continued access to our market.
(3)	As the United States' demand for oil increases, we may some day want more supplies from the Middle East, which now has 62 per cent of the world's reserves.
(4)	Import quotas would impair our relations with friendly foreign nations and probably lead to retaliatory action prejudicial to exports of many of our industries and farms.

Mr. Jennings then went on in his statement to refer to Canada, and declared that any quotas imposed by legislation covering oil imports would have to apply to Canada, and this would be a direct repudiation of the United States' joint effort at economic cooperation with Canada.
Fortunately for our country, and fortunately for the western Canadian oil and gas industry, Mr. Speaker, the proposal to restrict oil imports into the United States is still just a proposal submitted by a group of senators. It is, I might say, strongly opposed by the United States administration as well as by the major segments of the United States oil industry. I am hopeful there will be no loss of jobs in western Canada this year, because I am also hopeful there will be no restriction by United States on imports of Canadian oil.
How important that oil market is to the United States is indicated by a few figures showing what we did last year and what we hope to do this year. Last year we first started selling oil in reasonable volume in the United States market. We managed to sell 7,900 barrels a day during the year. By the end of 1954 we were selling 24,000 barrels a day. In March, 1955, the United States actually took 47,700 barrels a day from
Unemployment
western Canada. Over 26,000 barrels of that goes to the Socony-Vacuum oil refinery in Ferndale, Washington; the rest goes to the great lakes area of the United States, where it is transported by the international oil pipe line.
Before the end of this year Canada is hopeful of expanding its sales of crude oil to the United States to an amount ranging between 65,000 and 75,000 barrels of oil a day, more than triple all Canada's production of oil just eight years ago. By the end of this year, provided that the doors are not closed to our oil by the United States, we shall be producing something over 360,000 barrels of oil a day in western Canada, which is something over 60 per cent of Canada's needs.
Will you call it six o'clock, Mr. Speaker?



BUSINESS OF THE HOUSE

Mr. Rowe:: What is the business for tomorrow?


Stanley Howard Knowles: Is it external affairs?


James Joseph McCann: Yes, external affairs.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, March 24, 1955