1955-05-02

Mr. Hamilton (York West):: 1.	What number of air crew are required to be recruited annually for the Royal Canadian Air Force to maintain the air strength necessary for present policy and commitments?
2.	What were the actual enlistments for air crew during the last twelve months for which information is available?
3.	(a) How many applications for enlistment as air crew were received during the last twelve months for which information is available?
(b) How many of these were rejected and for what reasons under the following headings:	(i)
physical disability; (ii) failure to meet educational requirements; (iii) other reasons?
4.	How many air crew passed their courses and qualified during the last twelve months for which information is available?
5.	How many qualified air crew were discharged
from the service during the last twelve months for which information is available and for what reasons:	(a) physical disability; (b) completion
of term of service; (c) other reasons?


Mr. Blanchette:: 1.	The number of air crew required for enrolment in the R.C.A.F. naturally varies from year to year. Inasmuch as the R.C.A.F. has been expanding, the general trend is still upwards. The number of air crew required for enrolment last year (1954) was somewhat in excess of 900.
2.	The actual enrolment for air crew training last year (1954) amounted to 885.
3.	(a) A total of 5,570 made application for enlistment as air crew last year (1954); (b) During 1954 the following rejections were made: (i) physical disability, 312; (ii) failure to meet educational standard, 80; (iii) other reasons, 3,729.
4.	During 1954 a total of 409 officers were qualified as air crew.
5.	During 1954 the following air crew were discharged: (a) physical disability, 20; (b) completion of term of service, 78; (c) other reasons, 53.



NATIONAL FILM BOARD


Mr. Fraser (Peterborough):: 1.	What firm or firms acted as distributors for national film board (a) commercial 35 mm films; (b) commercial 16 mm films, (i) for the year 1954; (ii) for the first three months of 1955?
2.	What revenue was received from this firm or firms for each type of film during (a) the year 1954; (b) the first three months of 1955?


Mr. Pickersgill:: 1.	(a) (i) African Consolidated Films, South Africa; Archway Films, U.K.; Art Films, Brazil; Astral Films, Canada; Atos Films, Belgium; British Film Institute, U.K.; British Overseas Film Sales, U.K.; Cardinal Films, Canada; Columbia Filmbooking, Holland; Continental Distributing Inc., U.S.A.; Columbia Pictures of Canada, Canada; Exclusivos Trienfo Lta., Portugal; A.B. Europa, Sweden; Favorite Films, U.S.A.; Films Dismages, France; Filmsonor, Belgium; Filmudlejning, Denmark; General Film Distributors, England; International Film Distributors, New Zealand; International Film Distributors, England; Janco, Sweden; Kingsley International Picture Corp., U.S.A.; Kommunenes Filmcentral, Norway; Manor Films, U.S.A.; Metro-Goldwyn-Mayer, England; New Realm Films, U.K.; Neue Filmkunst, Germany; Nor-disk Film Junior, Denmark; J. Arthur Rank Overseas, England; R.K.O., Pathe, U.S.A.; Regent Film Distributors, England; Selznick Releasing Organization, Belgium; Boris Seltzer (Elanfilms), Belgium; Schweizer Schul und Volskino, Switzerland; Stereo Techniques, U.K.; E. J. Smiddy, U.S.A.; Societe Beige, Belgium; UITKIJK Cinema, Holland; United Artists Corp., England; United Artists Corp., U.S.A.; Universal Pictures U.S.A., U.S.A.; Victor Films, Switzerland; Vita Films, Switzerland; Victory Films, France; Warner Bros. Pictures, England; Warner Bros., U.S.A.; Woodrow Corporation, Australia.
1.	(a) (ii) As above, plus: Nordisk Film Kompagni, Denmark.
1.	(b) (i) Association Films, U.S.A.; Black Star Publishing Co., U.S.A.; Francis Bolen, Belgium; Bray Studios, U.S.A.; British Information Services, Germany; Commonwealth National Library, Australia; Edita Films, France; G. B. Equipment (Br. Acoustic), England; Educational film exchange, Japan; Encyclopaedia Britannica, U.S.A.; A. B. Europa, Sweden; Film Images, U.S.A.; Film Traders, England; Interfilm, Germany; International film bureau, U.S.A.; Library Films, U.S.A.; McGraw Hill Book Co., U.S.A.; Sound Services Ltd., England; Sterling Films (Sterling Television), U.S.A.;

Questions
Svensk Filmindustri, Sweden; United World (Castle Films), U.S.A.; Young America Films, U.S.A.; Times Television Corp., U.S.A.; Canadian Broadcasting Corp., Canada; Canadian private television stations, Canada.
1.	(b) (ii) As above, plus: Freemantle Overseas Radio and Television Inc., U.S.A.
2.	(a) Commercial 35mm, $33,516.31; Commercial 16mm, $116,729.81.
2.	(b) Revenue figures for this period not yet available.



HEALTH GRANTS, NOVA SCOTIA

Mr. Balcom:: Under the national health grants program, what federal grants have been made to the mainland hospitals of Nova Scotia (a) under the hospital construction grants; (b) under the other health grants?


Mr. Martin:: The following federal grants have been made to the mainland hospitals for Nova Scotia:
Name of Hospital (a)
Bayview Memorial Red Cross hospital	
St. Martha's hospital	
Western King's Memorial hospital	
Nova Scotia Institute	
Eastern Memorial hospital	
Halifax County Mental hospital	
Nova Scotia hospital	
Guysboro Memorial hospital	
Children's hospital	
Victoria general hospital	
Provincial polio clinic	
Blanchard Fraser memorial hospital	
Queen's general hospital	
Lunenburg hospital	
Musquodoboit Valley memorial hospital ....
Twin Oaks memorial hospital	
New Glasgow hospital	
Eastern Shore memorial hospital	
St. Mary's hospital	
Colchester county hospital	
Payzant memorial hospital	
Name of Hospital (b)
Highland View hospital ....
Annapolis hospital	
St. Martha's hospital	
Nova Scotia training school
Nova Scotia hospital	
Digby general hospital	
Halifax tuberculosis hospital Victoria general hospital ...
Children's hospital	
Grace maternity hospital ...
Halifax infirmary	
Nova Scotia sanatorium	
Blanchard Fraser hospital ... Soldiers' memorial hospital .
Aberdeen hospital	
Roseway hospital	
Colchester county hospital .. Payzant memorial hospital .. Yarmouth hospital	
Location
Amount of Grant
Advocate	$	3,608.81
Antigonish	 122,000.00
Berwick	 28,333.33
Brookside	 74,761.11
Canso	 5,471.83
Cole Harbour	 300 000.00
Dartmouth	 533,080.00
Guysboro	 15,000.00
Halifax	 177,530.00
Halifax	 195,882.34
Halifax	 29,769.91
Kentville	 21,000.00
Liverpool	 41,666.66
Lunenburg	 38,666.66
Middle Musquodoboit	 5,349.12
Musquodoboit Harbour	 11,000.00
New Glasgow	 251,000.00
Sheet Harbour	 17,161.16
Sherbrooke	 10,113.09
Truro	 60,000.00
Windsor	 45,666.66

Location
Amount of Grant
Amherst	
Annapolis Royal Antigonish ....
Brookside	
Dartmouth	
Digby	
Halifax	
Halifax	
Halifax	
Halifax	
Halifax	
Kentville	
Kentville	
Middleton	
New Glasgow ...
Shelburne	
Truro	
Windsor	
Yarmouth	
$	7,026.00
550.00
16.205.00
64.688.00
279.301.00
550.00
52.265.00
642.319.00
21.035.00 6,006.00
8.900.00
198.711.00
550.00
550.00
7.822.00
47.392.00
11.568.00
7.311.00
7.311.00
.$1,380,060.00



TRANS-CANADA HIGHWAY PAYMENTS, NOVA SCOTIA

Mr. Lusby:: 1.	Has the federal government made payments to the government of Nova Scotia under the terms of the trans-Canada highway agreement?
2.	If so, how much has been paid to date?


Mr. Winters:: 1.	-Yes.
2.	-$75,699.97.



INDIANS

Mr. Campbell:: 1. How many houses for Indians have been built on the following Saskatchewan reservations, during
Questions
the past five years: Thunderchild, Moosomin, Red Pheasant, Sweetgrass, Poundmaker, Little Pine, Saulteaux?
2.	What amount of band funds stood at the credit of these different bands in 1945, in 1954?
3.	What has been the population increase in the past ten years, and what is the present population?
4.	Is relief, houses and farm machinery charged to band funds?
5.	Are there farm instructors on each of these reserves and, if so, who are they?
6.	How much land is under cultivation in each of these reserves, and how many cattle are on each reserve?
7.	What provision is being made to build roads on the same reserves?


Mr. Pickersgill:: 1. Thunderchild, 3; Moosomin, nil; Red Pheasant, 8; Sweetgrass, 8; Poundmaker, 9; Little Pine, 9; Saulteaux, nil.
2. Band	Balance	March 31, 1946	Balance	March 31, 1955Red Pheasant	Capital ... revenue ..,	Capital ...	$ 2,943.61 2 427Saulteaux	Capital . .., revenue ...	Capital ...	
385.43 1Poundmaker	Capital . .. revenue ...	
661.96	Capital ...	
3,326.51 619 67Sweetgrass	Capital ... , revenue ...	
5,361.12	Capital . .. revenue . .,	
2,070.42 	
4,464.98Thunderchild	Capital . .. , revenue ...	
79,215.35	Capital ...	
65,396.57 9. 9.Q91 1QMoosomin	Capital .... revenue ..,	
72,820.74	Capital . .. revenue . ..	
20,383.44Little Pine	Capital . .. . revenue ..	
622.86 	
372.47	Capital . .. revenue ...	
8,478.443.	Increase since Present
1944 Census Population
Thunderchild	
74	328Moosomin	
37	164Red Pheasant	
56	284Sweetgrass	
76	298Poundmaker	
59	259Little Pine	
85	298Saulteaux	
46	1164.	Relief, yes, when the revenue fund of a band is sufficient to meet the relief requirements; housing, yes, but only when the funds of a band are substantial; farm machinery, yes, but only when the machinery is required for band purposes and the band fund is fairly substantial.5.	Mr. R. T. Smith, farming instructor, with headquarters at the Thunderchild reserve is also responsible for instruction at the Moosomin and Saulteaux reserves.
Mr. W. B. Chisholm, farming instructor, with headquarters at Sweetgrass is also responsible for instruction at the Red Pheasant and Mosquito reserves.
Mr. C. Taylor, farming instructor, with headquarters at Little Pine is also responsible for instruction at the Poundmaker and Luckyman reserves.
6. Reserve	Acres under cultivation	Number of CattleThunderchild . .	
1,423	127Moosomin 	
1,465	152Red Pheasant ..	
920	164Sweetgrass 	
3,967	130Poundmaker . ..	
3,364	45Little Pine	
1,820	164Saulteaux 	
141	13
7. No provision has been made to build roads on these reserves during the current fiscal year.



CHILLIWACK CAMP


Mr. Harkness:: 1.	When was the house for the commandant at the Chilliwack army camp built?
2.	What was the cost of this house?
3.	By whom was it built?
4.	Was the contract let on a firm basis or on a cost plus basis?

Questions
5.	If it was on a firm cost contract basis, what was the amount of the contract?


Mr. Blanchette:: 1.	Between May 1949 and June 1950.
2.	Labour costs do not enter into the cost of the house since its construction was undertaken as a trades training project by Royal Canadian Engineer Corps trainees. The cost of the house is, therefore, the cost of the materials used in its construction, totalling $14,418.84.
3.	The house was built by trades trainees of the Royal Canadian School of Military Engineering. Construction began early in May 1949. Much of the initial work was done by pre-course trainees while awaiting the commencement of the next series of courses.
A total of 249 trades trainees worked on the project at various times. The different types of tradesmen employed included foremen of works, draughtsmen, blacksmiths (for steel and metal work), concretors, carpenters, painters, sheet metal tradesmen, plumbers and bricklayers.
Tradesmen worked on the project insofar as their training schedules fitted in with the type of work which needed to be done at any given time. Actual work on the house was accompanied by lectures on the particular phase of construction then being undertaken; a tented classroom was provided on the site. Some materials and installations which would not ordinarily have been used by a contractor were incorporated into the project in order to give a maximum number of trades experience and training.
4.	Not applicable.
5.	Not applicable.



HEALTH SERVICES, MACKENZIE DISTRICT

Mr. Hardie:: 1.	What health services does the Department of National Health and Welfare maintain or support for Indians and Eskimos in the Mackenzie district?
2.	What X-ray surveys have been carried out by the Department of National Health and Welfare in the Mackenzie district in recent years?


Mr. Martin:: 1. Nursing stations with a nurse in charge are operated at Coppermine, Fort McPherson and Fort Norman.
Full-time doctors are stationed at Aklavik, Fort Rae, Fort Resolution, Fort Simpson and Fort Smith. Arrangements are made with doctors in private practice at Yellowknife and with doctors employed by the Imperial Oil company at Norman Wells and Eldorado whereby their services are made available.
Mission hospitals are situated at Aklavik, Fort Rae, Fort Resolution, Fort Simpson and Fort Smith. In these mission hospitals there
[Mr. Harkness.l
has been an average of 255 Indians and 65 Eskimos. Cases requiring further treatment than that available in these hospitals are sent to the department's Charles Camsell Indian hospital. There has been an average of 100 Indians and 70 Eskimos from the Mackenzie area over the past year.
A full-time dentist is employed. He travels between the various settlements, and arrangements are made whereby an eye specialist travels throughout the area specializing in the examination of school children.
2.	1951-2,191 Indians were X-rayed.
1952-	2,355 Indians, 371 Eskimos, and 1,172 other than natives were X-rayed. 69 cases of active tuberculosis were found.
1953-	2,366 Indians, 1,002 Eskimos, and 2,210 non-natives were X-rayed. 76 cases were found, 51 of which were new.
1954-	Survey teams operated, by boat and aircraft during the summer months, around Great Slave lake and from there along the Mackenzie river to Aklavik, with side trips for the Liard and Great Bear rivers. Every known settlement and community was visited.
In addition, Eskimo gathering points along the Arctic coast and adjacent islands, from Pelly bay to Herschel island, were surveyed by an X-ray team. The only one missed during the year was Banks island and the Eskimos from this area were X-rayed at Tuk-tuk or Aklavik during their summer visits to these points.
5,938 people were examined by the mass survey method and 66 cases of active tuberculosis were discovered.
1,306 Indians of the Yellowknife agency around Great Slave lake yielded 30 lesions for an active incidence of 2-29 per cent. 23 of these cases were unknown previously.
1,370 Indians of the Fort Norman agency, along the Mackenzie, Liard and Great Bear rivers, had 19 lesions for an active incidence of 1-4 per cent. 10 of the lesions were not previously known.
In the 1,318 Eskimos who were examined along the Arctic coast 13 showed tuberculosis for an active incidence of -98 per cent. 11 of the lesions were new cases.
There were 1,944 non-natives examined by mass survey in the territories and only 4 found with active tuberculosis for an incidence of -2 per cent. Two of the cases were new.
There was an improvement in the coverage of Northwest Territories schools during 1954. Pupils were examined at Fort Simpson, Fort Providence and Fort Resolution after the beginning of the fall term. Those at the three Aklavik schools were X-rayed both spring and fall.

A total of 873 students were examined. 391 were Indians and no active disease was interpreted. 272 were Eskimos in whom 1 previously known lesion had become reactivated. 210 were non-native pupils and amongst these 1 new active moderately advanced case was picked up at Fort Simpson.
3,969 films from the Mackenzie-Western Arctic zone were referred to the Charles Camsell Indian hospital for reading during the year. Approximately 1,700 of these were quarterly plates taken on patients under treatment for tuberculosis. The remainder were referred for diagnostic purposes.
2,194 films were taken on Indians, 818 on Eskimos and 957 on persons of non-native status. 81 active tuberculosis lesions were picked up from these films of which 49 were new disease. Of the 81 cases, 53 were Indians, 12 Eskimos and 16 people of non-native status.



SCHIZOPHRENIA RESEARCH

Mr. Goode:: What action is the Department of National Health and Welfare taking to further research on schizophrenia?


Mr. Marlin:: Since the inception of the national health program assistance has been given by the federal government, under the mental health grant, to new or continuing research projects on schizophrenia totalling $464,765 as
follows:
Saskatchewan	$193,030
Ontario	 138,565
Quebec	 133,170
Total	$464,765
In addition, projects for the support of research dealing specifically with schizophrenia have already been approved for the next fiscal year totalling $129,984 as
follows:
Saskatchewan	$ 65,986
Ontario	 30,998
Quebec	 33,000
Total	$ 129,984
The projects which have been approved, as above, are helping well qualified physicians to carry out research into various aspects of this disease. Funds have been provided to secure necessary staff, equipment, materials and supplies.
Many other projects supported by the national health program are providing for research not only on schizophrenia but also on other similar and closely allied mental
Motions for Papers
diseases. Projects of this type have already been approved for the next fiscal year as
follows:
Nova Scotia	$ 30,000
Quebec	 11,720
Ontario	 48,510
British Columbia	 51,266
Total	$141,496



QUESTION PASSED AS ORDER FOR RETURN


Mr. Brooks:: With respect to the operation of the Disabled Persons Act in the four Atlantic provinces, what is the following information for each province: (a) the number of applications received; (b) the number granted; (c) the number refused; (d) the number still under consideration?



MOTIONS FOR PAPERS


Alfred Johnson Brooks: For a copy of all correspondence exchanged between the federal government or any department thereof, and the government of the province of New Brunswick, since January 1, 1952 until the present time, with reference to the proposals regarding federal assistance to the government of New Brunswick in financing the development of hydroelectric power on the Saint John river.


Mr. St. Laurent:: I hope this motion can be adopted, subject to the usual reservation that we will extend to the government of New Brunswick the courtesy of communicating with them before the papers are brought down.


Mr. Speaker:: The motion is carried, subject to the reservation expressed by the Prime Minister (Mr. St. Laurent).



ALLOCATION OF BOX CARS

Mr. Bryson:: For a copy of all correspondence, telegrams, memoranda, and other documents exchanged between the Department of Trade and Commerce, or any other department of the government, and all farm organizations, and between the Department of Trade and Commerce, or any other department of the government and any person or persons, pertaining to the allocation of box cars among elevator companies since October 1, 1953, to date.


Mr. Winters:: I wonder if the hon. member would be good enough to allow this motion to stand? I should like an opportunity of speaking to him about it.


Mr. Speaker:: The motion will stand.



ASSINIBOINE AND RED RIVERS-FLOODING

Mr. Dinsdale:: For a copy of all correspondence, memoranda, and other documents exchanged between the federal government or any department thereof and

Inquiries of the Ministry
the government of Manitoba and/or other interested parties in Manitoba, relating to the problem of flooding on the Assiniboine and Red rivers, for the period 1949 to the present.


Mr. McCann:: The Minister ol Northern Affairs and National Resources is unavoidably absent, and as acting minister I should like the hon. gentleman to allow this motion to stand for today.


Mr. Speaker:: The motion will stand.



YUKON QUARTZ MINING ACT


Hon. W. E. Harris (for the Minister of Northern Affairs and National Resources) moved: that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to introduce a measure to repeal the Yukon Quartz Mining Act, chapter 301 of the Revised Statutes of Canada, 1952, and to make provision by means of a new act for all substantive rights relating to quartz mining in the Yukon, including the rights to stake and acquire mineral claims and leases, and to provide for certain modifications in the administration of the law.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the house.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Hon. Milton F. Gregg (Minister of Labour):: I should like to reply to a question asked last Friday by the hon. member for Quebec West, Mr. Speaker, concerning the number of employees in the office of the unemployment insurance commission at Levis. The establishment for permanent employees at this office was reduced from 30 to 28, effective November 1, 1954, Our list for casual employees provides for 23. In January, February and March, 23 were employed. In April, I believe, 22 were employed and at the moment we have 16 casual employees there. This is in accordance with the commission's policy of employing casual workers in local offices to help take care of the extra work load during the wintertime.
[Mr. Dinsdale.l	iL li I



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Hon. George A. Drew (Leader of ihe Opposition):: Mr. Speaker, in view of the fact that there are a number of Canadians in Viet Nam, some in an official capacity and some not, I wish to ask the Secretary of State for External Affairs a question regarding the present situation there. In view of the rapidly changing events, and the reports which have been coming over the radio and through the press, is the minister in a position to give us any clearer interpretation of the picture, without in any way violating the ordinary protection that would be accorded secret communications?


Hon. L. B. Pearson (Secretary of State for External Affairs):: Mr. Speaker, there is not very much I can say about the situation in Saigon, except that it seems to be quieting down somewhat. The information we have been able to secure indicates that the Canadians who are in Saigon on official business with the international commission are all safe and well, and that we have had no report of any mishap with regard to other Canadians in Indo-China. Most of them are outside Saigon, and would not be affected by the disturbances there.
Tomorrow-I had hoped to be able to do it today-I shall be replying to the question asked me last Friday by the hon. member for Prince Albert (Mr. Diefenbaker), who is not in his seat today; and at that time I might be able to say something additional about the situation in Saigon and Indo-China generally.


CANADIAN BROADCASTING CORPORATION
[Stage Direction]
On the orders of the day:
James Joseph McCann: Mr. Speaker, on April 20 the hon. member for New Westminster (Mr. Hahn) asked the following question:
Will the minister tell the house why such a well known and respected firm as Southam Press company was denied the right to the transfer of the application for control of radio station CKNW New Westminster, by the Canadian Broadcasting Corporation board of governors, as announced in this morning's Montreal Gazette')
The answer is that pursuant to section 31A of the regulations under the Radio Act made by the Minister of Transport reference

was made to the Canadian Broadcasting Corporation for a recommendation on the application for transfer of control of the International Broadcasting Company Limited operating station CKNW New Westminster from William Rea, Jr., to the Southam Company Limited. The board of governors recommended that the application be denied since the control of the station would be held by interests already controlling broadcasting stations in Calgary and Edmonton, which would constitute extension of multiple ownership or control of stations contrary to the principle of subsection 31A (l)(d) of the regulations under the Radio Act. The recommendation has been forwarded to the Minister of Transport.


BATTLE RIVER-CAMROSE BY-ELECTION    REQUEST FOR CONFIRMATION OF DATE
[Stage Direction]
On the orders of the day:
Mr. Solon E. Low (Peace River):: Mr. Speaker, is the Prime Minister in a position to confirm a radio report of earlier today to t lie effect that the Battle River-Camrose byelection has been set for June 20?


Louis Stephen St-Laurent: Mr. Speaker, I did not hear the radio broadcast. The recommendation was made on Friday and, since it is out, I would assume that it has received the approval of His Excellency. The date recommended for that by-election was June 20.


PUBLIC BUILDINGS
[Stage Direction]
On the orders of the day:
Robert Henry Winters: Mr. Speaker, on Thursday last the hon. member for Peterborough (Mr. Fraser) asked if the old customs house at Peterborough had been turned over to Crown Assets Disposal Corporation. The answer is that it has not yet been, but that it will be turned over in the course of the next few days.


EXPORTS OF LEAD, ZINC AND CRUDE OIL FROM CANADA TO UNITED STATES
[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, on Friday
last the hon. member for Calgary South (Mr. Nickle) asked a question regarding certain amendments that had been proposed to a bill
Inquiries of the Ministry now before the United States congress to extend the Trade Agreements Act. These included certain specific commodity amendments, which would have affected the importation of crude oil, lead and zinc into the United States. They have now been rejected by the United States Senate finance committee, when it was considering the bill.
However, the same committee has approved several other amendments of a general character which might have a bearing on commodity trade. At this stage, however, I would not wish to speculate on the effect of those amendments, if passed, since the bill to extend the Trade Agreements Act has yet to be considered by the Senate as a whole and by a joint conference of the Senate and the House of Representatives.


George Alexander Drew: Mr. Speaker, I know that there will be some qualified measure of satisfaction in the information which has been given by the Secretary of State for External Affairs. As he has pointed out, the effect of some of the amendments will not be appreciated fully until they can be more carefully considered.
There is a certain aspect of the problem however in regard to which I think it might be well if there were some clarification, and that is the question of arranging control over the movement of oil as a result of the relationship between companies formed in Canada and parent companies in the United States.
I have no desire to press any question which in any way unnecessarily would present difficulties in the extremely friendly dealings that we have with the United States government. Nevertheless, I think we must recognize the possible consequences of an accepted plan under which restrictions, not covered by legislative provision, would be covered by some general arrangement such as has been discussed quite openly in Washington, and to which I have referred on earlier occasions in the house.
Perhaps the Secretary of State for External Affairs would like to take this as notice and, if so, I would be pleased to have it on that basis. But I would ask the Secretary of State for External Affairs if he will consider specially a request before the government of the United States that there be clarification of the intention of that government with respect to a system which is quite openly being discussed as a system of control outside the field of legislation which has government approval.


Lester Bowles Pearson: I might say at once that we are very much aware of the difficulties that might arise for us in Canada out of the kind
3342	HOUSE OF
The Budget-Mr. P. Gauthier of agreed arrangement the Leader of the Opposition has mentioned; and I can add that our preoccupations on that aspect of the matter have already been made quite clear to the United States government.


George Alexander Drew: And may I ask if the answer of the United States government will be communicated to the house, when it is received?


Lester Bowles Pearson: Yes, sir.


THE BUDGET
[Stage Direction]
The house resumed, from Thursday, April 28, consideration of the motion of Hon. W. E. Harris (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell, and the amendment to the amendment of Mr. Coldwell.
Mr. Pierre Gauthier (Portneuf):: Mr. Speaker, I shall try to be as brief as possible, because I am in favour of the shortening of speeches, and in this instance I shall try to give an example to other members in that regard. I have only two or three points upon which I wish to elaborate, and which I shall place before the house so that hon. members will have something to think about.
At the outset of my remarks may I thank the government for having fixed a floor price for butter, a procedure for which I know the farmers in my constituency are most grateful. May I convey their gratitude to the Minister of Agriculture (Mr. Gardiner) and to the government in general.
Secondly, may I congratulate the Minister of Finance (Mr. Harris) upon having given to the nation the budget to which we had the pleasure of listening a short time ago. I do not think I will be taken to task by anyone, because the larger part of the population of Canada received this budget with great approval.
Now, I must say a few words on a subject which my county holds dear, and for many reasons. Eight parishes of my county of Portneuf border the north shore of the St. Lawrence river. These parishes cover a distance of about 60 miles. Nineteen other parishes complete the total of 26, divided into 34 municipalities. The approximate percentage


of industrialization and farming is about 65 to 35. Therefore, you can see, Mr. Speaker, that my county is being industrialized quite rapidly. In the past nine years mines and cement industries have been successfully developed. The limestone and granite industries have been holding their own. The paper mills have been running and producing at full speed. One must not forget the production of timber, plywood and pulpwood, the former for exportation and the latter for local consumption. A survey has been made by the very active chamber of commerce of my county which ascertained the necessity and the urgency of the construction of a deep water wharf at Portneuf village on the St. Lawrence. The result of the inquiry has been conclusive; correspondence has been voluminous between the federal member for Portneuf, the chamber of commerce and the Minister of Public Works here in Ottawa.
The engineers of the department have made the necessary investigations, soundings, borings; blueprints have been prepared. The results of the inquiry made amongst the different companies operating in the county of Portneuf show the necessity and urgency of the construction of a deep water wharf on the St. Lawrence at Portneuf village. More delay would be very harmful to the industry and the economy of our district. Healthy competition is in fact necessary in a sound economy, and my people do not fear competition; they welcome it. Our people have always shown a true spirit and good initiative in business in general. They need encouragement to persist in that direction; and they are entitled to their share of the gigantic development which will follow the St. Lawrence seaway national enterprise.
My people are very anxious to see the initial works of that construction. They need that improvement; they need it badly. Industry and agriculture will greatly profit by it. I must say that the Minister of Public Works and his officials, not forgetting the hon. member for Levis (Mr. Bourget), the parliamentary assistant to the minister, have listened with benevolent ears, and have looked into the matter with care and keen interest. The taxpayers of the county are waiting patiently for the green light to give the signal. The wharf is necessary and urgent. I ask the minister to give it the necessary impetus in asking the House of Commons to vote the amount to be spent for the realization of the project, and the federal member will keep on praying.

My next point is this, Mr. Speaker. I have witnessed in this house for the past three or four years representations and remarks, more or less serious, and criticisms against the subsidy paid to farmers, especially in my province, who at the same time are maple sugar producers. We usually get this criticism from the loyal opposition, but this year the C.C.F. have been united with them in their criticism.


Mr. Knowles:: No.


Pierre Gauthier: Oh, yes, I was in the house when the criticism was made.


Mr. Sinclair:: That is the first time that the C.C.F. has been united this session.


Stanley Howard Knowles: Name the member.


Pierre Gauthier: Look in Hansard.


Alfred Johnson Brooks: Quote from Hansard.


Stanley Howard Knowles: Is he a C.C.F. member? You know he is not.


Pierre Gauthier: I agree that the number of maple sugar producers is rather small in other provinces compared with the very large number in my province, but my impression is that if their provincial governments had come to the rescue of the maple sugar producers in other provinces they would have enjoyed the same privileges as we enjoy in Quebec. The subsidy paid by the federal government is not due either to an outburst of temper or to political advantages, but to protect at the same time maple sugar producers in Canada and outside of Canada.
There is a provision embodied in the Food and Drugs Act of Canada to ban lead in any kind of food. To obtain that, regulations have been adopted to do away with welded tins as containers of all kinds of canned food; hooked tins are now being used. For the same reason, tea, chocolate and cigarettes are wrapped in waxed or aluminum foil; no more lead paper is used to wrap them.
The history of this subsidy to maple sugar producers is that lead was found in maple sugar products and all shipments were stopped at once, not only shipments to the United States, but all exports outside the province of Quebec. The maple sap itself does not contain lead but the oxide of lead found in maple sugar came from the buckets made with tin plate.
The Budget-Mr. P. Gauthier
Intensive work has been done for months and months to find a process to eliminate the lead in maple products. The problem has been discussed with technicians at Washington, Ottawa and Quebec. Only one way was found which could prevent lead found in maple sugar products, namely, to change the sap buckets. That is what they have done with the subsidy paid by the federal government. After an extensive survey it was found that the cheapest way to counteract the lead found in maple sugar products was to use aluminum buckets. That is what they did and they asked the provincial government to pay a subsidy equal to the subsidy paid by the federal government to help my maple sugar producers to replace their sap buckets with aluminum ones. If this protection had not been given to maple sugar producers, the industry would have disappeared. I am not trying to be unreasonable in my contention, because I am being truthful in saying that out of 21 million buckets in circulation, 17,500,000 have been changed. From the information I have received from some of my friends who are deeply interested in the industry, I am positive that a subsidy of about $200,000 from the federal government and $200,000 from the provincial government of Quebec would settle the matter and all the sap buckets would be changed for aluminum buckets and the maple sugar industry producers would be satisfied and grateful to the two governments for helping them to counteract this very dangerous finding of lead in their products.
I have heard criticisms from year to year against that subsidy. After all, only $3,886,728.24 has been voted. Out of that, only $800,000 still remains to be spent. I think we are entitled to the whole subsidy, and I ask the government and the Minister of Finance to pay the subsidy for another year so that my producers in the province of Quebec will be helped to the extent they deserve. I can put tables on the record from the province of Quebec to show every hon. member that we need that subsidy. Am I permitted to place the tables on the record?


Mr. Speaker:: Has the hon. member consent to place these tables on Hansard? He has said they are very small.


Some hon. Members:: Agreed.


Pierre Gauthier: The tables follow:

The Budget-Mr. P. Gauthier


TABLE 1-PRODUCTION AND VALUE OF MAPLE PRODUCTS IN THE PROVINCE OF QUEBEC, 1937-1954
[Stage Direction]
Years	Maple	Maple	Total expressed	Gross farmsugar	syrup	as syrup	value'000 lb.	'000 gal.	'000 gal.	$'0001937	4,020	780	1,182	1,3081938	3,212	2,354	2,675	2,9101939	2,715	1,810	2,082	2.6431940	3,252	2,211	2,536	3,2961941	2,244	1,650	1,874	2,8081942	3,538	2,272	2,626	5,0981943	2,290	1,563	1,792	4,1991944	2,034	2,339	2,542	7,3351945	1,804	1,203	1,383	4,0181946	2,448	1,638	1,883	5,4441947	3,260	2,831	3,157	11,0581948	2,187	1,750	1,969	6,8521949	1,651	1,894	2,059	7,4271950	1,692	2,273	2,442	8,4451951	1,500	1,750	1,900	6,7971952	2,020	2,777	2,979	10,0951953	1,266	1,688	1,815	6,7231954	1,110	2,025	2,136	9,803

[Stage Direction]
Provinces	Production	Average farm price	Total value	1954	1953	1954	1953	1954	1953Nova Scotia	'000 lb. 14	'000 lb. 6	cents 56	cents 53	$'000 8	$'000 3New Brunswick	32	38	56	47	18	18Quebec	1,110	1,266	44	39	488	494Ontario	19	14	56	52	11	7Canada	1,175	1,324	45	39	525	522

[Stage Direction]
Provinces	Production	Average farm price	Total value	1954	1953	1954	1953	1954	1953'000 gal.	'000 gal.	$	$	$'000	$'000Nova Scotia	4	2	4 34	4.24	17	8New Brunswick	11	5	4 60	4.85	51	24Quebec	2,025	1,688	4 60	3-69	9,315	6,229Ontario	264	121	4.28	4-32	1,130	523Canada	2,304	1,816	4.58	3.74	10,513	6,784
[Stage Direction]
The Budget-Mr. P. Gauthier

[Stage Direction]
Classes	Years					
1949	1950	1951	1952	1953	1954%	%	%	%	%	%A A	0-2	0-7	1-5	1-6	0-9	12A	9-8	16-2	22-6	25-0	14-3	25 3B	37-1	350	31-0	33-8	23-1	30 6C	51-5	24-2	200	21-8	30-8	18-8D	(')	21-4	21-8	15-0	27-7	20 4NC (2)	3-4	2-5	31	2-8	3-8	3-7
(') Included with "C". (2) Not classificable.
I said that I would be quite brief, but I should like to deal now with a subject that has proved to be quite touchy in past years to some hon. members. I refer to the income tax paid by the farmers of Quebec. I ask those who are saying that the farmers of Quebec pay such a small amount of income taxes to realize that we have what are called family farms in Quebec whereas in Saskatchewan they have what the people of the United States used to call industrial farms. I should like to give some figures to indicate acreages of farms in the two provinces in order that hon. members may get a proper picture.
In the case of farms containing 51 to 100 acres there are in Quebec 60,452, whereas in Saskatchewan there are only 1,767. In the case of farms of 101 to 200 acres, in Quebec there are 53,067, and in Saskatchewan, 39,366. It will be noted that as the acreage increases the number of farms increases in Saskatchewan while the number decreases in the case of Quebec. In the case of farms running 201 to 299 acres, in Quebec there are 11,000, whereas in Saskatchewan there are only 3,000. In the case of farms of 300 to 479 acres, in Saskatchewan there are 43,000, whereas in Quebec there are only 5,000. In the case of farms of 480 to 639 acres, in Quebec there are only 714, whereas in Saskatchewan there are 20,165. The larger the acreage the greater the revenue and the more income tax to be paid. We have family farms in Quebec and you have industrial farms in the west.
I have one last point to raise and I am quite sure I will be criticized for doing this and told that it is none of my business. But I do intend to say a few words on a question
which I believe interests every hon. member of this house, especially the medical men, as well as the general public. I refer to the use of human capital in our national game of hockey. I feel that I am entitled to speak on this matter in this budget debate because the budget refers to health.
As I said, I most likely will be told that this is none of my business, but I think this thing has gone too far. The national league schedule calls for 70 games in the season, with three, four or five games in the playoff series, which means that at the most the players do not play more than 80 games. The season starts in October and runs to about the last day of April.
However, the professional hockey league of Canada-not the N.H.L.-is still in the playoffs and there are four or five games yet to be played even though they have played already more than 70 games. I think this is too much to ask of the hearts of our athletes. I am afraid that in the long run hockey will be killed because it is too apparent that the almighty dollar has taken first position while the health of our young athletes is being ignored. I would like to get the public reaction to this situation.
I suggest that the managers and the big men of professional hockey look into this carefully. They should not ask the athletes of our country to do too much. I know there are fat cheques involved and large amounts of money; I know that with possibly few exceptions we all like to have lots of money on which to live. But when a player is exhausted, to the extent that some of these players are, the inevitable result is that he will lose control and not be responsible for
[Stage Direction]
The Budget-Mr. Thatcher what happens. I am quite sure that if these players were not so completely exhausted many of the incidents that have occurred during the hockey season would not have occurred.
I would propose that our national game be handled in the way baseball is handled in the United States. A commissioner or judge should be appointed by the federal government or the provincial governments working in unison in order that our national game may be protected.
Mr. W. Ross Thatcher (Moose Jaw-Lake Centre):: Mr. Speaker, I am happy that my first words after taking this particular seat in the chamber will be to disagree with what has been said by a Liberal member, the hon. member for Portneuf (Mr. Gauthier). I should like to refer for a moment to what he said regarding maple syrup pails. The hon. member said that he hoped the government would continue this subsidy. I must disagree with his point of view because I contend the subsidy is unwarranted; I think it is a waste of money. After all, a line has to be drawn somewhere. If we are going to supply maple syrup pails to maple sugar producers, it would be just as sensible to supply water pails to farmers, and dairy pails to milk producers. This is one instance where I hope the Minister of Finance (Mr. Harris) will refuse his co-operation.


Pierre Gauthier: May I ask the
hon. member if he has ever heard a member from Quebec say one word against subsidies paid in any of the other nine provinces of Canada? We are always willing to help the economy of any part of Canada because we realize that if the economy of any part of the country is disturbed, the economy of the whole country is disturbed. Criticism has been levelled against this subsidy for years and I submit that that is not quite fair.


Wilbert Ross Thatcher: I do not want the hon. member to think that I am against this subsidy because it is being paid primarily in the province of Quebec. Nothing could be farther from the truth. I do not agree with subsidies of such a nature, no matter to what province they are directed.
Mr. Speaker, with the indulgence of the house, I should like to take advantage of this budget speech debate, to discuss briefly the reasons why I found it necessary a week ago to leave the C.C.F. party. May 1 say initially that I took that step with deep regret and only after long and intensive reflection. Over the years I have enjoyed working with C.C.F. members, and I have many personal friends in that group. I hope I shall still have them.

However, as I stated a week ago, recently I have found my views on major public policy differing materially from those of my former colleagues. These differences were of such a basic nature that, in fairness to my former party as well as to myself, I felt that I had no alternative but to resign.
I came to Ottawa in 1945. I believed then, as I believe today, that my constituents did not expect me to vote contrary to my personal judgment or common sense. I do not think any party in this house, whether it be Liberal, Conservative, C.C.F. or Social Credit has all the wisdom. I do not think that any leader in this house, no matter how wise a man he may be, can avoid all error. I simply cannot see why a member should not support a sound proposal, no matter from what quarter of the chamber it may originate. This I have tried to do in the past; this I hope to do in the future, for so long as I may remain. I regret that my views in this connection frequently caused irritation and friction among my former colleagues. I suppose, however, it was inevitable.
I stated a week or so ago that my differences with the C.C.F. are fundamental. What are those differences?
In the first place I have been fearful of, and in disagreement with, what appeared to me to be a growing left wing tendency within the party. The leader of the C.C.F. and most of his colleagues, I know, have no more use for communism and its vicious methods than I have. They have publicly emphasized this fact on many occasions. Nevertheless, despite the good intentions and sincerity of most C.C.F. adherents, I personally feel that left wing elements have gained a dangerous and unwarranted recognition within the councils of the party. Here in parliament with increasing frequency, the C.C.F. party has taken a line on foreign affairs that in my opinion, no matter how honestly taken, can only give comfort to communist nations.
I cite only two examples: the recent vote in the house on the question of German rearmament, and constant C.C.F. attacks on United States foreign policy. Personally I disagree with those views. I think they fail to recognize the necessity for survival. I think they are fraught with danger for all Canadians.
In the second place, I come to the field of social welfare. I have said before-and I repeat today-that much credit for what we have achieved in the Canadian welfare field is due to the efforts and the presence of the C.C.F. party in Canadian politics. I supported those welfare measures in the past, because I thought they were desirable, necessary, and within the economic capacity of this country

to provide and finance. But if I am honest I cannot support the C.C.F. policy of demanding higher and higher benefits immediately without delay, regardless of the nation's ability to pay. As an example of such a motion, I cite the resolution which was proposed earlier this session by my former party, calling for a very substantial increase in family allowances, an increase which would have cost several hundred millions of dollars at a time when our budget already had a fairly substantial deficit.
Personally I believe that, as the productive capacity of Canada increases, or as our war expenditures decrease, it is the duty of the government to improve social welfare measures. But it seems to me that any such measure must bear a relationship to economic facts and realities. Irresponsible motions regarding social welfare measures which overlook such facts, no matter where they come from, usually tend only to arouse false hopes and bitterness. There is real danger to the nation when any political party, using the taxpayers' own money, recklessly endeavours to buy political favour by outbidding the other parties in the social benefits it will pay.
In my opinion the business of parliament is too important to be conducted like an auction sale. As I see the problem, premature welfare legislation, not founded on a sound economic basis, could actually endanger many of the reforms which we have already achieved, if a recession should set in.
Before leaving the field of social welfare, I should like to take only a moment to clarify my own position regarding old age pensions. It has been suggested that in the past I have opposed increases in the old age pensions. That is not a fact. On April 24, 1952, at page 1573 of Hansard, I made this statement, and I quote:
I cannot help doubting the wisdom of paying old age pensions to Canadians who are wealthy and have no need of them.
... I wonder whether it is sensible to pay old age pensions or family allowances to those with an income of $5,000 a year or more.
In other words, Mr. Speaker, I thought then, and I still think today, that the large sums of money which are presently being used to pay pensions to people who have no earthly need for them, could be better used to increase the amount which is being paid to those in very dire financial circumstances. In this view, of course, I differ again with the C.C.F., and I know I differ with most other hon. members in this house.
In the third place, I have viewed with concern the C.C.F. attitude towards economy in government expenditure. I may say that at times, too, I have viewed with concern
The Budget-Mr. Thatcher the attitude of the government itself. Since coming to parliament I have consistently advocated lower tax levels, particularly for those in the lower income groups. In order to bring about those tax reductions, I have urged the government to try to eliminate unnecessary expenditures, especially those which appeared to me to be wasteful or extravagant. In a similar manner I have criticized certain subsidies as being ill-advised. A good example is the one mentioned by the hon. member for Portneuf (Mr. Gauthier) a few moments ago. * As I see it, a dollar saved by the government means a dollar less which must be collected from the taxpayer. To most of my efforts in that field I felt, rightly or wrongly, most of my colleagues were not only apathetic but in many cases actually hostile.
In the fourth place, I believe that the C.C.F. attitude toward corporation taxation is unrealistic. I oppose their views that such taxes should be increased materially at this time. I certainly believe that corporations in Canada should bear their fair share of the nation's tax burden, but there is a point of diminishing returns. As I see it, no Canadian is helped when the taxation level on Canadian business and industry is increased to a point where modernization and expansion is retarded or discouraged. Such a policy could jeopardize the ability of our factories to compete in domestic and international markets. But what is even more important, it could endanger the creation of new jobs at a time when our population is increasing rapidly. I am absolutely convinced that excessive taxation in normal times on Canadian business and industry, as advocated by my former colleagues, will cause lost markets, fewer jobs, and in the end threaten the very purpose for which it is advocated, the social welfare of our people.
In the fifth place, I must admit that in recent years I have come to doubt whether the socialization of key industries is the answer to Canadian problems. That does not mean to say that I am opposed to all social enterprise. However, Britain's experience in socializing the coal mines and railways was discouraging. Moreover, the socialized industries recently established in the province of Saskatchewan have been, to say the least, not very satisfactory. For one reason or another it looks as though every time the government runs a business it has additional difficulty in doing so efficiently.
To further illustrate this point, I ask hon. members to look at agriculture. The contrast between the productivity of Canadian agriculture and that of the Soviet union is surely startling. We in Canada have had our farm

The Budget-Mr. Nickle difficulties, but those difficulties have been induced primarily because we have produced too much, as compared to what we could sell. But in Russia the collective farm system, after a quarter of a century, is still failing to supply sufficient food and raw material for the country, and the recent political crisis in Russia was engendered by that fact. From that fact I can only conclude that dogmatic socialism, with its co-partner bureaucracy, hinders rather than helps in improving the standard of living of the farmers.
As I have also stated previously in this house, I cannot agree with the C.C.F. proposal to nationalize the banks. Control, in the national interest, over the banking institutions of the nation can be adequately exercised under existing authority vested in the Bank of Canada. I would remind C.C.F. supporters that even the British Labour party many years ago discarded this plank as impractical.
I think hon. members, including even my former colleagues, would agree that our differences then are fundamental. There is a saying that men's opinions change with experience. I admit quite frankly that my views have altered substantially as I have studied the Canadian economy. Under these circumstances X would rather leave public life than have to pretend agreement or to hide frustration. For the remainder of the present parliament, as I stated a week ago, I propose to sit as an independent member. I shall not apply for membership in any other political party. I shall, however, continue to support those measures and proposals which I think are in the interests of my constituents, no matter from what quarter they are advanced. In the next election I shall be a candidate again only if there is a genuine and widespread belief among my constituents that I am needed to serve their interests.


Mr. Carl O. Nickle (Calgary South):: Mr. Speaker, before dealing with the subject that I wish to discuss today, I should like to say to our colleague the hon. member for Moose Jaw-Lake Centre (Mr. Thatcher) that, like others in this house, I have listened with a great deal of interest to his statement today. I want to say to him that I have great admiration for the course he has followed, for the firm beliefs he holds, for the way he expresses them and for his willingness to make sacrifices in order to further his firm beliefs.
Mr. Speaker, my subject today is primarily the features of the new budget as they affect one of western Canada's important industries, namely the oil and gas industry. At the outset I might say that I have been disturbed in recent years, and particularly in recent months, by two trends which I think should


also be disturbing Canada as a whole. The first trend that has been noticeable is the decline in Canadian participation in the development of western Canada's oil and gas, a decline that has been offset by an increasing participation by foreign capital in the development of this Canadian resource. A second trend which has become noticeable is the increase of Canadian investment in oil and gas development in the United States. As a Canadian I believe that to the greatest extent possible Canadian capital and Canadian investors should take part in the development of their own resources and that to the greatest extent possible those resources should be under Canadian control. These trends of a decline in our Canadian investment in Canadian resource development and an increase in Canadian investment in resource development outside of Canada are disturbing trends indeed.
Mr. Speaker, there are a number of reasons why those two trends should exist. They have to do with various factors which go into making the word "incentive", including the problem of marketing, the problem of price and so forth. But among these various factors which make up incentive is one that might be called Canada's taxation policy. I should therefore like to say that my main comments today will be by way of suggestions for modifying Canadian tax laws in order to raise Canadian capital sources to an equal competitive level with United States capital for exploration and development of western Canadian oil and gas resources. The things I have to say I think will apply equally to other types of natural resource development throughout our country.
It is a sad fact that Canadian oil companies and investors in them are still, under Canadian tax policy, required to compete on unequal terms with United States companies for the acquisition and the development of our western Canadian oil and gas resources. This is not the fault of the United States government nor of the United States companies which are investing in western Canada, unless we are prepared to condemn our southern neighbour government for allowing United States firms, on their foreign programs, the same depletion allowance and other taxation features developed over many years to stimulate and to maintain a high level of exploration and development within the United States, and also unless we are prepared to condemn United States firms for accepting the depletion and other tax features authorized by their government as applying to their foreign operations. But before doing any damning of the United States government or the oil companies, we might remember that United States policy has had and

still has a great deal to do with the large flow of United States capital that has contributed so much to the western Canadian development of the past eight years. I do not think that any sound-thinking Canadian would want to curb that capital flow from the United States.
The best way in which to put Canadians on an equal competitive basis with Americans in Canadian oil development is to amend Canadian taxation policy, particularly as to depletion allowance, in order to bring it more in line with what has been established as sound business in our southern neighbour nation.
Mr. Speaker, I am not trying to be politically partisan in this matter because I happen to sit in parliament as a member of the opposition party. I am well aware of the fact that oil and gas is a comparatively new "big industry" in Canada and that this government in many ways has been sympathetic to and has encouraged growth of the industry. Some of its policies on oil and gas, just like some of the views expressed by those on opposition benches, reflect a perhaps natural unawareness of all the aspects of a new great industry. Tax policy, for example, has been developing through the years by "trial and error" methods, gradually being modified as the government's knowledge of the industry's problems increases. My objective now is simply to try to speed up the modification process.
Let us now briefly look at the modifications to oil industry taxation policy set out on April 5 by the Minister of Finance (Mr. Harris). Then we shall consider the even more vital modifications which are still in the "hoped-for" stage.
The most important modification in the new budget is elimination of the time limit- which was the end of 1957-in the allowable deductions from income for expenses of exploring or drilling for oil or gas in Canada, or for searching for other minerals in Canada. The write-off of exploration and development costs, within the limits defined in the Income Tax Act, will thus become what might be termed a permanent feature of the tax laws, eliminating the annual review and yearly extension of the item by parliament, something which has been the policy for several years. As the Minister of Finance said in his budget message, the past procedure "carried with it some uncertainty for the future", and since the "special tax provisions have clearly established their value in promoting expansion", he proposes to make them a permanent part of our law. With that course I fully agree.
The Budget-Mr. Nickle
By no stretch of the imagination is the right to deduct as an expense exploration and development costs a subsidy or a tax concession, in the sense that this right has occasionally been described. This expense quite properly should be regarded in the same way in which we all regard the normal operating expenses of normal businesses. Costs of exploring and development are as much a normal expense of an oil company, if it wants to get into or to stay in business, as are the costs of advertising to a merchant, the costs of a plant to a manufacturer, the costs of seeding and harvesting to a farmer, and all the other costs which must be taken into account by anyone in any kind of business if he hopes to make a success of it.
What the Canadian government is now accepting on a permanent rather than temporary basis is what the United States government has long accepted, namely that exploration and development costs are normal expenses undertaken by the companies concerned in an effort to find and to develop new revenues, in which the government tax collector will share as soon as costs have been recovered.
Of course, there is no assurance that exploration spendings will bring discoveries and profit making productidn. If they do not the losers are the companies who have footed the bill. This fact, of course, is evident to a great many thousands of Canadians who have taken a gamble in oil, gas or mining and found their investment loss as a result of lack of success accompanying their operations. Many of the companies, both Canadian and foreign, who are carrying out Canadian exploration have yet to make discoveries adequate to pull them out of the red. Many others have made discoveries that will assure an ultimate profit, both for themselves and for the government. Many, many more discoveries will undoubtedly be made in Canada if the economic climate is favourable. In fact, however, the Canadian government has already been assured by the discoveries to date of many hundreds of millions of dollars of additional tax revenue in the years ahead as discoveries advance from the return of capital stage to the stage of paying profit. The Canadian government, and this is important, will draw some share of the profits whether the discovering and producing companies are Canadian or foreign.
Since American companies play such a major role in Canadian resources development, Mr. Speaker, it might be well to look briefly at how United States and Canadian tax policies function in relation to them. Some United States companies operate here as a division of the United States parent; others

The Budget-Mr. Nickle operate through Canadian subsidiary companies. A United States company doing business in Canada may include its Canadian exploration and development expenditures in its parent company's consolidated United States tax return, deducting these expenditures from its United States income. When and if it develops Canadian income, that income will go into its consolidated tax returns. For Canadian tax purposes the expenditures may be carried forward and charged off against future income in Canada, when and if it is obtained. In order to invoice international double taxation in profit years, tax payments made in Canada may be used as a credit against the United States tax liability. In effect, the United States income foots the bills for United States companies' explorations and pays any losses if adequate Canadian income is not obtained. If sufficient Canadian income to leave a profit after recovering of exploration costs is obtained, the profit is shared with the Canadian government.
Now, the second method of operation of United States companies in Canada is through Canadian incorporations as subsidiaries to the parents. In the case of Canadian subsidiary companies, of course, they pay taxes in Canada after the write-off of prior years' expenditures, the same as for a United States subsidiary. The United States taxes at current rates would be paid on dividends transferred to the United States parent company.
In his new budget the Minister of Finance (Mr. Harris) announced the end of the deep-test well special deduction. This will terminate next December 31. This measure was adopted several years ago specifically to encourage drilling of deep exploratory wells, that is wells over 7,000 feet deep and costing at least $150,000 each, in areas where the dominion geological survey believed significant and valuable geological data could be gained. Only individual wells specifically approved in advance by government authorities qualified for this concession. In fact, only about 1 per cent of the exploratory wells have been approved for this concession, and the cost to the Canadian treasury has amounted to only about one-third of 1 per cent of the total amounts invested by the oil industry in exploration in western Canada during the years this special deep-test deduction has been in effect. The deep-test well provision permitted deduction from income tax payable of 35 per cent of the drilling costs of exploratory wells qualified in advance by the government. It applied only if the wells were failures, that is dry holes.
If production were found, the tax concession no longer applied. The concession, Mr. 
Speaker, has been useful to Canada in encouraging drilling and obtaining of valuable geological knowledge in the deeper areas of our west. Because of its very limited application, however, in the over-all western oil development the ending of the concessions will not have very much material effect. The passing of it, therefore, is not too much regretted by those who are providing for the development of our west.
A new amendment to the Income Tax Act proposed by the Minister of Finance will permit oil or mining companies to deduct expenditures on either oil or mining exploration in cases where the expenditures were incurred otherwise than on the company's own account, in consideration for shares or an option or right to purchase shares of a corporation on whose account the expenditures were incurred. This would have application where a company participates in the exploration of mining or oil properties with others, through the medium of a corporation set up specifically to hold those properties and to explore them.
This amendment does not apply to oil company mergers and amalgamations, of which there has been a number in recent years. There still does not appear to be any provision made or contemplated in the statutes whereby such mergers can be carried out without the successor company losing the benefits of the expenditures for drilling and exploration costs to which its predecessor or predecessors would have been entitled.
This problem is a serious one, especially for shareholders of the smaller Canadian oil companies and mining companies which have, in recent years, been merged with others or which may have to be consolidated in the future in order to survive. The reasons for mergers are usually the conventional ones such as economy in operation, reduction in overhead, consolidation of properties, provision of additional finances, and of course the major one, the fight for survival. Practically all such companies have incurred expenditures for exploration in excess of their income in the expectation of the application of such expenditures against future taxable income. The right to charge off those accumulated losses against hoped for future income is not extended, under present tax policy, to a successor company. If for no other reason than that the policy discriminates against the thousands of small Canadian investors in smaller Canadian oil and mining companies, I trust that the government will not delay too much longer in amending the Income Tax Act to permit carrying over into company consolidations and mergers the right to write off qualified exploration expenditures..

Let us consider now depletion allowances which, as now constituted in Canada, place the Canadian company at a competitive disadvantage with the United States companies in the acquisition of and development of Canadian oil and gas resources. While it is vitally important that we have a continued large inflow of foreign capital, particularly United States investment, it is at least equally important that the maximum possible Canadian investment and equity be maintained in our own resources. Revision of present depletion allowance policy would go a long way towards increasing the Canadian stake in our western resources, by offering Canadians greater encouragement to invest in competition with people from the United States in this resource development.
There is another very serious aspect of the present depletion allowance policy. It encourages Canadian companies to rest on their laurels, draw production from current wells, and curtail exploration. This is so simply because depletion allowance for the Canadian [DOT]company does not apply until after all the exploration and development costs have been recovered, and the company is in a profit position. In contrast, under United States tax law, the United States company is permitted deductions of depletion from gross income prior to the recovery of exploration and development costs, whether the costs were incurred in the United States, Canada or elsewhere.
Depletion allowances are basically a recognition that a well or mine producing oil, gas, coal or any other mineral is a wasting asset strictly limited as to the ultimate production it can yield. The owner, in order to stay permanently in business, must continuously explore to replace with new wells or mines the reserves that are produced. In principle, depletion allowances provide natural resource production industries with a lower rate of taxation than applies to industries which do not have the same problem of replacing by exploration the products they produce. Depletion, of course, does not apply to what might be termed the normal business phases of such an industry as oil. In other words, profits from refining and marketing are taxed at the full corporate tax rate without benefit of depletion allowance.
Under present Canadian policy, operators of oil and gas wells are entitled to depletion allowance of 33J per cent of the net profits, if any, remaining after all costs of exploration and development have been recovered. Because the huge expenditures in recent years have far exceeded gross production income, only about one-tenth of the Canadian companies engaged in exploration are in the
The Budget-Mr. Nickle position of having net production income against which to apply depletion allowance. The actual benefit of depletion allowance to date has been only about 1 per cent of the spendings made to replace and increase proved reserves. The purpose of the depletion provisions therefore has been largely defeated.
Under present regulations, a Canadian company could discover an oil or gas pool and, if it were carrying on an active exploration program, could produce all the oil or gas from that pool and receive very little, if any, depletion allowance. On the other hand, if the company reduced or halted exploration, it could derive a very substantial depletion allowance and ultimate profit from the operation of the pool. Thus there is a penalty on the company willing to continue large-scale exploration, and that is certainly an undesirable state in a nation whose future depends in no small measure upon the continued risking of large amounts of capital on natural resource exploration and development.
In contrast to the limited application of depletion to the Canadian companies who pay out a large part of exploration and development costs in our west, there is under present tax policy a depletion allowance of 25 per cent of gross income extended to recipients of gross and net royalty interests in Canadian oil and gas wells; in other words to those who do not bear the major burden of exploration and development costs.
Might I say, in passing, that I own a small company which, for some years, has been engaged in the development of oil and gas- unsuccessfully, I might say, until a couple of years ago. My company acquired gross royalties in a certain area of Alberta which became productive. That little company is no longer carrying out any exploration-at least, not at the moment. It is drawing a fair amount of revenue, and is enjoying 25 per cent gross depletion allowance because its producing assets are gross royalties. On the other hand, many other companies which are doing far more than my little company toward exploring and developing new resources in Canada find themselves in a position where they are not enjoying the benefits of the gross depletion allowance which, as owner, I enjoy.
I have previously urged, and will continue to urge, in the House of Commons that the government amend its present depletion allowance regulations to provide that the present allowance of 25 per cent of gross production income now permitted royalty owners be extended also to those who provide the costs
3352	HOUSE OF
The Budget-Mr. C. Cameron of exploration and development, in place of the current allowance of 33 J per cent of any ultimate net profits.
Such a step would go a long way towards providing the continuing incentive for Canadian capital to maintain a large-scale exploration program in Canada, and would in addition put the Canadian in a nearer-to-equal position with his friendly and essential competitor, the American, in the drive to develop Canadian resources to the full. Under American law, United States companies have a depletion choice of the more beneficial to them of two methods: (1) 27J per cent of gross production income; or (2) 50 per cent of net income.
Scores of thousands of Canadians who, as investors in Canadian oils, gas and mining, are helping develop our western resources, could help themselves and the nation by adding their voices to those of the Canadian Petroleum Association and the numerous independent Canadian oil companies who have been urging the government for some time to bring its depletion policy closer in line with that of the United States, in order that the development of Canadian natural resources may be, to a greater extent than it is today, the development of Canadian resources, largely by Canadians for the benefit of Canada.


Mr. Colin Cameron (Nanaimo):: Mr. Speaker, in entering this debate I do so with the idea in mind that our budget is something more than merely the accounts of our public housekeeping. Sometimes one does see some rather shaky analogies drawn between the public accounts of Canada and the account books of private concerns. This very often misleads those who seek to find their way through the mazes of the budget.
I think we have to remember that one of the most important features of the budget is that it contains the government's proposals, not merely for the collecting of revenues and the disbursement of funds in the public administration, but also the government's proposals in the way of leading our economy in the direction in which, in the public interest, it considers it should go. And it is on that basis I wish to discuss the budget this afternoon.
First of all, I think we have to decide in what direction it has been going of late; and to that end I think we should direct our attention to its effect on the Canadian citizen. Because, after all, like the Sabbath, our economy was made for man, not man for the economy. And the only yardstick by which really we can measure its effectiveness and the effectiveness of the policies of those


who conduct it, is to establish in our minds quite clearly the effect on the members of our society. To that end I wish for a few moments to deal with some figures produced quite recently by the dominion bureau of statistics in its labour force survey. One particular figure interested me very much, and that was the figure showing the number of people who, at March 31 this year, had been looking for work unsuccessfully for seven months or more. The figure given was 45,000. We may ask, in a work force of 4,500,000, what is 45,000? But those 45,000 are human beings, men and women who have been looking for work for seven months or more.
I wonder how many members in this chamber have any conception of what it would be like to look unsuccessfully for work for seven months or more-to have started last year in the heat of August, to have carried on through the fall and winter and into the spring, and to have remained unsuccessful. I wonder how many members realize the terrible process of deterioration that takes place in a man's morale under those circumstances, the dreadful doubts which begin to arise as to whether or not he has the capacity to find a job, or to hold it if he does find it, and finally the relapse into despair and indifference, and resignation to being maintained on a reluctant charity, either public or private?
Among those 45,000 I wonder how many could have been found a year earlier among the 22,000 who, at the end of March, 1954, had been looking for work unsuccessfully for seven months or more. And were any of them, do you suppose, to be found among the 11,000 who, at the end of March, 1953, had been looking unsuccessfully for work for seven months or more?
Those are the figures that interested me in the D.B.S. figures of the labour force survey just issued, and which is revealed in reference paper No. 58 which was produced not long ago, being a recapitulation and revision of all the statistics relating to our labour force from the year 1945 to 1955.
You find that in those years the number of those who have been looking for work for seven months or more has doubled each year since 1953, and as it has advanced by geometrical progression has had a very disturbing and frightening effect, perhaps more significant of economic malaise than the total figures of unemployment. Who are they? Who are those people who have been thrown out? One can only guess, of course, but my guess would be that we shall find among them those who are a little too old, a little too unskilled and a little too unintelligent.

Those are the ones who are thrown out whenever the necessities of industry force cutting of costs. I think there has been evidence, in this doubling each year of this number, that industry is raising its sights in this regard and is demanding higher and higher standards of vigour, of skill and of intelligence. That economic necessity, of course, is to be found in the market situation to which the minister referred in his budget speech at page 2729 of Hansard, when he had this to say:
No appraisal of the economic situation could avoid some reference to the revival of international competition. So far as the basic industries are concerned, most of our producers have proved quite capable of maintaining and even increasing their markets at home and abroad. However, some of the secondary manufacturing industries have lost ground in export and domestic markets to their competitors. I mention this to illustrate the point that the difficulties which some industries are facing today are not the result of any general decline of demand, but of a new situation applicable to the industries concerned and in large measure capable of correction by those industries. Clearly these are situations which cannot be corrected by government. What is needed is resourceful efforts by management and labour to meet that competition by reduction in real costs and the improvement of quality and efficiency, all of which 1 firmly believe Canadian management and labour can provide.
What does that mean? Just what does the minister imply? Presumably, these 45,000, twice as many as last year, which was again twice as many as the year before, who are more or less-I think we can say this fairly safely-permanently unemployed, is the first step in that process that the minister is advocating for industry so that it can meet the rising tide of international competition.
Does his suggestion imply that we have to lower wages, perhaps, or have less workers or increased productivity per man, or all three? I suggest, Mr. Speaker, that it is not good enough merely to say that industry has to rationalize its efforts in order to capture and recapture lost markets. We also must have some consideration for the effect of such policies on our economy and society as a whole. While I quite agree that the efficiency of industry must be maintained and increased, we must at the same time all bear in mind just what is happening to those who are the victims of that process. We have been told time and again ad nauseam that our present type of economy, our present method of producing and distributing goods, is the best one and it will work. I have always taken that to mean that an economy that works provides continuously for the needs and necessities of all the members of society in that economic unit. And here we have a group that our economy is not doing that for. And therefore it seems to me that those who 50433-212
The Budget-Mr. C. Cameron are the advocates of things being unchanged, of leaving its economic foundation as it always has been, have now to think of how it can be made to work.
I suggest, Mr. Speaker, that it is not good enough merely to call for economics in public administration, economy and rationalization of industrial production and distribution. It is also necessary to embark on some new thinking in regard to the needs of our people. I remember that during the earlier part of the debate one of the hon. members of the official opposition suggested that the time had now arrived when the government should consider the adoption of a policy of deficit financing. I myself am not always prepared to support the idea that Keynesian economics is the solution to our problems. I do think, however, at this juncture that perhaps the late Lord Keynes had something which could be at least of stop-gap value to us. And in order that we may judge of the possible efficacy of Keynesian economics with consequent deficit financing, it might be well to rehearse here the debt reduction that has taken place since the end of the war, up until 1953, because there is one thing that we should bear in mind, namely, that deficit financing, per se, is neither good nor bad, neither dangerous nor safe. It depends entirely on the relationship which the resulting national debt plays in ratio to our national income. I have those figures. I would like to put on the record the reduction of the national debt which has taken place since the end of the war owing to surplus budgeting that was engaged in by the government during those years.
Up to the end of the year ended March, 1947, the national debt was reduced by $373,600,000; the following year, the year ended March, 1948, it was reduced by $676,119,000; the following year, 1949, by $595,502,000; 1950, by $131,520,000; 1951, by $211,294,000; 1952, by $248,033,000; and by March, 1953, by some $23,500,000. The total reduction during that period, Mr. Speaker, was $2,259,000,000. These figures are taken from the Canada Year Book, our dominion bureau of statistics figures. At the same time that our national debt was being reduced in this fairly substantial way, our national income was steadily increasing. But during the same period that the net debt declined by $2,500,000,000 the national income increased by some $9,225,000,000. Interest rates have also been falling since that time, since September, 1953, as a matter of fact, and the minister reported in his speech a week or so ago that there had been a similar decline since 1954.
3354	HOUSE OF
The Budget-Mr. C. Cameron
The question that is always raised when one suggests the possibility of deficit financing is the possible danger of inflation. Admittedly, at a period and in a situation where all our productive factors are engaged, where we have no unemployment and where industrial plant is producing at full or nearly full capacity, then of course any measure of deficit financing will result in inflation; but when we are in a position, as we are today, where a considerable body of our labour force is unemployed, when much of industry is producing either at a curtailed rate of production or closed down altogether, then the problem of inflation does not arise. I think we may take it for granted, Mr. Speaker, that we can at least engage in deficit financing to the degree necessary to engage again all the working population and to engage again all our productive plants.
Again I want to put on the record suggestions for the employment of the funds raised by deficit financing.
One is the obvious one of the growing need of public works throughout Canada. We have had repeated demands from various quarters in this house for such projects as the South Saskatchewan river dam which apparently cannot be gone on with because we cannot afford it. There is a great need for the fruits of deficit financing, but perhaps more important than the field of public works as such is the field of the production of capital goods for those parts of the world which are now repeatedly demanding them. In this group we have repeatedly urged that our contribution in this field should be stepped up immensely, and in the light of our present and dangerous situation in this country I think the time is certainly ripe for a rapid increase in our contributions to southeast Asia in the way of capital goods, to be accomplished by the placing of substantial orders for agricultural machinery and machinery of all sorts required by those countries.
This could be done either by way of gift or by way of loan contracts with these nations. I suggest that we would be on sounder ground if we stayed fairly well within the confines of making gifts such as we can afford to these countries. The history of loans under these circumstances has not been too happy and possibly the result of lending capital goods instead of giving them might be merely to cause irritation in international relationships.
At the present time the government is pursuing a policy opposite to the one I have suggested. It has been following a policy, which has been intensified this year by the present minister, of attempting to leave in the hands of Canadian citizens incomes large
[Mr. Cameron (Nanaimo).1

enough to encourage them to invest in Canadian production. One can hear the argument every day; one hears it repeatedly in this house that the people are being taxed so heavily they are not able to purchase enough goods to keep up consumer production and that on the other hand they have no surplus left over for investment in the expansion of production.
I would point out that we have no guarantee whatever that the funds left in the hands of Canadian citizens will in actual fact be invested in the expansion of our productive enterprises. The history of recent years indicates that that is rather a vain hope. It is a vain hope because of the failure of Canadian investors to invest on a large scale in new enterprises in Canada and also because of the fact that so much of our development process in Canada is now in the hands of subsidiaries of foreign companies which do not afford an opportunity for Canadian investment.
Many of the companies operating in Canada as subsidiaries of United States companies do not call for Canadian funds and Canadian investment. The opportunity is not there. In addition we have seen a growing tendency in recent years to invest in investment trusts where the goal has been a modest return with absolute safety. The old days of the pioneer investor with risk capital seem to have vanished; we do not seem to have any of that any more.
I feel that unless the government is going to plan for deficit financing we shall have no practical realizable results from it. We shall wind up with serious budgetary deficits for which we have nothing to show. We have the first one this year, the $194 million which is predicted by the minister as a deficit and for which there will be little if anything to show.
We shall go on doing what governments did during the thirties when they had continuous deficit financing with nothing to show for it. I suggest that if we are going to follow the policy outlined by the Prime Minister (Mr. St. Laurent) in this house, a policy confined solely to the relief of the unemployed, we shall incur all the ills of deficit financing and have none of the offsetting benefits which could be obtained by the conscious adoption of Keynesian economics for the time being.
As it is, we have the minister's statement that he expects a deficit of $194 million this year, and this can be nothing more than a morose prediction that we are not going to have enough money coming in with which to pay our bills. There has been no deliberate and conscious planning for the sort of deficit

financing which might well be calculated to pull us out of our present and growing condition of economic decline.


Mr. A. B. Patterson (Fraser Valley):: Mr. Speaker, I think enough has been said in this debate already to indicate to the minister that his first budget has failed to meet with the full approval of the Canadian people.


Walter Edward Harris: Enough has been said, period.


Alexander Bell Patterson: I would not quite agree with that.


Stanley Howard Knowles: The minister did not say enough.


Alexander Bell Patterson: Of course the minister may argue that no matter what kind of budget he brought down, the members of the opposition would still be dissatisfied or perhaps unsatisfied, and perhaps that is true. However, I venture the suggestion that, with a little more imagination and optimism, the minister could have done a great deal toward eliminating many of the features which are so unsatisfactory and which present themselves as splendid targets for the opposition guns.
Although wide latitude is permitted in the budget debate, my observations will be limited to the consideration of several matters of vital concern to the people of Canada. I have been trying to figure out in my own mind just why the budget is so interesting to a great many people. I suppose it is that they live in hope, and they say that hope springs eternal in the human breast. They are looking forward to the possibility of the minister's finding some way to reduce taxes without altogether upsetting the economy of the nation. As we consider the budget before us we find that little has happened to bring much relief to the individuals in our nation who need some help at this time.
Shortly after the present minister assumed the portfolio he expressed the view that taxes in Canada were pretty high. I have a newspaper clipping which reads:
Finance Minister Harris said Tuesday night he has made an initial examination of Canada's tax rates and has found them "pretty high". He described the personal income tax as "severe".
Then a little later:
But what amazed him most was that Canadians allow the federal and other governments to "take away" from them nearly one-third of their incomes.
I suppose looking at it from the broad point of view they can do something about it, and I venture to suggest that perhaps in the near future they will. However, be that as it may, as we consider the budget before 50433-212i
The Budget-Mr. Patterson
us we find that the Minister of Finance (Mr. Harris) has not done anything to suggest that he was too much in earnest when he made that assertion, or if he was in earnest at that time he apparently ran up against obstacles which he did not anticipate, and had to be satisfied with less than what he was considering initially.
One matter to which the minister referred in the budget was the 5 per cent reduction in excise tax on automobiles. On page 2739 of Hansard we find these words:
In the case of automobiles, however, I think the rate should now be brought down to 10 per cent. Effective tomorrow, therefore, the rate of excise tax on automobiles will be reduced by 5 percentage points.
Now that is very acceptable, but it certainly is far from being satisfactory. An article appearing in the Ottawa Journal of March 5, 1954, had this to say with respect, to the high excise tax on automobiles:
Who paid most of this tax-$161 million?
That was in 1953.
Not the buyers of Cadillacs and Lincolns: the luxury buyers. More than 60 per cent of all automobiles in Canada last year were owned by people earning less than $3,000. And of the other 40 per cent or less, many of their owners were earning only slightly more than $3,000.
In no sense are Canadian taxes on automobiles luxury taxes, such as Britain's purchase taxes.
And these hidden taxes, bearing down most heavily on people of moderate means, are not merely on automobiles; they are on a whole line of necessities.
We notice as we consider the budget that, as I have already said, there is a 5 per cent reduction, but that is not sufficient in this day when automobiles occupy the place they do in our economy, transporting workers to their places of employment and providing services in so many necessary ways. We would suggest that the minister continue to look upon taxes as being pretty high, and certainly taxes on automobiles, and that before he brings down his next budget we hope he will see his way clear, not only to reduce that tax but to eliminate it altogether on these necessary vehicles for our present economy.
As I have said, the minister's pronouncement is welcome but it is certainly not in actuality an indication of a very magnanimous spirit. This failure to ease the tax burden in the lower income bracket is more or less evident throughout the entire budget. While on the subject of automobile tax, let me say that I support the views that have been expressed very clearly by my leader, the hon. member for Peace River (Mr. Low), and the views of all those who have referred to the failure of the minister to provide for refund of taxes on automobiles presently in
3356	HOUSE OF
The Budget-Mr. Patterson stock. The dealers' position, I think, should be recognized and some consideration given to this particular matter.
There is another subject to which I should like to refer at this time, one that does not find its place anywhere in the budget, nor did it last year. I am not sure when it last found its way in. But it has to do with donations to charitable, religious and educational organizations. At the present time 10 per cent of the income is deductible for contributions to charitable, religious and educational organizations. I think there are specific reasons why this percentage should be raised.
I have an article from the Pasadena Star-News of Saturday, December 6, 1952, which has this to say:
Washington, D.C. Taxpayers are being reminded by the U.S. bureau of internal revenue that they can give up to 20 per cent of their 1952 gross income to religious, charitable, or educational institutions and deduct it from their income in computing the federal tax due on March 15.
The bureau's 1952 edition of instructions to income taxpayers calls attention to the fact that congress has raised the previous limitation on charitable contributions from 15 per cent to 20 per cent.
In this connection I should like to say also that I understand the United States has made a further increase and is now allowing taxpayers a deduction of 30 per cent on contributions to religious, educational and charitable organizations.


Walter Edward Harris: Is there not a ceiling on that?


Alexander Bell Patterson: Not according to the account that I saw, Mr. Minister, but I would not be positive. I think that some consideration should be given to this matter. Certainly, if that reduction is allowed in the nation to the south, I think the minister could give some consideration to it and possibly bring in something along the same line.
There is another reason why I believe some consideration should be given to this particular subject. Considerable pressure is being exerted for wider regulations respecting raffles and lotteries. I am not going to go into a discussion of raffles and lotteries, as I imagine we will have that at some time in the future. However, I think I can say that I am opposed to the principle of lotteries and raffles being used to finance charitable, religious and educational institutions. I think it is a method that tends to undermine that admirable quality of open-hearted giving and reacts unfavourably upon our social conscience.
I would suggest that an increase in the amount of deductions allowed in this particular regard would encourage voluntary contributions for these purposes. I think this matter should be given careful consideration. We would appreciate it if the


minister would take it to heart and mind and bring in something along those lines in the very near future.
I would just like to make reference to the subject of succession duties. In the budget that was brought down in 1954, the last budget of the present minister's predecessor, he referred to the succession duties. He said, and I quote from page 3734 of Hansard of April 6, 1954:
The Excise Tax Act has been streamlined, simplified and made more systematic. Up until now I have not been able to devote enough time to a similar improvement in succession duties. However, I have recently asked officials of the three departments concerned-finance, national revenue and justice-to commence work on rewriting the law.
In the next few months, while the redrafting is proceeding, the views of informed and interested persons or groups of persons, would be welcomed on any provision in the law which deserves reconsideration. In the meantime no change will be made in the present law.
As we turn to the budget speech which was given on April 5, 1955, on page 2738, we find our present Minister of Finance has this to say:
Now just a word about succession duties. The budget speech of last year indicated the intention of the government to undertake a complete revision of the act and invited representations regarding it. Useful briefs and comments have been received and the work of drafting and shaping a new structure is under way. The task has proved to be somewhat more difficult and time-consuming than was anticipated. The new bill will not be ready for introduction at the present session, but I hope it will be ready next year. In the meantime the present law will stand unchanged.
I think the minister was very frank in making that statement. At least he intimated that studies were progressing and he still had this under advisement. We certainly hope, as he says he hopes, that at least by the next session something will be brought in along these lines.
One request that has been advanced-and I think it is justified-is that a $50,000 deduction be allowed in the computation of succession duties. If I understand aright the law as it stands, an estate of $50,000 is tax free but if it is $51,000 that fact brings it into the realm where the entire estate is taxable. I believe that is right. I believe the minister indicated that to be the situation. I would venture to suggest that $1, $100 or $1,000 should not make that much difference. It would seem to me that the request that has been made by certain organizations is a fair one, namely that a $50,000 true deduction be allowed on all estates. As the minister gives this matter consideration, I trust that he will take that suggestion and incorporate it in any legislation that is introduced in the future.

There is one other matter I wish to call to the attention of the house at this time. It has to do with old age pensions. Although this subject received considerable attention last session, comparatively little has been said about it during the present session. However, I think it remains as one of the matters of urgent concern to a group of citizens who are certainly deserving of our consideration. It has been pointed out on other occasions that the pensions our senior citizens are receiving are just about equal to 50 per cent of their dollar value in 1939. Certainly the time has come, in my opinion, when something definite should be done to bring further assistance to these people who are in dire need.
According to the last annual report of the Department of National Health and Welfare, under the caption of old age assistance, we find that there are 93,273 recipients of old age assistance. The federal share for the fiscal year was in the neighbourhood of $20 million. We in British Columbia are much concerned about this matter because we have a higher percentage of old age pensioners or senior citizens in our particular province. Hence we are vitally concerned about this particular situation. In this group we have 8,144 who are receiving old age assistance. Then as to old age security, British Columbia stands third with a total of 79,464 recipients.
When we combine those figures, we find that the combined total of recipients under those two categories stands at 808,672. I realize that that number constitutes a considerable proportion of our population. May I again suggest that it is an extremely deserving part of our population. I would suggest that something further be done with respect to giving assistance to these people.
At the present time the allowance is $480 a year except in Newfoundland where it is $360. The permissive ceiling is $720 for a single recipient, $1,200 for a married recipient and $1,320 for a recipient with a blind spouse. We realize that in some of the provinces additional assistance is given to our senior citizens. In British Columbia and in Alberta a supplementary payment of $15 per month is given. In Saskatchewan I understand they have been giving $2.50 but that there has been an upward revision for some of the recipients of old age assistance.


Mr. Casileden:: Up to $20 for some.


Alexander Bell Patterson: It is not necessary for me to picture again the circumstances under which many of the recipients of these allowances are living. We are all fully aware of the position in which they find themselves.
The Budget-Mr. Enfield I believe that public opinion is going to

if I may use the word-force the government to take some action. It is time that action was taken. In fact, it is long overdue. I think public opinion is going to come to the place where it is going to force the government to do something about this matter of raising the allowances of those who are recipients of old age pensions.
There is one other matter to which I wish to refer in this connection. I believe that the government should give consideration to lengthening the period of stay permitted outside of Canada. I do not think it is fair to these senior citizens to be obliged to lose their pensions if they reside outside of Canada beyond a period of three months; I believe that is the period at the present time. It would seem to me that it would be only fair and certainly would be justified to raise that length of stay to at least one year. I know that some of their organizations are advocating that it be for an indefinite period.


Stanley Howard Knowles: That is the way the judges
have it.


Alexander Bell Patterson: I would not say just what the judges receive, but I will accept the hon. member's interjection in that regard. However, in all fairness, I believe that this matter should be given consideration and that the period should be lengthened to one year for these senior citizens.


Mr. F. A. Enfield (York-Scarborough):: Mr. Speaker, I have been greatly interested in the debate this afternoon and in the way in which those who have spoken have endeavoured to deal, during the greater part of their discussion, with the general aspects of the economy as reflected in or affected by the budget. I respectfully rise to make my submissions and to endeavour to carry on this trend of discussion.
I was going to say that one feels that the budget has been generally well accepted owing to the note of optimism that is expressed therein this year. I think it has been well accepted in the country. Of course we realize that this feeling is not unanimous here in the house. However, I think the budget presupposes that the development of our economy will continue on a good level. It assumes that we are at present in a period of good economic activity. I think that optimism is justified. However, I think it will depend a great deal on how the level of our development of our natural resources continues throughout the coming few years. I should like to devote my remarks to a few generalizations with regard to our natural resources, to draw some conclusions and, if
3358	HOUSE OF
The Budget-Mr. Enfield possible, to relate those conclusions to the taxation policy outlined by the budget.
We are prone to talk rather glibly of our limitless forests, our untold mineral wealth and our vast reserves of oil and gas throughout the country. Perhaps we rather pass over the fact that the country is so large, and that there are such tremendous problems in gaining access to these resources and therefore the question as to whether it is possible economically to develop the resources perhaps has not received the attention it deserves.
In this connection I should like to point out that the following factors or problems are involved: First, there is the matter of easy access to the resources themselves. Second, there is the matter of the distance that they are from the possible market for the resources. Then there is the saleability of the resources, when we do get them, for currency that we can use or for other consideration. Then there is the matter of competition from other countries.
We are inclined to feel that we have a marvellous find, which we have of course, in our iron ore developments in Labrador. We fail to recollect that there is a mountain of iron ore in Venezuela, which is quite close to transportation, thus putting it in competition with ours. Iron ore is, after all, the most abundant mineral on the earth's surface. We must face the proposition of substitution. What is a resource today may be out of fashion tomorrow. We have seen great changes in the steel industry. Plastics are now taking part of what was once an exclusively steel market. The chemical fibre industry, that is the production of synthetic fibre, has dealt a body blow to the textile industry where cotton and wool, what you might call the natural fibres, are used. In fact, I feel that the development of this new synthetic fibre industry has been one of the root causes of the dire straits in which our textile industry found itself during the last winter.
The most important factor in endeavouring to develop our resources is the transportation problem. This is the key, I believe, to the whole situation. There is also our population to consider, both as a market and as a source of labour supply, and that is basic to the further development of our resources.
In so far as transportation is concerned, I may say that the importance of it struck me yesterday on our visit to Churchill. As we flew over that vast country covered with lakes and rivers, I saw this single rail line heading into Churchill on Hudson bay. One is struck by the enormous factor that the


transportation problem really is. It must have been a tremendous undertaking to build that railway line, and as you look down from the aircraft it appears as a sort of lifeline. It must have been of great advantage in opening up that country. I cannot put too much stress on the transportation factor.
I should like to make a few general classifications of our resources, and relate them to these factors or problems I have outlined. I feel that our main resource lies in our sources of energy. We do not tend to feel that sources of energy are natural resources. Generally speaking we think of a natural resource as something we can look upon, feel, deal in, buy and sell. Sources of energy are, however, important resources; and the whole prosperity of our country is, I believe, based on the hydroelectric energy, just as it might be said that in the past the economy of Britain was based on coal as a source of energy. The sources of energy include, and I am listing these in what I think is their order of importance, hydroelectric energy, atomic energy, coal, oil and natural gas.
In considering hydro, we have the problem of ease of access and transportation to market. We know for a fact that in Labrador there is a river called the Hamilton river on which the fall is greater than at Niagara falls and on which the flow is just about as great as in the Niagara river. We also know that resource to be incapable of any development at the moment because of difficulty of transportation of electrical energy over long distances. It seems to me this is the role in which the government could assume the greatest importance; that is, to provide research into means of developing transportation so that something like the Hamilton river could be used to advantage. The hydro potential there is about one million kilowatts as compared with our present installed hydroelectric capacity of about 11 million kilowatts across the country.
I turn now to atomic energy. I think the announcement earlier this session of plans to build a new atomic energy plant in conjunction with the Ontario hydro amounted to one of the most momentous announcements we have had in this parliament. The advance of atomic energy could have a tremendous impact in a country like Canada where we have such vast distances to cover, and perhaps at present with so little available energy to cover those distances.
I am particularly interested in the development' of atomic power which is, of course, of vast importance. In connection with the development of that energy, you will recall a few days ago seeing an article in the Ottawa Citizen concerning an announcement by

President Eisenhower, entitled "Dramatic Gesture for Peace". The article reads in part:
President Eisenhower today unveiled plans to send a new atomic-powered merchant ship around the globe in a dramatic demonstration of U.S. determination to win "a just and lasting peace".
The new vessel, the president said, will travel thousands of miles without refueling and "will demonstrate to people everywhere this peacetime use of atomic energy, harnessed for the improvement of human living".
We know also that the United States has been experimenting with a submarine, the Nautilus, in which an atomic power plant is used. Apparently the submarine can travel under water indefinitely without refuelling. Think what it would mean if we in Canada could develop atomic energy to propel vehicles over the land. It is said that one pound of fissionable material is equal to about 1,200 tons of coal. The advantages of extracting energy from fissionable material and applying it to the propulsion of a railway train are self-evident. I believe we should devote more of our energies and more of our budgetary expenditures to the development of atomic energy, not only for use in propelling vehicles on land but we should try to catch up in regard to its use in ships and in the air as well.
At the present time our budget calls for the expenditure of about $18 million per year under our atomic energy plan. This might easily be used, of course, in the development of our power plant. It would not be out of the way, in my opinion, to set aside a like amount, say $20 million a year, to develop other uses for atomic energy. The advantages would be absolutely tremendous.
Now, Mr. Speaker, when it comes to the production of energy we run into particular difficulties concerning its export. The export of energy is a sort of double-edged sword, you might say. When you create an outlet for the export of energy such as hydro power you have the advantage that it provides a steady market and obviously a steady income from that market. On the other hand you also tie yourself up on a permanent basis. I am thinking of the proposed Kaiser dam development, about which we heard a great deal in the early part of the year. Here the proposition was that we produce energy and supply a proportion of it to the United States market. The trouble with such an arrangement is that it is so permanent. It is most important, to my mind, before we go ahead with a project of that type to make certain of two things. One is that we are going to have a true surplus over and above that which our own market will need and, second, that you make the utmost use of the source of energy itself.
The Budget-Mr. Enfield
In that connection it was to be hoped that the development of the whole Columbia river basin would be accomplished as a unit. I think it would be fair to say that. It was to be hoped that the proposed development would fit in with the total development of the potential that was there. Once you commence the export of energy you create a permanent demand for its use by the communities using it. Those communities become completely dependent on that source of energy, and one cannot simply say, "Conditions have changed, so we would like to keep the energy for our own use." We must, therefore, ascertain that we do have a true surplus before we entertain any plans for the export of hydro.
The second class of natural resource that I would consider would be what might be termed the renewable material resources. This class is represented by all our important forest products and our agricultural products. I believe that on the average our lumber products account for about 31 per cent of our exports. Wheat alone accounts for about 14 per cent of all our exports. In regard to lumber and wood products, conservation is the keynote; and I do think that the pulp and paper companies will have to bestir themselves in their own interests to adopt good, solid conservation practices.
In connection with wheat, we find the particular marketing problem is that of finding a market where we can sell and in return receive a currency we can use. Unfortunately in the last few years, since the war, we have run head-on into restrictions in the sterling area, and it is most difficult to forecast when there will be a removal of those restrictions. We can count on this, however; that when that removal does take place, the sale of our farm products, particularly wheat, will be greatly benefited.
Then wheat is also subject to the vagaries of weather. However, wheat is what one might describe as a basic commodity in respect of which we have natural economic advantages in the matter of production, and it should provide a steady market for the future. I think other foodstuffs must rely chiefly upon the domestic market for their distribution.
Finally, there is a third class of natural resources which I would describe as nonrenewable. I refer to the products of the minerals found in the Canadian shield. Of course we do not know to the full extent what the wealth of the pre-Cambrian shield might be; indeed, I doubt frankly if it has ever been fully surveyed, with the result that its vast riches to a great extent are uncharted. We realize that the cost of transportation is the key factor in connection with our mineral resources. Undoubtedly we are going to face
3360	HOUSE OF
The Budget-Mr. Enfield bigger and bigger demands for our natural resources in the form of minerals from the pre-Cambrian shield.
The United States set up a materials policy commission in 1952, in an effort to find out upon just what resources they could depend in that country. The report states, briefly:
The United States has crossed the great industrial divide and from being a nation with a surplus of raw materials has become a deficit nation.
Obviously they are going to look more and more to the north for their sources of mineral supplies, and we must be ready to meet these increased demands. The role of the government, it seems to me, would be to provide services for the area, and transportation through it, if we are to be ready to meet these demands. In this connection I believe we should adopt a courageous policy in the matter of constructing railway branch lines. There is a tendency to look at the deficit under which the Canadian National Railways operate and then adopt a strict policy of economy, perhaps to the detriment of a philosophy of expansion.
I would not like to see that come about. Last year we had plans to carry a branch line into the Chibougamau area, which I thought was most commendable. Perhaps next year we should give similar consideration to the Great Slave lake area, because I understand from my friend the hon. member for Mackenzie River (Mr. Hardie), who has a special interest .in the area, that there are tremendous advantages which would accrue from the construction of a branch line to Great Slave lake. Consolidated Mining and Smelting Company, I am informed, would receive great advantage from the use of a rail line in connection with the operation of their Pine Point property which is very rich indeed in lead and zinc, and of course requires only rail transportation to make it economically possible to take advantage of the deposits.
To sum up, I have endeavoured to outline the types of resources with which we must deal-our agricultural, lumbering and mineral products. I think the only conclusion one can draw is that there must be tremendous investments of capital and tremendous risks taken in order to develop these natural resources. In the past the incentive for such risks has resided, first of all, in the profit system. There have been great profits to be made in such developments, and of course rightly so. Then there is tremendous human satisfaction in the creation of new industry.
The obvious question one must ask is this. What should the role of government be in this situation? What must be the duty of government? To my mind it would be the duty of 

government to see that the development of our resources continues at a pace sufficient to provide economic prosperity and full employment. To my mind the best way the government can bring this about is to adopt a role under which it stimulates and encourages, and thus assists private industry.
Sometimes, however, we do not stop there, because we find it necessary not only to encourage and stimulate but also to operate. Private enterprise has been the dynamic and moving force in the development of our natural resources, and I believe it is incumbent upon us also to be a dynamic moving force. If we see that it is necessary to operate, as well as stimulate and encourage, then I believe we have a responsibility to operate. This indicates a devotion neither to the extreme principles of socialism on the one hand nor to the extreme principles of conservatism on the other, but rather is an effort to use wisdom, gained through experience, in adopting a policy that will provide the right decision at the right time as to what move should be made.
Pursuing this policy, the government finds itself operating a railway and air transport system, a broadcasting and television system, waterways and canals, a new atomic energy plant, and a large organization known as Central Mortgage and Housing Corporation for the encouragement of housing. All these are things the government operates, and there are many others. On the other hand we provide encouragement and stimulation by giving support to farm prices. We see the provinces operating hydroelectric plants.
These are just a few of the fields into which governments have entered. To my mind the emphasis should be placed upon stimulation, and only upon operation if necessary. Or, to paraphrase an old remark, operation if necessary, but not necessarily operation.
Of course the taxing structure as presented in the budget has a tremendous bearing upon what private industry will do in these fields. I should like for a moment to look at our budgetary expenditures. Perhaps it might be proper to suggest that our expenditures, as outlined in the budget, fall into two main classes-and perhaps I should add that this is a rather rough division. However, we do see money spent to provide security on the one hand and money spent to provide opportunity or stimulation on the other. If we look at the figures in the budget we find that about $1,200 million is to be spent on social welfare measures. Included in this would be grants for family allowances, old age security, unemployment insurance and others.

On the other hand, what do we find in the matter of direct expenditures by way of provisions to give encouragement and stimulus? Well, without having access to the tremendous amount of statistical material on this subject, the estimate I would make from what appears in the budget would place the figure at not more than about $400 million.
In that figure I have included all the money we spent on the national research council, the research carried out by the Department of National Defence and the Department of National Health and Welfare, the whole of the estimates of the Department of Agriculture, the whole of the estimates of the Department of Mines and Technical Surveys and the coal board, the estimates for fisheries, the estimate for northern affairs and the estimate for Department of Transport, part of the estimate for trade and commerce, and part of that for veterans affairs.
In other words, if we take these figures we find that we put aside for direct spending, or what might be called opportunity spending, the sum of $400 million. This is a liberal estimate, as opposed to $1,200 million spent directly on social welfare measures.
Because of that fact the question is asked, is a good balance indicated? We emphasize social security, and probably that is as it should be. I think any government would be loath to decrease any of the social security payments we now make. In fact most of us on both sides of the house would like to see a gradual-perhaps I am assuming too much-increase in the level of social welfare payments and hence a general betterment of living conditions as our government continues.
But we must not forget the other side of the coin. The only way we can continue expanding our social welfare is of course to keep expanding our economy. We have to increase our opportunity spending along with our security spending. By increasing our opportunity spending we shall increase economic activity and employment. The tax intake will be greater and the ability to pay social security will be enhanced. Of course, it is the old story of the goose and the golden egg.
I mentioned that the stimulus to risk-taking in the economy by private industry depends on reward. I have related this to the budgetary expenditures. On the other hand I should like to relate it to the tax-raising side of the picture. Of course the greatest amount raised in taxes comes from income tax, and that is a tax on the net profit resulting from the investment of labour and effort or money. Of this classification, the largest 50433-213
The Budget-Mr. Enfield total sum is received from taxes on corporations. Until recently we had a 49 per cent tax on corporation net profits, which was just about half. We saw a reduction this year to 47 per cent.
I must make a point here. I do not know whether it is generally known-it is generally known in this house but perhaps not in the country-that there is a degree of double taxation in regard to corporation net profit. We all know that the corporation pays 47 per cent on its net profits, as shown by its financial statement; and then, when and if the net profit is distributed as dividend income, the person receiving the dividend pays a further personal income tax on that income. This accounts for the credit of 20 per cent that has been allotted on receipts of dividend income. I refer chiefly to corporation tax. I would ask this question. Does the tax structure encourage risk-taking by industry? To date I do not think we have seen any particular discouragement. Over the last decade we have had an expanding economy, and despite some reports one hears in this house to the contrary, we do have a prosperous economy at this time.
When one looks at the last decade, however, one sees certain conditions to which he must give special regard. Wartime spending provided a terrific impetus to expansion. The post-war shortages continued the heavy demands for consumer goods. The cold war has provided its grim incentive, and we all hope that these types of incentives will not continue. Under such conditions industry can expand and pay the taxes; but as these incentives have a lesser effect we must keep an open mind and we must not-and I repeat "not"-look at the present levels of income tax and corporate tax as normal.
There is a great temptation to do that. We have heard recent statements in the house that the corporation tax is not high enough. The hon. member for Regina City (Mr. Ellis) mentioned that he felt the excess profits tax should again be considered, and a capital gains tax. We often hear it said that in order to meet increasing expenditures, perhaps on social welfare measures, the corporation tax should be increased. This may or may not be true. I submit that such levels of taxation need not necessarily be regarded as normal, that our minds must be kept open and, if necessary, adjustments made between the risk-taking principle on the one hand and the tax policies on the other.
I would say that every time we tax a corporation to the point where the company decides not to expand and take further risks, we push that company farther out of the business that it happens to be in and get
3362	HOUSE OF
The Budget-Mr. Trainor
ourselves as a government closer to being in that business. I further submit with respect that we must avoid thinking of present taxation policies as normal and traditional. We must keep an open mind, ready to consider new methods of taxation, in order that we might achieve the wisdom that will allow us to keep a proper balance in the budget and hence a prosperous economy. T feel that we have a good balance in our budget this year. We have had a good reduction in personal income tax and a small but important reduction in corporate taxes, and we are enjoying a good level of economic activity.
Perhaps the budget as it stands will produce the desired result. If not, we should not hesitate to examine the balance between opportunity spending, as I have defined it, on the one hand, and security spending on the other, and examine the tax structure from the point of view of encouragement of risk-taking in our resources industries.


Mr. O. C. Trainor (Winnipeg South):: Mr. Speaker, I should like to take the opportunity afforded by this budget debate to comment on and protest against the economically unrealistic policy of the government with regard to natural gas. We have the rather remarkable situation existing where areas in Canada which have no gas within several thousand miles, such as Toronto, Montreal, Ottawa, and so forth, have the benefit of natural gas; whereas other parts of Canada that have gas, practically speaking, at their back door, are denied the privilege of utilizing this resource.
I say, Mr. Speaker, in my opinion this is owing to a vacillating and completely unrealistic policy on the part of this government. Why do they do this? Obviously, as I stated at an earlier time, they do it because they believe that in the foreseeable future Canada may run short of gas. Therefore it is desirable to conserve our resources for the benefit of this country. That would be a perfectly logical and sound reason if it were true, but it is not true. There is no danger of this country, with any foreseeable rate of consumption, ever running short of gas.
In addition to gas resources we have fuel resources in this country which are capable of supporting any population this country is likely to have for generations to come. We are incapable of consuming these resources; yet the government seem to have adopted a policy whereby they must be left in the ground; if we cannot dispose of them, obviously they must be left in the ground. When they are left in the ground they are no good to anybody.
I would suggest to the government that they consider changing this policy and not


deprive the citizens of Canada, in one particular part at least, of the benefits to be derived from this fuel which, practically speaking, is at their doorstep. Winnipeg is in urgent need of natural gas, to such a degree that the local gas company has threatened, if I may use the expression, to build a pipe line on their own.


An hon. Member:: Why don't they?


Owen C. Trainor: They have indicated they will do that if lines are not built by companies favoured by the government at the present time. I suggest that the government pay heed to the feeling and demand which exist in western Canada in this regard.
I do not propose making any extended analysis of the budget such as was made by the hon. member for Greenwood (Mr. Mac-donnell). He is much better equipped than I to analyse the financial operations of the government. However, I should like to associate myself with his conclusions, which I consider to be valid and based on sound reason.
Some of the speakers to the left seem to have gone to considerable pains to try to demonstrate an alleged failure on the part of the Conservative party to offer anything in the way of constructive criticism of the budget. I am at a loss to understand why the official opposition should be expected to provide an alternative budget for the benefit of the government. However, if by constructive criticism and constructive suggestions the parties to the left mean what they are advocating ad nauseam, crackbrained and discredited economic systems to which only a tiny fraction of the Canadian electorate have given any support, then we shall have to-


Mr. Wylie:: Where are you now?


Owen C. Trainor: Just a minute; just listen for a while.


William Duncan McKay Wylie: You have no monopoly on your part.


Owen C. Trainor: Who says anything about monopoly?


William Duncan McKay Wylie: What are you reading from?


Owen C. Trainor: I am not reading at all.


William Duncan McKay Wylie: Yes, you are.


Owen C. Trainor: I am consulting my notes.


William Duncan McKay Wylie: Yes, sure.


Owen C. Trainor: If you do not believe that-I do not have to take anything from you.


The Acting Speaker (Mr. Applewhaite):: May I point out to hon. members that no hon. member who has the floor should be interrupted without his consent, and also that

hon. members taking part in the debate should address their remarks to the Chair.


Owen C. Trainor: Thank you, Mr. Speaker. Nevertheless a more careful analysis or examination of speeches delivered by members of the official opposition will disclose a number of constructive suggestions. For example, the hon. member for Greenwood has been responsible for a few. Among other things he suggested that we should devote more time to promoting higher skills in our population in order that increased competition in world trade might be achieved.
The hon. member suggested the removal of the sales tax on supplies purchased by municipal corporations, and advocated the processing of more of our raw materials at home. The government was urged by the hon. member to take vigorous action to reduce or eliminate discrimination against Canadian products by foreign countries to the end that a greater number of Canadians might be given employment at home. Surely these suggestions should be regarded as constructive.
The hon. member for Broadview (Mr. Hees) made several constructive suggestions. He advocated a reduction in the sales tax to stimulate sales and employment, and indicated that the increased sales resulting from this action might compensate for the possible loss of revenue. He suggested a real effort on the part of the government to improve industrial design and lower manufacturing costs so we may hold or improve our competitive position in world trade. He suggested a careful examination of the position of the Canadian dollar in world markets and pointed out the obvious handicap that Canadian products were under as a result of this premium position. Are those not constructive suggestions?
What do the parties to our left offer? They offer a cacophony of mutually exclusive panaceas; they offer a sterile socialist dogma which is repellent to the great majority of Canadians; they offer a threadbare, discredited economic theory propounded originally by a Scottish engineer and professed by groups of economic innocents which has met with universal derision from reputable economists the world over.


William Duncan McKay Wylie: On a question of privilege, I was called to order a minute ago because I said the hon. member for Winnipeg South was reading his speech. I think he is still reading it. I just went around behind the curtains and saw that he was reading it. We are not supposed to read speeches. This afternoon the hon. member for Calgary South (Mr. Nickle) read his speech, and I think this practice should be stopped.
50433-213J
The Budget-Mr. Trainor


The Acting Speaker (Mr. Applewhaite):: think the rule in Beauchesne that speeches should not be read is pretty well known to the house. I believe it is equally well known to the house that a succession of Speakers, and I say this with respect, seem to have failed miserably in their efforts to enforce that rule. We in the chair as well as hon. members on the floor are bound to accept the statement of any hon. member as to matters purely within his own personal knowledge, and one such matter certainly is whether he is or is not reading his speech.
On several occasions I have heard Speakers drawing to the attention of an hon. member the fact that he was not supposed to read his speech, but beyond that, so far as I am aware at the moment, the Chair seems to have no power to go. I appeal to the hon. member for Winnipeg South not to continue to read his speech if he is reading it, but beyond that I fail to see what power we have in this chamber at the present time to go any further. We must accept the statement of any hon. member that he is following his notes closely.
I think it is perhaps only fair to the hon. member for Medicine Hat (Mr. Wylie) that I should say that many hon. members feel as he does, and that it is certainly entirely within his province to draw to the attention of the house for its consideration the fact that he believes a member is reading his speech. But I feel that, as our practice has grown up, at the present time all I can do is appeal to the hon. member who has the floor and any other hon. members who may follow not to read their speeches, and leave it to their good judgment.


Owen C. Trainor: Thank you, Mr. Speaker. With regard to the point of order that has been raised, it seems to me the hon. member objects when something touches him keenly, and apparently something I have said must have touched him.


William Duncan McKay Wylie: Nothing you would ever say would touch me.


Owen C. Trainor: It must have, judging by your reaction. I think it was the hon. member for Rosetown-Biggar who complained of the income tax exemption for the holders of securities of dividend-paying Canadian companies. His remarks would have had more force had he been able to state what proportion of these dividends were subsequently invested in Canadian enterprises that provide employment for his fellow Canadians. The hon. member who spoke just before me has called attention to the pertinency of double taxation in this particular regard, which I think is important. It should not be forgotten that

The Budget-Mr. Trainor these dividends that were paid were previously subjected to corporation tax, and consequently the government has gotten its tribute. I think remarks of this type betray perhaps a complete lack of appreciation of the principles on which the economy of this country operates.
Mr. Speaker, at this point I should like to direct the attention of the minister and the house to two situations in which the basic principle of equal justice to every class of Canadian citizen is being violated. I have protested against both of these injustices on previous occasions in this house, and do so again in the perhaps vain hope that the government may do something to remedy the situation.
In the debate on the address in reply to the speech from the throne I called attention to the serious effect of the sales and excise tax on the public in so far as the price of automobiles was concerned. At that time I pointed out that if these taxes were removed or reduced to make them comparable to those in the United States, there was no reason why automobiles should not sell in this country at about the same prices as in the United States. For the small measure of recognition which the minister has given to this request I am grateful. It is far short of what I had in mind, but I suppose we should be thankful for small mercies.
However, it is a pity that the minister could not have provided his minuscule measure of relief without wreaking serious injustice on one class of citizen. Apparently, Mr. Speaker, like the Greeks we must fear the minister bearing gifts. Owing to conditions peculiar to the automobile industry, where the excise tax is levied on the manufacturer and passed on to the consumer through the dealer, we find that all dealers across Canada are expected to absorb the tax cut on all the cars they have in stock, because they have already paid the tax in the price paid to the manufacturers, and they are to receive no rebate.
The other day, in answer to a question from the hon. member for Prince Albert (Mr. Diefenbaker), the Minister of National Revenue stated that the government did not intend to provide any rebate, for the reason that these dealers had already benefited by tax increases that had occurred previously. I suggest that this is a rather specious argument, because when the tax was increased it was at a time of scarcity, when there were very few cars in stock owing to shortages, and also to the fact that dealers had made commitments to preferred customers and fleet accounts to deliver cars at the old price. Moreover, the manufacturers insisted on the


dealers rebating when a customer complained. Consequently few if any dealers obtained any particular consideration or any benefit when the tax was increased.
In any event, why should the government allow anybody to collect, on the excuse that they were collecting for the purpose of paying taxes to the government, when the government in fact never collected any taxes? That is perhaps a demonstration of the questionable moral sense that we have become accustomed to associate with this government.
Mr. Speaker, I realize that this cabinet has accepted the principle that all Canadians should not be taxed alike and that the few should be favoured at the expense of the many. Nevertheless, I would join with the hon. member for Prince Albert in urging the minister not to extend this iniquitous principle to the point where the many are favoured at the expense of the few.
I regret that the budget offers no relief to a class of persecuted citizens whose cause I have pleaded on previous occasions. I refer to those on fixed incomes, those living on savings or pensions, who have been crucified by inflation and the decreased purchasing power of the dollar. There does not appear to be any indication in this budget of any relief for these people, or any effort to reverse the trend to which we have been subjected of late years; no effort to arrest or slow down the plunge of our dollar to even lower values. The minister shows a callous disregard of the fate of those elderly citizens who are attempting to eke out a precarious existence on dollars that were barely adequate when they retired, but are now insufficient to maintain life even by the standards of extreme penury. What a fate to inflict on those who have contributed their best efforts to the growth and prosperity of this nation in days gone by. The government are responsible for this situation, for-make no mistake about it- the present depreciated condition of the currency is largely the result of deliberate design on the part of the government.
There are a number of methods the government might adopt to redress this situation of its own making, and for the benefit of my friends to the left I offer them as constructive suggestions. First, it could reverse the inflationary process; but this is probably too much to expect.


Walter Edward Harris: Does my hon. friend suggest that we have inflation at the moment?


Owen C. Trainor: Deflation?


Walter Edward Harris: I thought the hon. member said "inflation".


Owen C. Trainor: Do I suggest that we have inflation at the moment? I certainly suggest that we have.


Walter Edward Harris: All right.


Stanley Howard Knowles: "Flation" of some kind.


Owen C. Trainor: The second suggestion is that it could raise existing government pensions to compensate for the inflationary effect. Third, it could grant exemption from sales tax on the necessities of life to those on fixed income up to a level sufficient to support a decent standard of living. Fourth, it could substantially lower or even abolish the sales tax on the necessities of life. The last suggestion is probably the simplest from the administrative standpoint, but all of them are possible provided the government has a proper regard for, and interest in, the plight of our suffering fellow citizens. In any event, Mr. Speaker, the overriding consideration is that when these people ask for bread, they be not given a stone.
Finally, Mr. Speaker, I should like to call the attention of the minister and the government to a figure that I believe may have significance as a goal or guidepost in the future economic growth of Canada. It is reported that the average family income in the United States in 1954 was $5,300. This is a target for Canada to shoot at. It should not be impossible of attainment, although I recognize the considerable difficulties in the way. Both countries were discovered at about the same time and were settled contemporaneously by people of different racial stocks. Immigration has resulted in similar racial patterns. The political development in each country has differed, but in recent years the same independence of political institutions has prevailed in each country. The natural resources of both are similar. If anything, Canada might be said to enjoy an advantage. The population growth in the United States has been enormously greater than that in Canada, owing to differing policies of immigration. Population would seem to be the determining factor in this marked difference in economic development in each country.
The inference is clear. If we desire to emulate the economic progress of the United States, we must seek additional population through immigration. We shall not attain it by adopting the thesis of population growth by natural increase favoured by the Minister of Citizenship and Immigration (Mr. Picker sgill).
It is worthy of note that this remarkable economic prosperity has been achieved in the United States under a system of free enterprise. It could never have happened under a socialist system. It required the stimulus of individual initiative, for which there is no
The Budget-Mr. Castleden substitute. But behold the result, Mr. Speaker. It is the marvel and envy of the entire world.
I am not suggesting that this result can be duplicated in Canada immediately, but I would suggest that by providing similar incentive and encouragement to private enterprise, it is not too much to hope for eventual economic parity with the United States. In the interests of Canada this is an objective devoutly to be desired.


George Hugh Castleden: Mr. Speaker, in rising to say a few words in the budget debate may I say that I do not think there is a great deal I can add to the financial advice that has been given to the minister. However, perhaps I can offer him a few condolences.
He has certainly assumed the office of budget-maker at an extremely difficult time when we are faced with receding earnings, declining revenues, declining trade, declining activity and increased unemployment. Naturally we find him producing a deficit budget as; his first effort. That fact in itself would not be too bad if there were on the horizon any real signs that the budget for next year was going to be any better. We are certainly looking in every direction for some sign indicating that perhaps the trend will change, that economic activity will improve, that the picture abroad will be better and that the trade picture will improve.
Canada is in a rather unfortunate position at this particular time in this respect. Among the leading nations of the world Canada enjoys the unique reputation of being recognized as one nation that is suffering from a severe unemployment problem while other countries in Europe and America are finding their unemployment figures cut quite low. Yet Canada's unemployment figures are increasing. Something is definitely wrong.
The government is facing up to a rather difficult problem. A year ago I said that I did not think they had a solution to the unemployment problem in Canada. I am still of that opinion. We can perhaps take a certain amount of glee in saying, "Well, the minister is in a rather awkward position". He is suffering from decreased income and increased costs, but there is one saving grace about it. He is perhaps in the same position as many people in the country, certainly including the vast majority of those whom I represent. The farmers on the prairies suffered a 70 per cent decline in their net income last year, with substantially increasing costs.
In the saving grace, the one difference, of course, between the minister and the people is this. Whether he makes his budget balance or whether he has a deficit budget, the
3366	HOUSE OF
The Budget-Mr. Castleden minister will still get his $25,000 a year and be allowed expenses. On the other hand, the farmer will be in the rather serious position that he will have a deficit, all right, but he will have to try to make up that deficit personally, and probably will have to go into debt a bit. Perhaps the minister now will be in a position to understand what the farmer feels like, as well as the businessman, the retail merchant, and the retail car salesmen in garages who find that, in spite of decreasing income, they are expected to carry an extra burden of some $100 a vehicle.
This budget, by its reduction in the price of cars, caught the retail dealers in a rather awkward position. The protest over that matter has been expressed many times in this house. I will just say this. The vehemence with which the dealers came to me and expressed their rather profound disgust at the way they had been treated indicated their feelings in the matter. It is not right that in 1940, when they were forced to collect the taxes, when it was difficult to get vehicles and they might have made some money, they were not given that opportunity. Now when the tax is reduced they are forced to carry the burden. They are in a very unfortunate position, because the price reduction has affected the very large stock of used cars they have on hand. I should like to assure the minister that if he and the cabinet decide to reverse their decision concerning restitution to these dealers, they would have the support of a great many members in this house.
The revival of our economy is going to be important to the minister if he intends to balance his budget next year. As I sit here I often wonder what his thoughts are concerning the possibility of the Canadian economy being revived to the point where business activity would increase, wages would go up, profits would increase, income taxes would increase, all of which would result in increased revenues. The reason we have looked in vain for it is that in Canada we have never known any great revival from a period of recession except in time of war. As soon as this government spends $5 billion or $6 billion in war contracts industry is stimulated, young men are taken from productive activity and put into the army; then Canada's economy revives and there is prosperity. But at what a terrible price.
In spite of what the hon. gentleman who preceded me said today about the theories other parties in this house may have, I should like to tell him that the status quo, for which he stands, will have to provide something better than it has provided in the past in the way of solving its economic problems in peacetime or it will have to change.


One hundred years ago an industrial revolution struck the world and the system had to change. The changes that are taking place today under automation, and advanced scientific application of power to production, are relatively five or six times as great as the changes produced by the industrial revolution. The economic system under which we live must change or it will pass on. It must change peacefully or it will change in some other way. The hope of those people here who are suggesting economic changes is that they will be the kind of changes that can take place peacefully and democratically. The economic system which does not take into consideration the welfare of the human being, and that looks toward some other aim as its ultimate objective, will fail.
The principal approach in this 1955 budget is that the Canadian economy is slowing to a very dangerous position. This economy cannot enjoy what may be called the luxury of the idleness of 613,000 people who are looking for work. The people of this country need food, clothing, shelter, homes, roads, hospitals and universities. When the natural resources of this country are still in an undeveloped state and you have people looking for work, then those who own the machinery of production and those who own the natural resources have an obligation to bring the two together to provide the things the people require. The other commodity that is required is the toil of man. Today there are
613,000	people asking only that they be given the right to work. They must be given that right. They are not to be denied the right to work. The right to work has to be established within an economy or that economy will be changed by the force of public opinion.
During the past two years in this house there has been a lot of bloated optimism on the part of cabinet ministers. They have been saying that everything is all right; the Canadian economy is fine, and this is periodic or seasonal unemployment. Everything will be fine as soon as the ice breaks and summer comes again. Each succeeding year, as the ice goes, there is no solution of the economic problem. It is getting worse. This government must accept responsibility for solving that problem or admit that they cannot do it. We have voiced these sentiments in this chamber before, and we have been called the forecasters of doom.
Last week I listened in the railway committee room while the 10 provincial premiers recited their difficulties and the problems of the various provincial and municipal governments. The Montreal Gazette in reporting the event said here were 10 tales of woe.

The premiers of the various provinces were faced with difficulties which to them seemed insurmountable. There was the problem of taking care of the unemployed; the problems of the increased cost of living, the increased cost of government and the increased cost of construction. An economy which permits the costs of living to rise continually without providing a means whereby those increased costs can be met is fundamentally wrong. It will have to be changed or we will have only great deficit budgets ahead of us in the future.
When I say that everything can be supported, I live in Saskatchewan-


Mr. Studer:: You did not learn much.


George Hugh Castleden: I lived under an old Liberal political system during the depression that changed the hearts and minds of a great many people. When I see a dominion-provincial conference starting its agenda with the question, how are we going to share the costs of relief, I am reminded that I was one of those who lived in the west during the relief days. I hoped then that Canada would never go through those days again. All we have to do is put our natural resources to work, put the means of production and labour together, to provide the things that Canada can provide.
The economic system must operate in that way. We cannot afford another depression in Canada. A demoralizing depression is too high a price for Canada to pay. When one sees thousands of unemployed riding the box cars from one end of the country to the other looking for work, when one sees soup kitchens back again in this country, one knows that something is wrong and surely it is our job, collectively, to try to find a solution.
I do not know what the status quo is going to do about it. Somebody says, "What do you mean by the status quo"? I think of the definition of the old coloured parson. Somebody asked him what the status quo was and he said, "That is Latin for the mess we's in." We are looking for a way out of it. I would suggest to the minister that municipal governments are only too anxious to employ people when they find unemployment in their ranks, but they are finding themselves up against a stringent and difficult financial problem. I suggest to him that one way he could put a patch on the inner tube, that status quo that has let us down so badly, might be to make large amounts of long-term low interest money available to municipal and provincial governments. If money at a rate of 1 or 2 per cent could be made available to provincial and municipal governments they would be able to put people to work.
The Budget-Mr. Castleden
Roads are needed desperately in many parts of Canada. From the information I receive about roads in different parts of the country it is clear that we could spend billions of dollars on roads alone, thus raising the economic standard of our country and at the same time providing work. We could do worse than copy the program adopted in the United States for the provision of highway transportation systems. The movement of goods by road is an economical way of moving them. I believe it is better and cheaper for people to live in areas where they have easy access to markets. When we are using trucks and heavy vehicles for the transportation of goods we must have roads that are built to stand that kind of transportation. Municipal governments could use long-term loans at low rates of interest to do the necessary road building in their respective areas.
Then, in addition, school buildings are required, and in many municipalities they have housing problems beyond their ability to handle because of the necessary capital outlay. I believe there are many things that could be done along these lines, and certainly the people would be greatly helped if money were made available to them at these low rates. It would have the effect of stimulating building activity which, in turn, would stimulate other industry. While I do not suggest this is a complete solution for the problem, I believe it would help a lot now.
The farm problem in the rural areas is one which is slightly different, and to offer a solution one must investigate more deeply into the matter. My constituents, who ask me to speak for them in the House of Commons, are noble Canadians who earn their living by toiling on the farms. In this they use machinery and expend their energies to produce foods such as cereals, meat, butter, poultry and the like. Then it becomes necessary to sell the products of their toil to a hungry world.
I find, however, that agriculture in Canada is in a bad way. Figures from the bureau of statistics show that the agriculturist, the man who lives on the farm, is fast becoming the disappearing Canadian. These figures show that in 1931 some 37 per cent of the population in Canada were living on farms, while only 20 years later, in 1951, the figure was down to 20 per cent. Everywhere we see evidence of people leaving the farms and entering the larger centres. Surely this is a sad commentary on our way of life.


Mr. MacDougall:: Mechanization.
3368	HOUSE OF
The Budget-Mr. Castleden


George Hugh Castleden: It is not mechanization alone. In my opinion we cannot afford in this country to lose the family farm. True, mechanization has its place; but it will be a sad day for Canada when it becomes a nation in which can be found only mechanized and factory farming, and when the people living in those rural areas disappear. When people live in the larger centres, only driving out to the farms to conduct a mechanized form of factory farming, it will be a bad day for this country.
This afternoon the hon. member for Port-neuf said that we have factory farming in western Canada whereas in the east the family farm predominates. I believe it is true to say that the family farm must be established on such a basis that economic livelihood is possible, whereby people living on those farms by their toil can live in a fashion comparable with that of other Canadians doing the same amount of work and living in other parts of the country. If the government decides that mechanization is to take the place of the family farm, then it must take the responsibility for that decision; and let me say at once that this party would never support it.
I believe one of the firmest foundations of a great nation is its rural homes and the contribution they make to the finer things in the life of the nation-the great men they contribute, the leaders who came from the rural homes, the Abraham Lincolns. In short I do not believe any nation can afford to let the family farm disappear. To my mind it is disappearing in Canada because the security one used to find there is fast disappearing. There are enough hazards sent by nature to try the average farmer, without the addition of any artificial hazards.
One is reminded that out on the western prairies today rains have flooded lands to the point where they are becoming water-soaked and water-logged. Yet no more than 20 years ago those same lands constituted a dust bowl, where production was at a standstill. I have known summers in those days with a rainfall of less than half an inch in some communities, summers when cattle were dying from lack of food and moisture, dying because of dust in their stomachs, dying because they were unable to find enough good food to eat. Only 20 years later we find a new cycle in which rain is falling in flood proportions, to a point where dampness and rust are proving disastrous to the farmer. Another two years with similar amounts of rainfall would put large sections of the western prairies out of production.
These are some of the hazards under which the farmer must operate. But he does not
[Mr. MacDougall.l

complain about them. I had fewer complaints last year from farmers who lost their crops from one of the most disastrous rust infestations ever known to western Canada than I have had in a great many years. They did not complain about nature sending rust. But they do complain when, after producing their commodities, after being told to raise hogs or to raise something else, they find that prices have fallen to a point where no money can be made from their work. They do feel badly about those things. I heard more complaints about the allocation of box cars, which was handled in a manner whereby they were denied the right to deliver to their own elevators their grain-the little they had- than I had about the rust.
When the rust came they said nothing could be done about it, that it had been sent by nature, and accepted it as an occupational hazard. But when they are denied something they believe to be a basic right, the denial of which means injustice to them, then they are angry, deeply angry. They realize that the matter of pricing confronts them with a man-made hazard, one which should not be permitted to wipe out the family farm.
Surveys made in this country, particularly in Saskatchewan, show constantly increasing production costs on farms, a factor over which the farmers have no control. For a number of years during the war the farmer had a greater measure of prosperity because he enjoyed large crops, and his receipts kept up with his expenses. He was able to pay his debts and make his way. But in recent years his returns have been declining; prices of his commodities have been going down constantly. A startling example is found in the drop in the price of cattle sold by the farmer.
These things hit him hard. That kind of insecurity will drive him off the farm. No person can continue long in business when his costs of production are away beyond his income. This means the deficit financing that the minister understands. There is no security. Until there is some security he will be living in fear. He is not guaranteed any pay. He knows that his living and the living of his family are in jeopardy, and that if continued eventually he will be driven off the farm.
The farmers and the agricultural organizations are asking the government that the cost of production and a support price based on that cost of production be linked together. When costs are going up the farmer has no control over the cost of his machinery; he has no control over the cost of the combine, the tractor or the drill or even the hay machine. The cost of building a barn and the cost of cement are continually going up.

His oil cost and his taxes are going up. His cost of living and his cost of clothing are increasing. He has no control over these. He cannot do much about it except patch up the old machine and make it run a little longer. If no security is given to that industry, then there must be a linking together of his cost of production and the price he receives for the commodity he produces, based on its quality. When he produces a certain commodity of a certain quality, he is certainly entitled to a support price below which his income will not be permitted to go.
I hold in my hand the brief which the Canadian Federation of Agriculture submitted to the cabinet in March of this year, just a few weeks ago. In that brief they outlined the problem facing Canadian agriculture. I quote from the second paragraph on page 1:
At the present time, farmers are very greatly concerned over the weakening of their position in the Canadian economy. Farm prices have been falling over the past few years, while costs have remained at near record levels, and some have actually risen. The result is a cost-price squeeze that has made serious inroads on the standard of living of Canadian farmers.
They outline what is happening to the dairy industry, and certainly there are grounds for complaint in that regard. They have this to say on price supports:
The Agricultural Prices Support Act of 1944 states that "in prescribing (support or guaranteed) prices . . . the board . . . shall endeavour to secure a fair relationship between the returns from agriculture and those from other occupations". With this goal (parity of income for the farmer) we are in agreement since it expresses exactly the objective of organized agriculture in Canada today.
They merely asked that they be given a parity of income, as a result of their toil, with those engaged in other industries in Canada, so the income from the farm shall be related to the cost of operating that farm. I continue:
The prices support act, and the administration of the programs under it, have provided a large measure of stability for the farming industry,-
I may say it is rather unfortunate it did not have the effect of stabilizing the ultimate prices to the consumer; but at any rate that principle must be established. If agriculture is to continue, and if family farms are to continue as a part of Canada's economy, something along that line must be established, in view of the economic position in which agriculture finds itself today. I use these words advisedly, because I have watched the trends over the years, and the statistics prove that unless this is done the Canadian economy will suffer as a result of people moving away from the farms to some greater security.
The federation had this to say on page 6:
Since the relationships between farm products which held in the base period are not appropriate
The Budget-Mr. Castleden
today, we are using actual market prices in the immediately preceding ten years as a guide to arrive at the relationship of individual commodity prices. By this method fair relationship prices for farm products can be arrived at which will be in proper balance with one another, but which taken as a whole will represent a level of purchasing power on a par with that which prevailed in the period 1925-29.
They have taken the period 1925-29 as the base. They said that at that particular time a certain amount of farm produce would buy a certain number of commodities which the farmer required. Let us say that two bushels of wheat would have bought a pair of overalls. If that price relationship existed today, or a similar relationship, two bushels of wheat would still buy a pair of overalls. If that price relationship exists we can continue. There will be some hope that we may be able to plan ahead and will not be operating under a deficit budget. A deficit budget in agriculture means that the family farm will disappear from this country.
By establishing parity prices in Canada we can do a great deal of good. We should study what they have done in the United States over a period of some 20 years. The United States has had a system of parity prices and support prices, and in the past 20 years they have learned a great deal. It is my opinion that Canada can learn a great deal from the experience of the United States in this field. Basically, they recognize that if the family farm is to continue it must have some guarantee by way of parity support prices.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
George Hugh Castleden: Mr. Speaker, before the dinner recess I was referring to the need in Canada of a parity prices support program for agriculture and the possibilities of our learning something from the experience of the United States, where a support prices program for agriculture has been in operation for some 20 years. Agricultural organizations in Canada are demanding the establishment of such a program, and it is my opinion that they will persist in their demands until they get it. This should have the support of every hon. member from a rural riding in Canada, and it should be part of the program for agriculture everywhere in the country.
The establishment of a parity income for farmers and their families living on economic units in Canada could be the basis of the security so essential to Canada's prosperity.

The Budget-Mr. Castleden I am hoping that the members of this house will study the possibilities of this program and learn from the experience of other countries. This type of program is essential, not only because of economic conditions, not only because of the social effects it would have, but because of the effect it would have upon the basic well-being of the whole economy. It has been said by people who have studied the matter that depressions and recessions are frequently farm-bred and farm-fed. When you have an economy in which your agricultural people are prosperous, then you have the foundation for a good national growth and prosperity.
The program followed in the United States has provided security for agriculture there, and the results are to be seen throughout the economic structure of the country. It is true that it has taken the form of a subsidy to agriculture in some cases, but it has provided prosperity which has certainly been lacking in Canada in the last few years. There is less than half the unemployment per thousand of population in the United States than there is in Canada. The subsidy paid to agriculture, an essential industry, is much smaller than the subsidies that have been paid to other industries not only in that country but in Canada as well.
In farming communities and in those provinces where agriculture is the main industry, cities and towns very quickly feel the effect of any recession in agricultural income. People living in these cities and towns very soon find this reflected in their standard of living.
It is a well known fact that as a result of the program in the United States there are hundreds of millions of bushels of wheat tied up in surpluses, but if you study the problem I think it will be found that that is largely due to the fact that they subsidized the wrong kinds of wheat, and encouraged the growing of wheat in uneconomic areas. There is no surplus of hard spring wheat in the United States. If the consumption of wheat in that country could be increased by 4 per cent their surpluses would soon be wiped out. A similar increase in consumption would wipe out other surpluses. That is why it is necessary to make a deep study of the matter before setting up such a program.
The same thing was done with regard to cotton. They have large surpluses of cotton which are costing them a great deal to keep in store. A government storage program is an excellent thing. We could easily have a recession or a cycle in production which would cut down production to a great extent, and then our surpluses would be most valuable. The vast surpluses of cotton which the


United States has were due to the fact that they placed a parity price on this commodity without regard to the family farm unit. A parity price program could quite easily oversubsidize the kind of farmer who does not make the same contribution to the economy of the nation as does the family farmer. The program will require regulating to see that the family farm is the one that gets the subsidy, to see that you do not make millionaires out of people who are in mass production, to see that you do not bonus inefficient production on inefficient units.
I think the surpluses in milk and dairy products are good things to have. It is better to have too much of these products than too little. Their program of disposing of surpluses offers an excellent lesson for anybody who wishes to learn. If we recognize our position in the world as a producer of food, and if we recognize that there are almost a billion hungry people in the world today, then it would be wrong to say that we should not produce what we are able to produce, that we should not give all that we are able to give to those who are hungry.
A planned program of production would be a necessary part of that. There would have to be food banks where surpluses could be stored to take care of the leaner years. It might be necessary to zone production. We know from our own experience that a parity price in one particular area is quite different from a parity price in another area, even within the same province, where the cost of producing may be much greater. That kind of thing would have to be taken into consideration.
Many people think it would be costly, but the fact is that it would not be costly when we consider the effect it would have upon our economy. This would be far better for the nation than subsidizing air lines, aerodromes, gold mines and oil lines. The experience of the United States has been that during the period in which they have had this program, agriculture has enjoyed a period of prosperity which has helped tremendously in keeping the United States economy buoyant. A mismanaged program could lead to factory farming, and a properly managed program could prevent that kind of waste.
To sum it up briefly, I would say that the low-price and high-cost cycle that is facing agriculture today is a most serious thing. It will mean only one thing for agriculture, and that is bankruptcy. Canada cannot afford a bankrupt agriculture. The present condition threatens the very life of our most important industry. A support price program geared to the cost of production is an immediate necessity, and the longer it is delayed the more

serious the situation will become. Until steps are taken to institute an adequate program this government will be rightly criticized, and the protests from agricultural producers will continue.
If you look over what the countries of the world are doing to feed the world, through FAO, the Colombo plan and the United Nations organizations, you cannot fail to realize that here the democratic countries are given a weapon of the greatest value to help in winning the world for peace and democracy. Food and technical assistance given to the hungry peoples of the world, to the backward nations of the world, can do more to bring peace to the world than billions spent on armaments. This is the real responsibility of those nations who like ourselves have the power to produce something which the world needs and needs badly.
That is the kind of thing which is splitting the world into camps that do not understand one another and are warring against one another. When agriculture prospers, then the Minister of Finance will find it easier to balance his budget. Canada can make a real contribution toward the brotherhood of man and can increase the respect which these people in many of the depressed areas of the world have for democracy. It is a responsibility which Canada cannot afford to neglect.


Mr. H. A. Hosking (Wellington South):: Mr. Speaker, in taking part in this budget debate I should like to pay my respects to the Minister of Finance for the masterful fashion in which he has accepted his responsibilities, and to bring to his attention the respect he has won from people all across the dominion. The manner in which he has comprehended the burdens which taxation has put on all our citizens, and the methods he has used to distribute tax relief, have been fair to all. He supplied direct relief to the majority of our citizens, and especially those in the lower income tax brackets. To assist those who were unemployed to find jobs, he has given tax relief to industry which will encourage it to expand its economy and thus create jobs.
It is regretted that our defence requirements are still so large that it was impossible for him to cut expenditures further in that field. The spending of over $1J billion for defence this year prevented further tax reductions to our people.
I would ask him to give every consideration to those who are unable to find work. Until one has experienced being unable to find a job it is impossible really to appreciate the terrible problems of an unemployed person. Most of the hon. members in this house are old enough to have lived through the thirties. It was an exceptional person who, during
The Budget-Mr. Hosking those years, did not find himself hunting for a job; thus most of the members here understand the difficulties which have confronted too many of our citizens during this past winter. For them every effort must be made.
In Canada today we have another class of citizens requiring consideration; that is, our farmers. The time has come when great consideration must be given to their problems. I was pleased to hear the minister say that he was going to set up a royal commission with instructions to look ahead and examine carefully our future economic prospects. I hope the agricultural representatives on this commission will be strong, able men, and sympathetic to our farmers. We have entered a trend in our economy with regard to agriculture which, unless reversed, will be disastrous. It is impossible to imagine that the economy of this country will remain at its present buoyant state if the prices of agricultural products continue to drop year after year, while the cost of every material and service which the farmer has to buy and use continues to increase.
The minister suggests, at page 2739 of Hansard, that he is referring to the tariff board for revision two sections of the tariff act which have become out of date. I realize that he has had a very short time to study tariff problems since he became minister, and I would hope that before another year rolls around he will have found more than two commodities on which existing tariffs have become obsolete. I would suggest to him that in the last nine years the tariffs on automobiles have nearly doubled in comparison with the tariffs on textiles.
May I explain, Mr. Speaker, just what I mean in this regard? Many of the tariffs on textiles are so many cents per pound or so many cents per yard. We all know that the weight of a pound or the length of a yard of textile has not increased, though the cost of production of that pound or yard certainly has. Thus this part of the tariff on textiles is the same today as it was 10 years ago. The tariff on automobiles and trucks, on the other hand, is based on the imported price, and everyone knows that this price has doubled. Therefore, by comparison, the tariff has doubled on automobiles and trucks, and should be cut in half in order to keep a proper balance in our economy. Let us reduce the tariff on automobiles and trucks so that it is the same amount in dollars per car or truck as it was in 1946.
There is another reason why I suggest that the automobile industry no longer requires the tariff which is protecting it. The new factories now built by the big three in Canada were

The Budget-Mr. Hosking planned to be th,e proper size to give maximum efficiency, and thus can operate just as cheaply as they can in the United States. To prove this point, let us take a look at the Ford operation at Oakville. All members will remember that Ford has just completed a very large and modern plant there, but it is not large enough to produce all the production it requires in Canada. Why did Ford not build a larger plant at Oakville to meet its production requirements? Because it would have been too large and unwieldy, and not the economical unit it is today. I am confident that the new Ford plant at Oakville can build automobiles cheaper than any plant they have in the United States. This industry is no longer small, and the efficiency of the mass production methods used here is equal to or better than that of any place in the world. This industry has outgrown the reasons for requiring such a high protective tariff.
I agree with the speeches which the hon. member for Halton (Miss Bennett) and the hon. member for Ontario (Mr. Starr) made regarding the automobile being a necessity. They made the argument that because the automobile was a necessity it should not be taxed. I agree with them. The minister has cut the tax; let us cut the tariff too, in order to benefit the citizens who require this form of transportation.
I do not agree with all the details of the speeches made by these two hon. members, but if I were criticizing their speeches I would criticize them for their sins of omission rather than their sins of commission. They pointed to the excise tax on automobiles and, Mr. Speaker, our minister has rightly decided to remove some of that excise tax. A further suggestion I would like to make to these two members is that they ask the government of Ontario-which represents the same party they belong to-to look into the tax which it imposes on automobiles and trucks in our province.
Maybe if I gave a few figures it would be interesting. The total national revenue from federal excise and sales tax on cars and trucks for the fiscal year 1952-53 was $152 million. For the 1952 calendar year it was $139 million. The total revenue taken by the province of Ontario in taxes on motor fuel, oils, and motor licences was $93 million during the year 1951-52, and in 1952-53 it was $104 million. With the reduction the minister has made in excise taxes this year, and with the increased traffic on the highways, no doubt the government of Ontario will collect more from the motorists of this province in taxes on the operation of 
automobiles and trucks than will our government in the excise and sales tax for the whole dominion. Before further cuts are made in our taxes on this essential industry, it would be nice to see the provinces give assistance in this regard.
While I am discussing the 5 per cent cut in excise taxes on automobiles I would like to ask the minister through you, Mr. Speaker, to confer with his colleague the Minister of National Revenue again and see if it would not be possible to refund the taxes which the dealers have paid on automobiles which they have not sold.
Let me explain the position of an automobile dealer selling new cars. The manufacturer asks the dealer to estimate for three months ahead how many cars he will require. Once this figure is given by the dealer the manufacturer proceeds to build and ship these cars, with no further regard to the dealer. Once the manufactured car is loaded on the transport of the factory it becomes the property of the dealer. At this point, under our present law, the dealer has to accept responsibility to pay all the taxes on it as well as the price of the automobile itself. So you can see that many dealers have hundreds of cars in stock on which the taxes have been paid.
Surely it would be very simple to obtain an inventory of all the automobiles the dealers had on hand on April 5. Every legitimate dealer will have this in his records. Any vehicle he had on his hands on April 5 is one which is not registered under the provincial law in a customer's name. On these vehicles he has paid the tax of $70 to $150, and will not be able to recover it. This will result in the loss of thousands of dollars to these dealers.
This is a serious situation, and I would suggest that as far as the government loss in making this recompense to the dealers is concerned, it would not be more than some three weeks' production of cars. In effect, the minister could just imagine that he had put his tax reduction into effect on March 15. That is all the difference it would make to his revenue. If this is not done it will upset the economy of the automobile business in a way which will cause repercussions for years to come.
Maybe the minister has been informed by the manufacturers that they have made restitution to the dealers. If he has received this information, then I want to tell him that it is not true. They have not made restitution, nor have they promised to make restitution to the hundreds of dealers who are complaining about this unfairness. If no restitution is made to these dealers by the

manufacturers or by this government-and I have reasons for suggesting that perhaps the manufacturers should make restitution-it will create a serious situation before the next budget comes down.
You may wonder why I suggest that the manufacturers should make restitution to the dealers. They made increases in prices this year which were more than the amount of the tax reduction. Let us look at the price of an average automobile for just a moment, and I pick one of the low-priced automobiles at random, because the situation is similar in all cases. The standard suggested price for this automobile in December, 1954, was $2,110. In January, 1955, the price of the same model was increased by $84, to $2,194; and after the reduction in tax of $70, this same automobile sells for $2,124. Thus we see that without any increase in wages, material or taxes, the price went up a little bit more than the tax reduction, and the manufacturers could well afford to rebate to their dealers this tax reduction. But, Mr. Speaker, let there be no mistake about it; this has not been done in any broad sense.
I should now like to tell why I consider it is important that something be done to correct this mistake. When the taxes were increased on automobiles in 1940 the dealers had stocks of cars on hand, and government officials went out into the dealers' backyards and checked those automobiles so they could collect this tax. In other years when taxes on automobiles had been juggled this checking was not done. This situation was quite acceptable, because from 1940 until this year the stocks of new cars in dealers' hands were negligible. Taxes could be put on and taken off and it did not make any difference to the dealer, so the total amount of revenue gained or lost by the dealer and the government was negligible.
This year we reverted to the same situation as in 1940. The dealers had very large stocks, and so the total amount involved is important. In 1940 when the stock in the dealers' hands was large and the government wanted to collect-and properly so-the tax on those unsold automobiles, they turned loose in each city all the members of the national revenue department; customs men and everybody searched the dealers' yards, barns and house garages to find these automobiles on which taxes should be collected.
I do not disagree with that procedure. That was right and proper. Should we ever enter another war, it should be done again. If by reason of war we had to put a 25 per cent excise tax on the new cars in stock in the dealers' yards, certainly we should hunt them
The Budget-Mr. Hosking
out and collect this revenue from the automobile dealers. Now, when this situation is reversed, I plead with the government to do the right thing and refund this uncollectable tax to the dealers.
If they do not do so the result will be disastrous. In many cases the loss will be such that it will cause many dealers to go broke. Those who do not go broke and are in business next year will stop ordering new cars before the budget is brought down. We shall have factories shut down and there will be serious unemployment during the winter months, when we should be encouraging industry to create employment. It will not matter whether or not the tax is changed; our government will have created fear in the minds of these dealers, and that fear will force them to have no new cars on hand, and as few used cars as possible, before the budget comes down.
We all agree-including the dealers who have been so badly hurt-that as soon as possible the remaining 10 per cent tax should be dropped. This means that every automobile dealer will lose thousands of dollars, in fact 10 per cent of the value of his stock in both new and used cars. I would ask the minister to discuss the situation with the Minister of National Revenue and reconsider their decision, so that fair play will be given to these dealers.
Since I am dealing with this industry I might offer one further suggestion to the government. This problem is unique to the province of Ontario, because this is the only province in which automobiles are manufactured. More people's lives are influenced by the motor industry here than in any other province. If we correct the wrong of this tax situation, then we should review the whole automobile industry's production.
At the present time we are told that the manufacturers are planning to produce 122 per cent of the country's needs. This is a terrible situation. Obviously by August 1 the manufacturers will realize that they must stop production, and we shall have unemployment in September, October and November. What a time of the year to create unemployment. The government is interested in the welfare of every business in this country because of the taxes we collect. It is necessary to see that nothing happens to our economy.
Through you, Mr. Speaker, I would ask the Minister of Finance to study carefully ways and means of preventing this cutthroat rat race of overproduction in the summer months. It is good for no one. At best it
3374	HOUSE OF
The Budget-Mr. Hosking could benefit only the company which eventually succeeds in disposing of all its opposition. The resulting monopoly would not benefit the people of Canada.
It may be, Mr. Speaker, that instead of having the unemployment which is going to be created by the automobile manufacturers in September, October and November of this year, our Minister of Trade and Commerce could suggest to these manufacturers that they change to their new models in August, a procedure which would create full employment during the winter months. Surely this would be much better than the conditions which will otherwise exist this year.
I wish now to deal for just a moment, Mr. Speaker, with the land assembly proposition in Guelph. This is one of those propositions where the city was supposed to ask the provincial government to assemble property on which houses could be built, one in which the city pays 7| per cent and the province 17J per cent, and under those conditions this government would pay 75 per cent. I wish to commend the Minister of Public Works for refusing to pay 75 per cent of the cost of this property known as the Hadati farm in Guelph. My reasons are that the city never asked for this land to be assembled, and were only told about it during a casual visit by Mr. Bunnell to the mayor's and city engineer's offices on February 10, 1955. The province, ignoring the city, had already arranged the purchase of this land the previous year, on December 6, 1954.
I find it necessary to tell why the city was not in favour. The trunk sewer which would normally serve the Hadati farm is already overloaded. To bring sewer and water services to the edge of this farm would cost the taxpayers of the city of Guelph between $150,000 and $200,000. That is the reason this farm was bought for such a low price, namely $17,500, in 1948, and that is the reason it was ridiculous to offer $107,000 for a piece of land which, as far as the city of Guelph is concerned, would cost the taxpayers $300,000 before it could be serviced. This amount does not include the building of roads, sidewalks or any of the services which would be supplied on the farm itself.
We should also remember that on December 6, 1954, when the provincial government contracted for this land, there were 200 lots owned by the government unsold in the Green Acres scheme, which has been available to anyone to buy since 1951, and these are much closer to the business area and the heart of the city.
I wish to thank the minister for saving the taxpayers of Guelph from such treatment by


the provincial government. If this is a typical example of the way the money we turn over to the provincial government is used on land assembly projects, I would ask the minister to look at every deal with the greatest of care, because we should not allow the provincial government to squander the dominion government's money and take away the rights of municipalities while doing it.
I have been asked by several Jewish religious organizations to bring to the attention of the people of Canada the information that they resent Hon. Mr. Warrender suggesting that this deal was made with any Jewish religious organization. May I quote from the provincial Hansard of March 17, 1955. Mr. Wren asked these questions of Mr. War-render:
Mr. Chairman, may I ask the hon. minister three or four questions concerning a matter in the city of Guelph? Would the hon. minister say whether the government has purchased 165 acres in or adjacent to that city for a land assembly scheme?


Hon.   Mr. Warrender@: No, but I shall give the
hon. member some background on that. A few years ago, I believe it was in 1950, a Jewish organization, the name of which I cannot remember, it is religious, the Jewish youth centre organization-perhaps the hon. member from St. Andrew can help me-a Jewish youth centre organization for religious purposes came to us and asked if we were interested-that is, the partnership-in buying this acreage you speak of just outside the city of Guelph. At that time we said, "No", because their price, we thought, was prohibitive.
In connection with Mr. Warrender's remarks about this religious organization- this Jewish youth centre organization for religious purposes-the Jews have asked me to make it perfectly clear that no Jewish religious organization had anything to do with the Hadati farm or this deal, and they resent very much the suggestion by the minister that they had. I am told that the group who owned this farm were a business organization.
I hope, Mr. Speaker, that I^have cleared up this point, because I have found the people in Jewish religious organizations to be just as fine and honourable as the people in any other religious organizations. All good citizens can appreciate these fine people resenting their name being coupled with such a deal as this. I sincerely hope this statement will remove the injustice that has been done to these innocent people.
(Translation) :


Mr. Georges Villeneuve (Roberval):: Mr. Speaker, at the outset I would like to thank the government and more particularly the Minister of Finance (Mr. Harris), on behalf of the people of the constituency of Roberval, for the tax reduction announced in the last budget. Such a reduction, coming in a year

in which no election is in prospect, is proof of the sincerity of the Canadian government towards the Canadian taxpayer, as well as of its desire to stimulate the economy of this country.
It can therefore be expected that the load the taxpayer has to bear will grow lighter and lighter and that the government's policy will continue to be progressive.
Still I would like to call the attention of the Minister of Finance to the plight of the dealers in cars and other motor vehicles, who put in large stocks of vehicles to meet the heavy springtime demand and are now incurring heavy losses.
Since dairying is the basic farming industry in my district and constituency, I wish to express to the government, and more particularly to the right hon. Minister of Agriculture (Mr. Gardiner) my thanks, and those too of my farmer constituents, for heeding our urgent appeals and deciding to extend for a further year the support price of butter at 58 cents a pound. The farming people of my constituency are now going through a period of difficulties and are grateful to the government for maintaining this precious assistance. By looking after the farmers, the government is helping to maintain the economy of our country. The welfare of our farmers greatly affects that of all the other classes of society, because they are its most stable element.
The Catholic farmers' union of the Saguenay region has asked me to thank the government on its behalf for that decision which will be beneficial to them. They are particularly in favour of that price support program. So, as the representative of that county, among the four which constitute our region, where agriculture plays the greatest role, I am glad to convey those thanks to the government, and the right hon. Minister of Agriculture in particular, whose good will towards our farmers is very well known.
As a sequel to the speech I made in this house on March 30, 1954, and in which I urged the government to take the required steps to have Canada join the Pan-American Union, I wish to point out that during the Easter recess, on April 14 to be more exact, all the other countries on the American continent celebrated what has come to be known as the "Day of the Americas".
On that occasion, the parliaments of the 21 nations belonging to that organization take part in those popular festivities and proclaim
The Budget-Mr. Villeneuve their faith in the ideals which have made it possible to strengthen continental solidarity.
Since the far distant time when Simon Bolivar called together the Panama congress, in 1826, our continental neighbours have come a long way. After a number of conferences, they first set up the international bureau of American republics in 1890, then the PanAmerican Union in 1910, and finally the Organization of American States in 1948, at the time of the historical Bogota conference.
It can be said that more than once those continental conferences and the peaceful work of the Pan-American Union have been used as tests and even as an inspiration for research and work to ensure the fellowship of man and peace among the nations of this continent.
Although Canada so far has held aloof officially from that great Pan-American movement, I think I should point out that she has often taken part in the proceedings of specialized agencies from the first medical conference held in Washington in 1893 up to the economic conference held in Rio de Janeiro in November 1954.
Canadian delegates also took part in the work of continental organizations, like the Pan-American health board, the geographical commission of the Pan-American institute for geography and history and the inter-American institute of statistics, which held its convention in our Canadian capital, here in Ottawa, in the fall of 1952.
For all these reasons and in the name of continental solidarity, I think it is fitting that Canadians join, at least in spirit, in this feeling of pacific co-operation, anticipating a closer association in the near future with the sister nations of the three Americas, when Canada will take amongst them the seat set aside for this country since the birth of the Pan-American movement.
Until now, the federal government has given a good example to the country's employers by generally paying its employees well. Yet, I might bring to the government's attention and more particularly to the attention of the post office authorities an anomaly concerning the salary paid to rural mail carriers and more particularly to those of the Roberval district.
At the present time, rural 'mail carriers in my country are paid an average of 20 cents a travelled mile. In view of the difficulties pertaining to that service, especially in winter and during the spring thaw, this rate is proving inadequate. Not enough considera-
3376	HOUSE OF
The Budget-Mr. Villeneuve tion is given to the fact that in various districts in the province of Quebec heavy snowfalls block the roads and increase the difficulties of rural mail delivery to the point where rural mail carriers have to put in four or five hours more on the road than during the summer season. As a result, these men are unable to do other work and, moreover, have to spend more on vehicle repairs and maintenance and, at times, have to rent expensive snowmobiles when winter storms make the use of cars impracticable.
As a result of the present system, tenderers bid prices that are too low. This tends to breed carelessness on the part of many contractors and, sometimes, favours the hiring of incompetent people. Serious dutiful contractors become discouraged and give up their routes, with consequent necessary replacements, mistakes and lack of service. Localities in remote areas, the most poorly provided for, are precisely those with the greatest need for rural mail service; they are also those where contractors have the largest deficits and where service is poorest.
Following an investigation carried out in my constituency, where lumbering is of primary importance, may I be allowed to offer a few suggestions with regard to the government's wish to review unemployment insurance legislation.
To my mind the primary object of the act, at this time, should be to extend unemployment insurance benefits to as large a number of people as possible.
As far as workers in the lumber trade are concerned, it would be better if the slack season were considered to extend from May 1 to September 30 instead of April 1 to September 30. There is very little lumbering activity in April, and very little either on the farm. Driving operations are generally carried out between May 15 and July 15. Should 160 days instead of 180 be required, lumbermen could receive benefits during April, when their needs are particularly great and work very hard to find.
As far as farmers are concerned, I believe that the off-season should be extended from October 1 to April 30, rather than March 31, and that an inquiry should be made to ascertain whether they have worked in an insurable employment during the active season, rather than ask them to make the present declaration in order to find out if their annual income has exceeded $2 net


per day, so as to decide if agriculture is their main occupation. The method in use at present makes it too easy to present false claims and calls for penalties of such a nature as to create a great deal of trouble for people from whom a strict and orderly accounting cannot be expected.
These changes would, I am sure, help extend the benefits of unemployment insurance to all classes of citizens, which would be a great boon to farmers and lumbermen in particular over whose welfare I am especially concerned.
Mr. Chairman, as a native of the Lake St. John district, whose inhabitants have been given the nickname "the blueberries"-one that I accept with pride-I deem it appropriate, today, to call the attention of the right hon. Minister of Agriculture (Mr. Gardiner) to the acute problem raised by the marketing of that wild fruit which, though found elsewhere in the province of Quebec, on the north shore of the St. Lawrence river, in the Abitibi and the Timis-kaming regions for instance, seems to thrive particularly in my district and especially in my constituency.
Blueberry picking has given such a return in the past that it has been called "the blue manna". And Roberval county is the greatest producer of blueberries in this country, which is why I must pay special attention to that question.
Besides its economic value, blueberry picking has a sentimental aspect, having even inspired musings of the highest poetical level, such as are found in "Maria Chapdelaine" and in "Menaud-Maitre-draveur".
My colleague from Lake St. John (Mr. Gauthier) having put on the order paper of the house a resolution dealing with the marketing of blueberries, I will only touch on that subject today. Besides the aforementioned districts in the province of Quebec, we see that the provinces of Ontario, New Brunswick and Newfoundland are all interested in blueberry picking, which means that this question is getting more important all the time.
As a rule, blueberries are picked in the woods or on crown lands which are not supposed to be tillable. The people all go out and pick them more or less at random, because blueberry fields vary so much from year to year, and prices fluctuate considerably.
Our farmers' and workers' families, especially the larger ones, derive from blueberry

picking a revenue which often brings them security. In some cases a man will travel a hundred miles with his wife and eight children, to pick blueberries. That is an almost unique industry where a child is able to help increase his parents' revenue.
If I rise tonight, it is to urge upon the government the importance of that matter and attempt to arouse its interest in advance of the next picking season, which is likely to be next August and September.
I know this is mainly the responsibility of the provincial government, but I feel that joint legislation is called for.
As about 80 per cent of our blueberries are exported to the United States, I think the federal government, whose jurisdiction extends to interprovincial and international markets, will no doubt want to do its share.
In order to have an idea of the lack of stability on the blueberry market, I think I might well mention that, with regard to the crops of 1953 and 1954 in my district, each averaging about 10 million pounds, the price paid to the pickers was 20 cents a pound in 1953, and 10 cents in 1954. As to the demand, it remained more or less the same. It was good. This shows the lack of security of the pickers. It is due to several factors, some of which can be attributed to the pickers themselves, and others to the trade which is becoming less competitive from year to year, and lastly to the difficulties of marketing.
At Dolbeau, in my constituency, there is a blueberry freezing plant. That is the best method of packing this fruit for the market.
For the present, I shall ask but one thing from the Department of Agriculture:	the
establishment of a blueberry plant, under the supervision of horticulturists, under the jurisdiction of the federal experimental farm at Normandin, in my constituency. Pickers are taking an increasing interest in the growing of blueberries and as this crop is practically in its first phase, it is important that a special investigation be made on the spot. At Normandin, the soil is suitable for such an enterprise. I know that a similar experiment has been made at Tower hill in Charlotte county, New Brunswick, but since soil conditions and the consistency of the fruit are quite different, a similar experiment in the best Quebec blueberry growing district would be greatly beneficial I am sure to the people of the district who derive from blueberry picking between 2 and 2J million dollars per year
The Budget-Mr. Bryson and who are anxious to increase their earnings. I know that such an undertaking would endow our horticulture with a fruit which, until now, has been picked in its wild state. Our people are anxious to see this undertaking carried out as soon as possible.
(Text):


Hugh Alexander Bryson: Mr. Speaker, those who have taken part in this debate and who have dealt objectively with the budget have proven fairly conclusively that it will not give very much material help to the average citizen of this country. The average Canadian citizen to whom I have reference is the one who provides the goods and services within our economy. I believe that fact will be amply proven to those who have made only a casual perusal of the budget address.
It is not my intention this evening, Mr. Speaker, to place once again on the record the many figures that have been mentioned in respect to the tax reductions. I shall leave these very revealing figures as they are now on the pages of Hansard. I repeat that the effectiveness of any budget must be viewed from the point of view of the contribution it makes to the over-all economy of this country. Now we have the general pattern. Certainly the budget falls far short of giving the stimulus that is needed, and is therefore not going to materially strengthen the general economy of the country.
This evening I should like to say something about the very keen disappointment that was felt by agricultural producers when they found that the budget contained nothing that was going to add to their prosperity in the coming year. They were anxiously waiting, hoping that the budget would contain a measure of recognition of that depressed industry. I say that because during the past five years agriculture has undergone a very difficult period, especially in the last year. The budget contains little or nothing for the agricultural producers, in spite of the fact that the other evening the minister told us there was to be a tariff reduction on the purchase of automatic bird-scaring machines. I am sure many farmers were delirious with joy when they heard that announcement.
Before saying anything further about agriculture I should like to take this opportunity, because of the latitude given hon. members in this debate, to say something about the Prairie Farm Assistance Act. At the outset I
3378	HOUSE OF
The Budget-Mr. Bryson should like to say categorically that I am certainly not opposed to, nor am I critical of, the act as such, but I believe that the past year's experience in parts of western Canada where the act applies indicates the need for more serious thought in order that the act may be brought up to date.
No legislation can long remain effective unless fundamental changes are made in it during changing times and changing conditions. I believe that no industry has changed more in the last 15 or 20 years than has the agricultural industry. I believe the great change and the great progress we have made over the past few years have come about because of the courage and the determination of the farmers themselves, rather than from any measure of help they have been given in order to permit them to make a decent return on their investment, let alone a profit commensurate with their investment and their labour.
Agriculture is possibly our most vulnerable industry because of the fluctuations in prices and costs with which farmers are confronted. In respect to the Prairie Farm Assistance Act, I have wondered during the past two or three years why no fundamental amendments have been made to it. I have talked to a great many farmers; I have had a great many letters from farmers suggesting that the benefits they receive under the act are limited to the point where they are of little assistance to them. It costs more to produce wheat today than ever before. That, of course, was the thinking that prompted this group during last session to introduce a measure which, had it passed, would have increased the benefits to the farmers.
I suggest that the government give some consideration to the proposal. Before the farmers would entirely agree to pay a greater deduction to the fund as their share, provided, of course, that the government paid a proportional share; before they would condescend to make that increase in the deduction in order to get further benefits, two or three amendments would have to be made to the act.
I suggest to the minister that in calculating the basis of eligibility he should take into consideration the dollar value of wheat rather than the bushel basis, as now is the case. In many areas of western Canada, especially in the northern areas, it is not possible to grow quality wheat. That is not altogether owing to climatic conditions; it is in large part owing to soil conditions. A bushel of No. 1 northern is worth a great deal more than No. 3, 4 or 5, yet in northern areas of 

the western provinces, owing to soil conditions, farmers are not able to grow No. 1 northern and No. 2 northern wheat. Therefore they get a smaller return per bushel than does the farmer who is able to grow high quality wheat in the so-called prairie wheat belt of western Canada. There is another disparity which could be carried even farther.
In the northern area, in spite of the fact that farmers there cannot grow quality wheat, they are confronted with a much higher cost of production. It is probably true that we grow more bushels per acre because of our more intensive agricultural methods. By the same token, we pay more into the fund; therefore we are confronted with two conditions. We are confronted with a poor quality product. We take lower prices. On the other hand, we are confronted with higher production costs.
These two conditions combined place us in a much poorer position than, for instance, the farmer on the Regina plains, but we both pay the same amount per bushel into the fund. I suggest to the minister that he take that into consideration when he is contemplating amendments to the Prairie Farm Assistance Act. I am sure if those recommendations were taken into consideration, farmers would be quite willing to make greater contribution to the fund in order to get an increased benefit from it, provided the government increased its contribution proportionally.
I should like to refer to a few other aspects of our agricultural industry. We have heard figures quoted over the past two, three or four years showing that agricultural income has fallen in the gross by 20 per cent and in the net by 30 per cent. We are bombarded on all sides with a great many figures one way and the other, from various sources.
When we consider these figures I think it is significant that we find that last year net farm income in this country fell by $300 million. The latest authoritative estimates we have for the period 1951-54 indicate that during that time net income has fallen by some 50 per cent. In 1951 the net income of Canadian agriculture amounted to $2,154 million, while the latest estimates from the best sources indicate that for 1954 the net farm income will reach only some $1,200 million, down almost a billion dollars.
These figures are alarming, and until our agricultural industry can return to some measure of prosperity we can look in vain for a solution to our unemployment problem and the economic depression which confronts Canada today. I say that without any hesitation whatsoever. Authorities tell us that three-quarters of the drop in the gross

national product last year was due largely to the severe losses suffered by agriculture. Those losses were reflected in retail sales across the country. During the six months' period from May to October retail sales fell by $129 million.
This three-quarters of the drop in our gross national product was not due to the poor wheat crop or because of the cut-back in agricultural production; it was due in its entirety to falling prices and lost markets. Is it any wonder that producers are critical and somewhat annoyed when government authorities are telling all and sundry that agriculture in this country is fairly bursting at the seams?
What must be done to stabilize this agricultural industry which is so important to the economy of this country? Possibly that question could be best answered by asking another question. What is it that our agricultural producers want? I should like to answer that question by saying that the agricultural producers of this country want nothing less than that they should be able to enjoy a standard of living equal to that enjoyed by non-agricultural workers.
What is the position? We find that in 1953 the average income of a farmer in Canada was $2,247. In the same period we find that the net income of non-agricultural workers averaged $3,122, almost $1,000 more. When I quote those figures I am not suggesting that non-agricultural workers should get less, but 1 do suggest that the agricultural producer is getting too little.
In the face of the complexities of markets and prices, what action should this government take in order to grapple realistically with this knotty problem? I believe that a completely new approach is needed. I suggest to the government that representatives of the farm organizations be given an invitation to sit permanently in Ottawa in an advisory capacity to the Department of Agriculture rather than to have, as we now have, an army of economic experts and oak-desk farmers attempting to advise the government. I am certainly not suggesting that all these economic experts should be eliminated, but I do suggest that you must have more than an academic realization of agricultural problems. I think if these two organizations were working together we would have much better results than we are getting at the moment.
Over the past year we have heard a great deal about efficient production from the so-called economic experts in the Department of Agriculture. Farmers are told by these people that they must pattern their operations
The Budget-Mr. Bryson on the modern, streamlined industrial machine methods, and they are never hesitant in holding up the automotive industry as a paragon of efficiency. They say that every farmer must become an efficiency expert.
In some respects I suppose that is true, but I wonder if it is not overdone. I wonder how efficient the automotive industry would be if someone else set the price for cars. I question seriously whether the millions of dollars spent in fancy advertising and other gadgets add much to the efficiency even of the automobile industry. I believe they are getting much of their so-called efficiency at the expense of the dealer.
I believe that farmers have really tried to achieve efficiency. They have tried all sorts of strategic moves in order to improve their standard of living. But in spite of the fact that they have bought larger farms; in spite of the fact that they have bought bigger and better machinery; in spite of the fact that they have improved their techniques, their economic position is slowly and surely deteriorating. This is due to a simple and elementary fact: the farmer has absolutely no control over prices or costs.
We need a new approach to the problem. I certainly endorse what was said this afternoon by the hon. member for Yorkton. I believe we must get back to what he termed the family-sized farm. Many people in this country fail to realize that to hundreds of thousands of farmers in this country farming is something more than just an economic entity to be exploited in order to make a fast buck. To hundreds of thousands of farmers in this country agriculture is a way of life, and they believe that way of life can best be experienced on the basis of the family farm.
However, under present agricultural policies it is impossible to return to that type of farming, in western Canada in particular. No farmer would consider such a thing, because it would be economically unrealistic. Operating costs coupled with present day living costs would rule it out. Yet if we are to prevent western Canada becoming either a desert of wheat, which is certainly most undesirable, or a series of vast syndicated farming enterprises, which is equally undesirable, we must consider the alternative.
We can return to the sensible, diversified family type of farm if we guarantee to the producer a decent standard of living. Support prices as presently administered are not going to do the job. In spite of the fact that over the years the government has maintained that support prices were underpinning our agricultural industry, I can think of no
3380	HOUSE OF
The Budget-Mr. Bryson other single piece of farm legislation that has so completely kicked the pins out from under agriculture than has the Agriculture Prices Support Act.
I am not going to say anything about foot-and-mouth disease, which was a national disaster and would have been taken care of as such, but during the past 10 years only $13,500,000 has been used to support agricultural products at minimum levels, and in most instances that support was not at the producer but rather at the processor level. So I would advocate a parity prices system on major farm commodities.
I would like to support the Canadian Federation of Agriculture on their proposal for parity prices. While I am not in agreement with flexible support prices-because I believe in full production, I could hardly go along with the principle of flexible supports-I think they are to be congratulated on accepting the parity concept as a principle. I can see nothing wrong with the 1925-29 base which they propose as a fair period for calculating parity, with possibly a few adjustments.
While I do not like flexible parity, I would not go so far as to suggest that every major commodity be supported at 100 per cent of parity at all times. I realize that there are some which at times might be above and at other times might be below parity. But I suggest that a diversified agriculture and the soil conservation which inevitably goes hand in hand with such a program can best be accomplished on a family type farm. I suggest, too, that most farmers would gladly diversify if their initial investment were protected by a forward price, based on parity, which would guarantee them an average return for the total number of products grown, which in the aggregate would represent parity.
Earlier I mentioned the loss of markets, both domestic and foreign. I suggest that there is a tremendous market for agricultural products right here in Canada, and I think we should exploit those possibilities. The government admit that they are unable to cope with unemployment. Certainly they are not prepared to enter into any large scale public investment program, but they are suggesting that they are prepared to provide a share of relief for the unemployed.
If the government are going to entertain such an idea as that, if they are going to give no consideration to a public investment program, and if the best they can do is to provide relief, I say that 600,000 unemployed in this country can consume a tremendous amount of the food that is grown in this country, and it should be made available to them. I would suggest also that food be made


available at no cost to every Indian reservation in the Dominion of Canada. I would also suggest that food be made available at no cost to every welfare institution in this country, except possibly distribution costs.
What about the proposition of disposing of a tremendous amount of food in a school lunch program throughout this country? I am sure there are tens of thousands of children going to school in this country who are not getting enough milk, who are not getting enough butter, and who are not eating enough eggs. These are things which we now have in surplus. I believe we could use these surpluses, and when the surpluses have gone let us continue to provide that food for those children.
Then I suggest, if there is anything left, that the food be sold to underdeveloped countries of the world, with the stipulation that it be used in a similar school lunch program in those countries. I believe that illiteracy is the greatest stumbling block to progress in these underdeveloped areas of the world. Children attend school only for a very short time, if at all. I am told on the very best of authority that these children marry at the age of 12 or 14.
I also believe that the only people who are going to solve the economic problems confronting them in their own countries, the only people who are going to rebuild the economies of those countries, are the people who live in them. I believe we can help them do it by instituting a school lunch program. Instead of these children marrying when they are 12 and 14 and reproducing in turn the same kind of illiterate people, I believe that the result of a school lunch program would be that they would attend school until they were possibly 16 or 18. They would attend school in order to get food; they could get it no other way. In this way they would obtain the technical skills that are so necessary if they are going to rebuild their economy.
Canada, I believe, could accept for that food the currency of the country in which it was sold. We should not take the currency out of that country, but we should invest it there to build up their economic machine, and certainly we would have to provide the technical people to operate this machine for some time. But as these children came out of school at 18 years of age with the technical skills acquired by virtue of this school lunch program, they then would be able to take over the operation and management of those manufacturing concerns which our reinvested money would have provided by that time.
Such a program, I believe, is sound, and is one that would not only provide a tremendous

market at the present time and a greater market for agricultural products in the future, but it is a humanitarian forward step which we should take. It has great possibilities for future trade and greater possibilities, I submit, for the peace of the world.


Mr. C. W. Carter (Burin-Burgeo):: Mr. Speaker, the presentation of the budget is an event of major importance, and one of intense interest to all Canadians both in and out of parliament, because we are all anxious to have a general picture of the nation's economy during the year under review, and also to get some idea of what it will probably be like in the year that lies ahead.
To help us understand the forces that are at work and their effect on our economy, the budget provides us with a breakdown of receipts and expenditures during the fiscal year just ended and a corresponding statement of the receipts and expenditures that are expected during the year that has just begun. In addition we are all interested in knowing what taxation policy the government intends to follow and what changes in taxes and tariffs are proposed.
As the budget under debate is the first the Minister of Finance has brought down since his assumption of office, I should like to congratulate him on the clear and concise manner in which he presented this information in his budget speech. The fact that his first budget has been so well received throughout the country must be a source of great satisfaction and encouragement to the minister. We are all grateful to him for the reductions in income tax and in corporation taxes, and it is particularly gratifying to me that income tax cuts have been spread in such a way as to benefit practically all Canadian taxpayers.
It is expected that the reductions in sales and excise taxes and tariffs will stimulate trade, and that the reduction in corporation tax will put Canadian manufacturers in a better position to meet foreign competition and enable them to invest more money in improved machinery and methods. It is hoped that the over-all result will be an upswing in the Canadian economy which will increase the number of jobs and help to solve the unemployment problem, which is still of serious proportions.
In my opinion this budget can best be described as an experimental budget, but it is also one that is both courageous and economically sound. The two main criticisms of the budget made by the opposition are, first, that the tax concessions are not big enough to be of much real help to Canadian business and, second, that it does not give enough tax relief to the little man.
The Budget-Mr. Carter
The government's answer to the first criticism is that the decrease in corporation taxes is sufficiently large to establish a trend. The government cannot solve the nation's problems all by itself. All the government can do is set up as favourable an economic climate as possible, having regard to all the factors concerned. This is what the present budget is designed to do.
Our national problems cannot be solved unless Canadian business, labour and the general public take advantage of this better economic climate and co-operate with government in an effort to promote the general interests and economic welfare of the nation. The present tax concessions are plenty big enough to discover to what extent such cooperation will be forthcoming, yet still small enough to prevent any serious harm to the nation's economy should it be withheld.
The answer to the second criticism is that the bulk of our revenue from personal income tax is collected from people earning less than $5,000 per year. This group represents 85 per cent of all Canadian taxpayers. There are over 3 million taxpayers in Canada, but only 60,000 of them earn more than $10,000 per year. Hence there are really very few rich people in Canada.
Some people advocate that the government should get its revenue by soaking the rich. This is an extremely foolish idea, because there are not enough rich people to soak. If the government took every cent earned by the 60,000 taxpayers with incomes of over $10,000 per year, they would still get only $1 billion. The other $3i billion would have to come from those who are not rich, those who are earning less than $10,000 per year.
Opinion on the deficit has been divided. Some feel that the deficit should have been bigger, while others feel that in a time of relative prosperity there should be no deficit at all. All that goes to show is that no matter what you do, you can never hope to please everybody.
As one whose constituents are nearly all fishermen, I should like to thank the minister also for removing the duty on fishing vessels over 100 feet long, and for the reduction of duty on certain equipment used in the manufacture of fish meal and in the precooking of processed fish. This assistance to the fishing industry will be welcomed by fishermen and operators alike. At the same time I regret that the minister could not find it possible to remove the sales tax on fuel oil used by all fishing vessels. The removal of this tax would help considerably to lower the cost of fish production, and I trust the minister will keep it in mind for further consideration when the next budget is being prepared.

The Budget-Mr. Carter
I should also like to commend the minister on his proposal to set up a royal commission to study those factors which are likely to exert a major influence on our economy in the next decade or two and to try to determine, as far as possible, what the results of those influences are likely to be. In a young country like Canada, with great untapped natural resources and a vigorously expanding economy, such a periodic study is vitally necessary in order that government policy may be adjusted to permit maximum advantage to be taken of all those influences that are favourable to our economy and to help minimize the effects of those influences that are unfavourable. It seems to me that the present time is most appropriate for such a study, now that our economy has paused to level off and consolidate itself before starting again on its upward trend.
It is all the more appropriate in view of the fact that large-scale use of electronic brains and other forms of automation will soon be introduced into our factories, and the time is not far off when atomic energy will be available to industry on a competitive basis with power from other sources. The effect of these two forms of scientific progress is not easy to foresee but we can be sure that it will be far-reaching.
In the past, improved manufacturing processes, cheaper production methods and greater output have always resulted in creating more jobs than were destroyed. This may very well hold true for the future. Increased use of automation will certainly result in an expansion of all phases of the electronics industry, with an increased demand for highly-trained technicians. Cheaper cars will make them available to more people, and it may well be that the extra jobs created in connection with repairs, maintenance and servicing will more than offset the reduction of jobs in the factories.
On the other hand, some temporary displacement of labour may result, whereby workers no longer required in factories would have to be retrained for jobs created elsewhere. The mobility of labour is already an acute problem, since people out of work in one place have become so immobilized that they are not in a position to accept jobs that are available in another community.
It is also an unfortunate fact that the primary producer has never benefited directly from technological advances to the same extent as those who are engaged in secondary industry. This is mainly because the bulk of scientific invention is related to the secondary industries. The workers employed directly in those industries, being more

strongly organized, have by reason of those advantages been in a better position to secure for themselves a larger share of the increased wealth which science has made possible. Since automation and atomic energy are also likely to find a much wider application in the secondary than in the primary industries, the advent of those two new factors may very well increase the disadvantages under which primary producers now suffer.
It should be remembered that without the primary producer there could be no worthwhile secondary industry at all. Furthermore, the factory worker would not be able to work in the large factory and engage in mass production methods unless the farmer and the fisherman worked to provide him with food to keep him alive. The primary producer is, therefore, entitled to a much fairer share than he has hitherto received of the increased wealth which technological progress in the secondary industries makes possible. I hope, therefore, that the commission will examine this problem and try to determine how the position of the primary producer can be improved.
Another question of major importance is the extent of government responsibility in finding a solution to the economic problems of our nation. This is a point upon which there seems to be a great deal of confused thinking. I hope it will therefore be included in the commission's agenda. Since my election to parliament six years ago I have become increasingly alarmed at the extent to which the government is being pressured to accept all responsibility for the political, economic and social welfare of our nation.
A few days ago a conference of provincial premiers was held here in Ottawa. Like most hon. members, whenever I had a spare moment between committees and appointments I sat in on that conference and listened to what the provincial premiers had to say. The fact that struck me most forcibly at that conference was that all the briefs I heard presented were based on the premise that such things as unemployment, housing, health insurance, trade, marketing, industrial income, individual income and general prosperity were primarily the responsibility of government. The main problem to be settled seemed to be how this responsibility should be divided between governments at the provincial and federal level.
I do not share that view at all, Mr. Speaker. I think it is a false premise. We all know that it is impossible for governments alone to provide these things. No matter how earnestly and sincerely they strive or to what degree they co-operate, the fact still remains

that the provision of these things lies largely outside the scope and power of governments altogether. I believe the responsibility for these matters belongs primarily to free enterprise and the role of government is a secondary one, namely to provide the kind of economic climate necessary to enable free enterprise to discharge its responsibilities to the nation. I am a firm believer in free enterprise which, according to my definition, includes labour as well as management.
In my opinion the economic problems of the nation should first be studied by a conference of leading industrialists, top management and the representatives of labour. After their proposals have been drawn up, then they should be studied by a conference of the federal and provincial governments to determine how they can best co-operate to provide the maximum assistance to enable free enterprise to carry out its responsibilities.
I know this will sound very naive to my socialist friends, because socialism is based on the assumption that human nature cannot change. They therefore contend that capitalists are greedy and selfish; that they are motivated by self-interest; that they will never accept their responsibilities to the nation, and for that reason capitalism should be replaced or at least controlled. On the basis of the same assumption the communists go a step farther and say that capitalists should be destroyed altogether.
I happen to know that human nature can change. In many parts of the world, in Europe, in India, in the United States and here in Canada, there is abundant evidence that even industrialists and capitalists can change and accept responsibility for the needs of their employees and the needs of the nation. Right here in Ottawa there lives a businessman who is one of the pioneers in this new dimension of thinking for business and labour. He is a baker, and he accepts responsibility for providing the nation with good, nourishing bread at the lowest possible price commensurate with high quality. As an employer he accepts the responsibility of caring for the needs of his employees. In co-operation with Central Mortgage and Housing Corporation by giving his employees the benefits of the purchasing power of his firm and the services of his accounting department, he thus enabled them to become owners of high quality houses at a greatly reduced cost. As a result of this experiment the city of Ottawa has enlisted his services to provide low-rental housing for citizens in the low income brackets.
This businessman has also instituted a plan of health insurance which includes not only his employees but their whole families.
The Budget-Mr. Carter Thus he has removed the two greatest fears that haunt the ordinary worker, namely the fear of inadequate shelter and the fear of sickness. As a manager his business is run on a democratic basis by a management committee. Before any new policy is initiated it is hammered out with the heads of each department on the basis of what is right, and not who is right.
The businessman to whom I have been referring is Mr. Cecil Morrison of the Morrison-Lamothe Bakery, Ottawa. If any hon. members are interested, I am sure Mr. Morrison would be only too glad to have them visit his bakery and get firsthand information about the things I have just mentioned. Speaking to a group of friends in Los Angeles a few days ago Mr. Morrison had this to say:
Marian Anderson at Palm Springs said, "It is now becoming normal for artists of the theatre no longer to glamorize the problem but to dramatize the answer and live it."
It is the same with business and industry. We must get a whole new conception of our function and basic motives where it becomes normal for business to emphasize its ideology and live it by putting the service to the public, the care of the workers and the best interests of the nation first, with profits only the by-product. With this conception business and industry would soon become the greatest ideological force in the nation-the very hope for the future. Because where governments deal in millions industry deals in billions.
The philosophy of Moral Rearmament is that the wealth and the work of the world are available for all and the exploitation of none. Dr. Frank Buchman says, "There is enough in the world for everyone's need but not for everyone's greed and if everyone cares enough and everyone shares enough everyone will have enough."
Mr. Morrison went on to say:
We plan for expansion and new prosperity but we live in fear of depression and unemployment. We try to meet the united plan and passion of alien ideologies with talk and lip service to high ideals but with a last resort to strikes, lockouts and force. Then we hope to live as we always did, selfishly, comfortably and undisturbed.
The great hope for industry lies in this great principle of changing and uniting on the level of an answering ideology as found in Moral Rearmament.
Technology, manufacturing efficiency and organization are of little lasting value unless they are used for the good of humanity and not for the benefit of the few. Our leaders in industry and labour must be prepared to make industry strong morally and spiritually and to take our rightful place in the responsibility for the solution of national and world problems.
He goes on to say:
If we could bring the guidance of God's holy spirit and the four absolute standards as the normal for industry we would learn how to work to live instead of only living to work and the busy, busy, busy businessman would become the statesman of the future and the architect of the atomic age instead of a slave to his own selfishness.
With this spirit instead of being the enemy and the target of attack for communism or socialism, industrialists will become a challenge and an inspiration. We businessmen can become the heralds of the new world order, inspiring and
3384	HOUSE OF
The Budget-Mr. H. J. Murphy encouraging cabinets and parliaments to make government of the people by the people a reality first in our own nation, then in every nation in the world.
This, then, is the pattern of the free enterprise of the future, because freedom of enterprise is bound up with the freedom of the individual, and neither can remain free unless each accepts the full measure of responsibility.
Speaking at the federal-provincial conference a few days ago Hon. J. R. Smallwood, premier of Newfoundland, posed the problem of the development of Canada's extremities, with particular reference to the underdevelopment of the Atlantic provinces. He admitted that he did not know the answer, but whatever it was it would have to be something big, something far bigger than anything ever yet experienced in our nation's history.
I submit, Mr. Speaker, that the answer is free and responsible enterprise working out the vision described by Mr. Morrison to his friends in Los Angeles; and I have sufficient faith in human nature to believe that Canadian enterprise will rise to the challenge.


Mr. H. J. Murphy (Westmorland):: Mr. Speaker, I am very pleased to take part in this debate because it affords me the opportunity of bringing to the attention of the house once again the desirability of the construction of the Chignecto canal. To present the arguments for the Chignecto canal I must go back into the history and economic development of New Brunswick.
My province has not progressed since confederation to the same extent as other provinces in Canada. This central government at Ottawa has had about 80 years of experience in administering the affairs of the nation, and has done remarkably well. But a comparison of figures showing population, industrial development and wealth indicates that the central provinces have gained most by the institution of the central government.
Some 80 years before this central government was established the legislature of New Brunswick was meeting in Saint John, New Brunswick; and it appears from the records that we in New Brunswick from that time- 1784-until confederation administered the affairs of New Brunswick very well. It is a fact that at the time of confederation New Brunswick stood second from the top in terms of employment in industry and opportunities for labour, and that the wages paid were high.
When New Brunswick was convinced that confederation was best for all of Canada, it became part of the dominion. About the


same time that the legislature of New Brunswick first met in Saint John, the boundaries of that province were being drawn over in Europe. I do not believe it was intentional; I believe it was because of ignorance of the geography of the eastern part of Canada that the boundaries of New Brunswick were drawn so that we had a corridor thrust between the maritime provinces and the rest of Canada, which makes it appear that either geographically we are in the wrong country, or that the state of Maine should belong to Canada.
It is also a fact that previous to confederation most of the trade in the maritimes, and especially in New Brunswick, was with the New England states. After confederation the industries of New Brunswick suffered a decline. Recently in this house there was a discussion on seasonal or cyclical unemployment, but a comparison of figures shows that in New Brunswick we can talk of century unemployment. In 1875 one out of every five industrial workers in Canada was employed in the province of New Brunswick. In 1946 this figure had dropped to one out of 17. In 1871 the industrial wages paid in that province were the highest of any province. By 1946 industrial wages in New Brunswick were the second lowest of any province of Canada. For example, in 1871 the industrial wages paid in Ontario were less than those paid in New Brunswick. By 1946 Ontario's wages were three times as high as ours.
In bringing a project to the attention of parliament it is somewhat difficult for us from New Brunswick to exert the influence in this house that we exerted at that time. At one time we had 15 members of parliament from New Brunswick, and the representation from all the country was much smaller than it is today. Now we have only 10 members in a much larger house. It has been said in this house that the maritime provinces have been exporting people and brains. Perhaps that is why we have not such good representation as we had at the time of confederation. Of course, this could be an accident of settlement. Canada was settled in the east. The University of New Brunswick was established in 1800. In New Brunswick we were turning out scholars before most of the western provinces had legislatures.


An hon. Member:: Many of them have come west.


Henry Joseph Murphy: I understand they have done well there.
The Chignecto canal would afford a sheltered route from the great cities of Canada to the seaboard states of the United States. In time of war this would be valuable

as a defence measure. I feel that if the Chignecto canal had been constructed before the second world war the saving in costs of assembling convoys would have paid for its construction in less than a month. It has been pointed out to me that all parts of the mari-times might not want the canal. That is understandable. I could not expect the great winter port of Halifax to be enthusiastic about the project, but the canal should be viewed as a national project. There was a time when it was a maritime project, but now it should be viewed as a continuation of the St. Lawrence seaway and as a national project. The majority of the people in the maritimes, and especially in New Brunswick, are very much in favour of the construction of the Chignecto canal.
At this point I might say that one of the greatest supporters of the Chignecto canal has been the city of Saint John, New Brunswick. A member of the legislature from Albert has spoken in support of it at Fredericton. Just the other day in this house the hon. member for Saint John-Albert (Mr. Bell) called upon other hon. members from New Brunswick to support a project that he was supporting. I feel that this is also a time for him to speak up in support of the Chignecto canal. I do not mean that I am debunking the value of the Beechwood project in
The Budget-Mr. H. J. Murphy New Brunswick. When the hon. member for Saint John-Albert challenges me to speak on something that will be of benefit to New Brunswick it is like challenging me to eat my dinner. I do not have to be asked to do that. I am in favour of anything that is of benefit to the province of New Brunswick.


Mr. Speaker:: Order. It is now ten o'clock.


Henry Joseph Murphy: I move the adjournment of the debate.
On motion of Mr. Murphy (Westmorland) the debate was adjourned.



BUSINESS OF THE HOUSE

Walter Edward Harris: Mr. Speaker, when we tried to decide on the most expeditious manner of disposing of this debate, hon. members opposite suggested we might continue it throughout this week if necessary. I made it known, sir, that it was not possible for me to be here tomorrow. Nevertheless it was decided that the debate might go forward, and should there be a vote on it tomorrow in any form this is to notify you that I shall not be able to participate in it.


Stanley Howard Knowles: How would you vote?


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.
3387
[Stage Direction]
Tuesday, May 3, 1955