1956-03-05

Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, I beg leave to move, seconded by the hon. member for Vancouver-Quadra (Mr. Green):
That the address of His Excellency Giovanni Gronchi, President of the Republic of Italy, delivered before the members of the Senate and of the House of Commons of Canada in the chamber of the House of Commons on March 5, 1956, together with introductory and related speeches, be included in the House of Commons debates and form part of the permanent records of this parliament.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the order:
Introduction of bills-The Minister of Citizenship and Immigration-Bill intituled: An act to amend the Indian Act.
Mr. Speaker:: There is by clerical error a bill intituled "An act to amend the Indian Act" placed on today's order paper, and I have ordered that this entry be deleted because it is based on a resolution which appears under government orders, No. 26, and therefore the bill cannot be introduced until the resolution has been agreed to in committee of the whole, reported and concurred in by the house.



HOUSING


Hon. Jean Lesage (for ihe Minister of Public Works) moved: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure for the further improvement of housing and living conditions and for that purpose:
(a)	to provide for payments of contributions to municipalities in order to assist in the clearance, replanning, rehabilitation and modernization of
blighted areas, up to twenty-five million dollars and such other amounts as may be subsequently authorized;
(b)	to increase the amount of a home improvement loan that may be guaranteed under part IV of the National Housing Act, 1954; and to increase the aggregate amount of home improvement loans that may be guaranteed, from one hundred and twenty-five million dollars to two hundred million dollars;
(c)	to increase the aggregate amount of all loans in respect of which insurance policies may be issued under part I of the act from two billion dollars to four billion dollars;
(d)	to provide five million dollars out of which to pay expenses of Central Mortgage and Housing Corporation incurred in carrying out its responsibilities under part V of the act relating to housing research and community planning;
(e)	to provide fifty million dollars for federal-provincial land assembly and housing projects; and
(f)	to provide for a number of administrative and other changes deemed necessary for the more efficient administration of the act.


[Stage Direction]
Motion agreed to.

Jean Lesage: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure to amend the Trans-Canada Highway Act to provide that the Minister of Finance may pay a higher contribution for a portion of the highway in a province not exceeding 10 per centum thereof; to extend contributions to costs incurred up to December 31, 1960 and to terminate all contributions on May 31, 1961; and to provide further that the aggregate of all expenditures under the act may be increased to a maximum of two hundred and fifty million dollars.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Motion No. 33-Mr. Knowles:
For a copy of any surveys, or any reports based thereon, with respect to wages and hours of work of prevailing rates employees on the naval station at Renous, New Brunswick, made at any time since April 1, 1955.
Mr. Gregg:: Mr. Speaker, while the employees at this station are employees of the Department of National Defence, nevertheless the surveys and the reports referred to in

Inquiries of the Ministry the motion are carried out by my department. To make these surveys useful my officials must collect information from employers and trade unions. Heretofore that information has been considered as confidential. In view of the fact that I can assure my hon. friend that a recent survey has received consideration on behalf of these employees, I hope he will drop the motion.


Mr. Speaker:: Does the hon. gentleman agree? Is it agreed?


Some hon. Members:: Agreed.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mrs. Ellen L. Fairclough (Hamilton West):: Mr. Speaker, I should like to direct a question to the Minister of Labour. Will the minister inform the house as to what arrangements, if any, have been made to absorb the employees of the railways in Newfoundland whose job will be jeopardized by the diesel-izing of the lines?


Milton Fowler Gregg: Mr. Speaker, I will consult with my colleague the Minister of Transport (Mr. Marler) and see if an answer can be given to my hon. friend's question.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. Colin Cameron (Nanaimo):: Mr. Speaker,
1 should like to direct a question to the Minister of Citizenship and Immigration. In view of the recent decision of the supreme court in the Brent case, would the minister tell the house if it is his intention to suggest amended legislation, or is he issuing orders to his officials to comply with the ruling of the court in their procedures?


Hon. J. W. Pickersgill (Minister of Citizenship and Immigration):: Mr. Speaker, I think it goes without saying that the ruling of the court will be complied with and that no further orders will be based upon a regulation which the court has said the governor in council did not have the power to make.
I am giving consideration with the officials of my department to what further course it may be advisable to take in the light of this decision of the court, and until I have had an opportunity of discussing that with my colleagues I shall not be in a position to make any statement to the house.
(Mr. Gregg.]



COMBINES INVESTIGATION ACT


[Stage Direction]
On the orders of the day:
Mr. H. O. White (Middlesex East):: Mr. Speaker, I wish to direct a question to the Minister of Justice. Are any investigations now under way or proposed into an alleged price-fixing arrangement in the jute bag industry in Canada? If so, would the minister report any progress?


Hon. Stuart S. Garson (Minister of Justice):: Mr. Speaker, my hon. friend did not give me notice of his question but my reason for not being able to answer it is not because of that fact; it is because of the ruling with which I am sure he, as an hon. member of this house, is familiar, that it is never our practice in any of these combines inquiries to disclose that an investigation is under way until the actual report has been tabled in the house. Our reason for withholding this information is the obvious one, that were we to do otherwise, we would blacken the name of and create a prejudice against people who might be quite innocent.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. W. M. Hamilton (Notre Dame de Grace):: Mr. Speaker, I have a question for the Prime Minister. In view of the fact that an advertisement of the post office in the Financial Times of March 2 this year is signed by Hon. Alcide Cote as Postmaster General, may I ask if he has replaced Hon. Hugues Lapointe as Postmaster General with a more active minister?


Louis Stephen St-Laurent: Mr. Speaker, I think it should be obvious even to the hon. member that that must be a typographical error.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. T. A. M. Kirk (Shelburne-Yarmouth-Clare):: Mr. Speaker, in the absence of the Minister of Transport may I direct a question to his parliamentary assistant and ask him if he can give the house any information concerning the unfortunate interruption of the ferry service by the motor vessel Bluenose between Yarmouth, Nova Scotia, and Bar Harbor, Maine?


Mr. L. Langlois (Parliamentary Assistant to the Minister of Transport):: Mr. Speaker, I thank the hon. member for having given notice of his intention to ask this question. As it has been reported in the press it is true that the S.S. Bluenose suffered some damage to her starboard propeller some time last week after having apparently struck some submerged object or other underwater obstruction whilst manoeuvring in Yarmouth harbour. The ship is now steaming toward Saint John, New Brunswick, where she will be placed in drydock, it is expected, some time tomorrow. The representations made over the week end by the hon. member regarding a substitute service for the service provided by the Bluenose before the accident have received the consideration of our department. However, until such time as the damage and the period of lay-up in drydock have been ascertained it will be impossible for the department to consider a substitute service. I can assure my hon. friend that as soon as the nature and extent of the damage have been ascertained the situation will be reviewed.


Mr. G. C. Nowlan (Digby-Annapolis-Kings):: May I ask a supplementary question. In view of the fact that the parliamentary assistant has said that this ship will be off service for several months, would it be possible to have a substitute service provided during the period of her convalescence, no matter how long that may be.


J. G. Léopold Langlois: I did not say what the hon. member has attributed to me. I said that it was pretty hard, until we know the exact length of time the ship is going to be in drydock, to make arrangements for a substitute service. Indeed, if that period is to be relatively short, as I hope it will be, we may not even have time to make arrangements for a substitute service before the ship is back in operation.



THE BUDGET


[Stage Direction]
On the orders of the day:
Mr. Sianley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Minister of Finance. Does the minister intend to bring down his budget on Tuesday, March 20? If not, what date has he chosen?


Hon. W. E. Harris (Minister of Finance):: The answer to the first and second question is that I have not chosen any date yet.
Private Bills PIPE LINES



TRANS-CANADA PIPE LINES    INQUIRY AS TO COMPARATIVE COSTS OF GAS

[Stage Direction]
On the orders of the day:
Mr. J. A. Byrne (Kootenay East):: Mr. Speaker, I should like to direct a question to the right hon. Minister of Trade and Commerce, or in his absence to the parliamentary assistant. Would he care to comment on the newspaper reports over the week end that gas from Western Canada to be distributed by Trans-Canada Pipe Lines Limited will cost 60 cents per thousand cubic feet to Sudbury consumers while Chicago consumers will receive gas for 34 cents?


Mr. J. H. Dickey (Parliamentary Assistant to the Minister of Defence Production):: In
the absence of the minister I would not be prepared to comment, and I shall take the question as notice.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
' Mr. G. R. Pearkes (Esquimall-Saanich): Mr. Speaker, may I direct a question to the Minister of National Defence. When the minister was out on the west coast was his attention drawn to a complaint by employees of the Rocky Point magazine regarding their travelling pay and, if so, was he able to reach a satisfactory solution?
Hon. R. O. Campney (Minister of National Defence):: Mr. Speaker, the answer to the first question is no, which also takes care of the second question.


Mr. Pearkes:: I will be pleased to bring it to the minister's attention now.



PRIVATE BILLS


[Stage Direction]
The house resumed, from Friday, March 2, consideration of the motion of Mr. Weaver for the second reading of Bill No. 151, to incorporate Hydrocarbons Pipeline Limited.
Mr. M. J. Coldwell (Roseiown-Biggar):: Mr. Speaker, when this bill was before the house on Friday evening I objected to its being read a second time largely because hon. members had not had sufficient time to look over the bill which was presented to us on Friday morning and moved for second reading on Friday evening. I wanted to consult the debates on this bill in the other place, and I have now done so. I find that there was very little debate there, in fact

Private Bills
1 think the hon. member who introduced the bill into this house gave us more information regarding the company than I could find in the Senate Hansard. I understand that it went before a committee there and was investigated to some extent but no report of the proceedings was taken.
I am not objecting to this bill going before the appropriate committee, but I think when a bill is placed before us we should have sufficient time to find out what it is all about. I did not know what it was all about on Friday evening and that is why I moved the adjournment of the debate. I am not offering any objection now because when the bill is before our committee the members of that committee may question the people who are promoting it and we shall have more information when it comes back to the house than we have at the present time.
I have seen some references in the public press, of course, to the bill and to the proposal. I find that in this case, as in Trans-Canada Pipe Lines, there are some United States interests connected with it. That is something that members of the committee should inquire into very carefully because, I think, we have to do much more to safeguard resources of this description for the Canadian people than we have been doing in the past.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on railways, canals and telegraph lines.

[Stage Direction]
The house resumed, from Friday, March 2, consideration of the motion of Mr. Hunter for the second reading of Bill No. 158, for the relief of Lorinc Orvos Nagy.
Walter Edward Harris: Stand.


Mr. Speaker:: Has there been an agreement that this debate is not to be resumed today? You just cannot stand the resumption of a debate unless it is by unanimous consent. Is it agreed?


Some hon. Members:: No.


Walter Edward Harris: Mr. Speaker, I should have risen a few moments ago to agree with the leader of the C.C.F. party that there was no reason why he should not have had the adjournment of the debate the other night on the private bill with respect to the pipe lines, because I did not realize at the time that he had only received the bill that morning. I agree that one should have time to give consideration to the terms of the bill before one should go forward with it. That, of course, is by way of parenthesis at the moment. I did not want to hold up the second reading.

In this particular case, sir, I have on more than one occasion said "Stand" to a debate on a private bill and I have always had unanimous consent to it, as I recall. However, I take it that is not the purpose of the hon. gentlemen opposite, though I might respectfully point out that they do not have the carriage of the bill nor do they have the adjournment. It happens that I have a budget meeting going on at the moment. It has been going on for something over two hours, and I was hoping to be able to continue with that immediately the orders of the day were over. However, if they do not feel they could grant that-


Stanley Howard Knowles: Mr. Speaker, all the minister needs to do is to move the adjournment of the debate. I think Your Honour's comment was perfectly right that this debate is in a different category than bills that have not been proceeded with at all. As far as I am concerned, if the minister wishes to move the adjournment of the debate on this bill, we are agreeable.


Walter Edward Harris: I do so move, sir.


Mr. Speaker:: Is the motion for adjournment agreed to?


Some hon. Members:: Agreed.
Motion (Mr. Harris) agreed to and debate adjourned.



INDUSTRY


Mr. W. G. Dinsdale (Brandon-Souris) moved:: That, in the opinion of this house, the government should consider the advisability of taking advantage of every possible opportunity to promote the decentralization of industry, particularly with reference to defence industry, thereby,
(1)	helping to reverse the trend towards concentration of population in large metropolitan areas with the accompanying social evils;
(2)	encouraging a more equitable distribution of population and development right across Canada, and
(3)	assuring the strategic dispersal of vital war industries in the interests of national defence.
He said: Mr. Speaker, it is three years since I first placed this motion on the order paper. In previous years we have exhausted the number of days allotted to private members before arriving at this particular resolution. But in the interval I have been interested to notice that a good many of the resolutions that are placed before this house from time to time by members in various parties relate to the implications of the resolution that we have before us today, that is, the desirability of decentralization

and diversification of industry for the general well-being of national development in Canada.
At the very outset, Mr. Speaker, I would emphasize that I am speaking not only in terms of decentralization as between regions. I also wish to emphasize, right at the beginning, that there is a desirability of decentralization and diversification within the various provinces themselves. I raise that point because in this country it is quite obvious that there is the general tendency for the few large urban centres that we have-the half dozen or so large metropolitan communities-to become increasingly larger at the expense of the smaller communities across the country.
Even though we have been delayed somewhat in time in coming to this resolution, it seems to me that it has become more important as time goes on. Since the war we have been passing through a post-war boom. All the experts in economics are now quite free in acknowledging that we have passed through this transition period of post-war adjustment which, from the standpoint of Canada, might be described as an economic honeymoon. We have been placed in an extremely favourable position in relation to the economies of other countries. But that honeymoon is now past and the fact of the situation is that we must face the economic realities if we are to continue to progress as we have during recent years.
Unfortunately, during the transition period the tendency for industry to concentrate in the two central provinces and in the larger urban areas has been intensified rather than decreased and today we are faced with a situation-to sum it up in general terms- where 60 per cent of the population, 80 per cent of the manufacturing and 50 per cent of the total mineral production is concentrated in the provinces of Ontario and Quebec. We therefore have a concentration of industry, population and-what is perhaps more important so far as our activities in this house are concerned-political power. The latter is perhaps one of the most significant features of this trend that has been noted.
The Gordon commission has been meeting across Canada within recent months and I have followed with a great deal of interest the press summaries of the various briefs presented to this important commission. In every province-particularly those in the maritimes and in the prairie region-without exception the briefs have emphasized the necessity of carrying out the principle of
Decentralization of Industry the resolution we have before us. For example, the brief from the Manitoba government expressed the need in these terms:
Decentralization of industry is essential to a sound national economy and it is imperative that steps be taken and programs developed which will ensure the spreading out of industries throughout Canada.
That is the official viewpoint of the Manitoba government. I was especially interested to note the other day the brief presented by the joint labour groups, namely the Canadian Congress of Labour and the Trades and Labour Congress. They went right back to first principles so far as this equitable economic development of Canada is concerned, and they did so in the following words:
Nothing in the confederation debates is clearer than that the Fathers intended and expected that confederation should benefit all parts of the new nation. They would have repudiated instantly and with horror any idea that one province, one region or a group of provinces or regions should progress while the others stood still or fell back.
That is taking us right back to the first principles upon which this country was established. Perhaps from time to time it is necessary to go back to consider all the complex factors that were involved at the time of confederation. Certainly it was the vision of Sir John A. Macdonald and Georges Cartier that they would build a country strong and free from the Atlantic to the Pacific. To this end they adopted a national policy to help build a strong and democratic economy to accomplish what was considered in their day an almost impossible task, and even in the light of contemporary engineering capacity is still regarded as a tremendous engineering feat, the construction of the Canadian Pacific right through to the west coast.
Since that time we have tended to lose sight of the problems Canada was up against in the launching of this federal experiment. More recently in Canadian public affairs the necessity for development on a national scale has become somewhat obscured by the game of regional politics. The west has been played off against the east, and as a result of economic frustration the west has gone splintering off in various political directions. I think, Mr. Speaker, that the time has come, as has been underlined by the recent activities of the Gordon commission, for a serious re-appraisal of economic policies in the light of Canada's great position and power as a nation in world affairs. If it was important at the beginning of Canada's national existence to the development of this unique experiment in sovereignty in the northern part of the North American continent, it is even more imperative now in view of the much more important position that Canada occupies in international affairs.
1792	HOUSE OF
Decentralization of Industry
It will be noted, Mr. Speaker, that the resolution is divided into three parts. It refers not only to the general principle of decentralization, but also we have enlarged on that particular aspect and have broken it down into three of the more important facets that are involved in carrying out this principle. First of all, there is the tendency for industry and population to concentrate in small regional areas, particularly urban areas. This has been one of the most characteristic phenomena of the last 100 years in the western world. We have seen the development of the factory system, which emerged out of the industrial revolution. Because of the large amount of labour involved in factory industry there has been an influx of workers, an influx of population from the rural areas to the urban areas, and that is a process that has continued up until recent times. Out of this concentration of population in urban areas there has been a growth in social problems which, down through the past hundred years, it has been almost impossible to cope with by government on all levels as well as by private agencies of various kinds. Indeed, there is a general feeling that uncontrolled urbanization, unplanned urbanization, has given rise to some of the extreme social problems that we are still confronted with in Canada as well as in other western countries.
Characteristic of urban growth has been the emergence of slums, blighted areas, within the heart of our large industrial cities. In Canada we obviously are still trying to cope with the problem of slums in the big cities, because just the other day we had placed before the house by the Minister of Public Works (Mr. Winters) some further attempts to deal with the problem of slum control, and that is merely the physical manifestation of the problem. The underlying social difficulties are much more damaging to our way of life.
In the city we have people operating largely on an impersonal level. The close relationship of the neighbourhood, which is characteristic of the rural social situation, breaks down and there tends to be an atomization of individuals. They live as separate entities in many cases. This can be demonstrated by the indices relating to symptoms of social disorganization. In many instances human beings become less than human. In the big, booming, pushing confusion of our large urban areas there is a tendency for values to change. Individuals crowded together in this situation, instead of finding satisfaction on the spiritual and intellectual level, tend to be largely motivated by physical impulses. There is all sorts of evidence in this regard; the rapid increase in commercial recreation; the


rapid increase in the consumption of alcoholic beverages. The hon. member for Winnipeg North Centre (Mr. Knowles) had some returns tabled within recent days, as recorded on page 1738 of Hansard, which indicated-I do not have to give the figures-that the consumption of alcoholic beverages has increased at a very rapid rate within recent years. I venture to say that had we the information we would see that the consumption in urban areas is much above that in rural areas. In other words, people wishing to escape from the confusion of the city do so by means of the cup that cheers.
Related to this problem of the effect upon individuals in the modern, big, booming cities, we have the impact upon the basic social institutions of the nation-and the nation is strong only in so far as the basic social institutions are strong-the family, the church, the school, and so forth. I merely emphasize the family in passing because it is the most important. No society can be great, no society can progress unless the dignity and the integrity of the family are preserved.
In the city we are constantly hearing about the problem of juvenile delinquency, the increasing divorce rate and similar evidences of family disorganization of that kind. The family in the cities, in many instances, instead of being the healing place of the soul, as it should be, the place where personality is moulded, the place where we acquire our values, the place where conscience is formed; instead of performing these functions adequately, tends to become a place of tension, disorganization and confusion. Evidence of that development again could be put forward in the statistics relating to mental illness in this country. I had a return from the Department of National Health and Welfare in this regard just a few days ago. It is dated Tuesday, February 14, 1956. It shows that in every province in Canada between the years 1950 and 1954 the admissions to our mental institutions have doubled. In 1950, the total was 16,411; in 1954, it was 29,351.
Just to carry this particular line of thought one step farther, the country has been shocked within recent weeks-in fact, we have had the subject raised in this house on several occasions by hon. members from the communities affected-by the upsurge in sexual deviation, another problem in the disorganized and confused atmosphere of the big urban community. Values become so distorted that we wonder today what is normal in the city. We rub shoulders with criminal types, with bohemian types of all kinds, and

we are completely oblivious of the fact because personalities remain largely anonymous, unknown to one another. We are completely unaware who the man right next to us might be.
When these tragedies occur there is a great outcry and particularly when the psychopath-because these persons are nothing more or less than psychopathic people who, because of the confusion in the home and so forth, have not developed a social conscience that can conform with the values of our way of life-when the psychopath, indulging in deviation, commits murder attempting to hide his deed and satisfy his twisted conscience. These are all evidences of the problem and I say it is one of the difficulties that underlie the problem, this tendency for population to concentrate in large cities; because of the very nature of industrial development the populations concentrate in large urban areas.
The government has moved slowly to do something about the social problems emerging out of this concentration. Up until 1929 very little attention was paid to the social difficulties that followed in the wake of the industrial revolution. One of the pioneers in this regard was the late Mr. Woodsworth, who was active in the city of Winnipeg during world war I when the industrial revolution first hit that community, and it was aggravated by the rapid influx of waves of immigrants, with the resultant social difficulties. That situation made its impression upon the social conscience of Mr. Woodsworth, who was a clergyman, and he became very active in agitating for reforms. In fact, I believe he was one of the pioneers in founding the social welfare council in Canada. He also later became involved in politics, as is well known, and I do not know whether or not that was a good thing for one of his convictions.
It was in 1929 with the onset of the depression that the government of Canada was forced to take action. Prior to that time we had acted according to the tenets of laissez-faire liberalism and hoped everything would adjust and regulate itself automatically for the best of all concerned. The first comprehensive attempt to cope with the problem was the new deal of Mr. R. B. Bennett passed in 1935 which did not get very far because of the vagaries of politics in this country at that time. Since that time these new measures have found their way to the statute books of Canada.
I want to make this point. All that governments can do both on the federal and provincial level is try to absorb the shocks by means of grants in aid, whether they be to government departments or to individuals
5, 1956	1793
Decentralization of Industry within the country. Governments can only make transfer payments. Much of our government's social welfare legislation has been in the form of financial welfare trying to bolster the economic situation of the individual caught in the disorganization of a changing society. That helps of course but it does not get down to the basic problem. The basic problem is the disorganization of our social institutions and the effect this has on personality and the development of citizens of mature stature in a democratic society.
The institutions that are really doing the job and are really getting to the heart of the matter are the churches. The basic function of the church is to provide meaning and motivation to the people in a particular nation. For example, in order to restore stability to the family unit we have heard this theme for the past few years, "The family that prays together stays together". That seems to me to go to the heart of this problem that has grown out of urban concentration in Canada.
We also have all sorts of new professions, social workers, psychiatrists, criminologists and marriage counsellors. We also have the work of the labour unions, chambers of commerce and farm organizations which endeavour to cope with the underlying difficulty. It is quite significant too that the entire service club movement has emerged within the last 30 or 40 years in this country. These are the groups which are getting down to the basic problem.
One association which I think is really coming to the heart of the matter so far as the approach we are taking in this resolution is concerned, and that is the decentralization of industry, is the Canadian community planning association which has an active organization right across the country in every province. The Canadian community planning association is dealing with the problem of concentration in urban areas. It is endeavouring to plan communities in such a way that the social and traffic problems which are so besetting us today will be solved. We also have our own national capital plan which will attempt to unravel some of the mistakes of the past over the course of the next few decades.
One of the essential measures of the community planning association is to restore the neighbourhood atmosphere wherein people can recover the feeling of belonging to a closely knit group of fellow humans. It is trying to meet the need and the desire that
1794	HOUSE OF
Decentralization of Industry lies deep in every one of us to have a rose-covered garden by developing green belt areas where a neighbourhood atmosphere can be restored.
The emphasis of all these voluntary groups is towards the decentralization and relocation of the Canadian population on a more equitable basis throughout these wide open spaces to which we have fallen heir. If we are going to accomplish that it means, of course, that there must be a decentralization of industry. Manufacturing, secondary industry, is a large user of labour today. If we are going to be able to restore our urban communities it means that we have to get the population out of the centre of these communities. We have to scatter industry on a much broader geographic basis.
I admit at once that everybody talks about this. As I look through the resolutions that are still before the house I find they relate themselves very closely to this subject. The subject of decentralization is almost like the subject of the weather; everybody talks about it but no one does anything to change it. I will admit further that it is an extremely difficult project to carry out particularly where you have to .go against the laws of economics such as the tendency for industries to congregate together for the sake of mutual support.
At this point I wish to go back to the first principle I enunciated at the outset of my remarks. In the past we had to fly in the face of economic reality for the sake in the first instance of establishing this country and later for preserving its sovereign strength as a nation in the midst of challenging circumstances, originally from south of the border, and then later involvement in two world wars. Therefore I suggest that something more than economic factors must be considered if we are going to deal with this problem.
I do not intend to merely talk about this subject; I have one or two specific suggestions which over the long-run period will, I feel, help to bring about a greater degree of decentralization of industry. The tragedy is that the trend has all been in the other direction. Instead of the situation becoming easier through the passing of time the concentration has been aggravated in recent years. That is perhaps why we in less populous regions make so much noise about it in this house. If there were evident a reversal of the trend, perhaps we would be mollified to a certain extent.
First of all, and I merely mention this subject in passing, it has become obvious during recent weeks in this house that western agriculture is in a declining position. We [iur. Dinsdale.]

had some three weeks' discussion on this subject so I do not feel obliged to reiterate the points that were made. Because of the revolution that is taking place in agriculture through mechanization and other causes, we see a condition of a declining population in rural areas. For example, in 1921 40 per cent of the labour force in Manitoba was occupied in agriculture whereas in 1951 only 24 per cent of the total labour force in that province was occupied in agriculture. That means that our ability to absorb and employ people in agriculture is declining.
That is one reason why the prairie regions, with the great spaces they possesss, have not been able to participate fully in the immigration program which has been carried on since the war. A most disappointing percentage of the newcomers have settled on the prairies. The only way we can provide employment for newcomers is to have an opportunity to industrialize. The only way we can prevent this migration from the rural areas which is still going on is to have a diversified industrial program on the prairies. We must consider the position of agriculture as the first point.
Second, our trade policy is a most important factor in this difficulty. In Canada we have been shifting from a United Kingdom to a United States market emphasis. This has resulted in the United States having more and more influence and control in our Canadian economy. Because of the high level of development of the United States economy and the great market they provide for mass raw material exports, we find we have been exporting an astounding amount of newsprint, minerals and metals in recent years. I do not have to harp on this point because it is obvious that if we are going to emerge into a position of strength population-wise, and in financial and industrial terms that our position in world affairs calls for, we must get away from economic primitivism and move more and more toward exerting some of that vision which was exerted at the time of confederation. We must get into secondary industrial activities. If we want to express it in original terms, we must apply some of this national policy to western Canada and the maritimes-they will speak for themselves later on I trust-that was applied by Sir John Macdonald to central Canada at the beginning of the life of this nation.
Then there is the matter of our petroleum industry and the possibility of decentralization. We are going to be considering in this house shortly an important measure, the trans-Canada pipeline, and it is hoped, speaking from the western viewpoint, that gas will be sold at the minimum economic

price. Unless that is done we are not going to enjoy the special benefits which the possession of this form of energy should give to western Canada. Unfortunately many important projects have been delayed because of the delay in getting under way with this activity.
There is a taxation feature which should be considered by the federal government. Canadian oil companies are at a disadvantage in competing with United States firms in the Canadian oil field because of the less advantageous position our Canada oil people occupy in comparison with their United States counterparts. The United States government gives special incentives to such an extent that much of the United States risk capital operating in the Canadian financial market is made up of money saved because of the absence of excessive taxation. That government also gives a more generous allowance for depletion.
From another standpoint transportation is important to the prairie west, particularly to Manitoba, because we stand mid-way. Under the topic of transportation I should like to include briefly the subject of highways. The federal government is moving slowly and cautiously into the area of highway construction by its grants in aid to the trans-Canada highway. That is a beginning which we in Manitoba feel will have to go much further. Considering the matter from the standpoint of national defence requirements, the opportunities offered by the tourist industry and the provision of access to our natural resources, it seems to us that the federal government will have to take a much more active hand in developing a suitable highway system than it has up to the present time. It has large returns from excise taxes on automobiles, petroleum products and so forth and that money could not be put to better use than in the development of a highway system in the interests of the general development of Canada.
We are interested also in the St. Lawrence seaway and we give hearty approval to that measure because it is going to improve the transportation situation in Canada. But if the people of Manitoba as well as those in other sections of the prairies are to benefit, certain factors will have to be kept in mind. It must be remembered that the terminal facilities at the head of the lakes are not adequate to deal with the larger vessels which will be coming through. The harbour facilities will have to be deepened. Unless these problems are taken care of in the over-all planning of the St. Lawrence seaway there will be no direct benefit to the prairie economy.
Decentralization of Industry The highway from the head of the lakes to Winnipeg is going to be totally inadequate according to present standards as soon as the seaway is put through and the head of the lakes becomes the busy seaport it is anticipated it will be.
Then there is the problem of air transportation in the west. On a per capita basis the people of Manitoba use air transport more than the people of any other area in Canada. We were disappointed when the application of Canadian Pacific Air Lines for a through freight franchise was turned down. That works to the disadvantage of Manitoba. We were disappointed also when Winnipeg, which now has an international airport, was denied the privilege of passenger rights on the line operating from the west coast to Europe.
These are just indications of the subtle discrimination that exists against the less populous regions. They are also evidence of the active role which the federal government can play. It is just the accumulation of these small things which will have to be overcome.
We are always interested in freight rates, and in this connection I should like to mention a little difficulty which we ran into in my own constituency. In-transit or stopover rates are not permitted in Canada, other than on grain. We have a little industry employing some 60 people operating in a small town fabricating west coast lumber into laminated structures. Because of the present freight differential they find it most difficult to compete in the eastern markets. A stopover privilege or an in-transit rate would make it possible to fabricate that lumber and ship it without any undue freight disadvantage. The industry would then be competitive in the east. Fortunately they are able to use truck transportation to save the situation at the moment, but if the pressure is continued this industry will be forced out of business.


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


Walter Gilbert Dinsdale: Could I have one more sentence, sir?


Mr. Deputy Speaker:: Has the hon. gentleman leave to proceed?


Some hon. Members:: Agreed.


Walter Gilbert Dinsdale: Thank you very much for your courtesy in this regard, Mr. Speaker. I wish to raise two more points and I shall do so as briefly as I can. I have emphasized the role that government might play in this process and I would just like to mention the role that private industry is playing.
The movement of branch plants to the west is already well under way. There is a large

Decentralization of Industry enough domestic market now to provide sufficient business for an economic location of a branch plant of the larger plants with headquarters in eastern Canada. I should like to give one illustration of outstanding success in this regard. We have a very thriving electrical manufacturing industry that was established by four young engineers who broke away from the larger industrial firms, General Electric, Westinghouse, Great Northern and so forth. They saw an opportunity for industrial development on the prairies in the rural electrification that is going on. They pooled their talents, developed an excellent transformer and a mechanical circuit breaker, and succeeded in capturing the prairie market for rural electrification, and they are also well into the Ontario market and making headway in the Quebec market.
That is the sort of thing that is taking place from the standpoint of private initiative and private enterprise, and we should not ignore that particular development. It should be encouraged in every way, so far as tax concessions are concerned. It is difficult to get equity capital for these small firms. We must always keep in mind that over 75 per cent of Canadian employing firms have less than 15 employees, and they are the nucleus around which the other industrial developments will grow that will make Canada the strong nation industrially and economically we know she is destined to be.
Now for one final point. This is the matter of defence industries. I could not let this subject pass entirely without mentioning that recently General Worthington, who is in charge of civil defence, has been talking about the need for decentralized population. He makes the claim that no city should have more than 50,000 people. He goes further and says that it should not have more than 50,000 people even if there were no threat from hydrogen bomb warfare. His reasoning is that once a city grows beyond that level it runs into the social problems that I outlined at the outset of my remarks.
The field of defence industries is one area where government should participate directly, and certainly with a great deal more enthusiasm than it has in any period of emergency. During world war II we in the west were depopulated because of the rush of the population to the factories in the east. It has been little better during the Korean episode. We find most of our defence industries, in fact all of them, concentrated in the two large urban areas of Montreal and Toronto. I do not have to labour that point. It is obvious in this day of the threat of the H-bomb that if we are going to have any reasonable and sensible defence program at all, basic to that 

program should be the decentralization and the relocation of at least our defence industries.


Mr. A. R. Lusby (Cumberland):: I have listened with great interest to the remarks of the hon. member for Brandon-Souris, the sponsor of this resolution. I think he mentioned that possibly members from the maritimes might wish to speak on behalf of their part of the country, and that is my intention to a considerable extent.
It is my thought that in this debate we should consider first the general principle of the decentralization of Canadian industry, which is, I think, the core of the whole resolution; and then the possibilities of a practical application of such a principle, particularly with regard to the nature and scope of the role that the federal government might properly and legitimately play in relation thereto. It seems to me that in connection with the first object of our consideration, which of course is more general, there are not as many difficulties arising as in the case of the second.
The term "decentralization of industry'* may, I suppose, be applied either to a national decentralization-that is, a wider distribution of industry generally over the whole country-or merely to, shall I say, an intra-provincial decentralization, which would be a spreading of industry within the boundaries of one particular province. If I understand the hon. member for Brandon-Souris correctly, he said that his remarks were intended to be applicable, to some extent at least, to both types of decentralization. In this regard,
I note that in the present resolution there are listed three objectives, as I might call them. Summarizing them somewhat, I would say that these are indicated as being attainable through a decentralization of industry: a less pronounced metropolitan concentration of people; a more equitable distribution of population and development right across Canada; and, third, a strategic dispersal of war industries.
In view of the vast geographical expanse of the provinces where Canadian industry is, and where, unfortunately, it shows all too many signs of continuing to be, largely concentrated, a merely intra-provincial decentralization of industry might constitute at least a partial step toward the attainment of the first and third objectives mentioned in the resolution. That is not so, however, as regards the second objective; for any results in that quarter, only a national decentralization would be effective.
It might be pointed out, in so far as an intraprovincial decentralization is concerned, this government and this parliament would,

:it seems to me, have comparatively little concern with that type. Only national decentralization, as I have defined it, is really entitled to the status of a national problem. I take it this resolution is intended to apply, at least primarily, to such national decentralization. In any event, I should like to say that in so far as my own remarks are concerned, when I refer hereafter to the decentralization of industry, I am thinking in terms of what I have called national decentralization, such as would affect the dominion as a whole and not merely one or two provinces.
It must be recognized that there are many difficulties in the way of the practical application of any wide principle of decentralization, but I am convinced that the principle itself is sound and that the possibilities of promoting it by such measures as may properly lie within the federal purview are worthy of the earnest consideration of this house as offering a prospect of materially advancing the best interests of Canada as a nation. It is my opinion that a widespread decentralization of industry would promote the best interests of every part of this country. I am aware that such an opinion is likely to be received with an attitude of extreme scepticism and possibly one of downright rejection by those provinces that industrially are now pre-eminently the favoured ones of Canada.
That attitude, to my mind, is an utterly mistaken one, though perhaps not unnatural, and of that attitude I intend to speak more in a few minutes. But, in so far as decentralization means spreading industry into those provinces which now are industrially deficient, I think there is no shadow of doubt whatever that it would be of incalculable benefit to such areas. To no region in Canada is that statement more applicable, in my opinion, than it is to the maritimes. For there the lack of sound industrial development and opportunity has, I maintain, been one of the greatest handicaps, if not the greatest, which have plagued us ever since the beginning of this century.
I turn again to the three objectives-as I say, I think that is the proper term-which are listed in the present resolution. I do not think any lengthy argument is necessary to emphasize the inherent value of all three. Let us examine the first. Let us consider whether it is in any way desirable to have vast numbers of people gathered in restricted, crowded, built-up areas, and whether any real justification remains-if it ever existed- for the growth of cities which number their population in the millions.
I think perhaps I am treading on safe ground there because I do not believe either Montreal or Toronto has yet reached a plural
Decentralization of Industry figure. Whatever the answers may have been in the past, I think that today two things, namely traffic and the hydrogen bomb, provide two new and cogent negatives to the question; and that is apart altogether from the high incidence of crime, misery and general human degradation which so often characterizes the life of a really huge city.
In distant ages national populations tended to swarm together in walled cities for the purpose of making more effective defence against their enemies. In more recent centuries heavy concentrations of population in cities tended to simplify the problems of communication and transport which then existed. Of course for countries such as England or Japan, it may well be that the huge city is the inevitable and inescapable result of limited land areas and dense populations. But not one of these factors applies with any force to the Canada of today. In proportion as our cities are overgrown, they simply present the choicer targets for the hydrogen bomb in time of war and an increasingly hopeless congestion of traffic in time of peace. Certainly in this half continent of ours there is no lack of space for population dispersal if it is considered desirable that the population shall be more widely scattered.
I agree with those who advocate-and this is not a new idea

as the ideal for the conditions under which modern man must live, a wider dispersal of urban populations into comparatively scattered towns and cities of no more than moderate size. That is the ideal. In so far as the present resolution tends to encourage some progress toward that goal, I think it has a worthy aim.
Some of the observations I have just made apply with equal force to the third objective mentioned in the resolution. The destruction of a substantial proportion of our total population by means of a single hydrogen bomb dropped upon one huge city would, even apart from all humanitarian considerations, have a disastrous effect upon our will and our capacity to carry on war. Equally crippling would be the eradication of any large segment of our defence production facilities in a similar sudden manner. In case of war industries located near our cities, as unfortunately many of them are today, one single bomb might serve a dual purpose.
We are told that the duration of any future total war will be necessarily brief, a matter of a few weeks at most. No doubt that is correct. Nonetheless, any shreds of victory will certainly accrue to that side which has best preserved its people and its war-making potential. The wider dispersal of our defence
1798	HOUSE OF
Decentralization of Industry industries as well as our population would be a tangible step toward that end.
All matters pertaining to national defence are, of course, of vital concern to every Canadian from the Atlantic to the Pacific. In the maritimes, however, we face no problems, at least no serious ones, concerning the undue concentration of either people or industry. On the contrary, our lack of industrial development, with the attendant lack of opportunity for our young people, has led to a steady and continuing hemorrhage of our population to other parts of the continent. In earlier days this was chiefly to the United States, so that it is said there are more persons of Nova Scotian descent in New England than there are in their own ancestral province. In more recent times the flow has been rather toward central Canada, a change of direction which undoubtedly is beneficial in so far as Canada is concerned, but which nonetheless has upon the maritimes very much the same effect, with far too slow a rate of growth in our population.
We need more population in the maritimes, Mr. Speaker. We need more population fully as much as does any other quarter of the dominion. To achieve it I think we must have a greater development of our industrial potential. Certainly in the foreseeable future there is not the slightest danger, in so far as our part of the country is concerned, that any steps which may be taken toward attainment of these ends will lead to an undue concentration of either people or industry, such as that which already obtains in certain areas of central Canada. If anyone here should doubt that statement, all I can do is assure him that we are certainly willing to incur the risk with the utmost equanimity.
The third objective mentioned in the present resolution is to a marked degree a concomitant or perhaps one might call it a component of the broader second objective. Bearing that point in mind, I would say that from the economic point of view it is the latter which is the most significant factor of the whole resolution in so far as my part of the country is concerned. A more equitable distribution of population and development right across Canada, to use the words of the resolution, would fill a real and long-felt need in the maritime provinces. In view of what I have said, Mr. Speaker, I find myself, both from a regional and from a national standpoint, in accord with the principle of decentralization of industry as it is advocated in the present resolution.
At the outset, however, I said that after considering the principle itself, I thought we should then consider the possibilities of its
[Mr. Lusby.l

practical application, particularly with regard, to the nature and scope of the role which the federal government might legitimately and feasibly play in relation thereto.
I think it is clear that that role, even at its widest, must be subject to marked limitations. It is the aim of the federal government, of course, to maintain at all times a national economic climate favourable to industrial development and expansion. That is an aim, I may add, which has been attended with a remarkable degree of success. But the attainment of that aim does not in itself contribute to the decentralization of industry. It certainly is essential for industrial development and expansion anywhere but, as I say, it does not lead to the decentralization of industry. In fact it may perhaps be fairly said that because of the success with which that aim of general prosperity has been pursued in this country there exists today this tremendous concentration of industry in central Canada.
The federal government, of course, cannot meddle in fields of purely provincial jurisdiction or, under our system of free enterprise, compel the location of private industries in any specified area. Private industry will go where it appears most profitable to go. Consequently it seems to me that all efforts toward decentralization of industry must be directed to make it profitable for industry either to remain in or to migrate to the area which it is wished to build up.
Now, what does lie within the possible purview of the federal authority in this regard? I was interested in reading a few days ago, Mr. Speaker, of the representations with respect to the maritimes contained in the recent joint submissions of the trades and labour congress of Canada and the Canadian congress of labour to the royal commission on Canada's economic prospects, the Gordon commission. In view of the fact that maritime prosperity has advanced at a slower rate than has that of other parts of the country, the submission urged that the maritimes should be regarded as a special area. The submission did not confine itself only to the area of the maritimes, but it did urge that the martimes be regarded as a special area. They urged that, to bring industry to the workers, governments at all levels-this was not directed merely to the federal government-should adopt a four-point program consisting of tax concessions and other financial inducements to firms to remain in or go to special areas; the channeling of purchases, particularly by the dominion government, to firms in special areas; further assistance t industries through the subsidization of freight rates; and the subsidization power production in special areas.

I might add here incidentally that a number of people laid stress upon hydro and atomic power plants, but my own feeling is that the real future of electrical development in Nova Scotia is and should be directed to the development of electrical power by coal. I think that would be in the best interests of the maritime provinces. However, those four points were made in the brief. I think whatever difficulties of practical application there may be with regard to any of these proposals, they are all deserving of careful study. I hope this government will give long and sympathetic consideration to any recommendations which may emanate from the royal commission with respect to that four-point program to which I referred.
It must not be forgotten, of course, that this government is not entirely a stranger by any means to actions designed to build up industry in certain areas. For instance, this government extends a very large measure of assistance to our Nova Scotia coal industry through a system of subventions. Then again special freight rates designed to benefit maritime industry have long been in effect.
It seems to me that one promising avenue of new federal assistance to build up maritime industries, thereby furthering national decentralization of industry, might lie in the allotment of government contracts, on a preferential regional basis, to firms in the mari-times in this particular instance. In my own town of Amherst we have several industries which from time to time have been successful in obtaining orders from the federal government, particularly the Department of Defence Production. The employment thus provided has been of inestimable value, not only to the town but to the surrounding county. I believe that is an example of encouragement which can be given to industry, and to the people in an area doing vital defence work, in areas other than the highly industrialized part of the country. I might say that in particular we have in the town of Amherst a plant engaged in the manufacture of aircraft components. It seems to me that of all the industries perhaps the aircraft industry is as vital as any and is one that should be as highly decentralized as is feasible. I think a further allocation of orders to the Amherst plant, as well as further assistance in the provision of any facilities required to undertake additional government work, would be a most desirable move in the interests of such decentralization.
Some little time back, Mr. Speaker, I mentioned that a policy of decentralization of industry was unlikely to receive wholehearted support from those provinces which are now industrially in a favoured position.
Decentralization of Industry I think I said also that that was a natural but mistaken attitude. My statement was really prompted by a certain cartoon which recently appeared in the Halifax Chronicle-Herald, the work of Chambers, the inimitable staff artist of that paper. I have the cartoon here but I am not going to ask leave to table it. It is entitled, "The Geese that feed the Goose that lays the Golden Eggs", and has reference to a reported remark of the premier of Ontario that his province was Canada's goose. I understand that remark was more in connection with the fiscal arrangements which are the subject of discussion at the moment. However, I think the attitude there displayed goes much farther. The cartoon portrays our general feeling in the maritimes that Ontario lays no golden eggs for us, but on the contrary she draws from us the wherewithal to lay the eggs for herself.
If I may use another barnyard simile, I should like to say that the attitude embodied in the remark of the premier of Ontario tends to confirm a maritime suspicion that central Canada is not only the heartland but also the hogland of Canada. The latter term has no reference to the production of hogs on the farms of central Canada. It refers to those in high provincial places. That is the feeling. I believe, Mr. Speaker, that such remarks as that of the premier of Ontario give a foundation for this feeling in the less favoured parts of the country. I submit also that the attitude shown by such a remark, and it is undoubtedly shared by many others in the favoured provinces, is not only erroneous but shortsighted because in the long run the prosperity of any province of Canada is undoubtedly dependent upon a reasonable degree of prosperity being achieved throughout the rest of the country. I believe that, in turn, calls for a wider distribution of both people and industry across the whole country.
During this session there has been some talk of the possible federal role in matters of education. I should like to suggest that it might not be amiss if the federal government could devote a little effort towards attempting to educate the provincial leaders of central Canada to the truth of what I have just said.


Mr. Clarence Gillis (Cape Breton South):: I welcome the opportunity to take part in this debate, Mr. Speaker. I have moved similar resolutions in this house a good many times in the past, but provoked very little discussion. I am glad to join with the prairie member from Brandon, who has now moved this resolution indicating that other parts

Decentralization of Industry of the country than the maritimes are vitally interested in the question of the decentralization of industry.
Now, to determine the value of any matter that may come before the house, one has to ask this question. Are we justified in taking up the time of the house on the subject under discussion? I think all the evidence that is available on the need for both provincial and federal governments taking a look at the concentration of industry in central Canada justifies the time we will spend on this resolution. The hon. member for Brandon-Souris (Mr. Dinsdale) pointed out that at the present time with respect to the dollar value of manufacturing, in the distribution and concentration of industry there is some 82 per cent in the two central provinces of Quebec and Ontario. The rest of the country has to struggle along on the other 18 per cent. I think that statement alone should bring to the mind of the federal government the necessity of taking another look at the matter of a better distribution of industry and manufacturing in order to give the country a more balanced economy, and as suggested, make for better protection in the event of war.
These considerations alone justify our discussing this resolution. The hon. member for Brandon-Souris put figures on the record, which he obtained from recent statistics, which show that 51-7 per cent of manufacturing and distribution is in the province of Ontario, and 30-3 per cent in the province of Quebec. That shows a trend toward more centralization, because as I have looked at these figures over the years I have found that they have been going up all the time. The last time I looked at them they were around 80 per cent; today they are 82 per cent.
Instead of anyone paying any attention to past discussions in the house on the question of decentralization, we find that the trend is still continuing. It may not be accidental, because this is the pattern that was followed in the United States. The United States built the centre and left the east and the west pretty much as hewers of wood and drawers of water. That influence has crept into Canada, and we are getting exactly the same development.
I want to make it quite clear that so far as the maritime members are concerned we are not suggesting there is nothing we can do for ourselves. At one time the Minister of Trade and Commerce said he was getting tired of listening to maritime members asking for handouts. We are not asking for handouts, Mr. Speaker, and I shall prove that


before I finish. I would like to impress on the minds of hon. members that what we are asking is to establish adequate industry, to have a balanced economy and to have some control over our finances. We had that in the maritime provinces before confederation.
If hon. members will take a look at a survey made by the late Norman Rogers, an economic survey of the maritimes over the past 60 years now, they will find that over 50 major industries were siphoned off from the maritimes and located in either Quebec or Ontario, many of them during my own lifetime. The late Mr. Rogers enumerated those industries. Some of them were quite large. There were cheese factories; a skate factory at Dartmouth; a sugar refinery. A nut and bolt factory, a very large one, was moved from Trenton to Montreal as late as 1946. A plate mill at Sydney was closed down and the business taken away to Ojibway, Ontario. There were many other industries. There was a fertilizer plant which was moved from Sydney; there were shoe factories. At least 50 very substantial industries, including the control of seven banks that were established before confederation, staffed and managed by Nova Scotians and mari-timers, who used their capital to finance industry and agriculture in the maritime provinces, were moved away. We are not asking the government to bring back all of these industries, but I believe that many of those that were siphoned off and centralized in the central provinces could have made just as great a contribution to the economy of Canada in the maritimes as they can in either Ontario or Quebec.
As I said before, the pattern we are following in Canada is the United States pattern. There may be a good reason for it. Maybe the United States industrialists, United States capital and citizens of the United States on Canadian boards of directors have influence enough on these boards to guide industry and investment to that part of the country to which they want it to go.
I took a look at an old file in my office just for fun today. I picked out a brief that was presented by the United Mine Workers of America to the government back in 1948. It had to do with the Nova Scotia steel industry, and on the point I am just making, the influence of Americans on Canadian corporations, they had this to say:
There is now ample evidence indicating that American interests control or may shortly control Dosco's huge steel and coal empire.
The American Securities Corporation, 25 Broad street. New York, has acquired since its formation in 1946, what we understand is a substantial interest in Dominion Steel and Coal Corporation Limited.

Mr. Charles G. Terry, president of American Securities Corporation and chairman of the finance committee of Colorado Fuel and Iron Corporation, is now a director of Dosco. Mr. R. J. Wysor, past president of Republic Steel Corporation, has also received a similar appointment to Dosco's board.
It would not seem accidental that American financial and industrial interests are acquiring an interest in one of Canada's great steel plants and deposits of high quality coal. Rather would it appear quite certain that the discovery and development of the enormously rich Quebec-Labrador iron ore field would be a fully adequate reason for American interests wishing to acquire control of Nova Scotia's two major industries, viz, steel and coal.
That statement was made back in 1948. I am not stating that they have control of the corporation, but I am suggesting that men as influential and as experienced in the fields of steel, coal and iron development could be a very large factor in influencing the development of coal, steel and iron in that particular part of the country, and maybe in other industries or in most industries in Canada. We are getting that kind of influence from the United States in developing the kind of centralized economy that we have in Canada at the present time because that is the pattern they follow in the United States.
It is rather hard to answer the question why there has not been a greater expansion of our basic steel plant. There has been some modernization, but it is creating unemployment. The investment in plant for turning out steel has increased very little since 1939. There is talk of another expansion in the production of raw steel, but I could never understand why there was not some fabrication down there. I could never understand why a modern plate mill that employed 600 people, that was established by the federal government during the war, was allowed to go out of production when 90 per cent of our steel plate is imported from the United States. That mill just petered out and was sold. I could never understand why, as recommended by the McKee report-that big company came in there and made an examination of the economy-a tin plate industry was not built around basic steel. They have the steel, the iron ore, the limestone and the coal all within a few miles of where raw steel is turned out.
I think this is a charge that no member of the government can refute. During the war, the government was pouring millions of dollars into corporations for the purpose of developing industry that was to be used for war purposes, and I could never understand why in view of the development of a munitions industry and other kinds of plants that were used for war purposes, and particularly since we started to supply NATO, all the 67509-114
Decentralization of Industry equipment for war is produced in Ontario and then dragged across the country and shipped over to Europe, when the shortest route to Europe is from Sydney where this equipment could be produced much cheaper than in any other part of Canada, in my judgment. You can charge the government with inequality in that respect. The government was making money available to corporations that went into war production.
As I said before, the maritimes are not pleading or begging; they are merely making a claim which they can justify. The maritimes sacrificed considerably for confederation, but we want to build a nation and we are not squawking about that. We recognize our geographic limitations; we recognize our limitations under the British North America Act, and we accept the things that have to be done.
However, we do not feel there is any justification for the fact that over the years the industries that were established in that part of the country were siphoned off and concentrated in two of the Canadian provinces, which has given them an 82 per cent monopoly in the fields of manufacturing and distribution. I do not think any government which permits that kind of development is nationally minded and is thinking of the best interests of all the people in the country.
Let me call as a witness a good Nova Scotian Liberal who in my judgment is a very good man. A dominion-provincial agricultural conference was held in Ottawa in December, 1955, and a gentleman by the name of Waldo Walsh, the deputy minister of agriculture for the province of Nova Scotia, attended that conference and spoke on the subject of centralization and the lack of national planning as far as the federal government is concerned. I think he makes it quite clear that maritime farmers are entitled to some rebate in view of the tariff and the amount of money they spend protecting central Canadian manufacturers. Mr. Walsh had this to say:
Mr. F. Waldo Walsh, Nova Scotia's deputy minister of agriculture, did the Canadian nation a real service last week. At the dominion-provincial agricultural conference in Ottawa he let out some of the economic facts of life as encountered by citizens of these Atlantic provinces.
The print is rather poor.
He intimated what this province paid, and pays yearly, to make the Canadian confederacy possible.
He is referring to Nova Scotia.
Referring to centralized industry in Ontario, he said:
"The great cities where the industry is, where the cars are made, are there because this country has established a system of tariffs and protection that enables them to be there.

Decentralization of Industry
Last year Nova Scotia bought approximately $23,000,000 worth of cars from three firms, all within 60 miles of Toronto. The tariff on them made us in Nova Scotia pay $2,865,000 more than if we bought the cars in the United States without a tariff.
We bought in that same year $100,000,000 worth of goods from Ontario. Tariff and protection on that cost us about $10,000,000.'*
Mr. Walsh's presentation has since received the public support of his minister, the Hon. Colin Chisholm. While there are men of Mr. Walsh's forthrightness in our public life there may be a slight chance of rescuing the Atlantic region from a state of economic vassalage.
There is a man for whom I have a great deal of respect. In very clear language Mr. Walsh tells us about the amount of money we are paying for protection of the Canadian manufacturers in so far as automobiles are concerned, and he quotes figures concerning the amount of money the province of Nova Scotia is paying to protect central Canadian manufacturers. It must be remembered that these figures relate to only one province. Similar statistics could also be produced for the provinces of Newfoundland, New Brunswick and Prince Edward Island. You could perhaps multiply by three the figures Mr. Walsh gave, and you would have a much better understanding of the amount of money the maritime provinces are paying to protect central Canadian manufacturers. I think that places us in the position where hon. members from the maritimes particularly-hon. members from the prairies and British Columbia can perhaps make the same argument if they look at their own provincial figures-


Major James William Coldwell: The prairies can, too.


Clarence Gillis: I think the type of discussion we are having is valuable. I believe the government should pay particular attention to this discussion, especially in view of the fact that two men who hold the offices of minister and deputy minister in a government similar to the federal government have come out and made the kind of kicks that Mr. Walsh and the minister of agriculture in the Nova Scotia government have made.
I think it is time for the federal government to take a look at the dispersal of industry in so far as it is able to do so itself. The federal government itself has established a lot of industry by way of crown companies, all of which is scattered in the two provinces I mentioned. Much of the industry in the central provinces was heavily subsidized or received grants which were written off by accelerated depreciation. I think the time has come for the federal government to thoroughly check what can be done in relation to economic conditions. It is my hope that when the commission which is studying the economic strains and
IMr. Gillis.]
stresses across the country makes its final report the government will take some action. As I said before, I hope the report is short enough so we can all read and understand it.
It is all right for hon. members to get on a platform or to speak on the radio or to rise in this house and say, "I am a Canadian; I am proud of Canada". Well, so am I; but you know, we have nine different kinds of Canadians in this country, and perhaps ten. There is a vast difference between the economic circumstances and the social possibilities in each of the provinces. The budget of the city of Toronto is much greater than the budget for the whole of one of the maritime provinces. When we talk about being proud of Canada, I think it should mean that we are proud of all of Canada, not of just two or three provinces.
An effort should be made to get a more balanced economy in this country. It would not take very much; you would not have to shift a great deal of industry from Ontario or Quebec to New Brunswick in order to cure the ills of that province. I am sure the Minister of Labour remembers what happened in his own riding. A textile mill at Marysville had operated for over 100 years; then the mill was closed down and the operation was shifted to Cornwall, Ontario, where a more modern mill was available. The company was able to make a little more profit, but the expense to the government of having to retrain those people, and the effects upon the economic and social life of the community in my opinion far outweighed that little extra money the company was able to make. That trend is continuing all the time.
I am glad to see that there is some hope in the maritimes, because the people are convinced that self help is the best thing. They have formed an organization which in my judgment will do much to reverse the trend and overcome this lopsided economic development we have today.
I see in the transportation improvements which have taken place, particularly in Nova Scotia, great possibilities of development in the future. We now have the Canso causeway which overcomes the bottleneck that existed in the movement of steel, coal and other products between the mainland and Cape Breton island. Then there is the ferry from North Sydney to Newfoundland which will help to develop interprovincial trade between that province and Nova Scotia, particularly Cape Breton island. There is also the bridge across the harbour from Halifax to Dartmouth, which will open up the eastern end of the province on the Dartmouth side. Then there is the Bar Harbor, Maine, and

Yarmouth, Nova Scotia, ferry. All these transportation improvements will bring about an improvement in industry and aid in the movement of our products.
In this connection something has taken place that should have taken place 30 years ago, the formation of the Atlantic economic council. It is all right to appoint royal commissions, but there have been dozens of them appointed. They simply write reports, most of them stereotyped, and you cannot get anything out of them; they are simply a rehash of the things that happened 50 years ago. But this Atlantic economic council is building up its membership and is gathering real facts.
In my judgment if in the years that lie ahead we can get a proper survey, if we can have proper planning in the utilization of the resources of the maritimes, if we can increase our interprovincial markets, which is the objective of the Atlantic economic council; if we can group those million and a half people into a market for the products of the maritimes and can save the millions of dollars which we pay in the way of protection for the manufacturers in central Canada; if we can utilize those savings in our own end of the country, these provinces can be selfsustaining. If the people really get behind those who are developing that Atlantic economic council these results will be achieved.
Until that time comes I think the federal government should co-operate with the provincial governments in that end of the country which are now doing some planning along the lines of self help in order to give them assistance or to take up the slack in areas where industry, like the mining industry, has gone out. A small defence industry employing 1,000 people would give great relief to the people of Nova Scotia if it were located there. I am sure that is equally true of New Brunswick, Newfoundland and Prince Edward Island, but it is particularly true of the province I mentioned.
Much has been said here about there being no power, but the fact is that Nova Scotia can supply the power. Make no mistake about it; there is power enough in the province to take care of any industry and there would still be a surplus. I believe there are resources in New Brunswick which would be easy to develop. I am pretty sure that if Joe Smallwood of Newfoundland were given the opportunity to take in an industry he would find the means to do so.
I do not want to monopolize the time of the house in dealing with this particular subject, but it is one I have thought about quite a lot.
67509-114J
5. 1956	1803
Decentralization of Industry I have moved a similar resolution time and time again. I am glad to join with my prairie friends and those who have indicated their support of this resolution in asking the government to take a square look at the social and economic developments in this country, to determine for themselves if it is a good thing to adopt the pattern which has been adopted in the United States where they have a super centre and rely upon the east and west for their raw materials and natural resources and brawn. All these are brought into the centre to be developed, and in many cases this is a complete waste of effort.
I should like the government to consider also whether the maritime provinces should be asked to pay protection on automobiles and other things as was indicated in the editorial by Mr. Walsh, the deputy minister of agriculture in Nova Scotia. I hope that every member of this house, or at least some from the different regions in Canada, will put themselves on record in connection with this motion, and that later on the responsible minister will stand up in his place and assure the house that if this question is not thoroughly analysed in the report of the royal commission now studying Canada's economic possibilities, a committee of this house will be able to sit down and go into this matter with the end in view of bringing about a more balanced economy in this country.


Mr. R. F. L. Hanna (Edmonton-Stralhcona):: Mr. Speaker, I had not originally planned to take part in this debate, but I thought it would be desirable to lay before this house and hon. members some facts about the developments that have taken place recently in and around the city of Edmonton. I think these illustrate how the decentralization of industry is actually taking place in Canada at the present time without any government interference or direction.
I do not take the view that government interference or direction is necessarily a bad thing in every case. There are some occasions when it is absolutely necessary. For example, we have our Department of Defence Production endowed with certain powers which we on this side of the house at least think are absolutely essential to our national defence. During the lengthy debate last summer our friends across the aisle apparently did not think too much of the necessity for that particular department to have the powers which we on this side think it should have. Today the hon. member for Brandon-Souris seems to want to put more teeth into the very provisions for government control of industry which he scorned only a few months ago. I say this because the government would really

Decentralization of Industry have to throw its weight about with private industry in order to accomplish what he suggests ought to be done.
I do not want to take up the time of the house by quoting at length from Hansard some of the things the hon. member for Brandon-Souris said in opposition to government control and direction of industry. His remarks will be found at pages 4612, 4613,
4614	and so on of Hansard for last year. In his speech on that occasion the hon. member vigorously opposed state domination, democratic socialism, national socialism, state socialism, state capitalism or, as he said, whatever name you like to use to describe this trend toward increasing domination by the state. Those are the very words he used. He decried what he described as a tendency toward a completely authoritarian system of direction by the state. As recorded on page
4615	of Hansard he had this to say:
...I am surprised when I find members of the nominal Liberal party succumbing to what has been described as the dominant dogma of our age, that chaos, confusion and crisis can be stopped only by an increasing resort to coercion and force on the part of the executive arm of government.
I am surprised to find a member of the nominal Conservative party now succumbing to this very same doctrine that he opposed so vigorously on June 9 last year.


Walter Gilbert Dinsdale: Mr. Speaker, I did not wish to interrupt the hon. member, but I rise on a point of privilege. I was very precise in all my remarks and I specified several methods-by means of taxation, by means of transportation policies without any interference from the aspect that my hon. friend is making at the moment-whereby the government could assist. In my remarks I went out of my way to point out that private enterprise was taking the initiative in this matter and was away ahead of the government.


Richmond Francis Lionel Hanna: Mr. Speaker, I am sure I do not wish to be unfair to the hon. member for Brandon-Souris, but he has just now mentioned discriminatory taxation, for example, and other things. Does that not amount to coercion if it is carried far enough?


Walter Gilbert Dinsdale: This is a straw man.


Richmond Francis Lionel Hanna: However, I should like to put on record some of the things that industry is doing along the lines of decentralization, in the constituency I have the honour to represent. I think we have some excellent examples there of what we might call forms of decentralization based on sound economic lines. In the vicinity of Edmonton we have had hundreds of millions of dollars invested


in industry during the past 10 years, in an area that was formerly the centre of a chiefly agricultural community. Of course some people will say, "You found oil and gas out there." We certainly did, and we are very happy about it. That is one of the main reasons for the industries that we have there today, but I suggest that is not the whole story.
We have several large oil refineries, and we have the terminals of two huge pipe lines, one going to the west coast and the other going to central Canada. But we have much more than that. At Edmonton we had a vast petrochemical industry established a few years ago. In other days we could visualize such huge industries being established only in the world's major cities, such as New York, Detroit or perhaps Montreal or Toronto, but now we have them in Edmonton. The combined investment in this type of industry alone runs to over $100 million, and expansion is still taking place.
Of course some people will say that is purely because oil and gas were found there, but I suggest there is more to it than that. We have also had established at Edmonton in the last very few years-less than five years-iron and steel mills, roofing mills and so forth. At the town of Fort Saskatchewan, which is located some 20 miles from Edmonton and has a population of about 2,000 people, we have a huge nickel refinery, and several other industries of a similar nature are planned there. That, in my opinion, is decentralization of the very best kind, where no government controls at all entered into the picture. There was no government interference of any kind. Industry has established itself there simply because it was economically wise and prudent so to do.
Then we have two pulp and paper mills projected for the Edmonton area, involving a capital investment of over $10 million. One of the pulp and paper mills is being built at a little place called Hinton, 180 miles west of the city of Edmonton. There again we have real and practical decentralization on a voluntary basis.
A little over a year ago a new cement plant costing over $12 million was started in the federal constituency of Edmonton West. It will be starting production this month. This cement plant in Edmonton West was no sooner begun than another company moved into Edmonton-Strathcona and now has near the production stage a second cement plant. Here again was no government direction, but the free play of free competition going full steam ahead in the development of this great country along sound economic lines. So I could

go on indefinitely. Other cities in Alberta are experiencing similar industrial activity, but on a somewhat smaller scale-Calgary, Red Deer, Lethbridge and so on.
Before I close I should like to emphasize this point. Those industries I have mentioned have sprung up at Alberta points since world war II because of very sound reasons. I am convinced that industry generally is keenly aware of the merits of decentralization. The captains of industry are not so slow; I think they have studied most of the points that have been brought up here this afternoon by hon. members. They know the values inherent in decentralization in this day and age, and I think they are not unaware of the fact that we are living in an atomic and hydrogen bomb age. But the captains of industry are also aware of the cost of decentralization. They have weighed, considered and evaluated all the factors concerned. They know there are many considerations other than merely decentralization for the sake of decentralization. I think we must go along with them a long way and recognize that the economic factors of the situation are very important.
Would any hon. member here suggest, for example, that there could be a paper mill established on Baffin island, just because it happens to be remote from our large cities? Where would the raw materials come from? Where would we get the power? Where would we find the workers for such an industry? Probably most important of all, where would we find the markets? How much would such an industry cost if it could be established in such a remote area, and who would meet these extra costs?


An hon. Member:: The taxpayer.


Richmond Francis Lionel Hanna: My hon. friend says "the taxpayer". I do not want to be unfair to the hon. member for Brandon-Souris, but I should like to know from him just what industry he would like to establish in his own constituency that is not already there. Who is it proposed would do the directing of industry to the many constituencies that we represent here in this house? Would it be left up to the local member of parliament? I certainly hope not. I suggest that this is more a matter for local chambers of commerce to attract industry to these various locations by pointing out the economic benefits that would accrue to the industry and to the community generally by the establishment of a new industry there.
These are some of the questions that deserve consideration before we go off the deep end in this house on a proposition to legislate for the decentralization of industry. Decentralization in this day and age can be made to appear plausible on the surface, but I am
Decentralization of Industry sure that it is fraught with many dangers unless we take many other factors into consideration. Decentralization sounds fine, but without a little bit of economic sanity behind it, I believe it is largely a snare and a delusion. We simply cannot fly in the face of economic realities, as has been suggested here this afternoon.
I have nothing but praise for Canadian industry and what it has done so far toward decentralization. I believe decentralization is a good thing. I do not believe that all the industries in Canada should be concentrated in the central provinces. We in Alberta want all the industry we can get, and we are going out after it. The more that comes, the happier we will be. But I believe that we must be realistic about this thing. We could not possibly have deserved, shall I say, a petrochemical industry at Edmonton before the discovery of oil because it simply did not make economic sense.
As I have said, I am not opposed to decentralization of industry. For those areas which, like the one I have the honour to represent, have acquired new industries, we can assure hon. members here that it is a good thing indeed. But our industries have not been brought to Alberta by any kind of government direction. There were strong economic factors behind the new investments that have been made in our community. Without consideration of the economic factors we cannot get very far in the long run.
However, I am satisfied that we shall see more and more decentralization of industry in Canada in the years ahead as our country grows and develops and as new resources are discovered in the various parts of the country. I certainly hope that our good friends in the maritimes get their share. Nevertheless, I think we shall make a great mistake if we try to place on the statute books of Canada any legislation which will arbitrarily force industry to move from one part of the country to another.


Mr. J. H. Blackmore (Lethbridge):: Mr. Speaker, it has been a great pleasure to listen to the contributions to the debate this afternoon. I have appreciated greatly the facts which have been placed before the house. Before I begin to discuss what I was planning to discuss, perhaps I should refer to the fine speech of my friend the hon. member for Edmonton-Strathcona (Mr. Hanna). May I point out to him that there is one respect in which he is utterly mistaken, and that is when he supposes that the industrial development in Alberta was not the result of any government activity.


An hon. Member:: Oh, oh.
1806	HOUSE OF
Decentralization of Industry


John Horne Blackmore: Mr. Speaker, I hope the hon. member does not spoil the effect of his fine speech by silly remarks from here on. In the first place, the first thing that started the development of Alberta was the introduction of treasury branches in Alberta, bringing down the interest rates. They brought down interest rates from 8 per cent to 5 per cent. Do you think that would have no effect on the industrial development of any province? That is as simple as it can be.
Then they began to reduce the debt. Do you suppose that any sensible corporation would go in and spend a vast amount of money in a province which was plunging into debt at the cataclysmic rate at which Alberta was going into debt before the Social Credit government took it over? We owed $167 million in Alberta when the Social Credit government took it over. Of every dollar of our revenue we were paying 49 cents out in interest on the debt alone. That is an extremely serious matter. No sensible leader of a corporation would invest money in a province that was in such a desperate financial condition as that. Those are only two things.
Now may I say a word in respect of the discovery of oil and the suggestion that it was not good management on the part of Alberta that caused the phenomenal development of oil. It was good management. There Was a definite plan for the development of the oil, and by reason of that plan the oil development took place. Only one or two things need to be said. In the first place the province of Alberta said, "We are going to reserve the parcels of land which are contiguous to any parcel on which oil is discovered; that will mean that it will be impossible for two or three big companies to come in, drill for oil and then blanket the whole province with a monopoly."


Richmond Francis Lionel Hanna: Will the hon. member permit a question?


John Horne Blackmore: As many as you like to ask me.


Richmond Francis Lionel Hanna: I should like to ask the hon. member whether he does not consider that the activities of the federal government over the years, particularly those of the former department of mines and resources, had something to do with this oil development in Alberta?


John Horne Blackmore: Up to the time the Alberta Social Credit government had got well under way with its policy, all the federal government did for Alberta was to slap her in the face. That was all they did, slap her in the face. When we first -ame down here


20 years ago we were just objects of derision. We were just poor doers down at heel because our province had been plunged so terribly into debt. We were not supposed to know how to manage our affairs. We knew how to manage ourselves well enough so that in 1921 we threw the Liberals out and put the United Farmers of Alberta in. They tried to govern the country in something like an economic way. Then in 1935 we put the U.F.A. out and put in the Social Credit government which changed the whole future of Alberta.


An hon. Member:: Oh, oh.


John Horne Blackmore: Yes. That is perfectly right. If the hon. member will just ask me questions one at a time I will answer him, and then he will not be foolish. He does not know one thing about Alberta where I know six. He is a foolish young man who has been doing his level best during the last two or three years to throw out of Alberta one of the very best governments on the face of this earth, one with a record which he himself has been adulating this afternoon in his speech. He has been trying to throw that government out, and has been lying about it and misrepresenting it all over the country until we had a most disgraceful situation in the last election in the spring of last year. I will prove every word I am saying right here on the floor of the house before we get through.
If the hon. member has anything to say about it, it is wise for him just to remain quiet and listen and learn. I have been in Alberta ever since I was 2| years old. I have been in Alberta for 62J years. I was in the organization that put the U.F.A. in office. I supported the U.F.A. while it was in office. I was in the organization that put the Social Credit government in office. I have watched the development of Alberta with the greatest of interest ever since I was old enough to go to university, which was in 1909. With all due respect to the hon. member, I say to him that he can learn a great deal from the hon. member for Lethbridge about the economic development Of Alberta.
Now I wish to say just a word or two with respect to the development of oil. It was not as the result of any accident at all that we got the oil development. If two or three big companies could have come to Alberta, drilled oil wells, found oil and then just bought the monopoly-a great big blanket monopoly

all over the province, the like of which has occurred, for example, in New Brunswick with respect to the woods, it would have been just good night to the development of oil in Alberta.

If there had been in Alberta groups of men who were principally concerned with building a great big pork barrel from which the henchmen of the party would help themselves to money to go out and prostitute the people all over the country and keep them ignorant about facts concerning the province, as was done in British Columbia under the Liberals and Conservatives, so that the fine resources-


An hon. Member:: Oh, oh.


John Horne Blackmore: Just a moment now,
please. You can have all you wish when the time comes, but believe me you had better know your stuff before you begin asking me questions about these matters. Now, out in British Columbia there were tremendous resources just frittered away, and the effect the Social Credit government has produced in British Columbia has been simply staggering.


Mr. Fulton:: It certainly has.


John Horne Blackmore: You cannot laugh that off. Developments have taken place all over the province. Just wait until the next election, and you will find what the people think about them.


John Whitney Pickersgill: May I ask the hon. gentleman a question?


John Horne Blackmore: Well, come on.


John Whitney Pickersgill: Has the hon. gentleman been reading the British Columbia newspapers recently?


John Horne Blackmore: Of course he has been reading the British Columbia newspapers, as far as he needs to do so.


Mr. Johnston (Bow River):: Was that about the Mackenzie King book?


John Horne Blackmore: He is well informed about British Columbia. I should like to go back to the oil question for a moment.


An hon. Member:: You had better.


John Horne Blackmore: We are not discussing British Columbia now. If there are hon. members who want to discuss British Columbia, then bring them on. There is no doubt in the world that British Columbia was plunging into debt at the same staggering rate as Alberta was until Social Credit took over. This government of British Columbia has cleared off the debt at a phenominal rate since it took power, and has developed roads and other things as well. However, this is not the time for such a discussion. Today we are discussing the matter of the decentralization of industry.
The hon. member for Edmonton-Strath-cona made the statement that he thought
5, 1956
Decentralization of Industry everything that has happened in Alberta since 1947 has been accidental. It was very far from that, I can tell you now, and I can prove it beyond a doubt. I spoke about the first thing being to avoid monopoly. Because the Alberta government adopted a policy of crown reserves in respect of oil to prevent monopoly, by 1948, one year after the Leduc discovery, there were 62 different companies of varying strength and sizes drilling for oil in Alberta. Why was this? It was because they knew they would be protected from the big concerns, and they would be protected by the simple device of crown reserve. There is no answer to that.
Here is another thing we did in Alberta. We said to the companies, "We will not charge you a flat rate of royalty. If you have a very fine well that produces abundantly, is close to markets, and it is easy to make money from that well, then we may charge you a royalty of 16 per cent. But if you discover a well that is not so good, is rather far from the markets and is not a profitable well all the way round, we will not charge you any more than 4 per cent". This one simple device guaranteed so much protection to the oil companies it brought them in by the scores and kept them there. It will keep them there from now on, too.
Those are just two of the simple things that were done. There were about eight of them that I could name if we had enough time. I have them at my finger tips. However, we are discussing the matter of decentralization of industry. I will tell you that the only thing the federal government has done for Alberta ever since I have been there has been to put blocks in her way and stop her from developing, just as they stepped in and stopped British Columbia from developing the Castlegar dam with their so-called rivers bill. They just got in the way, as a stubborn mule would. Do you know what they did as a result of that? They took out of the hands of the British Columbia government and people a means of making $252 million in 50 years.


The Acting Speaker (Mr. Applewhaite):: Order. I think I should point out to the hon. member for Lethbridge that if he is permitted to make remarks which might be thought in some quarters to be provocative on subjects dealing with the development of natural resources, it will only be fair that the Chair should permit those who perhaps will not agree with him to meet some of his arguments. The resolution we have before us does deal with taking advantage of every possible opportunity to promote the decentralization of industry, particularly with reference to defence industry.
1808	HOUSE OF
Decentralization of Industry
I think perhaps the hon. member could discuss that subject without finding it necessary to go into the development of natural resources in one particular province and extend the scope of this debate as it must be extended if he is permitted to make statements which other members may feel they should answer.


John Horne Blackmore: We would be very happy to provoke them to talk. We have quite a lot of men here who will deal with their nonsense. However, I do not desire to enter into that matter except to answer what the hon. member for Edmonton-Strathcona said. He made remarks that would be interpreted by the good people who were sitting around him at their face value, when as an absolute fact those remarks were erroneous and misleading.


Richmond Francis Lionel Hanna: Will the hon. member permit a a question? He has said the federal government put blocks in the way of the development of Alberta oil and gas. Would he mind explaining to the house how the federal government put blocks in the way of the development of oil and gas?


The Acting Speaker (Mr. Applewhaite):: have no intention of allowing the hon. member or other members of the house to go further in pursuing that particular subject, the development of natural resources in any province. It may be, and doubtless is, a very fit subject for discussion in the parliament of Canada, but not under a resolution dealing with the decentralization of industry with particular reference to defence industry. I would ask members of the house to give that line of thought some little consideration during the next two hours.
It being six o'clock, I do now leave the chair.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
John Horne Blackmore: Mr. Speaker, in the few moments that remain at my disposal tonight in the discussion of the matter of the decentralization of industry and its desirability, I should like to devote my attention particularly to the need for decentralizing industry. I think the hon. member for Cumberland (Mr. Lusby) gave a very good talk. I appreciated the way in which he approached the subject. As I recall it, he indicated to the house and the country quite clearly that it was impossible for us to have a really sound and flourishing Canada unless every part of
[The Acting Speaker (Mr. Applewhaite).]

Canada is sound and flourishing. Consequently, what occurs in the province of Newfoundland is of vital concern to the province of Alberta and to every other province in the country and, therefore, what occurs in British Columbia or in any other province is of vital concern to the province of Newfoundland.
Little by little I can feel that hon. members, as each succeeding parliament convenes, are coming to realize this more and more, much more than they did in 1935 when I first came here. Bit by bit we Canadians shall begin to see that we must look after ourselves as a whole if we wish to go forward to the glorious destiny which all of us realize Canada can have.
How can this matter of the decentralization of industry be brought about? As I recall it, the hon. member for Cumberland quoted from a recommendation to the Gordon commission. If I am correct, four devices were outlined, as a result of the application of which we might render the decentralization of industry much more common and possible in Canada.
When I visited Britain in 1941 with the empire parliamentary association delegation, I was rather impressed to learn that Britain was divided into twelve regions for the purposes of the war, and each of those twelve regions, as I was informed, had a government of its own. Each had an industrial life of its own. Each had a military establishment of its own, so that in case all the other eleven were overcome by the foe the twelfth one could stand up and fight with all the power and vigour that it was capable of fighting with, with what remained of Britain.
Canada could very well aim at some such thing as that. As matters are now, I think we must all realize rather unhappily that if we get involved in a struggle and the industrial areas of Ontario and Quebec are seriously impaired it will greatly damage our fighting strength. If we were relying upon those two sources for our food and other supplies, and the enemy disrupted our transcontinental railways, it would put us at a tremendous disadvantage. We would be wise to give careful thought to all of this, and probably aim to make each province a selfsufficient emit as far as we can. I think the resources of the provinces are such that in the main that sort of ideal could be almost attained.
When we look at what has happened to the maritimes, as the hon. member for Cape Breton South (Mr. Gillis) pointed out so well this afternoon in that fine speech; when we look at the industries in the maritimes we

find that a most serious deterioration has occurred since they entered confederation. As hon. members will recall, the hon. member pointed out that 50 different industries had been siphoned off, as he said, from the maritime provinces into Ontario and Quebec. That might have been pretty good business for Ontario and Quebec, but it was bad business for the maritime provinces and in the long run it will be bad business for the two central provinces as well.
There are enough resources in this nation to support a population of many, many happy millions; but we shall never have the many, many happy millions so long as all the industry supporting this nation is concentrated in those two central provinces. Out in the other provinces there still is need of economic strength to support an adequate population.
What can we do about it? Well, let us examine for a few minutes the case of New Brunswick and see what happened to her as a result of entering the confederation of Canada. I hold in my hand the submission of the province of New Brunswick to the royal commission on dominion-provincial relations, issued in April, 1938. This submission is a most valuable document, because it undertakes to analyse for us what has happened to New Brunswick and what brought it about. Before I finish my remarks I may read some passages from this document, which, by the way, I commend to the most earnest consideration of every hon. member. First of all, 1 may say that New Brunswick attributes most of her ills to three main factors; an adverse tariff, which has injured her terribly; adverse freight rates, which have also injured her; and lack of control of credit.
If I may read from page 49 of the document, I think hon. members and the people of the country will be glad to hear these words:
The disadvantages from which New Brunswick has suffered in relation to the tariff were further accentuated and increased by the unauthorized burden of excessive freight rates on the railways in the maritime provinces after 1912.
May I interrupt there to recall what I was saying just before the house took recess. I said that all the federal government had done for Alberta up to the time the Social Credit government was elected in 1935 was to slap her in the face. One of the means by which she was slapped in the face was by the use of a most onerous and iniquitous set of freight rates, which it was positively a disgrace to foist upon any community whatsoever. The cost of getting goods out and the cost of getting our goods back were such that we hardly had anything left after those rates had been paid. Some of the most monstrous 67509-115
5, 1956
Decentralization of Industry items could be mentioned, but I shall not go into them at present because it would take too much time. I continue reading from the submission:
Principally as a result of these two elements industries became centralized in the province of Ontario and Quebec.
The two elements there were tariffs and freight rates. The submission continues: Large companies having their head offices in Ontario and Montreal bought up many industrial plants in New Brunswick and then closed them down. The manufacturing in New Brunswick at the present time is insignificant as compared with manufacturing in other parts of the dominion.
I do not know what was the matter with the federal government that they did not do something or other to try to stop the purchasing of those industries by these great concerns in Ontario and Quebec. It will be argued that this is a free enterprise country. I will grant that it is a free enterprise country. It is also a country which was organized under the British North America Act to see that every part of Canada prospered equally, and just as soon as the powers that were in Ottawa began to realize that that kind of thing was taking place something should have been done, but something was not done.


An hon. Member:: What?


John Horne Blackmore: Someone asks "what". I would be delighted to go into that. I do not think I shall have time to go into it tonight, so I shall have to discuss it at some later time, but certainly something ought to have been done. To say that something could not be done is simply to be utterly unrealistic and to acknowledge that the British North America Act, and Canada under that act, was a failure to begin with, which I am not ready to concede.
It goes on to say in the next paragraph:
In this connection it is well that the commission should bear in mind that the Canadian banks have been centralized in Ontario and Quebec. Prior to confederation and for some years afterwards we had our own banking institutions in this province and our people were able to obtain money for the encouragement of industry here.
I would think the very first matter of which the government in Ottawa would have taken cognizance was that very fact. Anyone with any intelligence whatsoever could see that if the banks of the maritime provinces came under the control of the banks in Ontario and Quebec, then the industries in the maritimes could be denied credit and could be seriously impaired if not destroyed, greatly to the immediate advantage of the industries in Ontario and Quebec, thereby rendering the maritimes practically vassal states to the two central provinces. It should not have taken intelligence of any high order
1810	HOUSE OF
Decentralization of Industry to see that, and it should not have taken intelligence of any high order to have devised some means whereby that sort of thing could have been offset.
I do not hesitate to point out what I know every hon. member in the house readily recognizes, that unless we can remove the three disadvantages which the province of New Brunswick points out in the submission, as a result of which New Brunswick is faced with impossible odds, that province will never attain the greatness which she was designed by the Creator to attain. She will never be able to develop her resources and add fo her population, and she will never be able to be strong in that sense. She will always be a hewer of wood and a drawer of water, not because she has not the resources or the people willing to risk and toil, but because there is a paralysing force imposed upon her as a result of the indifference-or the cooperation, although I hope not the co-operation-of Ottawa.
What can we do? What the government needs to do and what the people of the country need to do, because we are all vitally interested, is this; find out what can be done in respect of these three matters and encourage people in the country to think about this matter. As I pointed out in a previous speech, there are altogether too many Canadians who view Canada with a snake's-eye view and not with a bird's-eye view, which soars aloft and sees the possibilities of this magnificent heritage which has been bequeathed us. There are possibilities not only for industrial strength but for increased population and over-all greatness arising from the loyalty of people who realize that they are getting a square deal and have a future worth looking forward to; that they can safely raise a family with assurance that the family is going to be able to have the means of supporting dignified and abundant lives. To say that such an ideal is impossible of attainment is to be utterly unrealistic, I maintain, and is tantamount to being a little Canadian instead of a big Canadian, a snake's-eye Canadian instead of a bird's-eye Canadian.
Let us now continue with the New Brunswick submission. The people who wrote the submission do not complain very much, but they do not pull many punches. On the same page it goes on to say:
The head offices of these hanking institutions were removed, after confederation, to Montreal and Toronto where they were situated more immediately in touch with the financial interests by which they were controlled.


Let us recall what the hon. member for Cape Breton South said this afternoon in relation to the picture which is indicated there. I quote the next paragraph of the submission'-
The result has been that industries in New Brunswick have not been able to obtain financial assistance in cases where such assistance would enable our local industries to compete with those in the provinces of Ontario and Quebec.
To what extent is that true today, Mr. Speaker? That is a question which must be asked and answered. We must also ask to what extent can we by actions in this parliament grant to New Brunswick the means of overcoming this handicap. I do not wish to go into financial matters in too great detail, but it is quite obvious that financial conditions go right to the very root of the matter.
I wish to put it on the record that I commend the hon. member for Edmonton-Strath-cona, for the very fine speech he made this afternoon, in which he expressed great understanding and appreciation and exactly the kind of ideals that Alberta people everywhere wish to express. But I point out that one of the great steps in giving Alberta a chance to get ahead was the treasury branch. The province of Alberta, exercising the powers given to her and Saskatchewan under their charter on entering into confederation, was able to lend money out of the treasury of Alberta, which meant that she was able to put at the disposal of the farmers and others in Alberta the credit of the province of Alberta as far as she possessed credit financially.


An hon. Member:: Even cabinet ministers.


John Horne Blackmore: That is exactly what was demanded when we first put in the treasury branches. Then we had papers like the Calgary Herald and other big, wise know it alls beginning to complain how members of the legislature and cabinet ministers did not dare trust their money in the treasury branches. We had a campaign such as only those people can conduct; and members of the legislature and the cabinet, freely accepting the responsibility that was on them, began to do their banking business in the treasury branches thereby strengthening the treasury branches as a whole and the credit of Alberta so the farmers could produce more. What the members of the legislature did was to help Alberta to become strong, just as the people in a credit union help all the other people who are in the credit unions to be strong. This is plain common sense, and even a simpleton could understand it.
Very largely as a result of the treasury branches in Alberta the province was able to get a measure of control of her credit.

The bankers were not willing to lend in Alberta before the treasury branches were set up. An ordinary man in my district was not able to get a loan from a banker to save his life. The bankers turned up their noses and called common farmers uncredit-worthy. They said it was because the people were indebted, or for any one of a dozen other reasons. But as soon as the treasury branches were established in Cardston and Raymond and several other towns, the bankers came out on the street and buttonholed the men they had said were not credit-worthy before. The bankers were very ready to lend money to them then at 5 per cent, whereas before they would not have lent it at 8 per cent. I mention this just to show how potent was the effect on the Alberta economy of the introduction of the treasury branches. I submit that if we could build a set-up in the province of New Brunswick under which the province with the assistance of the dominion government, using Bank of Canada funds, could set up something comparable with the treasury branches of Alberta it would be simply astonishing how rapidly the economy of New Brunswick would begin to revive, just through a simple device like that.
There is one other thing worth considering. If it be that New Brunswick is too small a province, too insignificant to manage an important financial concern, then why not have New Brunswick and the other three Atlantic provinces combine their financial strengths? Let this Atlantic economic council, about which the hon. member for Cape Breton South spoke this afternoon, be given the power to establish financial means in the four Atlantic provinces as a result of the use of which they could begin to rebuild their economy. If that were done then we would find an immediate change for the better, which change would accelerate as the days went by, just as it has in the province of Alberta.
As I said a few minutes ago, there is simply no need for us to sit here and say that nothing can be done about this situation. There is no reason why we should be objects of contempt to such people as the communist leaders of Russia. There are plenty of producers in this country if we use free enterprise the way it could be used. We could then make Russia look like a nation of pikers. Let them do the best they can under their state ownership and socialism; we could do still better. What we lack in this country is not production, because we can produce until further orders.
That has been proved over and over again. We literally smothered our foes in two world 67509-1154
Decentralization of Industry wars with production, using private enterprise. The thing that on those occasions made it possible to use private enterprise to such advantage was that we then had the money with which the people could buy. That indicates quite clearly that it is a matter of finance. To say that we cannot devise means in this country whereby we can make our financial instruments the servants of our productive instruments is to prove ourselves unworthy of being where we are. I read further from page 50 of this report:
Pertinent cases may be cited where local industries in this province have been destroyed because of the difficulty of financing and we submit that finances have been withheld as local industries might come into competition with similar industries in the last mentioned provinces.
I appeal to all hon. members. Can you think of a more hopeless position in which a group of people could be than that in which the province and the people of New Brunswick found themselves under circumstances like that? At the same time you have people boasting all over the place about free competition. There was not anything resembling free competition under those circumstances. New Brunswick could no more compete freely with industries in Ontario and Quebec than a man could compete with a wrestler when he had both hands tied behind him. There is one suggestion I make as to how we can overcome the disadvantage which confronts us.
There is further discussion to be found on page 63, but I have not time to go into that because my time is practically exhausted. This indicates how the tariff was used to choke off and destroy the fish canning industry of New Brunswick. I wish I had time to read all that will be found on page 64. They set out a number of little technicalities, rules and devices which permitted the tariff to be used to place difficulties in the way of this great industry which represented an investment of $2 million, and it was practically ruined. I am not sure whether it had to close its doors.


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


An hon. Member:: Let him go on.


Some hon. Members:: No.


John Horne Blackmore: Mr. Speaker, I do not wish to question your ruling, but the point is that we did not start until three minutes after eight. I did not get under way until a quarter to six, and I was interrupted with question after question. I have said practically all that I proposed to say. My message is

Decentralization of Industry this. Let us not assume that there is nothing that can be done about this situation. Let us stand up to our responsibilities.


Mr. Deputy Speaker:: Order. I should like to say once more that I have found the officials at the table extremely accurate in this matter of time. The hon. member commenced speaking at 5.45 and spoke until six o'clock. He recommenced again this evening at 8.02 and therefore his time had expired at 8.27.


John Horne Blackmore: Did you take off the amount of time Mr. Speaker occupied and the amount of time occupied by questioning?


Mr. A. M. Fraser (St. John's East):: Mr. Speaker, in rising to take part in this debate, first of all I should like to congratulate the hon. member for Brandon-Souris for moving this resolution. I think he has raised a question which is important and timely. With the principle that the government should encourage the decentralization of industry I have no quarrel whatever, but the practical application of that principle is another matter. I hope to be able to consider that further on in my speech.
There is perhaps no need for me to remind the house that there are many economic factors governing the localization of industry with which this whole question is intimately bound up. First there is the question of the availability of raw materials. Second, there must be an available and adequate supply of skilled labour. Another essential is the proximity to large markets, and here I am thinking not only of the actual number of consumers composing the market but the purchasing power possessed by those consumers. We know that if a demand is to be effective it must have purchasing power. Another indispensable factor is cheap and efficient means of transportation, and another is a plentiful supply of power at reasonable rates.
To these important economic factors perhaps two more might be added, namely an adequate supply of capital and an adequate supply of managerial ability. However, these are much more mobile factors and respond more quickly to the magnet of the other factors, particularly the movement of capital which naturally gravitates through the sensitive mechanism of the money market to those areas in which it can be employed to the best advantage.
It is obvious that for all these reasons some areas are better endowed by nature than others to become great industrial centres. It is hard to resist the pull of natural advantages, and indeed it is not always desirable to attempt to do so. All through history economic and geographical factors have powerfully influenced the location of industry, and in


our own time modern technological developments have contributed to industrial concentrations.
I should like to turn now to the problems that arise out of the centralization of industry, especially when that centralization becomes excessive. First of all, undue centralization of industry militates against a wider and more even distribution of prosperity throughout any country. Second, it causes a drain on labour skills and business ability from the periphery to the centre of the country. I have often heard it said that the Atlantic provinces have been threatened with the loss of some of their best brains to other parts of Canada. This movement of population imposes a heavier burden on those who remain. A single example might perhaps suffice to illustrate this point; the per capita cost of provincial services immediately rises.
Another aspect of this problem to which I think we might devote a few moments is that it is a self-perpetuating process. The exodus to the centre swells the mass market, for instance, of central Canada, thereby increasing the advantages of industrial location there. At the same time it produces precisely the opposite effect in the peripheral provinces. In a sense it is a vicious circle, with cumulative effects that are very serious to the lesser industrialized provinces. Then again, it causes population congestion in the great metropolitan centres, with certain social and moral disadvantages to which various hon. members, including the mover of the resolution, have drawn our attention and upon which it is unnecessary for me to dwell at any length. Certainly it makes great problems for municipalities in such matters as juvenile delinquency, traffic difficulties and so on.
In my opinion one of the most important aspects of this question is the strategic aspect. We all know that we are living in a thermonuclear age and that nuclear air attack, if it comes, which God forbid, will cause heavy casualties in our populous centres. The incidence of these casualties will be all the greater because of congestion of urban centres. Then too, from the standpoint of the effect of such attacks upon the country's economy, that economy is undoubtedly rendered more vulnerable by undue centralization of industry. If a country's industrial centres are knocked out, the entire economy can be paralysed because the flow of goods to the rest of the country will dwindle to a trickle or perhaps even cease altogether. Wider dispersal would mitigate this problem.
Undoubtedly Canada has the great advantage of wide spaces, and it seems to me that

this advantage should be utilized to the utmost that is practicable. What I have said particularly applies in the case of defence industries which, of course, are all-important in war. We do not want to be faced with a situation in which the fighting strength and power of resistance of the country may be knocked out by a few terrible blows on great industrial centres. It is my view that the problems of civil defence-and we know they are very grave and very complicated- are aggravated by undue centralization of industry.
The problem of industrial centralization has, in my opinion, particular relevance to my own province of Newfoundland. Here the impact of industrial centralization is felt by both the consumer and the producer. Newfoundland has derived great benefits from the union with Canada. That is recognized very clearly in Newfoundland, particularly as regards social services; but I should like to point out that there is another side to the picture.
Prior to confederation the Newfoundland consumer could buy in the cheapest markets. Now this freedom has been circumscribed to some extent by the Canadian tariff system. Here I should like to refer to a few figures concerning the distribution of Newfoundland's external trade before union, when separate statistics were kept. In the year 1947-48, for instance, Newfoundland exported to Canada goods to the value of $11 million, but imported from Canada goods to the value of almost $55 million; so that even before confederation the mainland of Canada enjoyed a favourable trade balance with Newfoundland by almost five to one. Since confederation, although no official figures are available, there can be no doubt that sales from the mainland of Canada to Newfoundland have greatly increased. An estimate by one competent source has placed them at about $150 million. That, of course, is unofficial, but I think it is a fairly accurate estimate.
Of course there has been a marked diversion of Newfoundland purchases since union from other countries to the mainland of Canada, particularly from the United States. Unfortunately, however, there has been no corresponding increase in Newfoundland sales to the mainland of Canada. That is perhaps inevitable in the economic circumstances, for the mainland and Newfoundland economies are competitive rather than complementary.
This is particularly true in the case of two of Newfoundland's three staple exports, namely fish and newsprint. The only important exceptions are iron ore and, to a lesser degree, fluorspar.
Decentralization of Industry
It will not have escaped the notice of the house, I know, that recently the provincial government of Newfoundland, under the dynamic and imaginative leadership of Premier Smallwood, to whom I was glad to hear the hon. member for Cape Breton South pay such a handsome tribute earlier in this debate, has undertaken a bold program of industrial development. New industries, some 16 in number, have been established with government assistance and under government sponsorship, though not under government management. Some of those industries look to the Newfoundland market; others to the mainland markets. Sales in the Newfoundland market benefit the Newfoundland consumer and help to some degree to offset the disadvantages of centralization of industry.
Sales to mainland markets are, however, handicapped by distance. Newfoundland is at the end of the line, on the extreme east coast. It is, of course, a maritime province in the sense that it is an oceanic province, an island province. Low coastal shipping rates are essential to the Newfoundland consumer and producer alike. We must have low-cost shipping facilities. The keenest possible competition among shipping services is necessary in order to keep down shipping rates.
Here I feel I must refer to a matter which is giving very great concern to Newfoundlanders at the present time. That is the attempt of certain mainland shipping interests to exclude ships of United Kingdom registry from Canadian trade. This exclusion would be fatal to Newfoundland. I cannot overemphasize that fact. It would be really a death blow to the island's economy. It should be borne in mind that the only other means of transportation of goods into and out of the island is by means of a narrow-gauge, single-track railway which is greatly overburdened at the present time.
Another aspect of this situation to which I should like to draw the attention of the house concerns its fiscal effects. Newfoundland's contribution to the federal treasury is, I believe, much greater than it might appear at first sight, because of the sales made in Newfoundland of goods produced on the mainland of Canada. Federal excise tax and federal sales tax are paid on those goods produced on the mainland and sold in Newfoundland, but when the taxes come into the federal treasury they come not from Newfoundland but from the provinces of the origin of the goods.
Then also I think it is important to point out that a considerable part of the corporate income tax paid by mainland companies on manufactured goods sold in Newfoundland and personal income tax paid by employees

Decentralization of Industry of all ranks in these firms are, to some extent, due to the sales made of these goods in Newfoundland. That, of course, is true also of other provinces which are consuming centres for the great industrial regions of our country.
As has been pointed out by the hon. member for Cumberland who, I thought, made a most admirable contribution to this debate, there are practical limitations on the role which the federal government is able to play in this matter of encouraging the decentralization of industry. First of all there are the constitutional limitations of our federal system. Second, there are the economic limitations imposed by economic laws operating within the private enterprise system. Both these systems, in my opinion-that is the federal system and the private enterprise system-are essential to the development of our country.
It is true that this framework imposes certain unavoidable limits upon the opportunities with which the federal government is presented to encourage decentralization. Nevertheless, I believe that even within this framework there are steps which can be taken by the federal government. Of course these have been taken, and they have contributed in large measure to the development of the provinces in all parts of the country. I am confident that these steps will continue to be taken by the government which has done so much to promote the prosperity of the nation as a whole.
Amongst these I would single out for special mention the maintenance of equitable freight rates; co-operation with provincial governments in scientific surveys of natural and industrial resources, particularly in the underindustrialized areas of the country; and the placing of government orders, where these are possible and economical, with firms operating in underindustrialized areas.
I offer these comments in no merely provincial spirit but from the standpoint of Canada as a whole. In this great country of ours the prosperity and the well-being of the whole are inextricably bound up with the prosperity and the well-being of all the parts. The optimum development of the industrial resources of every province of Canada is in the best interests of the Canadian nation as a whole.


George Clyde Nowlan: Mr. Speaker, I am glad to have the opportunity to take part in this debate, but only for a brief period, I hope, because I realize it is an important one and that' there are many other hon. gentlemen who want to take part in it. The day is a rather short one
[Mr. Fraser (St. John's East) .1

because of the fortunate circumstance at 2.30 this afternoon, when we had the opportunity of greeting the head of the Italian state. I therefore intend to speak but briefly. In fact, however, I should like to speak for a long while.
One sometimes gets disturbed-I will not say irritated-by what one hears. This afternoon I thought suggestions were made- perhaps it is oversensitiveness on my part

that some people were a little bit worried about the maritime province or felt that the maritime provinces were making some special plea on this occasion. Actually, Mr. Speaker, that is not the case, and I think all of us from the maritimes rather resent any such implication. I almost caught that suggestion, I thought, from the remarks of the hon. member for Edmonton-Strathcona, who said he did not think anything could be done by legislation and that nature would have to take its course.
After all, some of us remember the fact that before they joined confederation, the maritime provinces happened to be the most prosperous section of what was then the Dominion of Canada, and that some parts of Canada which now boast of their wealth were occupied only by Indians. Sometimes we almost wish they still were, to be a little bit facetious about the matter. Certainly the natural resources about which they boast today were part of the natural heritage which we assumed was being taken over by the provinces which at that time formed confederation. At any rate, whatever may be the accident of geography today, the fact remains that in those eastern provinces there was a remarkably high degree of prosperity. After confederation that prosperity-to put it mildly and to use a conservative understatement-did not maintain the same relative position.
I realize that there are historical reasons for that fact. In the first place, just before confederation there was the civil war and the great prosperity which the maritime provinces enjoyed through being able to ship goods to the United States. I almost think one could be frank and say that they shipped goods to both sides over the border during that conflict. There was also the fact that the great wooden shipbuilding industry, which had flourished in the maritimes, had given us a predominance in trade not only with what was then Canada, the eastern provinces and British North America as such, but also in trade all over the world.
Of course, shortly after confederation came the economic development of the steel ship and wooden ships passed out of commercial

practice and practicality. It may be-and I think possibly the criticism can be fairly levelled-that in the maritime provinces, particularly in Nova Scotia, an effort should have been made to shift from wooden ships to steel ships, to maintain the position which we theretofore had occupied. But whether or not that is a fair criticism, the fact remains that the shift was not made. As a result, shortly after confederation the relative prosperity of the maritimes lapsed and we did not keep pace with the rest of Canada. I am also prepared to admit that in the maritimes sometimes there has been too much of a habit of placing one's head on the shoulder of confederation and weeping over the ill effects of confederation upon the maritime economy.
I think we have overplayed that, frankly.
I think, to a large extent, it was political. After all, confederation became a political issue in our province. The Liberals were opposed to it. They fought it and they carried all the maritime governments against it after confederation and, in fact, once before it. When prosperity slipped away, whether it was their fault or whatever the reason, there was a natural tendency to say, "Well, didn't we say confederation was a bad thing." Then all the maritime governments began weeping on the shoulders of confederation; it became a provincial policy to place the blame largely on confederation. That is part of the background of this feeling which we sometimes hear suggested, as we did this afternoon, that we have overemphasized the disabilities which we have suffered.
Whether or not that was justified in the past, it is not for me to say. But I can say this. I think the maritimes have tried to accomplish something despite some of the obvious disabilities from which they suffer. This is not the place to discuss it. When the estimates of the Minister of Transport are before us one could take a full 30 minutes in that committee, then continue after an interruption for another 30 minutes, speaking on the freight rate structure and the disabilities which have been imposed upon the maritimes because of it.
When we entered confederation we were told, it is true, "You are not going to be able to ship to the south. You are not going to be able to enjoy the trade pattern which you have enjoyed heretofore. But there is going to be an east-west pattern developed, and you are going to profit immeasurably by that." The Intercolonial Railway was built for that purpose. Up until 1911 or 1912, before the outbreak of world war I at any rate, that pattern was fairly well maintained.
5. 1956	1815
Decentralization of Industry Since Mien it has been forgotten, and as a result the freight rate structure is such that it is very difficult for industries in the maritimes to enjoy this east-west trade that was at one time promised to them.
Notwithstanding that, Mr. Speaker, there are firms in the maritime provinces which have maintained a national position, and not only those in the luxury trades such as confectionery. For instance, the hon. members for Halifax have one great national firm there, and there is another one in New Brunswick. Despite all the difficulties of the textile industry, that industry in Nova Scotia is still maintaining a national position. There are the heavier industries such as Enterprise Foundries at Sackville, which manufactures stoves and furnaces, amongst the heaviest articles manufactured today. They are still maintaining, either by good management, by ability or by fighting against this adverse trend, a national position. There are many other firms in the maritimes which have done likewise. As the hon. member for Cape Breton South suggested this afternoon, it is true that many have disappeared. On the other hand, there have been at least some which have been able to maintain their position.
The situation in the maritimes has not been one of stagnation. It has been one of development, but our complaint is that relatively the development has been, I will not say immaterial but at least not in keeping with the developments that have taken place in other parts of Canada. I just happened to be glancing over a report of the Nova Scotia Light and Power Company. We have a public utility commission in Nova Scotia, and we have a large privately owned utility. There are also two or three smaller ones. When you glance over that report you notice that during the last five years the output of electricity by this firm has been doubled. It has been trebled since the war and they are envisaging doubling it again in the next seven years, and again doubling it in the following seven years. They do realize that there is development taking place in the maritimes, particularly shall I say in Nova Scotia.
If one looks at the population figures one sees that our population in that province increased by 11-2 per cent between the two censuses of 1941 and 1951. I notice, and I am sure the Halifax members are proud of this fact, that the population of the city of Halifax has increased between 1941 and 1951 by over 35 per cent. It has only been exceeded by four other cities in Canada, the four western cities of Edmonton, Calgary, Vancouver and Victoria. We are not, therefore, in
1816	HOUSE OF
Decentralization of Industry a position of weeping on someone's shoulder. We are not sitting here crying at the moon, and we are not saying that the situation is hopeless or that nothing has been done. We are appealing to the government to help us.
Our people there have tried to help themselves. I should like to say of the Nova Scotia Light and Power Company, to which I referred a moment ago-I am sure the hon. member for Cape Breton South would support me in this if he were here-that instead of using oil in its generating plant, as it could have done being situated at Halifax, it has installed steam generating plants using Nova Scotia coal for the development of that steam, thereby increasing the use of Nova Scotia coal. If their plans are carried out for doubling and redoubling the output in the next 14 years, there will be a tremendous increase in the use of Nova Scotia coal by that one plant alone.
As I have said we have tried to do, and I think we are doing, something to counteract this situation which developed following confederation. As the hon. member for Cape Breton South said this afternoon, I think the organization of what is briefly called APEC, or the Atlantic provinces economic council, is a forward step. We believe it will have a marked impact on the development of the maritime provinces. You now have the four Atlantic provinces, not just the maritime provinces but the four Atlantic provinces of Newfoundland, Nova Scotia, New Brunswick and Prince Edward Island, associated in one economic council with a secretariat and staff organized to make studies of the problems with which we are confronted and attempt to arrive at some solution on a common basis. I am quite sure when that economic council, financed by three Liberal governments and one Conservative government at the moment, make their recommendations they will not accept the suggestion that was made this afternoon that there is nothing the federal government can do to assist in carrying this into effect. I believe there is.
As I said, whatever developments we have made-and I emphasize this because sometimes I think the suggestion is that we have done nothing for ourselves-nevertheless it is the relative position which disturbs us. I should like for a moment to give one or two figures with respect to that. I am speaking now of the three maritime provinces. In 1949 we had 9-2 per cent of the total national population. By 1954 that had dropped, not terribly but nevertheless it dropped, from 9-2 per cent to 8-7 per cent. Our percentage of labour employed had dropped from 8-3 per cent in 1949 to 7-5 per cent in 1954. Perhaps most important of all, Mr. Speaker,
[Mr. Nowlan.l

the percentage of new investment and capital investment had dropped from 6-5 per cent to 4-8 per cent, which is a very substantial drop in new investment.
In so far as Nova Scotia itself was concerned, I could not get the figures for the maritimes for 1954, but I did check with the dominion bureau of statistics this afternoon and they gave me these figures for the percentage of new investment and capital investment in Nova Scotia in 1950, as 3-7 per cent. In 1955, last year, it had dropped to 2-8 per cent. In this connection it should be pointed out that our manufacturing investment dropped over 24 per cent between 1949 and 1955. In other words, Mr. Speaker, the 2 [DOT] 8 per cent of the national investment which we had in 1955 was largely represented by institutional investment, hospitals, schools, plus investments made by the Minister of National Defence in enlarging national defence organizations in the maritime provinces and in Nova Scotia.
As I said, when you see that our manufacturing proportion dropped 20-3 per cent, despite the fact that in other parts of Canada it increased tremendously, you can understand that we are somewhat concerned about the situation. If it had not been for the investments made by the Department of National Defence in their installations-not in productive facilities such as factories-at Shearwater, at Stadacona, at Greenwood in my own constituency, and at Cornwallis in my own constituency, and all over because of our geographical position, because we happen to be one of the provinces on the eastern seacoast which has to be prepared for whatever emergency may come, we would be in a worse position. Because of our geographical location we have had this tremendous expenditure in national defence installations, which accounts almost entirely for the new capital investment which has taken place in the maritimes. It has accounted for almost all of the new capital investment which has taken place in Nova Scotia during the last few years.
We all know, Mr. Speaker, or we all hope, that this type of expenditure will not be permanent; that it is something based on an emergency, and it is not productive except for the moment. Because of the enlarged barracks and the increased and enlarged installations we of course get the wages and salaries of the personnel and their purchases, and it all contributes to an expanding economy. But when the time comes, as we hope it will, that these expenditures can be restricted, then the economy of the maritimes

vis-a-vis the rest of Canada will be even worse than before these expenditures were made.
When you see the briefs which have been filed with the Gordon commission-I am not going to read the figures which were given this afternoon-which show that over 80 per cent of all of the industrial development is taking place in the two central provinces; and when you envisage all this great further development which is going to take place along the St. Lawrence river basin and in southern Ontario, I do not think those of us who come from the maritimes can be criticized if we suggest that something should be done to reverse this trend and try to make national production more widely distributed in this country.
The hon. member for Edmonton-Strathcona said, "Well, you cannot of course do this by legislation". No one is suggesting, at least in this resolution, that it can be done by legislation, but legislation can accomplish something. I did not hear him objecting in the last three weeks when we were discussing legislation which was certain to be of benefit to some parts of Canada, Mr. Speaker.
We have on the order paper legislation which presupposes the expenditure of some millions of dollars for the construction of a pipe line, which will be of assistance to some parts of Canada but certainly not to the maritime provinces. We have had on the order paper and in the estimates hundreds of millions of dollars for the construction of the St. Lawrence seaway, which certainly is not going to benefit the maritimes; in fact, it is going to be an absolute deterrent to them in every way, shape and form, and that legislation was perfectly acceptable. I do not think there were any shudders or any nausea when it was passed.
I can say this. The members from the maritime provinces support that legislation because we believe in Canada, and we want to see a strong Canada developed, even stronger than that which we have had heretofore. But we do believe a national policy works both ways. A national policy should not be created to make only a strong centre, which we perhaps are a little bit envious of but which we accept. We also believe it should be extended to the periphery of this country as well.
Today we heard something about the constitutional problem; that constitutionally this parliament cannot do anything. But, Mr. Speaker, the constitutional problem is greater in the United States than it is here because, if I remember my constitutional history and constitutional law at all, in the United States
Decentralization of Industry the residuary power is vested in the individual states, and only delegated powers are vested in the central government, whereas our position is the reverse.
Well, what do we find in the United States? We find that country has been able to pass legislation and to offer tax exemptions, for instance, to industries which will locate in certain states, giving certain inducements so far as freight rates are concerned to industries which will locate in certain states. The President has directed national defence industries to locate in certain states. These are three steps which have been adopted and carried into practice by the United States of America. I suggest, Mr. Speaker, if that can be done by that country with their constitutional problems, then the same thing can be done by our country where the constitutional problem is far less.
The hon. member for Cape Breton South spoke this afternoon about the steel industry and what could be done there. We all believe this in the maritimes, Mr. Speaker: the thing which made us prosperous in the past, and which made us great, really-and we were great; we were small but we were great provinces-was the fact that we had an export position. We could take part in international trade, and we were able to ship to the markets of the world.
We still have that export position. You cannot tell me that with a steel plant such as we have in Nova Scotia, or such as could be developed there, the Minister of Defence Production or this government could not direct that more of those products could be made in Nova Scotia or in the maritimes so they could be shipped more economically to our NATO allies and to other parts of the world. There are scores of things such as this that could be done.
I am not going to elaborate further because I made a promise to myself that I was not going to speak so long as to interfere with the half a dozen others who I am sure want to speak, but I do say in conclusion there are things the government could do. There are certain constructive measures that could be taken either by freight rates, by taxation, or by the allocating of industries, and probably in more ways. If we had the time, if we had two or three days in which we could debate this, I would like to make further constructive suggestions with respect to it. But I do say that I heartily approve of this resolution, and I believe that every hon. member should approve it. We are all proud of Canada; we are all proud of the fact that we are Canadians, but we do believe, those of us from the periphery, that something along that line should be done.
1818	HOUSE OF
Decentralization of Industry
Perhaps those from the west coast, because they have been blessed by Providence with greater wealth and natural resources than we have been blessed with in the east, do not suffer from the peripheral position to the same extent we do; but this country can never become the country that the fathers of confederation envisaged unless we develop a national policy which will make all parts of Canada relatively prosperous. It is not that we expect the 80 per cent of the industrial development, or anything of that kind. But I know, I am convinced, that steps can be taken to rectify this trend which has developed here, not during the last few years but for many years. The time has come when it must be rectified; I believe it can be. I think this resolution, although of course it is only a resolution, envisages and presents to the house the possibility that it can be done.
(Translation) :


Mr. Fernand Viau (St. Boniface):: Mr. Speaker, the resolution introduced in the house this afternoon by the hon. member for Brandon deserves another reading for the information of the hon. members. It is as follows:
That, In the opinion of this house, the government should consider the advisability of taking advantage of every possible opportunity to promote the decentralization of industry, particularly with reference to defence industry, thereby,
(1)	helping to reverse the trend towards concentration of population in large metropolitan areas with the accompanying social evils;
(2)	encouraging a more equitable distribution of population and development right across Canada, and
(3)	assuring the strategic dispersal of vital war industries in the interests of national defence.
The principle of that resolution or motion presented by the hon. member is perhaps very commendable, but we are indeed surprised that the opposition should put forward such a resolution since it amounts to inviting the government to implement a regimentation policy which has long been denounced by the Liberal party. We would understand a motion like this being introduced by a socialist group, such as the C.C.F. party but coming as it does from a Progressive Conservative member, it surprises the house.
Of course only an authorized spokesman of the Progressive Conservative party can present such a motion in its name. This new stand in favour of regimentation can only be explained by the fact that his party has never, for more than a quarter of a century, put forward a clear-cut policy as far as the


economic and social welfare of the Canadian population is concerned.
A few weeks ago, we witnessed a tragedy on the T.V. screen when the young representative from Three Rivers (Mr. Balcer), proud of his membership in the Progressive Conservative party and in his capacity as chairman of the national association of his party, was utterly unable to state the Progressive Conservative policy in answer to questions put to him by newspapermen on behalf of the Canadian population.
It is therefore not surprising that the house was astonished this afternoon to hear a member speak in favour of a policy of regimentation because but a few months ago, in fact last July, the official spokesmen of the Progressive Conservative party emphatically opposed certain powers that parliament proposed to grant to the right hon. Minister of Trade and Commerce and of Defence Production (Mr. Howe).
Industrial decentralization consists in using regimentation to uproot certain industries established in the industrial provinces of Quebec and Ontario, and forcing them to establish themselves in other provinces, following a survey of the industrial situation throughout Canada, from the Atlantic to the Pacific.
Tonight I would like to state the views of western Canada, and more particularly those of Manitoba. I believe that the policy so well shaped by the Liberal government of Canada has, everywhere and at all times favoured industrial decentralization because, after all, even in Manitoba, during the war, we witnessed the departure of a large number of our young people and heads of families who enlisted to defend their country. Others went to work in industries established in the provinces of Quebec and Ontario; in spite of all that, many Canadian citizens came to settle in the western provinces and particularly in Manitoba.
Since the great victory of the allies in 1945, numerous industries have established themselves in Manitoba, where an imposing number were already operating. For instance, in my own city of St. Boniface we have the largest stockyards and packing plants of the British Empire, while in greater Winnipeg there are large textile, clothing, sugar beet, cement and other industries. Since 1945 more than 500 new industries have been established, a fact which has enabled the people of western Canada to receive each month a large amount in the form of salaries. The establishment of these industries has obviously contributed to the economic advancement of the Canadian nation.

Salaries in western Canada packing plants are in excess of $14 million. I wonder if the hon. member for Brandon would not be the first to protest, if the government were forced, as a result of this motion having been carried, to require, for instance, the packing plant in Brandon to remove to Portage la Prairie, shall we say, so that the people of that community could be allowed to enjoy the economic benefits accruing from such a plan. Yet, that would just about be the policy which would follow upon the passage of that motion.
I do not think we should adopt that motion since the Liberal government, after all, ever since it came into power back in 1935, has taken all possible steps necessary towards improving the economic and social well-being of the Canadian people.
As regards decentralization, may I point out that industry has always been encouraged along that line by legislation introduced in this house and now placed on our statute books.
The report of the industrial development bank indicates that it has on numerous occasions extended financial assistance to those Canadian citizens who wished to establish industries in western Canada. We might add too that the National Housing Act has made possible the building of a great number of houses in western Canada. All that has brought constant benefits to the Canadian people. These are but two instances of beneficial legislation enacted by the Liberal government. Such legislation is abundant. With the support the Canadian people has always given the Liberal government, I am sure that we will be able to keep on improving the economic standards of our country, which makes the envy of all the other nations of the world.
I am opposed to such a motion because it would mean the enforcement of an act of regimentation which, as I stated a moment ago, is inconsistent with the policy of the Liberal party. Moreover, through the increase in population in western Canada, and the establishment of industries in always increasing numbers and through the help of the minister of industry and commerce of Manitoba,-who has done everything in his power and has even appointed a foreign representative to find ways and means of bringing new industries to western Canada, all that with the support of the federal government- western Canada will soon enjoy constant prosperity in the industrial sphere. I would rather
Decentralization of Industry support a policy of steady economic progress, such as we have always enjoyed since the Liberal government came to power in 1935.
The beneficial steps taken not only by the provincial ministers of western Canada but especially by the federal Liberal government were meant to ensure the progress of the agricultural industry which has steadily improved not only under the right hon. Minister of Agriculture (Mr. Gardiner) but in particular under the direction of the right hon. Minister of Trade and Commerce. I am sure that but a small minority among Canadians, during the depression, would have been ready to burn them in effigy and that, with the present economic and social development going on throughout the country, the Canadian people are willing to erect a monument to these ministers. All this is due to their knowledge of our problems and of course to their desire of forever upholding the great principles of the Liberal party.
Mr. Speaker, these are the few remarks I wished to make tonight. I am sure that what we want is to maintain our policy which has been so firmly established for a long time and to reject any legislation conducive to regimentation.
(Text):


Mr. A. J. Brooks (Royal):: Mr. Speaker, I wish to take only a few minutes this evening to discuss this resolution. The resolution is quite familiar to me, because I have heard similar resolutions moved in the house a number of times. I want to congratulate hon. members who have spoken already, particularly the hon. member for Brandon-Souris, who moved the resolution, and the hon. member for Digby-Annapolis-Kings, who spoke of the situation in the maritime provinces. As a matter of fact it was such a splendid speech and illustrated our position so well that I feel it is hardly necessary for me to say anything. I want to thank the hon. member for Lethbridge for taking up the cudgel on behalf of my own province of New Brunswick.	.
This subject has been debated in the house on many occasions. I remember in the late thirties when it was brought up. Then during the second world war we asked that industry be decentralized and different sections of the dominion given a share in the production of war materials. We brought up the matter
1820	HOUSE OF
Decentralization of Industry during the so-called cold war and requested that the outlying sections of Canada, such as the maritime provinces and certain sections of the west, be given some opportunity to produce war materials. Even now we do not consider it is too late for the government to give consideration to this important problem.
It has been pointed out that with industry concentrated in great centres like Montreal, Hamilton and Toronto, in case of an attack, if such a thing should happen, the country would be in a very poor position indeed. Our war industry could be entirely destroyed without much effort on the part of the enemy.
Despite the fact that these matters have been discussed in this house for many years, what is the net result? As has been so well illustrated by speakers here today, I think it can be said that the net result is that there is more industry today in Quebec and Ontario than there ever was before. The people of the maritime provinces and other parts of Canada who were poor before are today poorer, while the people in the central part of Canada are richer today. That is a state of affairs which we hoped would be corrected.
It is not necessary to go back into history to the days of confederation, because those days are past and gone and we must look to the future. To review the situation which has existed in this country for 80 years is not going to help us. Of course we can tell how in 1871 New Brunswick had 10 per cent of the industry of this country while its population was not 10 per cent of the whole. There was hardly a village or town in any part of New Brunswick or the maritime provinces that did not have its small industry. The economy was well balanced, the people were happy and contented, and they stayed in their own part of Canada.
As the hon. member for Cape Breton South has said, today Ontario has 49 per cent of the industry of Canada, Quebec has 33 per cent, while New Brunswick with a population of practically half a million has only 2 per cent of the total industry of Canada. Such a situation is not healthy, and I feel it is one which should be corrected.
The sad deterioration of our position during past years can be blamed, as was pointed out by the hon. member for Lethbridge, upon certain things. Let me say to the hon. member for Edmonton-Strathcona that the government does have something to do with this. As was pointed out by the hon. member for Lethbridge, an adverse tariff is one of the reasons why the maritime provinces have lost their industries. That is something over which federal governments, not provincial governments, have had complete control since confederation.
[Mr. Brooks.l

The hon. member referred also to adverse freight rates. The federal government has complete control of freight rates. The hon. member for Digby-Annapolis-Kings referred to the lack of control over credit, which is a matter under the control of the federal government. There is another item which could be added to the list mentioned by the hon. member for Lethbridge. This did not apply in days past, but it has applied for the last 20 years. I refer to the lack of cheap electrical power in those provinces.
I should like to quote the remarks made by a former premier of the province of New Brunswick, Hon. J. B. McNair, who is today the chief justice of our province, during the dominion-provincial plenary conference of 1945. Referring to the situation in his own province he had this to say:
Let it be remembered again that the control of all matters national in their scope and which affect most vitally the social and economic well-being of the people in the provinces is now vested in the central government. I have already mentioned the main items. The chronic unbalance in the Canadian economy with the heavy concentration of industrial, commercial and financial power in certain favoured areas, is due to the play of forces under the control of the dominion parliament and government since confederation. That situation is capable of being remedied, and only remedied, through national policy.
That was the opinion of the premier of New Brunswick, a very able man, as expressed in 1945, and it is the opinion of the people of New Brunswick today and has been the opinion of the people of the maritime provinces since confederation. As I said before, that opinion has been expressed repeatedly to governments in this country, but today the situation is no better, in fact it is even worse than it was 25 or 30 years ago.
During the second world war billions of dollars were spent, but only one-half of one per cent was spent for the development of industry in New Brunswick. As the hon. member for Digby-Annapolis-Kings said, we were there down by the sea with the great ports of Halifax and Saint John, with people willing and ready to work, yet industry was concentrated in the central part of Canada and the products had to be carried over railroads which were frightfully congested during that period in order to reach those ports. No effort was made at all to create war industry in the maritime provinces.
Then there were the after-effects of the war. During a debate in this house at the beginning of the war I suggested that we should have more manufacturing in the maritime provinces of the requirements of war. The then minister of fisheries, Hon. Mr. MARCH 5. 1956
Michaud, said, "We do not want to manufacture too much in New Brunswick; the result will be that we will have a lot of empty factories in the maritime provinces after the war is over."
There were a lot of empty factories after the war was over. Where were they? They were in Quebec and Ontario. They were sold to commercial concerns at fire-sale prices, and today they are going concerns employing tens of thousands of people. If we had had some industry in the maritime provinces in those days, I believe today we would have industries flourishing in that part of the country. That was one way in which this federal government at that time could have helped the people of the maritimes.
I do not wish to take up a great deal of time, as most of the points have been covered. But this question of decentralization is not new in Canada, and it is not new in other countries of the world. The hon. member for Lethbridge mentioned the fact that they have decentralized war industries in other countries. They have not only decentralized their defence production indus-dustries, but they have decentralized other industries. In Paisley, in Scotland, they are establishing atomic energy reactors, so that part of the British Isles may be productive as far as industry is concerned.
I remember that some years ago the British government said that Durham was in a depressed area, and that it would start some industries there in order to make it as economically sound as other parts of Great Britain. The same thing was done in Wales. In southern United States years ago were producers of cotton, which they sent to the northern part of that country. As producers of the cotton for the north they were simply hewers of wood and drawers of water, but that situation was changed. The federal government and the Tennessee valley authority realized that those people would become great industrialists if they had cheap power in that part of the country. Cheap power was given them, and today the southern states have become greatly industrialized and they are not the poor section of the United States.
From 1919 to 1939 the New England states lost 40 per cent of their industries and 25 per cent of their working population. The people of those New England states said that something must be done, and in 1939 an effort was made to get more industry for the New England states. The great textile factories were bought up and used for other purposes, with the assistance of the federal government at Washington. Today there is a great improvement in the situation in that
Decentralization of Industry part of the country, owing to government policies. I have here an article in the Christian Science Monitor of January 16, 1956, which
says:
Today, New England industries are producing an amazing array of products used in nuclear installations and equipment throughout the country.
They are doing that through the atomic energy commission. It also says:
Similar defence department contracts have served to spur New England's leading industry: aviation.
It goes on to say that today, with the impact the government has given to that part of the United States, industry is in better condition there than it was many years ago. The Christian Science Monitor also speaks of decentralization in the matter of defence production, in an article dated December 28, 1955:
Production Shift Set
. . . air force secretary Donald A. Quarles laid down the policy Dec. 28, approved by the defence department, reversing the old idea of building up war industries after the start of hostilities.
The main paragraph, which I shall call to the attention of the house, reads as follows:
Mr. Quarles stressed the need for dispersal of war industry but emphasized that vulnerability was the key consideration and that dispersal is one factor in reducing vulnerability.
That is a statement by a very able man, and it is a statement that should well be taken into serious consideration by the government in this Dominion of Canada. A good look should be taken over this dominion, and industries should be given to the parts of the country I have mentioned.
Mr. Speaker, you may ask us how you could help the province of New Brunswick. The hon. member for Digby-Annapolis-Kings very aptly told us different ways in which the government could help. I and other members from New Brunswick have on many occasions here in the past few years told how our province could be helped without any cost to this dominion. What we need to encourage industries and to bring industries to the east is cheap power. I was surprised to hear the hon. member for Cape Breton South say they had as much power as they needed in Nova Scotia. I rather question that, because I read not so long ago that Nova Scotia could have had a $10 million pulp and paper mill in the southern part of that province if it could have had cheap power with which to operate.


Clarence Gillis: That is only propaganda.


Alfred Johnson Brooks: 
To the Minister of Defence Production the other day, when he was saying that we might trade with Russia and that one of the things we would buy from Russia would be manganese, I could have pointed out that we in the province of New Brunswick have discovered a considerable amount of manganese. I understand that this is one of the chief minerals used in the hardening and development of steel. In the maritimes we have everything that is needed-lime, coal and iron-to develop a great steel produce tion there. As I said a moment ago, not one dollar, except the money that is spent in digging the ore out of the ground, will go to Canadians. Most of it is going to be shipped to the Americans to the south of us. That is no way to build up our provinces by the sea. That is no way to build up this Dominion of Canada of ours.


Mr. Lennard:: While you are at it, you
might tell the Minister of Labour to pay a little bit more attention to you.


Alfred Johnson Brooks: I am not going to take up any more of the time of the house. The hon. member for Digby-Annapolis-Kings spoke about an organization that was formed. We are told to help ourselves. We have never tried to shirk helping ourselves. I cite the effort at Beechwood to develop power. Is that not a great step toward helping ourselves? We should like to get a little bit more help from others. This organization which was mentioned a few moments ago and which has been set up in the Atlantic provinces is called the Atlantic provinces economic council. It was formed for no other purpose than to help ourselves. I should like to read from one of their by-laws under the heading of "Membership":
1.	The membership shall consist of persons from the Atlantic provinces representing such interests as agriculture, construction, fisheries, labour, mining, manufacturing, banking and investments, insurance, transportation, public utilities, wholesale and retail trade, universities, tourist business, professions and other lines of business prominent in the said provinces.
2.	It shall be the privilege of any member or members of the council to withdraw therefrom at any time upon giving to the secretary thereof written notice of their intention so to do at least seven days prior to the date fixed for the annual meeting.
Then under the heading "Objects and Purposes" we find the following:
The objects and purposes of the Atlantic provinces economic council shall be:
I.	To survey and study the advantages and difficulties, including alternate transportation, under which the population of the said Atlantic provinces is operating for the purpose of :
1.	Discovering the forces which should make for economic growth and stability within the said provinces;

2.	Making recommendations concerning methods calculated to ensure the economic future of the said provinces;
3.	Promoting or opposing legislative and other measures affecting trade, commerce, manufacture and industrial development of the said provinces.
II. To stimulate;
(1)	Concrete expression as to matters vital to the economic welfare of the Atlantic provinces among organizations participating in its membership;
(2)	United action among the said provinces;
(3)	The promotion of the Atlantic provinces' agriculture, commerce, fisheries, industry, public utilities, transportation and other matters of common concern.
In this connection I might say that this council which has been formed in the Atlantic provinces is based on similar councils which were formed in the New England states, and which were to a great extent responsible for the interest of the federal government and the obtaining of industries in that section of the country.
In closing I wish to repeat that there is a responsibility on the federal government. The matter of freight rates cannot be dealt with by the province of New Brunswick or by the people of New Brunswick. The matter of tariffs cannot be dealt with by them. The matter of using our raw material in this country and prohibiting it from going outside to be processed, fabricated and manufactured cannot be dealt with by the people of the small provinces. There is where the federal government can help and there, I say, is the responsibility which rests upon the federal government in this country.


Mr. S. R. Balcom (Halifax):: Mr. Speaker, on Saturday I took time out to go down to the union station to give my personal welcome and my applause to the President of Italy. It was fortunate that I went down, inasmuch as it gave me an opportunity of seeing our Second Canadian Guards in action. I am full of praise for that body of men which was just recently organized. They are fine looking young men. The officers gave their orders clearly and well, and the men acted as though they were one. I therefore felt very proud of them.
You may ask, Mr. Speaker, what this has to do with decentralization. I should like to suggest that when these young men are fully trained the Minister of National Defence, in his wisdom, send at least one company of them to Nova Scotia. If I might do so, I see the hon. member for Digby-Annapolis-Kings in his seat and I would suggest that they be stationed in his riding at Aldershot.


George Clyde Nowlan: Arrange it with the minister.


Samuel Rosborough Balcom: In speaking on this resolution I am sure that I will be expressing, in greater or less degree, the views of every member of this house. I suspect, however, that there
Decentralization of Industry are many different ideas on what decentralization means. A town a hundred miles from Toronto or Montreal compares its relative position with that of one or other of these great cities, and a sigh is emitted, touched perhaps, as was said this afternoon, by envy. In Nova Scotia or in the far west we must sigh much more loudly in order that the sound may carry the necessary distance to Ottawa, or what should be more important, to the point of the concentration of private enterprise industry in the upper provinces. That perhaps accounts for the superior lung power of those from the provinces more distant from the centres of larger population.
I am concerned mainly with decentralization of industry that will encourage a more equitable distribution of population and development right across Canada. In our private enterprise economy the government cannot instruct or direct industry to locate in any particular spot. The choice of a location for a plant involving the expenditure of any substantial amount of money is usually made after careful consideration of all the factors that will affect the cost of doing business. That is good, sound logic. A firm weighs the risks and then takes the plunge. Except in a few rare instances, competition is such that it must scratch pretty hard to make things go; at least that applies in the maritimes. Most Canadians feel that the responsibility for such decisions should rest with the firms, and that in the long run this will bring the greatest good, in a material sense, to the greatest number.
The government does not direct industrial location, nor can it by legislation endow an area with resources, eliminate distances by act of parliament or remove the tariffs and other obstacles to trade put up by other countries. What then can it do to encourage a more equitable development across Canada? When confederation took place the greatest single problem confronting the individual provinces was the cost of providing adequate transportation facilities. This is still the most important single factor affecting the development of Nova Scotia's economy today. Distance from the central Canadian markets on the one hand and tariff barriers in our export markets on the other have us in a very tight squeeze.
For this reason I urge upon the government the need to maintain and extend its efforts to reduce trade barriers. If we are to sell fish, lumber, wheat, base metals, we must accept goods in return. We cannot have our cake and eat it. Our people demand a high
1824	HOUSE OF
Decentralization of Industry standard of living, so we must develop our natural resources and trade them in the world market if we are to provide that standard.
The government has more direct control over transportation costs as they affect the outlying provinces. Speaking as a Nova Scotian I have said before in this house, and I urge again, it is time we took another look at the Maritime Freight Rates Act. There is no need for me to go into the history of this legislation and its application. It is sufficient to refer to the relative position of the steel industry in Nova Scotia compared with its competitors in Ontario. In public statements the president of Dosco has said that since the war the freight rate on steel bars to the main industrial market in Canada has practically doubled, while for one of its competitors the increase was less than 10 per cent and for the other roughly 60 per cent in the same period.
This is only one example, but it is enough to show that unless some action is taken the relative position of the Atlantic provinces will deteriorate rather than improve with the growth of Canada. Many factors have contributed to this; the growth of highway transport to the more populous areas, horizontal rate increases, and so on. While the freight picture is worsening, other more encouraging things have happened. Progress has been made on the trans-Canada highway; air travel facilities have been steadily improved; the national harbours have been greatly developed. All in all, our transportation facilities have come a long way.
The most important single development in this field in recent years has been the St. Lawrence seaway. Some years ago, in 1950 to be exact, when this project was still in the planning stage, I asked what study the government had given to the economic effects of this undertaking. In particular I was concerned that due attention should be given to the possible ill effects the seaway might have on certain maritime industries. I should like to be assured that some responsible federal agency has been given the responsibility for continuous study of this matter. This aspect of the project should be regarded as a national responsibility, and it should not be just left to the provinces to point out the difficulties. If as much effort were put into this as is going into research on how to keep the St. Lawrence river open the year round, we would be very happy.
The government is to be commended for the work it has initiated in the provision of
[Mr. Balcom.l

research facilities. The national research council in Ottawa and its maritime regional laboratory in Halifax are an imaginative effort for regional service. The provision of vocational and trade training in conjunction with the provinces has been important to industry in Nova Scotia. This is true of the fisheries as well as manufacturing generally, and the construction industry. Perhaps most important of all is the possibility of developments in atomic energy which will be available to all parts of Canada, irrespective of location. This is a field in which federal development should pay off for all provinces in equal measure.
We are, of course, interested in obtaining defence industry, but in particular we are interested in privately owned industry. Defence industry may be a temporary matter. You build up a locality with defence factories, then the pressure is off and they close leaving many people unemployed. We are interested in holding what we have. As so many speakers have said tonight, since confederation we have lost many industries. In particular, Halifax has lost several. There was a time in 1867 when we had many English distributing houses. They have all gone and are now found either in Montreal or Toronto. We had several cigar factories. They are all to be found today submerged in some upper Canadian plant. We had a broom factory, and we had shoe factories. In time they were sold to those industries in Upper Canada. Recently we have all received letters from the boot and shoe industry, particularly the rubber footwear industry, concerning importations from Hong Kong and what they are doing to the industry here. It was just that sort of thing that happened in Nova Scotia over the years.
Then at the time of the Halifax explosion there was a cotton factory which was blown up. What did they do with the money they were paid as compensation? Did they put it into another factory at Halifax? No; that also went to Montreal. Then on the east side of Halifax harbour, in Dartmouth, there was a very fine industry which closed.
May I call it ten o'clock, Mr. Speaker?



BUSINESS OF THE HOUSE

Walter Edward Harris: Tomorrow and Wednesday we shall take the resolution to set up the committee on railways and shipping owned and operated by the government; then the resolution to set up the federal district committee;

then the one with respect to the Criminal Code, followed then by the resolution in my name with respect to the Industrial Development Bank Act, and then second reading of the Small Loans Act. I should add that the latter two bills will be going to the banking and commerce committee after second reading.
Business of the House


Mr. Green:: What about the committee on research and atomic energy?


Walter Edward Harris: We will come to that, I hope, later.


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