1956-04-10

LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mrs. Ellen L. Fairclough (Hamilton West):: I should like to address a question to the Minister of Labour. Is the minister aware of the unemployment situation in the town of Pictou, Nova Scotia, and will he take steps to consult with the Minister of Transport with a view to having some work allocated to that area to relieve the situation?


Hon. Milton F. Gregg (Minister of Labour):: Mr. Speaker, I am aware of the situation referred to by my hon. friend, and the most immediate steps will be taken to help to improve it.


Mr. Thomas M. Bell (Saint John-Albert):: Would the minister also look into the situation at Saint John at the same time, particularly with respect to the lay-offs at the drydock due to the lack of federal contracts?


Milton Fowler Gregg: I am also very well aware of the situation to which my hon. friend refers, but I think that any comment would be incomplete if it did not state at the same time that the general employment situation in Saint John, New Brunswick, is very good indeed.


Thomas Miller Bell: The warden of a municipality near Saint John sent me a telegram with respect to the Saint John drydock lay-offs-


Some hon. Members:: Order.



EMPLOYMENT OF CANADIAN CITIZENS IN LABRADOR

[Stage Direction]
On the orders of the day:
Milton Fowler Gregg: I should like to reply to a question asked just before Easter by the hon. member for Kootenay West. I have sent the hon. member a copy of my reply, but I should like to give it to the house. His question can be divided into three parts. The first part is:
Are Canadian citizens seeking employment in Labrador required to complete standard form 60 of the United States civil service commission, handed to them by United States army officials?
The answer is as follows: It is presumed that this question refers to the employment of Canadians on Canada-United States mutual defence projects in Labrador. On the construction of these projects, contractors do their own hiring through the national employment offices of the unemployment insurance commission. The contractors use their own application forms.
The United States air force and the United States army corps of engineers also employ Canadians in connection with those defence activities in Labrador which are a United States responsibility. Recruitment of these Canadians is carried out through the national employment offices of the unemployment insurance commission. Since such persons are to be employees of the United States government, the application form used is that of the United States civil service commission.
The second part of the question is:
If so. do these army officials have the final say as to the employment of the applicant?
The answer is as follows: Whether personnel are employed by contractors engaged by the United States army corps of engineers or by the United States air force, the final decision as to the employment of applicants rests with the employer.
The third part of the question is:
Why are Canadian security personnel not used for this purpose?
The answer is as follows: In either case when there are security considerations involved, the security check is the sole responsibility of Canadian security authorities.



INQUIRY AS TO DATE OF FINAL


[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: Mr. Speaker, I should like to direct a question to the Acting Minister of Trade and Commerce. Can the minister say whether the final payment for the 1954 wheat crop can be announced soon so that western producers, who are still very short of cash, may be assisted in financing their seeding operations?


Hon. Robert H. Winters (Acting Minister of Trade and Commerce):: Mr. Speaker, as a result of the large sales made by the Canadian wheat board, heavy deliveries of grain will be possible during the next few months in western Canada, putting a good deal of cash into farmers' hands at the time of seeding and subsequently.

Inquiries of the Ministry
As for the final payment on the 1954 crop, this matter is under consideration and an announcement will be made as soon as a decision is reached.



DOMINION-PROVINCIAL CONFERENCE REQUEST FOR FARM ORGANIZATION REPRESENTATION

[Stage Direction]
On the orders of the day:
Right Hon. J. G. Gardiner (Minister of Agriculture):: Mr. Speaker, yesterday I was asked a question by the hon. member for Assiniboia (Mr. Argue) with regard to messages received. I find that I have one telegram which I can read to the house, and the answer. The telegram is as follows:
Yorkton, Sask.
Hon. J. G. Gardiner House of Commons Ottawa
En route on meetings just obtained copy press report your announcement of proposed dominion provincial agricultural marketing conference Ottawa April nineteenth. Believe it serious omission not to invite farm organizations. Feel this will have definite repercussions. Questions of marketing farm products too important an issue for government to ignore representation direct from farmers and farm women. Urge reconsideration and sincerely trust you issue invitations for farmer representation at once.
Jake Schulz,
Chairman,
Interprovincial Farm Union Council.
I answered that telegram on March 21 as follows:
Jake Schulz Chairman
Interprovincial Farm Union Council Yorkton Saskatchewan
It was decided at conference last December that one conference with farm representation is to continue to be held annually in the first week of December to discuss production and marketing for the following year and no other one in between.
I hope you will attend the next one. It was also decided that a conference of ministers of agriculture and officials was to be held as soon as possible to which others would not be invited.
James G. Gardiner


Hazen Robert Argue: Mr. Speaker, if the minister will not consider asking them as representatives, I wonder whether he would be prepared to have some representatives sit in as observers?


James Garfield Gardiner: It has been customary for many years to have an agricultural advisory committee meet. This agricultural advisory committee is meeting on the 16th, 17th and 18th, which are the three days preceding the other conference. All the farm organizations and all the provincial governments are represented on that committee, so they will be here the preceding three days.



ARTS, LETTERS AND SCIENCES INQUIRY AS TO SETTING UP OF CANADA COUNCIL

[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Prime Minister. Can the Prime Minister say whether the further consideration which on March 1 he said was being given to the establishment of the Canada Council has yet reached the point where an announcement can be made? If not, is the matter still under consideration?


Right Hon. L. S. St. Laurent (Prime Minister):: It has not yet reached the point where an announcement can be made, and is still under consideration.



IRRIGATION


[Stage Direction]
On the orders of the day:
Mr. W. M. Johnson (Kindersley):: I should like to direct a question to the Prime Minister. Is it the intention of the government to proceed with the immediate construction of the South Saskatchewan dam as indicated in some recent press reports?


Louis Stephen St-Laurent: No, it is not the intention of the government to proceed at this time with the immediate construction of the South Saskatchewan dam.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I ask the Minister of Labour if he has yet obtained the information we were seeking previous to Easter with reference to section 45 (2) of the Unemployment Insurance Act?


Milton Fowler Gregg: No, Mr. Speaker, not completely.



THE BUDGET


[Stage Direction]
The house resumed, from Monday, April 9, consideration of the motion of Hon. W. E. Harris (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell, and the amendment to the amendment of Mr. Coldwell.

( Translation) :
Mr. Frank G. Power (Quebec South):: Mr. Speaker, when we adjourned last evening I was advocating bilingualism. Continuing now on another very important subject I would like to say a few words on the change of site for the new post office.
Acting on the recommendation of its town planners and chamber of commerce, the city of Quebec had asked the Minister of Public Works (Mr. Winters) to study the possibility of changing the proposed site of the building and to choose instead property at present occupied by the Canadian National Railways. I was shown a model of the building on the original site and on the new proposed site. In my view, if the proposed changes are carried out, they would unquestionably constitute a definite advantage for the city, the Canadian National Railways and the Post Office Department. The project as it was described to me would mean a threefold transfer of property. The government would turn over to the city the present site which it has lately cleared. The city would have previously obtained from the Canadian National Railways the Ste. Anne station in exchange for St. Andre street. It then would transfer to the government the Ste. Anne station site. The three properties cover approximately the same area. After receiving a resolution to this effect from the city of Quebec, the Minister of Public Works (Mr. Winters) suspended the execution of the original plan and expressed his willingness to discuss with the civic authorities, at their convenience, the exchange between the city and his department of the property owned by the government at the present time, and that which the city expects to obtain from the Canadian National Railways. I wish to congratulate the minister for his co-operative attitude, and I am confident that the problem will be solved to the satisfaction of all concerned.
The limited time at my disposal does not allow me at the moment to discuss other important problems such as unemployment benefits for seasonal workers, for instance longshoremen, sailors, freight handlers. There is also the question of the Sillery wharf and other matters too numerous to mention in the time at my disposal. However, I shall endeavour to deal with all these questions some other time.
(Text):
I would like to thank you, Mr. Speaker, and the members of this house for your kind attention to my maiden effort.


Hon. George A. Drew (Leader of ihe Opposition):: Mr. Speaker, first of all may I congratulate the hon. member who has just taken his seat on his maiden speech; and
The Budget-Mr. F. C. Power may I say with very real sincerity that I can extend no more generous wish to him than that he carry out his promise of independence of thought and devotion to the public service which was displayed by his father during so many years in this house. Whatever our political opinions may be, his father, whom we all know affectionately as "Chubby" Power, will always be remembered with high regard by every one of us here as a great parliamentarian.
Naturally the first point I wish to deal with is the subamendment which will be voted on today. It is customary for the Leader of the Opposition to indicate the position of his party in regard to amendments of this kind.
The subamendment before us covers different subjects. With some of the points raised we are in agreement. However, I think I should read the subamendment so we can bear in mind exactly what it is that it is suggested we should support on this occasion. The amendment moved by the hon. member for Rosetown-Biggar (Mr. Coldwell) states that the following words be added to the amendment:
that it has failed to reduce the burden of sales and income taxes on those in the lower income groups, while continuing to favour privileged interests and those with unearned incomes by maintaining the 20 per cent dividend tax credit and by refusing to impose a tax on capital gains.
The latter part of this amendment may have an appealing sound to those who adopt the policy of "soak the rich" and seek to claim that this is a general political doctrine. It is put forward with the idea that there will be a suggestion that this is an attempt to deal with those having large incomes. The result would be the very opposite. In a country with an expanding income, such as ours, not through the virtues of this government, as the Minister of Finance was careful to point out in his own speech, a tax of this kind would soak the poor. Every small householder whose home increased in value would be taxed under a proposal of this kind, to the extent of that increase in value. Every small farmer whose farm increased in value would be taxed to the extent of that increase under a proposition of this kind.
Moreover, in a period when unhappily there is a great deal of inflation, it might well be that although the figures in dollars gave an apparent increase, there would be no real increase at all or even a net loss in terms of real dollar value. In a country of this kind, expanding as it is, I can think of nothing that would have a more unsatisfactory effect on our economy than an attempt to tax those increases that come as a natural part of the growth and development of the country.

The Budget-Mr. Drew
The rich people, you know, have a habit of being able to deal fairly satisfactorily with problems of this kind. Usually they are able to take care of themselves, particularly under a government which is so closely tied in with big business and is so solicitous of wealth, especially if it is foreign wealth. This government has unquestionably shown great interest in that field. Undoubtedly it has made it easier in a number of ways for those with wealth to meet some of these problems. The people who would be seriously affected by a capital gains tax in Canada would be the small farmers, the small householders and the small property owners generally. It would also discourage initiative at a time when there is so much evidence that we need to encourage initiative in every way possible. We shall certainly vote against a proposal which would produce such an unsatisfactory result.
I intend now to refer to something that has been very much in the press during the past few days, and which I believe is of very direct and immediate concern to every Canadian and everyone in the western world. I am referring to the visit to Great Britain within the next two weeks of Bulganin and Khrushchev. This is not an ordinary visit. This is the first occasion since the Russian revolution in 1917 that the head of the Russian state has come out to visit the western world. This is the first time there has been an opportunity for people in the western world to sit down in their natural surroundings and discuss affairs in this manner. I am not forgetting, of course, the visit of the Russian representatives to Geneva last year, but I recall that that was a broad international conference. The coming conference is to be one of those exchanges between the heads of state, one of those meetings which present unique opportunities for frank, confidential and open discussion of the great issues which concern us all at this time.
We have been told very frequently of the close relationship and the constant exchange of ideas between the governments of Canada and the United Kingdom. It is probably the only visit of this kind that will be made for some time by the heads of the Russian state to one of the great powers of the western world. Only yesterday, in the House of Commons at Westminster, Sir Anthony Eden said that the important problems of Europe would be discussed at this time, it does seem desirable that the Canadian government should indicate some of the subjects it hopes will be discussed in those conferences.
I am not suggesting for one moment that we abdicate in any way our right as a sovereign state to assert our own position through


the ordinary channels; nevertheless here will be discussed at the very top level some of the most immediate problems and it would seem appropriate that the Canadian government express its own opinion as to some of the things that might well be considered in the interests of the western world at this time. It can do so not only by its representations to the government of the United Kingdom, but it will also be able to do so through its own representatives there, who undoubtedly will be afforded an opportunity on this occasion for personal contact with Khrushchev and Bulganin.
I believe that we all welcome the evidence of extended contacts between Russia and the free world, but I sometimes question whether the desire which is naturally in the hearts of every one of us for peace and security does not lead people to strange and unnatural manifestations of that sentiment on some occasions. I find it just a little difficult to understand the sentiments which led people to demonstrate in the way they did at Canterbury cathedral when Malenkov visited it two weeks ago Sunday under the guidance of the red dean. It was only a few days ago that General Serov left London. The friendly gestures which were extended to Mr. Malenkov were not extended to General Serov; in fact General Serov was described as a murderer and butcher, as he is.
The Russian response to that statement or to the opinions which were expressed was to withdraw Serov's name from the list of those who will visit Britain two weeks from now with Khrushchev and Bulganin. But do people forget that these are the employers of Serov, and that if Serov is a butcher and thug and murderer these people are the employers of that butcher, thug and murderer? That at least might be borne in mind before those of us in the western world who want to see friendship extended as much as possible go completely off the deep end in our efforts to convince the representatives of the Soviet empire that we accept their gestures at face value.
I believe these exchanges are good as long as the facts are clearly borne in mind. I believe it will be very good for Khrushchev and Bulganin to see Britain, and I think it would be a good thing if they could see North America, if they could come to Canada and the United States. I would think also it would be a very good thing if the Russians would extend the same facilities to similar persons from the west to visit with equal freedom different parts of Russia, and also make sure that the press of Russia gave the same coverage to those visits as the press of Britain and the free world is giving to the Russians at this time.

Let us keep it all in perspective. Let us hope that our natural desire for friendship and peace will not let the smiles which now constitute the new party line beguile us into forgetfulness of the dreadful reality that has not changed in any way. Let us not forget the millions who have been slaughtered. Let us not forget that these people who employ General Serov as the head of the secret police now have in concentration camps between 12 and 15 million people living under conditions as vile and terrible as those imposed by the nazis in their days of terror. These are things that perhaps it would be wise to bear in mind. It would be wise to bear in mind that nearly as many people as make up the whole population of Canada are now living in those slave camps, placed there without trial of any kind.
Having said that, let us not close the door to hope. Let us not admit that we have abandoned all hope of some rationalization of this terrible situation. But, Mr. Speaker, the remarks I am making now, at a time when this visit is impending, are made in the hope that what is said here may offer suggestions as to thoughts that would properly and appropriately be conveyed to the government of the United Kingdom at this time. In the discussions that take place in London let us hope that in addition to the opportunity for increased contact and good will we also test their good faith. Surely this would be a particularly good time to suggest to the representatives of Russia who are visiting the free world and seeing how we live that nothing will better encourage the free world to believe in their protestations than clear and unquestioned evidence that they are ending religious persecution in the communist states.
There is something more, and something I am inclined to think we have been far too ready to forget. The smiles that undoubtedly will be registered by the newsreel and television cameras during the visit of Khrushchev and Bulganin will not mean very much to some 150 million people who were enslaved by the Russian armies and have not yet been freed. These smiles are not going to mean very much to the people of Poland, of the Ukraine, of Czechoslovakia, of Hungary, Bulgaria, Roumania, the Baltic states or East Germany, where the Russians are exercising control completely contrary to the Potsdam arrangements. These smiles will not offer any encouragement to them unless something more is done.
This is the time to point that out. This is the time to say with frankness and good will, "The best evidence you can give us of your good faith is that you now carry out the undertaking that was implicit in the charter of the United Nations signed at San
The Budget-Mr. Drew Francisco in 1945". I do not know why we are so reluctant to emphasize this point. I do not know why there should be any tendency to say that the Russians would not do it and then not put the argument forward. After all, they are constantly pressing their points. They are constantly talking about colonialism. The same Khrushchev and Bulganin were fairly free in their comments when in India last December. They do not hesitate to condemn the very reasonable exercise of authority that has been extended by the western world in many parts of the world, to the advantage of those countries in the end in almost every case.
Surely the time has come for us to talk about the very worst form of colonialism that has existed in all history. Surely as people sit down and talk to these men it is proper to say, "If you really mean all this then now is the time to agree with us that exactly the same thing be done that was done after the first world war. Agree with us that votes should be taken in the satellite states". Remember, not one of these satellite states joined Russia even by a communist coup except in the case of Czechoslovakia. Every one of these states was overrun by the Russian armies moving forward to attack Germany. They have remained there and imposed their will by force and terror, and still do.
Now is the time to say that if there is good faith, if this is a new deal, if this does represent a new attitude on the part of Russia and an acceptance of moral obligations, then let there be agreement that under the auspices of the United Nations there will be a vote in each one of these countries to decide what kind of government they will have. What reasonable objection could Russia have to such a suggestion? If they say these countries want communism, then let these countries declare it by a vote that is completely free under a committee on which there is Russian representation as well as representation from the west. Surely we can do what was done under the league of nations, and done in different areas. A vote of that kind was taken in the Saar only a few weeks ago under different auspices. This is nothing new. This is a tested method of asserting in practical form the principle that was declared first of all in the covenant of the league of nations in 1919 and later in the charter of the United Nations in 1945. What better subject could there be for discussion than a discussion of the reality that presents itself to us at this time?
Then I come to East Germany. There is no reason why we should perhaps place East Germany in a position of special favour. People have good reason to recall that twice

The Budget-Mr. Drew within the memory of many of us here Germany has sought to dominate the world by military power. Many here in this chamber took their part in stemming the tide of aggression let loose upon the world by different German governments in two world wars.
There are, however, special reasons why we should bear East Germany in mind. This is no academic problem for the university classroom. This is no problem for discussion groups alone. This is the most vital problem affecting the future of our people at this time. For more than a million Canadians what happens to the satellite states is something of deep and immediate concern. These countries now enslaved are the homelands of more than a million of our people here in Canada.
But for every Canadian those countries have a special appeal on the ground of the moral obligations we undertook. Surely this is a time to recall that this country went to war in 1939 because Poland was attacked. We went to war for as high a principle as has ever taken men and women along the road of sacrifice. That principle was the right of every nation to establish its own form of government by its own choice. That principle is now at stake.
But East Germany can be of even greater concern from the practical point of view. There is no use arguing now the right or wrong of what was done. When the western powers agreed to let Western Germany rearm, they not only gained a powerful ally in western Europe but forces were let loose which should be carefully watched. In five years West Germany will be rearmed. In five years West Germany will probably have an army of over one million highly trained men. They will have the latest type of aircraft with all the advantages that have been gained by the inventions of the western world. We know only too well that their armour and their artillery will be of superlative quality.
What a rearmed Western Germany will do five years from now if East Germany has not yet been united to it under such a free vote as I have suggested should be the concern of every one of us at this time. Can anybody be in any doubt as to what is going to happen unless unification takes place before that time? Look at the map of Germany. There are many here who have been in Germany. Those who have been there remember that Berlin is over 100 miles beyond the iron curtain, far into East Germany.
I hear someone opposite say that is a pretty bald statement. It is. Has anyone forgotten what a much weaker Germany did when they invaded the Rhineland before the last world war? Berlin is still the capital of Germany

in the hearts and minds of all Germans. There is no higher obligation of statesmanship at this time than to bring about the unification of both parts of Germany. Otherwise you have two explosive forces kept apart. The situation is like those terrible devices that were placed in ships leaving the United States in the first world war. They were small containers that had at one end one kind of acid and at the other another kind of acid. In between was a plate that would be steadily eaten away. When that plate was eaten away there came the explosion and the fire. Something of the same kind exists in the situation I have described. Hence now is the time to insist that in East Germany and the satellite states the obligations of the United Nations charter to which Russia is a signatory shall be fulfilled.
Only yesterday our minds were called back to the great battle of Vimy. There are many who will remember that dreadful day. There are many who will remember the slaughter on that occasion. It is a good thing that we should remember the price that has been paid for this freedom of ours. It is also wise to remember the dreadful cost of war. At such a time as this it is a good thing not to forget that time is running out. When we watch the smiles of the heads of the Russian state we should also recall that there was a period of sweetness and light before the last world war. I think we all recall that the then prime minister of Canada, the late Right Hon. William Lyon Mackenzie King, visited Hitler and came back with the report that he was sure Hitler had no intention of carrying out aggression. That was as late as 1937.


Mr. Habel:: What about the article you wrote?


George Alexander Drew: Oh, yes; I wrote an article entitled "Germany prepares for conquest". If you like I will send a copy of it to you. I do not hesitate to recall the fact that I said then that all the evidence was that Germany was preparing for aggression. I am not raising this part of our own history in order to embarrass anyone. I recall that there were others who were equally beguiled by the smiles. I remember that there was a man named Ribbentrop who became very popular in the western world but who was later hanged at Nuremberg. We have seen those beguiling smiles before. Has anyone forgotten the words of that completely sincere prime minister of Britain who, returning from Berchtes-gaden, said he believed that Hitler had no aggressive aims? As he got off the plane from that famous and tragic trip he used the words "Peace in our time".

Let us not forget that comparatively recent history. Let those of us who lived through that period of Hitler make sure that the younger generation, who were not even alive at that time, remember the similarity to some of these events. That was the period when the second world war could have been prevented. We have that statement on the authority of the greatest statesman of modern times, if not of all time, namely Sir Winston Churchill. If the western nations had stood firm on that occasion-not denying any evidence of friendship that might be extended but standing firm in their own faith and conviction and not forgetting the dreadful realities that were there-there might have been no second world war.


James Garfield Gardiner: Mr. Speaker, I do not wish to take any exception to the general trend of the arguments of my hon. friend, but in looking over the membership of the house at the present time I think probably I am the only one now in the house who was a member of the government when Mr. King came back from Germany, and the reference made by the Leader of the Opposition was not the report which Mr. King made.


George Alexander Drew: Mr. Speaker, it was the report and the record speaks for itself. As I said before, Mr. King was not alone. I pointed out that the then prime minister of Great Britain, a very earnest prime minister and a man with wide experience-


James Garfield Gardiner: I am not saying anything about that, but I do want to say I was a member of the government and heard the report when Mr. King returned here and that was not the report.


George Alexander Drew: This would not be the first time during this session when the minister has been extremely wrong in the statements he has made.


Mr. Rowe:: I heard him make the statement right in this house.


George Alexander Drew: I was not questioning the
earnestness of the prime minister of Canada on that occasion, and the right hon. gentleman who has interrupted me twice should not be so sensitive. I did not know he accepted any responsibility for it.


James Garfield Gardiner: I am not accepting any responsibility, but I like to hear the truth.


George Alexander Drew: That is one of the most encouraging things that has happened during this session. It is a refreshing change. We want to hear the truth as well, and we want to hear accurate statements from ministers opposite, which we have been getting on very few occasions since this session began.
The Budget-Mr. Drew
Again I come back to the fact that on this occasion I was merely illustrating that men who were earnest, men who sought to interpret events with the hope of peace in their minds, were beguiled. All I am suggesting is that we be warned by what happened on that occasion, and what happened to the government of which the minister was a member, because he remembers how hopelessly unprepared this country was as a result of their folly.


James Garfield Gardiner: That is exactly why I am calling my hon. friend's attention to the statement he made a few moments ago. It is not correct. The statement which was made here at the time suggested had to do with trying to get a sufficient amount through this house to make proper defence possible.


George Alexander Drew: It is a pity that nobody carried out that intention, because it was not done. The fact is, as the minister should know if he does not know, that no steps were taken at that time to prepare effectively for the war which many people saw coming. It will be recalled that at that time so convinced was the government of which the minister was a member that there was not going to be a war that they would not even let the R.A.F. train in Canada in preparation for a possible war.


James Garfield Gardiner: None of these things has anything to do with the point in question. I am simply saying the statement which has been made by my hon. friend in regard to Mr. King's report when he came back from Germany is not correct.


Mr. Fleming:: There must have been two reports, then.


George Alexander Drew: I shall proceed with my remarks, Mr. Speaker. The minister is well aware of the events which occurred at that time, and whatever other things this government can claim-I would be the first to concede that there are many things this or any other government can claim that it has done-one was not to prepare for the last war. This government, which is now welcoming with open arms United States control of our many great bases, would not even let British pilots train here at a time when they did not have room to train in Britain.


James Garfield Gardiner: Mr. Speaker-


Some hon. Members:: Sit down.


Mr. Speaker:: Order.


James Garfield Gardiner: On a question of privilege-


Mr. Speaker:: Order. May I suggest that the Leader of the Opposition proceed with his speech. If the Minister of Agriculture wishes to speak after that, he can take the floor.
2780	HOUSE OF
The Budget-Mr. Drew


Mr. Hodgson:: You do better with the South Saskatchewan dam.


George Alexander Drew: I wish now, Mr. Speaker, to deal with a subject that is very closely related to the subject I have been discussing, as has been illustrated by some of the interruptions which have been made. I refer now to a figure in the budget. It has been said by many that this budget contains nothing worthy of comment. In some ways that is true. There are, however, one or two things that are worthy of comment and that demand comment. One of them is the truly remarkable figure of $1,775 million for national defence, exactly the same figure as last year. This figure speaks for itself. Nothing more clearly reveals the utter bankruptcy of initiative in this government than to place a figure in the budget which everyone recognizes is given without any attempt to examine the requirements of national defence carefully.
It is not possible that we would have exactly the same figure if there had been any attempt of any kind to examine this subject. In fact I do not believe there is an hon. member opposite, even including the Minister of Agriculture, who would assert that this represents a considered opinion in regard to the requirements of national defence. It is simply a figure taken out of the blue. It is simply a figure that says in effect, so far as the Minister of Finance is concerned, "Well, with a crowd like this what is the use anyway?" He found he was not able to get any assistance from his colleagues, so he just put in exactly the same figure.
A figure of that kind invites extravagance. It is put in without any attempt to examine the changes that have been taking place. Where is the evidence of the changes that have taken place both in the United States and Great Britain in regard to the organization of defence units? Surely every hon. member saw a description a few days ago of the organization of airborne divisions in the United States. This is something we have been urging now for several years. It is something we have been urging as the rational approach in Canada to the problems of national defence.
Why is it that every senior officer who has been free to speak has criticized our military organization? I certainly do not agree with everything that has been said in those criticisms. I certainly do not agree with some of the proposals that have been made. But it is significant that senior officers who have been charged with the secret responsibility of dealing with our defence forces, when they have gained their freedom to speak have indicated their dissatisfaction with the organization as it now exists. We Canadians for


years have criticized the fact that, excellent though our permanent force may be-and it is-the bulwark of defence in Canada is the militia, the volunteer forces in the air force and navy. It is there that the great pool of manpower and womanpower is created. There is not an hon. member in this house with any contact whatever with the militia forces at this time who does not know that our militia is hopelessly unequipped and unprepared. Any hon. member who does not know should examine what the situation is in regard to armour, in regard to artillery, in regard to other equipment of that kind. In spite of all the money we have been spending the militia is not in a position to mobilize if that dreadful necessity should come. When the first world war broke out it was possible to mobilize in Canada. When the second world war broke out it was possible to mobilize. Today it would not be possible to mobilize the militia; yet we are spending these vast sums of money.
I asked that this subject be referred to the committee on estimates. I wrote to the Prime Minister asking that this be the first subject to be placed before the committee on estimates. That was not done. This is the second year this unsatisfactory experiment is being carried out by a truncated committee with no powers; but with great care the government is avoiding bringing before the committee the one subject that should come before it with highest priority. This cynical figure, exactly the same figure as last year, makes it clear that there should be such an examination. I would not want this subject to be referred to a committee which has no teeth, the committee on estimates which has been denied any effective power.
There is, however, a way in which the Prime Minister could give this house some evidence that the government is really anxious to tackle the national defence problem. We have several standing committees of this house. Those committees deal with various subjects. The standing committees now set up are:	the standing committee on privileges and elections; the standing committee on railways, canals and telegraph lines; the standing committee on miscellaneous private bills; the standing committee on banking and commerce; the standing committee on public accounts; the standing committee on agriculture and colonization; the standing committees on marine and fisheries; mines, forests and waters; industrial relations debates and external affairs. Not one of these subjects is nearly as important as the subject of national defence.
It would have been ineffective if this subject had gone before the muzzled committee that was set up by the resolution presented by

the government. I ask the Prime Minister now to take the appropriate steps to set up a standing committee on national defence, which will continue as a standing committee and deal with the responsibilities of government which account for nearly half the total expenditures, when we include all the incidental requirements of national defence. If that were done right away there would be plenty of time to bring before that standing committee experts in the various fields and find out what the facts really are; find out just how many artillery units could go into action in Canada; find out how many armoured units would be in a position to carry out any real military duties; find out what the real state of the equipment of our different militia defence units really is at this time.
Such a committee also could call before it the senior officers who are now free to speak. It would be much more useful for them to speak before such a committee than at the various places they are now speaking. I am not criticizing the speeches they are making. I do suggest, however, that the place where their statements would be most useful would be in a standing committee such as I have suggested. From such a standing committee, a committee similar to those we have in regard to much less important subjects, we could have constructive proposals which undoubtedly would result in tremendous savings in many lines, and probably increased expenditures on some of the technical equipment that is required.
Certainly one of the things that could be done would be to examine into this question of an entirely airborne army able to move in a matter of hours to any part of Canada or any part of the world. That is no longer a visionary thing; it is a reality, an airborne army in which the infantry, the artillery, the armour, the engineers and all the ancillary units are carried by aircraft to the points where they may be needed. Suppose, for the sake of argument, that paratroops were dropped in some of the distant areas of our northland. How much use would some of the static units be that we are now training? At any rate, let that be examined; let the whole organization be examined. And I repeat, in the face of the obvious need for such an inquiry, in the face of that cynical figure, the exact figure used last year without any change, I urge the Prime Minister to give evidence to this house and to the people of Canada that the government really desires to organize our national defence for the effective protection of this country.
Now I wish to deal with something else that is not entirely unrelated to that subject. One of the most interesting developments in the United States in the last couple of years has been the extent to which oil and gas
67509-176i
The Budget-Mr. Drew pipe lines have been recognized as part of the general program of national defence. The present budget makes it clear that in spite of the bland assurances we have received from the always optimistic and usually inaccurate Minister of Trade and Commerce, there is no expectation at all on the part of this government that the eastern section of the pipe line to eastern Canada will be started this year.
The fact is that there is no clear policy of any kind in regard to this subject. There is no clear policy as to what is to be done in regard to these enormous resources of gas now available, as well as oil. This government has been dilly-dallying in a confused and hopeless manner with a vitally important subject because of the fact that they have committed themselves to a particular gentleman who obtained a franchise from this government. It is true that the interests have been extended in recent times.
This is a subject in regard to which there should be some policy. This is a time when it would be appropriate that such a policy be announced. We read in the papers about interviews that have taken place between a gentleman named McMahon and the government in regard to possible pipe lines. We, of course, only know what the papers tell us. We are merely members of parliament. It is the usual way we find out the facts. That is usually where the government gives the information that should be given here. There are suggestions that there have been other discussions. We do not know. At least we should have at this time some statement of policy in regard to this matter.
I suggested at the very beginning of this session that this question be referred to a committee. I pointed out that it could be referred to one of the standing committees and the facts obtained in regard to this very important subject. There are many places in Canada where pipe lines will be built. Already one is being constructed over the Rockies to the western coast. There has been much talk of one to come east, and undoubtedly other pipe lines will be built.
This is a subject which should be explored and in regard to which the house should be fully informed. The government should discuss this subject with the railways of Canada instead of helplessly saying there is only one way in which this can be done. Let the government explore the possibilities; let it see' what the railways can do. They have rights of way now. We are told about the difficulties which exist in northern Ontario. Well, long years ago those difficulties were overcome by a free enterprise railway with the assistance of Sir John A. Macdonald and his associates in the government of that day.

The Budget-Mr. Drew
The very fact that the difficulties were overcome has some bearing on the immediate problem. We all know from flying over that area that there are many lakes and rivers and many jutting hills in the north which make it a difficult area through which to create new rights of way for railways or for any other purpose. Why not explore the possibility of taking advantage of the rights of way that have already been established by the Canadian Pacific Railway and the Canadian National Railways across that northern Ontario stretch?
There is nothing visionary about this; it has already been done elsewhere. In the United States the Southern Pacific Railway has done that very thing. It formed a subsidiary company and last year it built an oil pipe line which was completed in January of this year. It is not a small pipe line. It is 1,500 miles long and extends from the refineries at Los Angeles east to Phoenix, Arizona and to the military fields in that area; then it proceeds from there to Tucson, Arizona. The greater part of that oil pipe line is within the actual right of way on both sides of the rail line of the Southern Pacific Railway. At some points where sharp contours suggest the advantage of short cuts the line cuts away from the right of way, but generally it follows the right of way.
The Southern Pacific Railway has not stopped there. Through its subsidiary it has now projected the construction of a further pipe line eastward from the refineries around San Francisco bay to Reno and on to an airbase at Salon, Nevada. That pipe line is about 700 miles long, making a total pipe line operation of about 2,200 miles built by a subsidiary of the Southern Pacific Railway. This subsidiary is a common carrier. The oil companies in the area served by that common carrier avail themselves of the facilities, and then the oil is sold in the east and distributed by the ordinary distributing organizations.
I merely put this forward, Mr. Speaker, as an indication of what can be done. This has been done elsewhere. The reasons for doing it in the United States are not nearly as great as they are in Canada, where it is costly to create new rights of way through difficult areas. There is no essential difference between oil and gas pipe lines. This is something that should be explored immediately. We know that Alberta has vast quantities of natural gas; Saskatchewan, Manitoba, Ontario and Quebec want that gas. This is the time for action.
I have already pointed out that the minister told us in this house only ten months ago that he did not like the method, the third method, that was then being considered. I refer to the third method, the one which is now before


us. I ask the Prime Minister once again to tell us why he now accepts the method he did not like, and I urge him to see that without delay the government examines what is being done in the United States and examines the possibility of getting our own railway companies to co-operate in this matter in order to have our pipe lines controlled by Canadians for the benefit of Canadians.
What happier augury could there be for the future development of these great services than to have those rights of way which were created with such hardship many years ago in the days of Sir John A. Macdonald provide the opportunities for the new common carrier at this time. This is something that would challenge the imagination of every Canadian. It is something that would make is possible to get ahead with this proposal which has been delayed for far too long. We want to see pipe lines built in this country. We want to see Alberta gas used in the east and in the west. We want to see it used to the greatest possible advantage of this country.
I want to speak about another subject which appears in the budget and which certainly should not be ignored, and that is the truly unique proposal in regard to the taxation of certain magazines in Canada. In his remarks the Minister of Finance asked us what it would be like to contemplate the possibility of having no Canadian magazines expressing Canadian thoughts on Canadian subjects. Without putting this on a personal level I think I can say that no member of this house has been more vocal than I, either in this chamber or outside it, about the need for truly Canadian thought and the development of a real Canadian culture upon a natural and sensible basis.
Perhaps it is not inappropriate if I recall that I have been a fairly extensive contributor to Canadian magazines on different occasions, and for that reason I have some personal knowledge of this subject and some personal interest in the extension of the facilities offered in this field. I believe there is a great need in Canada for a far greater emphasis on Canadian achievement at this time than is possible under the circumstances that exist today. I believe those Canadian magazines that are serving Canada are doing a splendid job. I think they deserve great credit because they are carrying on their task under great difficulty. Nevertheless any one of us who goes into any book store finds the shelves filled with reading material of a nature that I could not describe in terms which would be permitted in this house. It is material which is destructive, which serves no useful purpose. Certainly if the government is going to try to tackle this problem I

think it might well tackle it at that point. Some of these filthy documents that come in, some of these crime comics and things of that kind, might well call for attention by the government in any greater emphasis that may be placed on Canadian achievement.
I noticed just a few days ago in one of the publications with a very large circulation that comes in here-I imagine the same statement was repeated in advertisements in others- that Captain Eddie Rickenbacker was the ace of aces. Captain Rickenbacker is now president of Eastern Air Lines and is a most admirable and courageous gentleman who deserves full recognition for the part he played in the United States air force in world war I. However, it is perhaps not inappropriate for Canadians, especially young Canadians, to remember that there were at least 15 Canadian pilots who shot down more German aircraft in the first world war than Captain Eddie Rickenbacker.
The official figures given out at that time were that he had shot down 21 aircraft, but I notice the figure in this advertisement is 26 aircraft. I do not quarrel with that change, but I would recall-and this is something young Canadians might well recall, not to glorify war but to show the stuff of which our young people are made, those who lived at that time and those who are with us now- that in the first war, when aircraft for the first time in history took part, the greatest pilot in the western armies was Colonel Billy Bishop, who shot down 72 aircraft. Not far behind him was Colonel Colli-shaw who shot down 61, and not far behind him was one of the most gallant airmen who ever lived, Captain Billy Barker, who shot down six German aircraft in one day. Only two behind him was a gentleman whom I like to remember at this time. Just as Eddie Rickenbacker is still serving development in the air as president of Eastern Air Lines, we have as executive assistant of Trans-Canada Air Lines a most gallant gentleman in the person of Group Captain MacLaren, who shot down 48 German aircraft and six German balloons. He is still doing a magnificent job day by day serving Canada in its civil air development.
I want to see these things kept alive by all means. Let us give men like Captain Eddie Rickenbacker full credit, but let us remember something of what our own people have done. Let us remind our own youth what they have done in the first war, in the second war and in the days of peace as well. I want to see that done. I want to see Canadian magazines serve Canadians; I want to see Canadian publications serve Canadians; I want to see Canadians assert their own position in every field. I only wish this government were nearly as
The Budget-Mr. Drew solicitous about some other aspects of the Canadian economy as they purport to be about Canadian magazines on this occasion.
The desire to have a truly Canadian expression of opinion, a truly Canadian recording of our own history for our own use, does not justify a discriminatory tax of the kind which is now proposed and which is without precedent in this or any other jurisdiction. I must say that I would like to know who really is the father of this unnatural child. I do not believe that the Minister of Finance conceived this strange offspring.
It is strange that this proposal should be put forward by this government, extremely strange. In an effort to encourage Canadian magazines the Bennett government imposed a uniform tax on all foreign magazines coming into Canada. It is a late day now to argue whether that was right or wrong. It was done, and it was this government that repealed that tax. Whether or not that was the best method, at' least it was a uniform and not a discriminatory tax. If this government have some better method let them produce it, but do not let' them bring in this strange thing which is half-baked, impracticable and completely unsound as a method of taxation.
However, there is one particular reason why this government finds itself in a strange position when asserting this principle. I hope the Prime Minister will speak on this particular subject. I hope the Prime Minister will tell us why the government which professed such concern about any taxation on magazines now imposes a tax of this kind. There is a special reason why I would like to hear from the Prime Minister as to why they have imposed this tax. Nothing shows better what a completely half-baked idea this is than the action of the government itself in regard to television. The government tells us that it is concerned about any possibility of Canadian thought and culture not being disseminated through Canadian channels, but what is this government doing with television and radio? This is something which involves Canadian ideas, Canadian writers, Canadian workers and Canadian culture.
If this government believes in dealing with this problem let it start with its own organization which it controls, and controls so rigidly. The C.B.C., which is directed by this government so carefully, buys United States programs which involve the employment of writers in the United States, of actors in the United States, of news commentators in the United States, of stage hands in the United States, of musicians in the United States, and of all those who are engaged in what we call entertainment and culture.
The C.B.C. buys these programs with money put up by the Canadian taxpayer. It

The Budget-Mr. Drew buys some of these as live programs and it buys some of these in film form. This government which is so concerned about magazines buys these before they even know who the advertisers are. It buys such programs as will be helpful to Canadian culture as "I Love Lucy", "The Honeymooners", "Mama", "Father Knows Best", "Studio One", "Disneyland", "The Ed Sullivan Show" and a score of others in the same category. I do not know under what rule of Canadian culture these programs are bought by the chosen instrument of this government, but they are bought and then sold to Canadian advertisers. Canadian advertisers sustain these United States actors, writers, stage hands, musicians and others working on these programs who deny Canadians the possibility of presenting programs that might have been shown. The Canadian taxpayer, of course, puts up the money.
It is an interesting thing. They go far beyond anything contemplated by the magazines. They subsidize these United States programs. They are not even satisfied to deny the principle they assert with regard to magazines. They not only buy these programs and then tell advertisers what they can have and for how long, but they sell these programs for an average of 40 per cent less than they pay the United States producers for them. The Canadian taxpayer puts up that money. That 40 per cent is part of the budget now before us. That 40 per cent is part of what this government does to protect Canadian performers, writers, actors and others. Oh, of course I should not forget that the live shows are brought in by the microwave relay maintained by the Canadian taxpayer. They could not be brought in in any other way. That does not appear as a special item in the budget.
This government which expresses such concern and decides that we are going to be 20 per cent Canadians, this government through its own agency is putting up Canadian taxpayers' money to make perfectly sure that at least half our programs in this country will be created in the United States, employing Americans in the process.


William Earl Rowe: Champions of culture.


George Alexander Drew: Before I leave this subject let me also deal with the statement made by the Minister of Finance that because these magazines were really dumped here, having been paid for first in the mass media market of the United States, they were able to sell their advertising cheaper. May I point out that this statement is entirely incorrect. I have here the advertising figures based upon the latest rate cards issued by the different magazines. These are the advertising rates


for full pages per 1,000 circulation and are as follows: Time magazine, $7.44; Maclean's, $5.97; New Liberty, $4.95; Weekend, $3.69; Star Weekly, $4.16 and Chatelaine, $6.34. It will be seen that Time magazine charges the highest line rate per 1,000 editions for a full page advertisement.
I think we should also realize that the Canadian magazines have a large circulation and are not without opportunities to express their opinions. Time has a circulation of 170,000 in Canada. Reader's Digest, with its English and French editions, has a circulation of 900,000. But these are the circulations of the Canadian magazines: Star Weekly, 913,000; Weekend, 1,400,000; Maclean's, 510,000; New Liberty, 500,000 and Chatelaine, 400,000. As a Canadian I am very glad that there are these large circulations. I want to see these circulations maintained. I want to see Canadian programs maintained on television and radio. I want to see Canadian ideas distributed in every way. That will be done by other methods than this weird and hybrid form of taxation which has now been placed before us.
There is a real problem here, Mr. Speaker. I think there will be common agreement with the general purpose of widening as much as possible the dissemination of Canadian ideas. I hope the government will reconsider its position in regard to this particular proposal. Before the government does anything of this kind let it start by putting its own house in order. Let the government through its own agency encourage Canadian programs. Let the government make it quite clear to its agency that, at any rate, it is not going to subsidize United States programs with the Canadian taxpayers' money. Let it encourage, in the reasonable ways it can, Canadian writers, Canadian artists, Canadian performers, Canadian musicians.
Today in this field the government is the worst offender. On the basis of the assertion made by the Minister of Finance it is to be hoped there will be immediate action to deal with this problem. Let us, however, deal with the problem as a whole. We still have three or four months before this session will be over. Let this problem be brought before the members of the house in such a way that it can be examined detached from the budget. In the meantime, on the basis of its own preposterous action with regard to television, let the government in common sense drop this discriminatory and impractical tax, start all over again and for once seek the assistance of the members of the house in solving this very important problem.
I said that the government should seek the assistance of the members of the house. It is time it did. For long years great concern

has been expressed about the diminishing authority of parliament and the way in which the government is taking unto itself the business that we are sent here to do on behalf of the people of Canada. This government treats parliament with contempt. What should be remembered is that we are merely the people's representatives. The government is treating the people of Canada with contempt. It is denying not to us but to the people of Canada whom we represent, information which should be available to every one of us.
Let me give a recent example of the kind of answers this government gives. I had hoped that when the hon. member for Halifax (Mr. Balcom) spoke yesterday he might have mentioned this. Just before the Easter adjournment he asked this question, as found at page 2587 of Hansard:
What industries have been organized and are operating in Nova Scotia since 1951, through the assistance of the small industries division of defence production-
This is the answer of the Minister of Defence Production (Mr. Howe), and a typical answer it is:
The small industries division of the Department of Defence Production was created in 1951 to ensure that all segments of Canadian industry, particularly small industry, were given an opportunity to participate in the defence production program. Its chief function was that of a service division, to assist and advise those firms seeking either direct contracts from the Department of Defence Production or subcontracts from the department's prime contractors. In order to accomplish this, the small industries division until 1953 maintained representatives at various locations across Canada, including a representative in the maritime provinces who assisted a number of Nova Scotia contractors in the manner above outlined.


William Earl Rowe: Very clear.


George Alexander Drew: Mr. Speaker, that is not from "Alice in Wonderland". That is from the records of this house. That is the answer given to a question as to what industries have been organized and are operating in Nova Scotia since 1951, through the assistance of the small industries division of defence production. This government carries secrecy to the point of a mania. It is secretive when there is no reason for secretiveness. What earthly reason was there for a vague, uninformative and meaningless statement of that kind in answer to a perfectly clear question? The answer probably is that they have done nothing. Why did they not say so? But this is a typical answer.
This is something that has been under discussion for a long time. I go back to the year 1909, a long time ago. On that occasion Sir Robert Borden, then the leader of the opposition, is reported in volume I of Hansard of that year at column 368 as follows. I just
The Budget-Mr. Drew wish to quote a few words because they indicate the concern felt then:
We hear a great deal, both in the United States and in Canada, of the decadence of our legislative institutions, the decadence of the influence of parliament, in these latter days, when almost all the work of government is confined to the members of the cabinet.
I wonder what Sir Robert Borden would have said if he had been confronted with the disregard of parliament that has been shown throughout the whole of this session? I think he would have exploded. Can anyone imagine what Mr. Mackenzie King would have said if he had been denied information in the way in which we have been denied it? As a matter of fact, he said a few things, and this was one of them. I quote from page 36 of Hansard of 1935 what he said in the House of Commons on January 21, 1935:
I have said that one of the supreme efforts of this administration has been stealthily to alienate the authority and control of parliament, to take power into its own hands and away from parliament with respect to many of the important affairs of the nation.
Mr. Speaker, at that time no one would have dared do what this government now does. They did not set up a committee from which they had first drawn all the teeth so it could not even masticate the problems that came before it. They did not set up committees which were only propaganda agencies for well-prepared representatives of the government to put over their fancy ideas when the committees met.
I can imagine what would have been said by Mr. King if anything had been attempted such as was attempted here. I ask those members who still recall his assertions on behalf of a free parliament what he would have said if he had been confronted with some of the things that have been done in this parliament, such as the falsifying of Hansard by the Minister of Agriculture (Mr. Gardiner); the inaccurate answers of the Secretary of State for External Affairs (Mr. Pearson); the ignorance of his own department shown by the Minister of National Defence (Mr. Campney); the reckless disregard of the facts-I am keeping within the rules, Mr. Speaker-displayed by the Minister of Trade and Commerce (Mr. Howe) who over and over again talked about an order in council of July 7, who chided my friend the hon. member for Eglinton (Mr. Fleming) when he forgot that important fact, and who did not of his own volition tell the house that there was no order in council. Let us remember that. The only reason he told us there was no order in council was that I had asked the Prime Minister to produce that order in council and he had agreed to do so. Then,

The Budget-Mr. Drew and only then, the Minister of Trade and Commerce had to admit that there was no order in council.
Mr. Speaker, there were times when governments would not have tolerated answers of that kind. The Prime Minister has the highest measure of responsibility under our system. He is asked by the representative of the crown to form a government, and he is responsible for the conduct of the whole government. He has not acted upon conduct which would have called for extremely stern measures in other parliamentary bodies which operate under methods similar to our own.
May I remind you again of words spoken by his predecessor as far back as June 30, 1920. I refer to the Hansard record, at page 4540 of that day. This is what was said by the man to whom the present Prime Minister has paid such great tribute:
The business of the country should be carried on in the open on the floor of this parliament in such a manner that the government will be obliged to take into their confidence not only the members of parliament but the people of the country whose money they are voting to expend.
Mr. Speaker, with whatever disagreement any member of this house may express his opinion with regard to some things that were said by the predecessor of the present Prime Minister, let it be said that those words clearly expressed what the attitude should be to the people's representatives here in parliament. The business of this country should be carried on in the open. I would ask you to remember that the Minister of Citizenship and Immigration (Mr. Pickersgill), when asked a question about the Caughnawaga reserve which he did not want to answer, made the pretence that he wanted a debate on the subject and availed himself of the rules in order to achieve that result.


Mr. Pickersgill:: Mr. Speaker, I rise on a question of privilege. I was asked no question that I did not answer. I followed the rules with respect to a motion.


Donald Methuen Fleming: You took advantage of them.


George Alexander Drew: Mr. Speaker, the Minister of Citizenship and Immigration dodged an extremely important question, which should have been answered, by a device which produced a highly improper result. That action was merely symptomatic of a general condition. There is contempt of this house shown in everything this government has done. We now start the second stage of this session. We hoped that there might be some expedition in dealing with the business of this house. Mr. Speaker, the Minister of Finance applauds. The Minister of Citizenship and Immigration wags his flipper.


Mr. Garson:: What exquisite wit.


George Alexander Drew: But I would point out that if there has been any delay in dealing with the business of this house, it has been the result of all the confusion that has been created by this government in the handling of the business of the house, and by the deliberate evasion of the responsibilities of the government to this house. No worse example could be offered than that which was presented by the Minister of Trade and Commerce on the proposal to set up a committee to examine into the role of government in the field of non-military research in Canada, including operations in the field of atomic energy, and the operations of the national research council.
That motion stood on the order paper from the beginning of the session. It came before this house- on February 24, six weeks ago. That is an important committee. The motion was debated for one day and then was dropped. It is difficult to believe that there was any sincerity whatever behind the government's proposal that this committee should be set up. How does the government explain holding back the discussion of that motion? It was difficult to explain why they waited until February 24, but how do they explain holding this matter up now? It was up for discussion for one day and then it stood on the order paper. We now enter the second stage of this session and the time is extremely short within which this subject could be dealt with, even if this motion were brought forward and passed this week. I am reminded that it was up briefly a second time, but the Minister of Trade and Commerce became impatient and the debate did not go on very long.


Mr. Harris:: On a question of privilege, Mr. Speaker, since the minister is absent, both the Leader of the Opposition and the hon. member for Eglinton who prompted him know quite well what happened and why that debate did not conclude at that time as was agreed in this house, that we would vote on it and get on with the work of the committee.


George Alexander Drew: Since the Minister of Finance has said I know, Mr. Speaker, any measure of secrecy is withdrawn and I will say I do know. It was because the Minister of Finance said the Minister of Trade and Commerce was annoyed because there was any debate on this measure.


Walter Edward Harris: I made no such remark, sir.


George Alexander Drew: That is exactly the way this house is treated. Just because we are not yes men to the Minister of Trade and Commerce, the way some others are in this house, then we do not deal with the business

of the house and this stands on the order paper. I repeat that what has happened in this house from the very beginning has been contempt, not of the members of parliament but of the people of Canada. It is to be hoped that this will be dealt with in the only way possible, and that is for the Prime Minister to take responsibility from this point onward for the restoration of the rights of parliament and a return of the business of the people of Canada to their elected members here in this house.


Mr. A. M. Fraser (St. John's East):: In rising to take part in this debate I should like first of all to offer my sincere congratulations to the Minister of Finance on his sound and eminently businesslike budget.


Mr. Martin:: That is the first reference all day to the budget.


Mr. Fulton:: There is nothing in it. You cannot talk about nothing.


An hon. Member:: You have been talking for two hours about nothing.


Allan MacPherson Fraser: It is my purpose to congratulate him most heartily on the report he brought down for the financial year which has just ended. As you will remember, Mr. Speaker, a year ago the Minister of Finance, after introducing substantial reductions in tax rates, forecast a deficit of some $160 million. A week or two ago he was able to tell us that deficit had been cut by more than two-thirds to $52 million, a very gratifying result, I think, and the more so because of the substantial reductions in tax rates last year.
Now, Mr. Speaker, the budget speech and the white paper which accompanied it showed us very clearly the flourishing condition of the Canadian economy as a whole, a condition which I think must be a source of pride and satisfaction to all of us in Canada. The gross national product for 1955 reached the figure of $26-5 billion, a real increase because as we know there was no appreciable change in price levels. This gross national product was 10 per cent above that of 1954, and perhaps even more significant was 9 per cent above the peak year of 1953. Yet all of us, Mr. Speaker, recall that last year when the Minister of Finance forecast a gross national product of $26 billion, his estimate was derided by the opposition as fantastically optimistic. We can all remember that dismal chorus of gloomy prognostications which sounded like a dirge from the prophets of woe sitting on the opposition benches.
But what has happened? The minister's estimate of the gross national product has been exceeded. He has confounded his critics;
10, 1956
The Budget-Mr. A. M. Fraser and his confidence, and the government's confidence, in the boundless resources of this country, in the skill and energy of the people of this country, has been completely vindicated. This rise in gross national product, Mr. Speaker, was reflected in increased employment. As the white paper states, the national average of employed persons in 1955 was 5,328,000, a 2-5 per cent increase over 1954 and 1-5 per cent increase over 1953. What I think is particularly important, Mr. Speaker, is that this increase was a steady increase. It was higher than in 1954 in every month except January, and higher month by month from May onward than even 1953. This increase in employment was accompanied by an increase in wages, salaries and supplementary labour income in 1955 which reached the magnificent total of $12,861 million, an increase of $872 million or 7 per cent over 1954.
There was unfortunately, as the house knows, a fall in farm cash income of $55 million in 1955. However, apart from that single exception of farm income, all forms of income increased. There was an increase in interest, dividends and net rental income from $1,825 million in 1954 to $2,010 million in 1955, a rise of $185 million or 10 per cent. There was a rise in net income of non-farm unincorporated business from $1,645 million to $1,753 million, a rise of $108 million or 6 per cent, and in corporation profits from $2,420 million to $3 billion or 24 per cent.
At this point, Mr. Speaker, I should like to make reference to a statement made by the hon. member for Nanaimo (Mr. Cameron) during the course of his speech. He stated, as recorded on page 2568 of Hansard for March 23, 1956:
There Is rather a striking contrast between the increase of 7 per cent that was added to labour income and the increase of 20 per cent that was added to investment income.
Of course that is quite true, but what the hon. member did not point out is what seems to me a very significant and relevant fact, namely that this large increase in investment income in 1955 came after several years of little or no increase in the level of investment income, while labour income increased steadily in every one of those years. As a matter of fact corporate profits, by far the largest factor in corporate income, actually decreased in 1952, 1953 and 1954. Moreover, Mr. Speaker, even if we take investment income as a whole we will find that in 1953 it increased by less than 1 per cent over 1952, while labour income increased by 7-7 per cent. Again in 1954, investment income was slightly less than for 1953, about a quarter of 1 per cent less to be precise, while labour income increased by 2 * 4 per cent.
2788	HOUSE OF
The Budget-Mr. A. M. Fraser1
Taking the period 1952-1955 as a whole, therefore, we find that investment income was 18-8 per cent higher in 1955 than it had been in 1952, while labour income was 18-3 per cent higher in 1955 than in 1952. In other words the rate of increase in investment income from 1952 to 1955 was only one-half of
I	per cent higher than the rate of increase in labour income over the whole of that period. This, I think, gives a very different picture from the one presented by the hon. member for Nanaimo, and I submit a very significant one.
The substantial increase in incomes to which I have just referred placed greater purchasing power in the hands of the Canadian people and made possible a higher level of personal expenditures. This reached the record figure of $16,811 million, an increase of 6| per cent. And here, Mr. Speaker, I think it is -especially gratifying to note that the rate of increase was particularly large in expenditures on durables, which rose by
II	per cent as compared with 6 per cent on non-durables and 6| per cent on services. Undoubtedly, personal expenditure was at a peak in the last year.
Savings also reached a very high ievel, showing an increase in personal savings of $500 million, more than 5 per cent over 1954, and in gross business savings another $500 million, more than 16 per cent over 1954. Yet, Mr. Speaker, despite this phenomenal expansion, there is no reason to suppose the limit of Canada's growth is reached. As a matter of fact, the minister's estimate for the gross national product in 1956 is close to $28 billion, and I have heard no opposition member claim that that figure is too high. That is a very different picture from the gloomy one that was painted last year by the opposition.
On the basis of an estimate of gross national product close to $28 billion, the Minister of Finance has budgeted, as we know, for a revenue of $4,775 million. With expenditures at $4,650 million, he estimates a surplus of $125 million. We have heard criticism from the opposition on the ground that with the increase in the gross national product and the surplus in prospect there should have been a large reduction in the rates of taxation. I feel they are fundamentally mistaken, but first of all, before I go on to analyse that question further, I should like to remind the house that there have been cuts in the tax rates, small ones, it is true, but they have been very wisely applied to those sectors of the economy where they will be most helpful. I have in mind in particular the repeal of the sales tax on building materials, providing as it does an encouragement to home builders, and the


restoration of full duty-free entry to parts for agricultural machinery and equipment, which will be of benefit to our farmers.
Now, Mr. Speaker, to get back to the question of the criticism on the ground that there has not been a larger reduction in the rates of taxation, we all know, of course, that there are only three ways in which it is possible to reduce taxes. Either we must reduce expenditures or abolish the surplus, or the minister could have budgeted for a deficit. Let us consider each of these possibilities in turn. There have been very strenuous general demands by the opposition for a reduction in expenditure; but I have read all the speeches in this debate very carefully, Mr. Speaker. I have listened to a good many of them and I failed to hear any specific concrete proposals from the opposition that would have resulted in substantial reductions in expenditures. As a matter of fact, Mr. Speaker, during this session, as in previous sessions, we have heard from the opposition side of the house demands made for increased expenditures that would have involved the imposition of higher taxes by many millions of dollars upon the people of this country if they had been accepted by the government. Therefore, until the opposition comes forward with specific practical proposals for a reduction in expenditures that would make possible substantial reductions in the rates of taxes, I can only conclude that the Minister of Finance is completely justified in the fiscal course he is pursuing.
Suppose the minister had not budgeted for a surplus, what then? Could there have been substantial tax cuts? Well, no, because of course the surplus is too small. It is only $125 million, and as the minister himself has pointed out, that represents only about 2\ per cent of our revenue or expenditure. If I may quote the minister: "It is not much more than a prudent reserve against unforeseen circumstances that may arise in the course of the year". Moreover, we must bear in mind, Mr. Speaker, that during the past two years the public debt has been increased by $153 million in 1954-55 and by $52 million in the last fiscal year, 1955-56. Consequently, if it does prove that this estimated surplus materializes it could be usefully applied to a reduction of the public debt.
It should not be forgotten, however, Mr. Speaker, that there is a likelihood of substantial additional expenditures to be faced by the government in 1957-58. I think particularly in the first place of the proposed nationwide health plan which has been estimated to cost the federal treasury about $180 million annually, and also the proposed new federal-provincial tax arrangements,

The Budget-Mr. Nesbitt refer. I should like to express my strong support for the government's decision to increase Canada's contribution to the Colombo plan, an increase of $8 million or 23 per cent. I believe that this is a particularly wise decision in view of the fact that at the present time the cold war is being waged more and more by economic weapons and in the economic field. I support this decision both because I believe it is inspired by a genuine desire on the part of the government to help the economically undeveloped countries of the commonwealth and Asia to help themselves and also because I am quite confident that in doing this the government is doing what the overwhelming majority of the Canadian people would have it do. I believe, too, that the Colombo plan is serving as a model of the best way in which aid can be offered to countries whom we want so much to develop their resources and to do so in an atmosphere of good will and with no strings attached.
In conclusion, Mr. Speaker, I would just like to say once again how much I appreciate the soundness and the statesmanship which has lain behind the administration of the finances of this country during the past year, and to congratulate the minister once more on the extremely sound budget which he has presented to this house for its adoption.


Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, since the Minister of Finance did not see fit in his budget this year to institute a major change in financial policy it is with regret, I think, that many hon. [DOT] members view the fact that he did not remove certain small inequities in the present taxation system. While the inequities are not very important in themselves, a change would have brought inestimable relief to many individuals in the country. For example, a farmer who is a widower or a bachelor might have been allowed a deduction from his taxable income of a reasonable sum paid for the services of a housekeeper. This may be a small point, Mr. Speaker, but on the other hand there are many farmers in that particular category, and dairy farmers in particular have not shared in the boom which the rest of the economy has been enjoying. A farmer is not in the same position as an industrial worker who lives in an apartment in the city. Although it is not an essential part of the farming business a farmer must maintain a home. If the farmer has a child a certain type of deduction may be allowed if he is a widower and the child acts as housekeeper, but if the farmer's children have grown up or if he is a bachelor he has no relief in this way. It would seem to me that a minor form of relief such as this might easily be put into effect.


Another area in which I think the minister might have given some relief is with regard to the education and training of blind children. At the present time special training for blind children is not allowed as a deduction from taxable income for those who supply the funds for such training. I am sure it would make very little difference to the gross income which the minister obtains for carrying out the business of the country if a deduction such as this were allowed. It is a terrible handicap for one to be blind, particularly from birth, and considering the relatively small number of blind children it seems only reasonable that their parents who must put up the funds for their training should be given every conceivable assistance and aid in this matter.
There is another matter which I mentioned in this house last year and which I shall continue to mention from time to time as the opportunity presents itself. I refer to the cost of expensive drugs not being allowed as a deduction from taxable income. Lengthy illnesses are almost always very expensive and there are many families in the lower income groups who are not members of the Blue Cross or other health schemes. In many cases the drugs required for the treatment of these lengthy illnesses are exceedingly expensive.
As most hon. members know, in some cases the physician will supply the necessary drugs and then charge for them on his account to the patient. Then under the exemption for medical expenses over 3 per cent the taxpayer is able to deduct the cost of such drugs from his taxable income. This method discriminates directly against the druggists in the country. The druggist makes his livelihood from dispensing prescriptions and selling drugs. He provides a necessary service which should not be supplied by doctors. However, many doctors do provide this service in order that their patients may take advantage of deducting the cost of drugs from their taxable income.
I realize that there are certain administrative problems in allowing as a deduction from taxable income the cost of such drugs. I have heard it said that people would go to a drug store and get a receipt when they buy toothpaste, cosmetics, cigarettes or anything else. I am quite sure that this relatively minor administrative problem could be easily overcome by having the druggist set out on his account what was purchased. When the bills were attached to the income tax form it would be quite easy to see whether cosmetics had been purchased instead of drugs.
I mention this because many druggists throughout the country are incensed with

the present regulation. I received many letters last year after I made my remarks in the house in this connection and I know the Minister of Finance (Mr. Harris) has received representations from druggists' associations. It apparently is too late this year but perhaps next year the minister will consider allowing the cost of such drugs as a deduction from taxable income. It is an unwarranted discrimination against druggists which could be easily overcome.
There is another matter to which I should like to refer briefly before I reach the main object of my remarks today. I might say that on another occasion I intended to deal with this matter in greater detail and much more fully. I refer to the excessive-this is the only possible way to describe it-tax on tobacco which exists at the present time. I have always been led to believe that in its taxation policy the government follows the principle of ability to pay, and I think most groups in this country subscribe to that principle. However, it is quite obvious that that principle has not been applied to the tax on tobacco.
In the old days tobacco may have been considered as a luxury. It was largely imported and there may have been some excuse for applying a tax. But today tobacco is not a luxury. Whether people like it or not, it has become what could be described as an economic necessity. A large majority of the people in Canada, particularly those in the lower income groups, use tobacco daily as they use bread and other things. It is the low income groups that are hit by this excessively high tax.
It does not seem fair. We have often heard that the government should soak the rich, but in this case they are soaking the poor. In view of the generally high level of taxation, this tax on a commodity which is used largely by those in the lower income groups seems to be most unfair and unreasonable. It is shown by figures and charts which I have before me that because of the high tax on tobacco the per capita consumption of cigarettes in this country is somewhat lower than it is in the United States where the tax is less. As a result there is not the maximum use of tobacco that there ordinarily would be.
This has resulted in a reduced tobaccogrowing acreage, which in turn has resulted in considerable land in southern Ontario, land which is of no use except for the growing of tobacco, becoming waste, sandy land. You find this condition in the counties of Oxford, Norfolk, Brant, Northumberland, Simcoe and elsewhere.
I know that some objections to the reduction of the tax on tobacco may be put forward on health grounds, but it has never
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been shown conclusively that tobacco has any adverse effect on health. Many members of the medical profession say that it has, but just about as many say that it has not. Until we have conclusive figures I do not think that the government should attempt to use health, if it is doing that, as an excuse for putting a tax on tobacco. If the government can produce medical evidence that the use of tobacco has an adverse effect upon health, then possibly some other measures might be taken, but they should not be in the form of an excessive tax.


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



PERSONAL FINANCE COMPANY OF CANADA

[Stage Direction]
The house resumed, from Monday, March-26, consideration of the motion of Mr. Lefranqois for the second reading of Bill No. 160, respecting Personal Finance Company of Canada, and the amendment thereto of Mr. Coldwell.
Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, because of the rather disjointed manner in which this discussion of this bill has taken place, it might be wise for me at the outset of my remarks to remind the house that this bill calls for a change in the name of the Personal Finance Company to Beneficial Finance Company and also for an increase in capitalization. The hon. member for Rosetown-Biggar (Mr. Coldwell) has moved an amendment that the bill be given what we commonly call a six months hoist.
A continuation of this debate may come as a surprise to some hon. members of the house because it has been obvious to me as I have listened to the debate that some hon. members are inclined to regard this as a rather innocuous bill which should not concern us particularly. This, Mr. Speaker, gives me cause to realize that more than ever it is necessary for those of us in the house who believe in the things about which the hon. member for Cape Breton South (Mr. Gillis) spoke yesterday to rise in our places and draw to the attention of the house that as far as we are concerned this is not an innocuous little piece of private legislation but rather is a case in point of the very things about which the hon. member for Cape Breton South talked in the house yesterday afternoon. It is a present-day manifestation of the kind of attitude of mind that exists in this country which caused the people who drafted the Regina manifesto, to which the hon. member for Trinity (Mr. Carrick) re-

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ferred, to say that they would not rest content until capitalism had been eradicated from this country.
In rising to oppose the passage of the bill I want to make it very clear that that is the basic reason for my doing so. The very fact that in some quarters the bill should be considered to be an innocuous matter, something to which little heed or attention should be given, the very fact that a company should come to the parliament of Canada and ask us in effect to prostitute the English language is not something which we should sit idly by and see happen. In attempting to make my position clear I should like to point out that the writers of the Regina manifesto did not say they were going to eradicate capitalists from Canada. However, they were determined that this state of mind, this attitude which considers the almighty dollar the most important thing in the life of man, should be brought to an end, and that they would seek to build in this country a cooperative commonwealth.
It is perfectly true that the people who have attempted to warp and twist that statement, drafted at a time which most of us can recall was one that wrung the hearts and minds of men in the agony of the situation that existed, have attempted to suggest that the plan there set forth was one which would eliminate private enterprise. That is the sort of approach which is taken by people who will bring this kind of bill before the house, a bill that is helping to eliminate private enterprise and initiative in any real sense in this country.
That is why I feel I want to take part in the debate today in opposition to the passage of this measure. Why should I be concerned about what a particular company calls itself? As it happens, this is a matter that comes before parliament, and this company is asking that it be allowed to term itself "beneficial". I happen to believe that this company and its operations are not beneficial to the people of Canada and that it is an affront to us for the company to come here at this time and ask us to give our blessing to this change.
A while ago I took the trouble to look at a dictionary to see what the definition of the word "beneficial" is. I found that "beneficial" means benefiting, tending to benefit, conferring benefits, being helpful. The Beneficial Finance Company may be beneficial to some people but in my humble opinion it is a long way from being beneficial to the people who are unfortunate enough to do business with it.
I have discovered that many people in Canada get rather a jolt at times when they happen to find out the kind of mark-up that the merchants with whom they do business place on the products they sell. They may

hear that there is a mark-up of 25 per cent on certain goods they buy, or they may happen to discover that in some cases their hardware merchant may have a mark-up of 100 per cent on his goods, and they are shocked to the core. I wonder how many of them have stopped to think about the kind of mark-up this company has. I wonder how many members of the house have thought about that.
According to the company's own statement, which can be found in the report of the superintendent of insurance, I notice that under the heading of small loans they list under expenditures interest on borrowed money amounting to $642,231.28. To me that represents the wholesale cost of the commodity they are selling. Then, above that item under the heading of income earned on small loans there is an amount of $2,769,313.25 listed. I think a rough calculation will indicate that represents a mark-up of something over 500 per cent.
How can anyone, Mr. Speaker, term that a legitimate kind of business? Certainly as far as I am concerned I make no bones about my opinion of it. I noticed an announcement in the press recently that this particular company is opening an office in the Alberni valley where I live. As far as I am concerned, I certainly intend to advise my constituents to avoid that particular business like the plague, irrespective of whether or not the name of the company is changed. In my opinion there is no justification for the continuance of this form of legalized robbery. Because of the existence of this sort of institution, which attempts to fasten itself upon the backs of the working people of the country, there is, as far as I am concerned, still need for a party like the Co-operative Commonwealth Federation which is dedicated to the eradication of this kind of capitalism.
It is perfectly true that the operations of such companies are glossed over a little more smoothly now than back in the thirties. These people have discovered the benefit of having high-paid press agents to do their dirty work for them. In my opinion some of these press agents have warped the judgment of a good many members of the house over the course of the years. As far as I am concerned, this is an attitude of mind which represents the greatest enemy to the well-being of the people of Canada today.
It is all very well for the Minister of Finance (Mr. Harris) to talk about our bounding economy and the increase in our gross national product. Surely, we can slide along under that. It is perfectly true that some of the grosser effects of this kind of activity are glossed over in a period such as that in which we live at the present time. But that does not

alter the fact that still fastened like leeches on the backs of the Canadian working people is this sort of thing, the people who do the really productive work of this country. Probably the people who are in the position of being entrepreneurs in the genuine sense of that term do not have to resort to the use of this sort of lending institution. But unfortunately the people who work under their direction, beguiled by this misleading and high-priced publicity that is bombarded upon us from every direction, have resorted in large numbers to the use of this sort of thing perhaps partly because in many instances they have not been fully aware that it was unnecessary that they do so. When I think of the contrast in the approach that is taken by an institution of this kind with its 500 per cent mark-ups to the kind of service which is provided to many Canadians today through their credit union organizations, Mr. Speaker, I think that I am on even surer ground in rising in opposition to this measure.
If no other alternative was available it might be argued that, little as one liked this sort of thing, it was necessary and that we should give our blessing to their calling themselves "beneficial" or anything else that they might see fit to call themselves. But when there is in existence the kind of lending institution which is beneficial in the genuine sense of the word then, as I said before, I think the proposal contained in this bill constitutes in effect a prostitution of the English language and that we should have neither hide nor hair of it.
The other aspect of this particular piece of legislation is this. If we grant this particular proposal to this company, are we not in effect creating a precedent and are we not going to have all the loan companies and many other companies coming running to this parliament asking to be allowed to change their names in a manner which may give them, in their opinion, some slight competitive advantage over their competitors in misleading the public of this country? We are perhaps going to have coming in bills proposing all sorts of changes of names and we shall be spending our days and our weeks dealing with such bills.
I was wondering just what sort of names some of these other companies might want to have if they were to come in with similar bills. Again I consulted a dictionary in order to see what were some of the synonyms of the word "beneficial". I could offer a few helpful suggestions to the people who might be coming in with these bills. They might call themselves the "advantageous" finance company, the "good" or the "helpful" finance company or-I do not quite know how this one got in-the "profitable" finance company.
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I might even support a bill for a change of name to that one. Then, of course, Mr. Speaker, there is another synonym. They might call themselves the "salubrious" finance company. I think that name somehow has a rather nice sound. If the Personal Finance Company, instead of making this particular proposal, would agree to a change and would come in and ask us to give them the name of the "salubrious" finance company I think possibly I might withdraw some of my objections to their proposal.
Quite apart from this particular consideration, Mr. Speaker, I am reminded of remarks made earlier in this debate by, I believe, the hon. member for Trinity in which he tried to shoo us off and say that he thought this was not the time and the place to debate this question, that we could debate it on the government legislation to change the evil ways of finance companies when we came to it. That is all very well and good, Mr. Speaker, but my contention is this. After this government legislation to which he is referring has passed and has gone through the house, if we are satisfied that it is going to do something to rectify the situation and to make a decent, ordinary type of business out of this activity, we might be prepared to consider some proposal such as this. But until we know what is going to happen with regard to that legislation or what is going to come out of the discussion on it in this house, I submit that now is the time and place to debate this bill, and no other time. After all, the bill is before us under the rules of the house. If we feel that it is an evil and pernicious thing to be coming before us I would suggest, Mr. Speaker,-with all respect to the hon. member for Trinity-that this is the time and the place to debate a measure of this kind. I could only hope that the people who direct this company, after taking some cognizance of the objections we have raised, might be willing to have this particular legislation withdrawn, at least in so far as this proposed change of name is concerned.
There are too many ways in which this insidious abuse of the English language is creeping into the accepted ways of doing business in an attempt to extract every last nickel and dollar from the working people of Canada. Here is a flagrant example of it that has come directly before us. It is, if you like, an example symptomatic of an attitude of mind that is all too prevalent among those who consider themselves to be in the business world of this country. It is something we should oppose. Actually, Mr. Speaker, it is something which has nothing, to do with what are ordinarily termed divi-

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sions in thinking along political party lines. So far as I am concerned, it is something which goes much deeper than that.
It is based upon a recognition of the truth of the statement that man does not live by bread alone. Day after day, year after year, possibly because of the period of prosperity which was induced by and has continued since the last war, this type of thinking seems to be more and more accepted as something to be taken for granted; something which we can casually accept as part of our way of life. So far as I am concerned, this sort of thing is something which, if we hope to retain our freedom as individuals, we have to stand up and fight against. Otherwise, we are going to be lulled into a state of semicoma-perhaps a state of coma which is a little deeper would be a good thing. In such a state, Mr. Speaker, we would not feel the pain when these financial dentists are pulling our financial teeth. It is an intriguing thought, that we just allow ourselves to be lulled into a gentle somnolence, and let these financial wizards continue extracting everything we can earn.
I do not believe, Mr. Speaker, that man was intended to spend his life sleeping on a doormat. I think the people of Canada, if they are going to remain people, have to be alive to the fact that there are some things that hurt. If one is aware that one is being robbed, that does hurt. For that reason, Mr. Speaker, I think this bill should be thrown out. I feel that when the hon. member for Rosetown-Biggar (Mr. Coldwell) moved that this bill be not now read but be read this day six months hence, he was taking an action which was designed for the welfare of the Canadian people. This house would be well advised, as a parliament charged with matters pertaining to the welfare of the Canadian people, to accept the amendment introduced by the hon. member for Rosetown-Biggar.


Mr. A. H. Hollingworlh (York Centre):: We
are considering Bill No. 160, Mr. Speaker, and I think when one is talking about this bill one should probably recall that we are dealing with two bills, No. 160 and No. 166. I think one could make a distinction as to how one feels about these two bills, and that is what I propose to do today. I will say at this stage, although I realize I am not discussing Bill No. 166, I will vote against that bill and I will vote for Bill No. 160. The reason I am willing to vote for that bill is that I think we are dealing with pure technicalities.
We understand that the Personal Finance Company wants to change its name to the Beneficial Finance Company. In my opinion, *that is not important. I do not like the name. I do not think it makes sense particularly, and

I am inclined to agree with the hon. member for Comox-Alberni (Mr. Barnett). It is a rather silly name, but actually it is their own business. They are operating as a company in this country. They are obeying the laws of the country, and so far as I can see there is no reason why, on a pure technicality, they should not be allowed to change the name of the company.
Now, about two weeks ago the hon. member for Trinity (Mr. Carrick) pointed out that this name has met with the approval of the Secretary of State (Mr. Pinard) and the approval of the superintendent of insurance. If that is the case, I do not think it is incumbent upon hon. members, in effect by means of a filibuster, to try to block something which is purely a technicality. It seems to me that this is not a matter of substance. It is a matter of procedure. It is a matter of dealing with the name of a company only and not a matter of dealing with the merits or demerits of small loan companies. Hon. members well know how I feel about finance companies. I mentioned it in a speech I made just a few weeks ago. I believe that when one is considering such a company as the Signature Loan and Finance Company, that is an altogether different matter. There you are dealing with powers which are vested in hon. members, namely the decision as to whether or not a new company should be set up in this country.
It may well be, and it is my own opinion, that this is not the proper time for another company, particularly a United States company, to come into this country and especially when one receives letters from people who are concerned about the future status of Canadian finance companies. But surely in a matter which purely concerns the name of a company that is already in existence, which is operating in this country and which, so far as hon. members are aware, is obeying the laws of this country, we members should not interfere with this purely technical process. As I say, I cannot see that it concerns the merits or demerits of finance companies generally. Hon. members well know that soon Bill No. 51 will be going before the banking and commerce committee. At that time evidence will be adduced as to whether or not the interest rate should be changed. Personally, I feel it should be, and I am strongly in support of the government bill. But, Mr. Speaker, I submit that is not the case here. Therefore, as I say, I will support this bill but I will speak, and I will vote, against the subsequent Bill No. 166.


Stanley Howard Knowles: Will the hon. member permit a question before he sits down? Is he not

aware of the fact that this bill, in addition to changing the name, increases the capital of the company tenfold?


Allan Henry Hollingworth: Yes, I am aware of that.
I should have mentioned that. In my opinion, that does not concern the merits of finance companies. As the hon. member for Trinity pointed out, it is a matter of having a $9 million surplus in their capital account. I see no reason to object to increasing the capitalization. I think it is begging the question to try to draw a similarity between that and this other bill. I am aware of that. In my opinion, it does not change the merits of the argument I have made.


Stanley Howard Knowles: Except that it is rather beneficial to the Beneficial Company.


Mr. Erhart Regier (Burnaby-Coquitlam):: Mr. Speaker, I should like at the outset to congratulate the hon. member for York Centre (Mr. Hollingworth), who has just taken his seat, on the statement he has made that at least he intends to oppose one of these bills.
I think that is a noteworthy admission for him to make, and I hope that the national president of the Liberal party will not deal overly harshly with him when next the Liberals nominate in York Centre.
Various names for this company were offered by my colleague, the hon. member for Comox-Alberni (Mr. Barnett). I think he left out two other possible names. One might be the MacTavish Finance Company. After all, this man, Mr. MacTavish, is connected with a goodly number of these companies and he might well consider it is high time that his name was honoured in the name of one of the companies; or it could also be called the National Liberal Finance Company. That, Mr. Speaker, I think would make it have a very salutary effect both upon the Liberal party of Canada and upon the welfare of the Canadian people.


Mr. Langlois (Gaspe):: Why not call it the C.C.F. Finance Company?


Erhart Regier: The name of the C.C.F. finance company is known in almost every village now as a local credit union, and they are doing very well.


J. G. Léopold Langlois: That is about the only enterprise of the C.C.F. that did not go bankrupt.


Mr. Caslleden:: The hon. member does not know what he is talking about.


Erhart Regier: I think, Mr. Speaker, that the C.C.F. or the credit union method of helping people shows that people can be helped with small loans at reasonable rates of interest.
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I should like to compare just for a moment the attitude taken toward this bill by the newspapers belonging to the millionaires of Canada and the more moderate newspaper published in Ottawa. The Financial Times- that is the one I am referring to as a millionaire newspaper-in its issue of Friday, April 6, begins under the heading:
The C.C.F. and the Small Loans Companies
Unsuccessiul in their attempts to have the interest rate on small loans cut in half, the C.C.F. members of parliament had an opportunity of renewing their attacks on small loan companies in the course of debate on a bill providing for a change in name for one of the companies operating in the small loans field in Canada.
I must point out to you, Mr. Speaker, that that is a complete misrepresentation of the facts. The C.C.F. has not been unsuccessful. As I pointed out in another debate, the introduction of another bill by the government shows how successful we have been in our attacks in regard to what is going on in the field of finance companies. The other paper, the Ottawa Journal, was much more realistic. On Wednesday, March 28, over and above the news item headed: "D. K. MacTavish Attacked Over Loan Firm Connection", they have a very interesting cartoon. A man and his wife are washing a new automobile in the shade of a tree, and they look at a man walking in the dusty road, and the comment is:
A finance company put him back on his feet. They took his car away from him.
I think that is a very good example of the different reaction of the ordinary citizens of Canada, as exemplified by such a newspaper of a relatively smaller city, as compared with that taken by such a newspaper as the Financial Times. The one opens up with a completely false assertion. It is as false an assertion as were the assertions by the man named "Tempus" in the same issue of the paper when he attempted to forecast the number of seats the various parties would win in the province of Saskatchewan in the next' federal election. He was wrong in that. I am rather surprised that the wealthy people of Canada have only such unreliable newspapers to read.
The hon. member for Trinity (Mr. Car-rick) made some very interesting comments on this bill the other day. He rightfully pointed out that this bill not only implies a change of name but also asks us to authorize an increase in the capitalization of the company. He asked at page 2618 of Hansard:
Does that not seem a reasonable request?
Does it not seem a reasonable request that this company be allowed to increase its capitalization from $1 million to $10 million? When speaking on this bill, the hon. member for Greenwood (Mr. Maedonnell) rather

Private Bills
wondered whether the increase in capitalization would mean that the company would be prepared to put in an extra $9 million of their own money. In looking at the financial statement of this company, Mr. Speaker, I think it is obvious that it wants to raise its capitalization from $1 to $10 million merely so that it can issue share certificates for the surplus $9 million odd that they now have. I would like to suggest that since their net earnings under the Small Loans Act are roughly $1 million, they feel that $1 million net profit on $1 million of capitalization would indicate a net return of 100 per cent of their money in one year. They feel that they could raise the capitalization to $10 million without investing any more money, and that then in another year a profit of $1 million will look like only a mere modest 10 per cent earnings on their investment.
The question of the propriety of our entering the debate at this time has been raised by a number of speakers, both by the hon. member for Trinity and again by the hon. member for York Centre. I feel that when a company asks for an increase in its capitalization it has always been considered quite the appropriate time for parliament fully to examine the operations of the company that is asking for such an increase. If we look at the operations of this company we find some very interesting statistics. First of all, the company admits that in the year ended December 31, 1954, it spent on advertising the sum of $473,991.70, a little less than half of it on small loans, and the rest of the money was spent on loans in excess of $500. I feel that is imposing an undue hardship on the Canadian people. I do not think this advertising of theirs served any useful purpose whatsoever. If it is an emergency service they are rendering, I am sure the Canadian people are aware of telephone directories, and they can look up and find out where finance companies have their offices. No money whatsoever need properly be spent on advertising. If the advertising would lead to some competition among those companies I might be willing to consider it in a more favourable light. However, you find that the interest rates are fairly well the same. You can go from one to the other and it is 2 per cent a month on the unpaid monthly balance.
I am also interested in two things. My leader, in moving his amendment to the bill, read out the list of the directors. However,
I would like to call attention to the fact that the largest shareholder, of course, by far, is the Beneficial Loan Corporation of Wilmington, Delaware, but there are two other citizens of the United States on the board of directors. There is a Mr. O. W. Casperson, of Andover, New Jersey, and Mr. C. H. Watts, Fort

Lauderdale, Florida. I have reason to believe that both Mr. Casperson and Mr. Watts are the men who own the Beneficial Loan Corporation, so there is a very clear indication there that this is a company almost completely controlled by outside interests.
The hon. member for Trinity had the audacity to compare the usefulness of this company and its American money with the Aluminum Company of Canada. On page 2620 of Hansard he makes the statement that in so far as the earnings of both companies go to the United States, because the Aluminum Company of Canada is a subsidiary, there is not a scrap of difference. I would like to take issue with that statement. To me there is a very great difference. If the surplus earnings of the Aluminum Company of Canada are taken out of Canada and go to the United States we at least have the satisfaction of knowing that this company has aided in the development of our natural resources. That is something which we definitely cannot say concerning the operation of finance companies. The purchasing power of any money they take out of Canada is definitely lost to the Canadian people and the standard of living of the average Canadian citizen is lowered in ratio with the millions of dollars they take out of the country.
The hon. member for Trinity concluded his remarks by saying that the relief sought is reasonable. I feel that asking parliament for the right to use a name which in fact can be most misleading to the Canadian public at large and the request to increase capitalization when it is obvious that no additional investment on the part of the company is contemplated is in no way reasonable.
At page 2619 of Hansard the hon. member for Trinity gave expression to a remarkable thought when he said:
I put this question squarely to hon. members of this house. Is the choice of a name going to depend upon the likes, the dislikes or the whims of members of this house?
That comes about as close to contempt of the rights of parliament as anything I have yet heard any hon. member here express.
I can only say that this is a further indication that the speech was written in the ante-room of the Minister of Trade and Commerce (Mr. Howe), because if I did not know that that sentence had been used by the hon. member for Trinity I could readily believe it was a sentence the Minister of Trade and Commerce had used.


Mr. Carrick:: The hon. member is a great joker.


Erhart Regier: The Minister of Trade and Commerce has frequently expressed contempt

for the rights and responsibilities of hon. members of the House of Commons. I feel that to mislead the people of Canada with a proposed new name is definitely a matter that concerns this parliament and when we are asked to sanction such a change of name I believe we have every right and responsibility to consider its implications in full.
I notice that the operations of these companies indicate that these are vicious activities indeed. I have not the figures for the Personal Finance Company of Canada in detail on the matter I now wish to raise, but in looking at page 59 of the report of the small loan companies and money lenders for the year ending December 31, 1954, I see under the consolidated exhibits a classification of loans made during the year. It divides the borrowers into three categories: new, repeat and current. "New" means persons who were not previously borrowers from the lender; "repeat" means persons who had fully discharged all previous loans from the lender; "current" means persons with earlier loans from the lender still undischarged.
I notice that a total of 831,721 loans were made in the year and of this figure over half, or 484,667 people, were borrowers who when they came in to borrow were still indebted to the finance company for some loan made previously. This should be a warning to the people of Canada that of the total number of Canadians who found themselves in the clutches of finance companies over one-half were unable to get out of their clutches and found themselves deeper and deeper in debt.
When you hear that the veterans of Canada are paying as much as 8 per cent of their income to finance companies, I think it is time we gave some serious consideration to what is taking place.


Hazen Robert Argue: That was for interest alone.


Erhart Regier: The hon. member for Assiniboia has corrected me. He says that the 8 per cent figure is for interest alone, which makes it that much worse.
There were a few matters in the financial statement to which I would like to call the attention of the house. This company, which pays 25 per cent as much on advertising as it pays in wages, is also to be condemned for the level of wages it pays. The Financial Times appears to point out that the men who run these offices must be wise, must be able to help people and advise them how to spend their money and therefore they assume that the employees are very well paid. I happen to know that the employees of finance companies in Canada are paid on a scale that is put to shame by even the miserable wages paid by the chartered banks.
Private Bills
You can pick up a newspaper almost any day of the week and look under the help wanted column where you will see that some finance company or other is continuously advertising for help, especially male help. They lure male employees with the prospect of becoming branch managers. At the rapid rate at which they are opening branches I suppose there are a considerable number of vacancies from time to time; however, I have reason to believe that a large number of their branch managers receive only mediocre wages and therefore they resign with regularity and the turnover in employees is very high.
The main complaint I have against the Personal Finance Company is that it, like other finance companies, is using money that is not its own. It is bleeding the people of Canada for the use of their savings. Many hundreds of thousands of Canadians who have money in the bank or in life insurance companies and receive the measly percentage of interest on their investments must pay the exorbitant interest rates that are being charged by finance companies when they buy automobiles and household appliances. I feel that no one should be allowed to manipulate the savings of the Canadian people in this fashion. Under the heading "liabilities" I notice that this company owes to the Beneficial Loan Corporation the sum of $31,757,529.68. Apparently the reputation of the Personal Finance Company is so low that it cannot borrow from Canadian banks or insurance companies but has to persuade the parent company to do its borrowing for it.
I resent very much the change of name and I resent the increase in capitalization that is being asked for, because I feel it is only misleading in that no additional capital will be forthcoming.
I repeat that the people of Canada should know, and I hope they soon will know, that the Liberal party of Canada is intertwined and intermeshed in this plot to collect the hard-earned savings of the Canadian people which is going on at the present time.


Mr. H. A. Bryson (Humboldf-Melforf):: Mr. Speaker, in rising to take part in this debate I intend to point out one of the newer things in which we find these small loans companies engaged. I refer to the rather nefarious expansion of their present practices and I rise to draw this to the attention of the house at this time.
Before I do so I should like to point out something known to a great many members of this house, especially those who have had anything to do with the credit union movement. Credit unions are engaged in exactly the same type of operation as these small loan companies which we are discussing and yet the interest rate charged in most instances

Private Bills
is only 8 per cent and the borrower is insured so that if he dies the loan will not be charged against his estate. Then in most instances a good part of the interest paid is returned in the form of dividends. We are familiar with the operations of small loans in the credit union movement. When we are told, as we were told here a day or two ago, that the exorbitant interest rates charged are due to the risk involved and the cost of processing loans, we know that will not stand up when the facts are presented.
I should like to point out a new practice which has been established in this country by these loan companies. They are not able to get all the business as there are many other institutions such as department stores which are getting a tremendous amount of business because so many people indulge in instalment buying. Even in the city of Ottawa we see the insidious practice where subsidiaries of these small loan companies are set up. They go to people who have become financially embarrassed, to people who find their pay cheques too small to meet their monthly commitments to the department stores, to people who are unable to make their cheques go around; these subsidiaries which are operated under other names but which are exactly the same people go to these people and say, "If you will turn over your pay cheque every month we will take care of your obligations around town." They charge 2 per cent for that service.
After they have operated for a few months they come back to the party and say, "Because of our handling of your accounts we are able now to allow you to make a down payment on another piece of merchandise." I do not think it takes a great deal of imagination to realize exactly what is taking place. It has been proved in this house that Simpsons-Sears and T. Eaton are charging as high as 52 and 54 per cent on instalment buying. These people in effect are collecting, not 26 per cent-


The Acting Speaker (Mr. Applewhaite):: Order. I hesitate to interrupt any hon. member who has the floor but I have been listening to the hon. member for the last three or four minutes and I find it a little difficult to connect his remarks with the present bill. As hon. members know, there is a general bill dealing with small loan companies now before the banking and commerce committee. There are only two clauses in the bill now before us. One clause provides that one specific company, the Personal Finance Company, shall be allowed to change its name, and the other provides for an increase in capitalization.
I hope that I shall always have sympathy with the hon. member who has the floor,

whoever he may be, but I do not think it is within the rules of the house to permit a specific bill to be used as a vehicle by which we might discuss various aspects of small loan companies, more particularly so when up to the present the hon. member for Humboldt-Melfort (Mr. Bryson) has not indicated that the Personal Finance Company which we are discussing is of the nature which he is outlining in general terms.
I have no desire whatever to hamper the hon. member in making his argument, but I think I should ask him to deal with the specific bill before the house.


Hugh Alexander Bryson: Mr. Speaker, I understand your position but the reason I was pointing this out is that I feel we must reject this legislation because of certain principles in which we believe. I was pointing out my arguments as to why we should not tolerate in this house the establishment of these small loan companies, regardless of what they may be called. However, you have made your point quite clear and I shall not press the matter further.
I do not think we can accept the argument which has been put forth by the hon. member for York Centre (Mr. Hollingworth), who said that it was immaterial at this time whether the name was "Beneficial" or not. I submit that if we agreed to changing the name to "Beneficial" we would thereby be agreeing to the operating of such organizations.


Allan Henry Hollingworth: That is a non sequitur if I ever heard one; it does not necessarily follow at all.
On motion of Mr. Bryson the debate was adjourned.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.


[Stage Direction]
The house resumed consideration of the motion of Hon. W. E. Harris (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell, and the amendment to the amendment of Mr. Coldwell.
Wallace Bickford (Wally) Nesbitt: Mr. Speaker, this evening
I intend to spend the rest of my time dealing with the dairy industry. Of course, it is quite impossible in 20 minutes or half an

hour to even begin to deal with all the problems of the dairy industry in any detail and with any accuracy. Consequently I intend to deal with two aspects of those problems, the problems that the cheese producers and the concentrated milk producers face at the present time. Without any exaggeration I think that these two problems are the most contentious problems at the present time of the many difficulties that the dairy farmers face.
Of course, Mr. Speaker, one must bear in mind that all branches of the dairy industry are very intimately related. In fact, they are rather like a pile of jackstraws. If you remove one of the straws the whole pile shifts. Consequently, if one branch of the dairy industry benefits or suffers all other branches benefit or suffer accordingly. I think hon. members should bear that in mind with relation to the rest of my remarks.
People regard the function of government in the world at the present time from two different points of view. If one is a socialist one considers the function of government to be that of the all powerful arbiter of the factors of production. Government decides where the various factors of production, land, labour, capital and management are to go, what products are to be produced and what products are good for the people. Those who subscribe to that theory consider that to be the function of government, but for those who believe in a free enterprise economy, a free economy, as some put it, the general function of government is somewhat different.
I think it may be safely said that in a free economy it is economically and socially desirable for the government of any nation to preserve a balance between groups; between farmers, labour groups, professional classes and so on who are in competition for a share of the national income. It is also true that many times in the past governments in this country have acted to protect or strengthen different groups within the nation. For example, tariffs have been established to protect new industries or industries which are essential to a balanced development of our country, industries which have to compete with lower cost industrial competitors or agricultural competitors from the United States or elsewhere.
Subsidies have also been used to maintain this balance. For instance, at the present time $2 per capita for every man, woman and child in Canada is used to subsidize those who are unemployed in the form of unemployment insurance, and about $1 per capita is used to subsidize the gold mines. However, when you get to the dairy industry
The Budget-Mr. Nesbitt you find that in the years from 1949 to 1954 an average of about 3 cents per capita has been used to help that industry. One might almost say that the government had forgotten the dairy industry with certain exceptions such as the 58 cent floor price on butter.
Agriculture as a whole in Canada has not shared in the general prosperity. It has not shared in the big boom we have been enjoying largely because we are so closely connected with the United States economy. Dairy farmers in Ontario in particular have profited from this boom the least of all. From 1951 to 1953 the net income of Ontario dairy farmers declined 25 per cent. In 1954 it declined another 12 per cent with a probable further decline in 1955 and in the present year, 1956. Unfortunately I do not have those figures yet.
It must be remembered that Ontario produces 48 per cent of all dairy products in Canada, and Quebec is a very close second. In 1954 agriculture's share of the national income was 6-8 per cent, the smallest since 1931. The situation of the small share of the national income has been aggravated very much by the increased requirements for farm capital outlay, increased production costs and the increase in costs because of the higher standard of living generally. Needless to say, a prosperous dairy industry is essential in Canada in peacetime and in war, whether it be a hot war or a cold war. Seventeen per cent of Canada's population is involved in the dairy industry, with a production in 1954 of somewhat over $900 million.
Farm groups have become increasingly concerned about this problem. The dairy farmers of Canada, the dairy farming association and the Canadian Federation of Agriculture have asked for tariff increases on cheese and skim milk powder. Of course, as hon. members know, and the minister particularly, the question of tariffs is very complicated indeed. In theory free trade is, of course, perhaps the ideal situation in the world in that the principle of natural advantage can be allowed to run the gamut. With the exception of non-economic reasons such as defence and so on, this might be the ideal situation.
However, we are not dealing with the world of theoretical economists but with the world as it exists for better or for worse today. Free trade is not feasible in the world today for many reasons. As hon. members know, there are wide wage differences and differentials in standards of living between one country and another. Then there are exchange restrictions, quotas and so on. Large well established industries in Canada such as the dairy industry and certain manufacturing industries must be protected. If they have been well established and have been in exist-
2800	HOUSE OF
The Budget-Mr. Nesbitt ence for a long time and a situation arises where they are threatened they must be protected or the whole economy becomes dislocated. This, of course, applies particularly to anti-dumping tariffs. I think the situation with respect to tariffs has been put reasonably and sensibly by one of my colleagues in the house, the hon. member for Lanark (Mr. Blair). I should like to refer to Hansard of April 27, 1954, page 4176, where he had this to say:
I do not believe it is advantageous to the economy of this nation nor do I advocate a high protective tariff policy for this or any other industry-
The hon. member was referring to the dairy industry at that time.
-because such a device can only provide stability for an uneconomic unit at unwarranted high cost to the Canadian consumer of the products which the industry produces.
Farther on in the same speech and on the same page the hon. member went on to say:
As far as tariffs are concerned, they should not be so low as to cause failures of efficiently operated Canadian businesses, nor so high that inefficient producers could still remain in business.
I am quite aware, Mr. Speaker, that Canada is a member of the general agreement on tariffs and trade, and I do not think there is a member of the house who would quarrel in any way with the general principles of GATT. Unfortunately, however, many of the member countries have not always lived up to the agreement, and our large neighbour to the south is one of them. I am not necessarily stating this by way of criticism of those countries that have done that because sometimes when a general rule is laid down exceptions arise to which attention must be paid. In dealing with economics or anything else in this world it is very difficult to lay down a hard and fast rule. Eventually situations arise when changes have to be made in some cases. When the economy of a country is threatened by conditions that were not foreseen at the time agreements were entered into changes may have to be made.
Let us look at the situation regarding cheese and skim milk powder. The present tariff on skim milk powder is as follows. As far as British commonwealth countries are concerned, it is 2J cents a pound. The mostfavoured-nation tariff is 5 cents a pound. The general tariff for other countries is 5 cents a pound, except-and here is the important part-that Australia and New Zealand have a special tariff of only 1 cent a pound on both cheese and skim milk powder. This tariff was instituted by the Right Hon. R. B. Bennett, when he was prime minister of this country in 1932, by a special tariff agreement with New Zealand and Australia. I see some hon. members opposite and I can gather what may

The Budget-Mr. Beaudry insurance, gold mines and other things. This would place approximately $2 million more per year in the hands oi dairy farmers and would be $2 million more in purchasing power for farm implements and supplies; $2 million towards keeping the industry in Canada; $2 million that would help the dairy farmer and avoid the necessity for depleting his capital.
In closing, I should like to point out one other thing. The Ontario cheese producers association have done a remarkable job in marketing their own produce by means of a stabilization fund. It has been suggested by many leaders of the dairy industry that a similar plan be put into operation for the whole of the dairy industry. I contend that any "self-help" plan run by an association such as this is much better than any government board set up to do the same thing. There is a genuine desire to sell under a "self-help" scheme. No such scheme as this, however, could be effective or would be worth-while unless the dairy industry is protected against the importation of New Zealand cheese and skim milk powder. I think it is very nearly time the government considered putting a tariff on these items and caught up with the times.


Mr. Roland Beaudry (St. James):: Mr. Speaker, my first duty in rising tonight is that of thanking providence for restoring my health, and in the same breath thanking those of my colleagues who were so generous in their sympathy and understanding over a long period of more than two years. Now that I am back, I see that nothing has changed. Soundness, Mr. Speaker, still comes from your right and sound from left centre. Yet, there does seem to be something new, something new and I trust not too permanent. The Conservative party seems to have sprouted a new wing, a busy, busy little wing. This little wing seems to be dedicated to what my late friend, the great Louis Francoeur, would have described as "the passionate pursuit of the fly speck".


Mr. Hamilton (Noire Dame de Grace):: We
will get some of the fly specks, too.


Roland Beaudry: In less than three years, Mr. Speaker, this wing has established an all time low in the discussion of public affairs. It sits together in a compact group under the joint leadership of the hon. member for Notre Dame de Grace (Mr. Hamilton), the hon. member for Quebec West (Mr. Dufresne) and the recently added temporary recruit, the hon. member for Restigouche-Madawaska (Mr. Van Horne).


Mr. Dufresne:: That is going to be a very good contribution to your party.


Roland Beaudry: These joint leaders, Mr. Speaker, are tireless in their pursuit of the miserable fly speck. They have no peers at the lowest altitudes and their range is limitless, although if I may borrow from the vernacular of aeronautics, they usually seem to fly by the seat of their pants. The measure of their courage-


An hon. Member:: Pull up your own pants.


Roland Beaudry: -their vision, their concept of statesmanship is best assayed by their contempt for the higher issues. They prefer to deal in human equations, to trade in human frailties. They stand up in this house as the knights of the picayune. Oftentimes, their concern for the safeguard of the nation's interest forces these gallant knights to ride in different directions. The hon. member for Notre Dame de Grace is wont to ride, galloping, in search of wall-eyed reindeer. The hon. member for Quebec West has no less zeal but less ambition. He has drawn to himself the somewhat lower duties of counting house attendance and members' bar chits. They ride fearlessly, their lances tilted to the ground, the better to scavenge, the better to display their infinite genius which is a genius for the small and low things. Woe to him who does not meet their standards of human assessment. Their wrath is soon spoken.
Now, the hon. member for Notre Dame de Grace has acquired to his escutcheon other bars. He wields his scalpel not only on the living, but under his valorous hand it becomes a dissector of the dead-even for them, he shows no respect. These are but a few of his glorious achievements in statesmanship.
In less time than it takes to say Bill Hamilton, he has burst the bubble of legend and tradition under which the gentlemen who have sat in this house for over 80 years have conducted the affairs of this country. Under his leadership, this house has learned that the confidential perusal of confidential papers no longer imposes on one the duty of respecting confidences. In one fell swoop of his shining scimitar this valiant knight has severed the bonds which, honour imposed, spring from mutual trust and respect, and by which this parliament has been guided ever since Sir John. I have a premonition, Mr. Speaker, that given another year or so we shall come back to these standards. No one will suffer, least of all the Conservative party. But that is enough, I think, about him. We should deal with matters beyond his scope and come to the budget.
Thrift is frequently a virtue, perhaps always. However, it offers a pitfall here and there. I should like to bring one to the attention of three ministers, perhaps more.

The ministers concerned are the Minister of National Revenue (Mr. McCann), the Minister of Finance (Mr. Harris) and the Minister of Defence Production (Mr. Howe). We on this side of the house have long held to the theory and practice that government purchases by tenders should be made from the lowest tenderer whenever he offers the required guarantee of performance. I have no quarrel with this practice and its application, and I am well satisfied that it best serves the interests of the Canadian taxpayer in most cases. I would, however, like to take issue with the application of the principle in cases, infrequent I grant, where it does not best serve the interests of the country. And broadly, this applies to cases where all tenderers for the sale of a given commodity offer no supplies of Canadian origin, but are importers of such supplies from any of the group of different countries, some of which undergo different treatment in respect of import duties.
The specific case I have in mind does not deal with large amounts of money; it deals with the purchase of musical instruments for the armed forces, most of the instruments purchased being of necessity of foreign manufacture. The concrete result is that by purchasing from the lowest tenderer as against a slightly higher tenderer the saving effected thereby is sometimes smaller than the income which would be derived from the duty which the higher tenderer would have to pay to import his goods into Canada.
I have some specific facts and figures on a group of tenders. I refer to tender B-20 A-l-642, March 30, 1954, where a low tenderer offered units at $146 and where a high tenderer offered goods at $163. We purchased from the low tenderer, as was normal. However, in effecting our purchase we overlooked the fact that the goods purchased at $146 had entered Canada duty-free, whereas the goods which would have been purchased at $163 had entered Canada after paying a duty and a sales tax amounting to $20.10, so that if this country had purchased from the higher tenderer we would have saved $3.10 for each unit purchased.
I will not bore the house, Mr. Speaker, with further examples, but I would say this. I would suggest to the three ministers concerned-and there may be others-that in any such cases we should not be necessarily guided by the almost inexorable law to purchase from the lowest tenderer, but perhaps by exceptional practices to first determine the true eventual dollar profit to the national exchequer. I am sorry, Mr. Speaker, and I fully apologize to the hon. member for Notre Dame de Grace and the hon. member for Quebec West for discussing such a topic in
The Budget-Mr. Beaudry this house before them, so far removed from their usual topics that I am almost embarrassed in bringing it up.
To come back for a moment to that virtuous nimrod, the hon. member for Notre Dame de Grace, that intrepid knight who looks a stamp in the eye before he licks it, that fearless discloser of confidential information, that gallant slighter of those we honour in their death, let me say this to him: Leadership is an attribute, it is not a cognomen of a man for desire or personal ambition. It is an achievement for which there is no stepping stone other than-


Mr. Van Horne:: Mind and body, both.


Roland Beaudry: I would hate to interrupt the hon. member for Restigouche-Madawaska, but I shall resume as soon as he has completed that part of my speech. I would like to repeat, leadership is not the result of aim or of ambition. Leadership is not the stepping stone to anything, nor does it require any stepping stone except the overnight shedding of personal ambition for the permanent preoccupation of public interest. Leadership the preoccupation of public interest-is not the constant daily whine over the vagaries of nature. It rises above that. It accepts that to err is human and to amend and to correct and to atone sometimes sublime.
Leadership is the courage to implement altruistic dreams. Leadership is the quality to do what could not be done; to perform where others would wish in word; to become architects and engineers, planners and artisans, where others would linger and tarry over discussion of fancied taste in interior decoration.
Leadership is a quality in men in whom other men recognize that quality and whom they endow with that dignity and its responsibilities. Leadership is not the aim of personal ambition. Leadership is the natural evolution of the many toward the one or the few in whom they recognize the ability and the unflagging desire and hope to work to the last for the common interest, to palpitate with every heartbeat with the hearts of those whose main asset is a heart, and to match minds with the minds of those whom nature has endowed with more mind than heart, so as to reconcile the interests of all. Leadership, I would gently remind the members across the way, and not all of them, because a great many understand it so well, leadership is a series of proofs of selfdenial in the interest of the public weal. In this party, Mr. Speaker, leadership is a succession of those who, beginning with Sir Wilfrid Laurier, had the vision to see that between the two oceans there should be a

The Budget-Mr. Beaudry perpetual link of material unity and who had the courage to implement their vision.
It is the advent of Mackenzie King who, under an austere exterior, concealed a heart; who, coping with the early-century ruthlessness of capital, applied his cold mind, tempered with an abundance of heart, to give Canada leadership in social advancement, in labour laws, in protection and security for the smaller man, to give every Canadian a vaster horizon. It is the advent and present tenure of one who completes a trilogy by inheritance of the greatest qualities of mind of the one predecessor and the greatest qualities of heart of the other; of one who perhaps will have no greater monument in this country, no greater monument in Canadian history, than the fact that, at the same time if by different people, but by all the people at the same time, he will have been known by some as Mister St. Laurent, and by others as "Uncle Louis".
May I felicitate the hon. member for Notre Dame de Grace, Mr. Speaker? He has truly assessed the frailties of great leadership. Some of our postage stamps offend the laws of aesthetics.
Of course, leadership has frailties, and the hon. member for Notre Dame de Grace has found most of them. His search for them has been so intensive that he, as a member for the island of Montreal, has failed to notice some of the achievements in Montreal proper in recent years since his arrival in this house. In this regard he cannot plead ignorance; he can only plead that he was busy with his fly specks.
When the hon. member next encounters his constituents let me suggest to him that he devote some scant minutes of his usual personally conducted tours in the catacombs of petty politics to recite briefly some of the recent achievements of Liberal leadership in the city which he was misguidedly elected to represent some time ago. Let him expostulate as long as he chooses to his constituents on the merits of his attendance, on the personal qualities of his left bower from Quebec city and on their joint discoveries in the field of pettiness, of human frailty, of weaknesses and of the sordidness which seem to have a natural attraction for them. Then let him mention that Liberal leadership, which flubbed so disgracefully in selecting a postage stamp, at the same time was busy making plans for the following: $8 million for improvements in the Montreal harbour this year; $47 million for canalization construction in 1956 and 1957; over $20 million for a new bridge to the south shore; $20 million for a new hotel, graced by a name which I think is ill-suited for a commercial purpose; and $13 million for the first slum clearance project in Quebec, in my own riding of St. James.

Let the hon. member deal in fly specks and human misery; we shall continue dealing in human well-being and happiness; and each will have best fulfilled the dictates of his heart and his mind in the pursuit of welfare for his fellow men.


Mr. C. E. Bennett (Grey North):: Mr. Speaker, first of all I am going to take advantage of this budget debate to again direct the attention of the house to the present difficulties of the Ontario farmer. As I said a few weeks ago in the house, the urban centres in my riding are enjoying the general prosperity of Canada but the income of my farmers has been reduced considerably. There is no question about it; in fact, the farmer has lost ground quite seriously during the past two years.
In his budget address the Minister of Finance (Mr. Harris) said that Canada's gross national product had reached a record high of $26-6 billion, up 10 per cent from the previous year, and he predicted in his budget speech that there would be a further rise of 5 per cent next year which, as the minister said, is the average annual increase in our gross national product during the last few years during which time our country has experienced such a great growth and development. My concern tonight is not only that the farmer is not now sharing in the general prosperity of the country but that his lot may not be any better during the next fiscal year.
Many figures have been given both by hon. members in this house and by farm organizations to show that the farmer's income is down. Some of the figures are exaggerations and others are certainly misleading in that they make comparisons with peak years, but there is no doubt that the farmer in both Canada and the United States is being caught in a cost squeeze.
Over the weekend a farmer from Grey county showed me his income tax return for 1955. His gross income amounted to $5,382.50, made up in round figures principally of cattle sales amounting to $1,600, proceeds from the sale of hogs $2,450, and proceeds from the sale of dairy products $1,150. His expenses totalled $4,073.98 which left a net income of $1,308.52. This net income was the return on his investment and the wages for himself and his wife. I do not need to point out to the house that if the total hours worked by the farmer and his wife were divided into the net income of $1,308.52, forgetting altogether the interest on money invested, the rate of wages per hour would be at a ridiculously low figure. The farmer of whom I am speaking is a good average farmer who lives on a good 100-acre farm.

I think most people are convinced that the farmer's real income is down and they are sympathetic with the plight of the farm community. Now the question is what can be done about it.
I want to say first of all that the farmers I represent are appreciative of the agricultural policies developed and implemented by the Minister of Agriculture (Mr. Gardiner) over the last 20 years and the farm policies of this government. To be fair I must point out that the net worth position of the farmer is much better from a capital point of view now than it was in 1940. Mortgages have been paid off; he is in a sounder capital net worth position. On behalf of my farmers I would like to thank the Minister of Agriculture for his announcement that the floor support under butter will be continued for another two years at 58 cents. I have received many thank you letters from farmers in my riding expressing appreciation of the floor support under butter. In 1955 Grey county produced more butter than any other county in Ontario and this floor is of the utmost importance to the farmers in my riding.
The farmers I represent are also appreciative of the price support which has been given to other farm products. I said a few weeks ago in the house that if it were not for the floor price of 23 cents under hogs there is no doubt in my mind that the price on hogs today would be considerably lower. The support of 38 cents under eggs is also of material assistance as are the premiums paid on grade A and grade B hogs and the feed grain subsidy. All these things help the farmer.
The question remains: How are we going to get the price of cattle and hogs up to a figure nearer parity with the costs of the farmer? I do not wish to go over the same ground I have already covered in this house but I am of the firm opinion that it is of prime importance to have on the statute books of Canada, and of the provinces, legislation to assist the farmer to help himself by setting up marketing agencies and marketing boards whereby there can be orderly marketing of farm products, whereby the farmer can sell his farm products in a modern, efficient, salesmanlike manner, and whereby he will have some control over surpluses.
I think all hon. members know that a reference has been made to the Supreme Court of Canada to test the validity of the present Ontario marketing legislation. In my opinion the Ontario and federal governments were very wise indeed to refer this matter to the supreme court because there has always been this question of constitutional validity
The Budget-Mr. Bennett and jurisdiction in connection with the marketing legislation.
If the supreme court renders a verdict that our legislation is faulty, if it says that the Ontario marketing legislation is ultra vires because of some deficiency in our legislation, then I would urge the Minister of Agriculture to have legislation prepared in advance so that new legislation would be placed on the statute books of Canada, at this session, to authorize the provinces to pass marketing legislation which would be within their competence.
Marketing schemes and agencies will not solve all the difficulties in the present situation but it seems obvious to me that 100,000 individual Ontario farmers cannot market their farm products on a hit or miss basis, and where there are surpluses, on a panic basis, and expect to receive a fair return for their investment, risk and labour. Especially is this true when one considers the recent development of the concentration of buying power in the purchasing of foodstuffs. The packing houses used to be blamed for fixing the prices of livestock, but the concentration of organized buying power has shifted to a new and different level, the large retail chain organizations.
It is said that 60 per cent of all buying of foodstuffs for the whole dominion of Canada is concentrated in the Toronto area, and that buying there is confined to four or five large retail chain organizations. Just think of the tremendous authority of this buying power exercised at this level. For instance, these large organizations may say this week, "We will push Ontario Northern Spies instead of Florida oranges", or "We will push pork this week instead of fish." A decision such as that is of tremendous importance to the producer. What chance has one farmer in competition with 99,999 other Ontario farmers in the face of this organized concentration of purchasing power?
Farmers all over Ontario are coming to the conclusion that while governments may help them, the farmers must help themselves by setting up central selling agencies. Selling is a professional business just the same as buying for the chain stores is. And farmers are now realizing that they will have to employ modern methods and engage top-notch professional salesmen if they are to find lucrative domestic and foreign markets.
I would like to ask hon. members, where would the western wheat farmer have been during these recent years of huge surpluses if it had not been for the wheat board. The milk producers of Ontario are properly organized and at the present time they are satisfied with the prices they are receiving.


I urge the government, as I have said, to have legislation ready to pass at this session, if it is necessary to do so, to empower the provinces to pass valid marketing legislation. I think our federal legislation should include power to widen provincial marketing schemes into national schemes if and when the time comes that a national marketing scheme is necessary.
Dr. H. H. Hannam, president of the Canadian Federation of Agriculture, said recently:
The government assistance we have in mind will be that of co-operation and assistance in carrying out marketing programs, more so than providing any considerable financial assistance.
If we as the federal authority then pass this empowering legislation we will have done our part. If the provincial governments do not take advantage of it or if the farmers do not utilize the legislation to the fullest extent, at least we will have done our part.
You may think that I am speaking against the consumer this evening when I advocate the setting up of a counterbalance to the power which has developed in the hands of the chain stores, which power undoubtedly has resulted in the lowering of prices to the consumer. On the contrary, I submit that it is essential, if our economy is to remain on a firm footing, that purchasing power be restored to the farmer. The farmer is dragging at the present time, and if he continues to drag, if he does not bring us all down with him, certainly he will at least brake the growth and development which our country is presently experiencing.
The only other representation that I have to make to the right hon. Minister of Agriculture (Mr. Gardiner) is to ask him to give consideration to doubling the premium on grade A hogs. As hon. members know, at the present time the premium is $2 on grade A and $1 on grade Bl. This proposal of mine is not an original one, as it has been put forward on a number of occasions by 'farm organizations. I remember that a former member for Wellington North, Mr. Darroch, made a speech on this subject some time between 1949 and 1953.
While the Ontario hog producers association has achieved a good deal of success up until this time, admittedly it will take time before it can materially up the price of hogs, as it would take any marketing agency some time to improve the price of the farm product with which the agency was dealing. However, I am confident that if the Ontario hog marketing association will continue to tighten its organization and better its selling techniques that it will continue to exert an influence for better hog prices. In the meantime it is essential that we place more purchasing power in the hands of the farmer.

Last year Canada consumed about 90 per cent of its pork and most of our exports went to the United States. As we all know, Canadian farmers have been able to sell pork in the United States at prices considerably higher than the U.S. farmer is receiving for his pork, simply because we are selling a quality product. The United States buyer has always been interested in our lean bacon. It would seem logical therefore that quality production should be further encouraged and at the same time place additional purchasing power in the hands of the farmer. It might be argued that the doubling of the premium on grade A hogs would have a tendency to encourage production, but in refutation of that argument I would say that tendency would not be nearly as great as would be the case if the floor were raised under hogs.
I think the Minister of Agriculture would say to me that if I want the premium on grade A hogs raised I should go to the premier of the province of Ontario. It is true that in Ontario we did have a premium on grade A hogs provincially which was discontinued some time ago. The only thing I can say to the minister on that point is that the government of the province of Ontario has not shown much interest in the farmers in this regard, and therefore I am appealing to him to help the hog producer in a direct way. After all, we did grant substantial assistance to the western wheat farmer this year, and this is one way we can help the hog producer who is also in serious trouble.
Turning away from farm problems, I should like to make one or two suggestions to the Minister of Finance (Mr. Harris) and I will state them very briefly. One is that I hope that some day soon the government will give favourable consideration to the granting of a handicap allowance to blinded persons of Canada without a means test. I do not think I have to elaborate on the great handicap under which the sightless citizens of Canada are living in this modern age.
The other point I want to make is that I think we should increase our contribution to the Olympic fund. A few weeks ago the Prime Minister (Mr. St. Laurent) said in the house that no application had been made for assistance but if one were made I would hope that the government would be generous. In the days of the cold war I do not think there is a better way of selling our country and our people than to make a better showing than we have been making at the Olympic games. I know there have been many editorials in the papers saying that we have got to be good sports, we cannot win the hockey crown all the time and so on, but I think
The Budget-Mr. Bennett the point that rankles in the minds of Canadians is that we did not make the best use of our talent and Russia did. That is no reflection on the Kitchener-Waterloo Dutchmen who were good sportsmen and good representatives of our fair dominion.
There is one other point I should like to bring to the attention of the Minister of Finance, and it is probably a very minor one. I should like to say this to him. A person who gives his or her blood to the Red Cross or a recognized blood bank clinic should, I submit, be given a receipt for so much money, say for $25, for a pint of blood or whatever the current price of blood is, which receipt would be used by the donor as an income tax deduction. At the present time if a person gives $25 to a hospital he may deduct that amount from his income tax but a person who gives $25 worth of blood cannot claim a deduction. What brought this to my attention is the fact that in the small town where I live it is always the same small group of people who are going to the hospital and giving freely of their blood. It is usually people in the working classes who could certainly use an income tax deduction. Of course, you would have to exempt people who gave blood for use by a member of their families or for replacement at a hospital of blood used for their families or their friends. However, I think my proposal is an equitable one and would also have the result of increasing the giving of blood in Canada. We can always use a large quantity of blood in this country.
The budget has been called a standpat budget, and I suppose that phraseology does describe it as far as tax changes are concerned. I thought the minister was quite clear in his explanation why there could be no changes in the general level of income tax or in the sales tax or special excise taxes. But certainly the phrase "standpat budget" does not describe that portion of the minister's budget address which dealt with Canada's booming economy. Nor does it describe with any accuracy the great fiscal achievements of the government during the past year in the field of federal-provincial relations.
As the minister said in his address, at the federal-provincial meetings held this year a foundation was laid for a working arrangement with the provinces to look after those Canadians who are out of work and who are not covered by unemployment insurance. Again, a more advantageous tax sharing plan has been arrived at, certainly more advantageous for the provinces, in place of the present tax rental agreements, and this is an important step. Finally, the foundation has been laid for a national hospitalization scheme which will provide for both hospital care and
2808	HOUSE OF
The Budget-Mr. Bennett diagnostic services whenever six of the provinces, representing a majority of Canadians, decide to enter into an agreement with the federal government under the federal-provincial health scheme.
My constituents are particularly interested in the national health plan because while the great proportion of the labour force and people in the middle and upper income brackets in the cities are covered by some health insurance scheme, in the smaller places a great number of people are not so covered. Therefore I look forward to the time when six provinces, representing a majority of Canadians, signify their willingness to enter into the agreement.
Before I sit down I want to congratulate the Minister of Finance on the forecast he made during his budget address last year with respect to the fiscal year 1955-56. His forecast was remarkably close. As usual, the Conservatives were very pessimistic last year. They seem to like to be pessimistic. I remember that when I first ran in 1949 I did not know very much about Progressive Conservative policies but one of the main planks in their platform was that our international trade was dwindling, that Canada was very dependent on international trade and that we were headed for ruin, despair and a real old-fashioned Conservative depression. In 1953 the story was just the same. The Tories then said: Oh well, that would have happened if the Korean war had not come along and saved the Liberal government.
As a matter of fact, the first time I ever heard a leader of the Conservative party was back in 1925. You will recall the campaign that was waged then. It was called the blue ruin campaign. Again last year we had gloom and despair. To be fair about the matter the Conservatives did have a young man, the hon. member for Broadview (Mr. Hees), who was their national president and who tried his best to inject some new spirit and optimism into the party. The Gallup poll a year or two ago reflected that he was meeting with some success-not much, mind you, but the Conservatives did gain a point or two. However, the old line Tories could not go for this new optimism, this new look, and they quickly kicked him downstairs. The Gallup poll of two or three months ago showed that the Liberals were creeping up again. I suppose the old line Tories are satisfied with their policy of keeping things as they are.


Mr. Monieilh:: Did you learn that in Walkerton?


Colin Emerson Bennett: It would have done you good if you had attended at Walkerton. To be specific, last year the financial critic of the Conservative party, the hon. member for


Greenwood (Mr. Macdonnell), had this to say in the opening portion of his speech, as found at page 2764 of Hansard of April 5, 1955:
Whatever else can be said, I think we can regard this as a delightful excursion into optimism.
How pessimistic he was and how wrong he was!
Getting away from pessimism, may I say that in Maclean's magazine of March 31, 1956, I read an article written by Mr. Peter Newman in which he predicted that the Canadian gross national product would reach the sum of $43 billion in 1965 and $65 billion in 1975. I am confident that when the Gordon report is tabled it will at least be in line with Mr. Newman's thinking, because I am absolutely convinced that our country is going to continue to grow and expand and prosper as it has done during the last 20 years under the wise and sound fiscal policies of this government.


Mr. E. G. Hansell (Macleod):: Mr. Speaker, once again it would appear that I come on the list of speakers at the end of a debate before a motion is put on the amendment. I recall that in the debate on the speech from the throne I was given about two minutes to make my speech before the deadline when the vote was taken. Once again I find that I am on the short end. However, I shall make the best of the situation and do what I can in the time still at my disposal.
In the first place it will be necessary for me to say something with respect to the subamendment proposed by the leader of the C.C.F. party. As recorded at page 2555 of Hansard his amendment adds to the main amendment these words:
that it has failed-
Referring to the government.
-to reduce the burden of sales and income taxes on those in the lower income groups, while continuing to favour privileged interests and those with unearned incomes by maintaining the 20 per cent dividend tax credit and by refusing to impose a tax on capital gains;
The latter part of the amendment as amended reads:
and that these and its other failures demonstrate the government's irresponsibility and unfitness to hold office.
I have never been quite able to agree that amendments embodying so many points are amendments of the best kind to propose to the house. Usually we find that in such amendments some things are good while perhaps other things are not so good. For instance, in this subamendment the clause referring to the government's failure to reduce the burden of sales and income taxes on those in the lower income groups is an admirable one. That is something that we can

vote lor. I think our record over the past years is quite clear and shows that we have always advocated a reduction of income tax on those in the lower income brackets. In fact, in our monetary proposals we demonstrate our belief that a good deal of taxation now imposed upon those less able to bear it could be completely done away with. I therefore do not think that our position in respect of that matter can remain in doubt in anyone's mind.
Then comes the wording, "and those with unearned incomes by maintaining the 20 per cent dividend tax credit". That is something that we have advocated previously and voted for. But in this amendment there is another clause which is not quite so appetizing to some of us. That is the clause "and by refusing to impose a tax on capital gains". I must modify my statement a little bit perhaps when I say that such a clause is not too appetizing to us. We believe, of course, that there is a certain amount of, shall I say, racketeering. That perhaps is an overstatement. However, we believe that advantage is taken of certain things in the sale of stocks and so forth. In the turnover, a certain amount of gambling is done whereby some people may make quite a pile of money and they perhaps should be taxed on such a capital gain. I think that we could agree perhaps with that part of the speech of the leader of the C.C.F. party, as reported on the same page 2555 of Hansard, in which he says this:
I believe that the people who are making large incomes by manipulation and speculation on the stock market should be called upon to pay part of their gains to the government and the people of Canada whose resources are the basis of exploitation and speculation.
I think we would agree with that statement without any reservation. But as the amendment is actually worded, any capital gain would be subject to taxation. That would mean that many of those in the small income brackets may have imposed upon them taxation which we do not believe would be altogether justified. For instance, there is the small home owner who purchases a home and puts some improvements on it. By reason of certain factors that might enter into that particular transaction over the years, the home owner will sell the home perhaps at quite a profit. But he is a small man. He should be entitled to that profit. Let us take into consideration our farmers.


Hazen Robert Argue: We would exempt them.


Ernest George Hansell: Thousands of them have
bought their farms and now are able to sell them at a capital gain. They too would be taxed according to this particular amendment.
The Budget-Mr. Hansell


Hazen Robert Argue: No; not at all.


Ernest George Hansell: We are a little bit sceptical about that part of the amendment. Hence I say that, when amendments are presented, I believe it is wise to attempt to word them in such a fashion that there can be some unanimity or agreement, particularly when there are several opposition parties here. I do not suppose that it is the intention of the leader of the C.C.F. or of the C.C.F. party to present any trick amendment but it could be interpreted as a sort of trick amendment. If you vote for it, you vote for something that is perhaps against your conviction.


Hazen Robert Argue: Do not be so suspicious.


Ernest George Hansell: It is a sort of package deal. I never quite agreed with package deals because package deals usually contain within them something that is undesirable. It is like presenting a person with a bag of food in which there is a small bag of poison, and-


Hazen Robert Argue: And you call that Social Credit.


Ernest George Hansell: -you tell him to take it. That is all very well. The food that you take for the nourishment of your body may be good but the arsenic that is in the bag of food is going to kill you.


An hon. Member:: It is good for the heart.


Ernest George Hansell: That is the position in which we find ourselves. What are we going to do? It is a sort of double-barrelled amendment. They say, now it is all right; look down this barrel because it is not loaded.


Hazen Robert Argue: You ask the hon. member for Rosthern (Mr. Tucker).


Ernest George Hansell: When you look down that barrel the other barrel is bound to go off and blow your brains out.
Now, what are you going to do under a condition of that kind? If I had my way, I do not think I would have any reason to vote for the amendment. I would simply say that because there is arsenic in the package I am not going to take any of it. Of course that could be misinterpreted and it sometimes has been misinterpreted. I recall that some years ago the C.C.F. proposed an amendment involving the nationalization of the banking system. Following that the hon. member for Lethbridge (Mr Blackmore) moved another amendment which to us was an expression of our desires in respect of our financial policy. Well, the C.C.F. voted for our subamendment. While we stated in our speeches we did not believe it was necessary to nationalize the chartered banks, we did not have any particular reason

The Budget-Mr. Hansell to vote against it and to be courteous with them, since they voted lor our amendment, we voted lor theirs. Then, what happened? They went all over Saskatchewan saying that we in the Social Credit group believed in nationalization. They said, "Pick up Hansard and you will see on page so and and so who voted lor it." Sure enough, there the name ol Hansell appears.
Previously I had given a speech saying I did not think it was necessary to nationalize the banks because it was not the ownership ol the banks that amounted to anything, it was the financial policy pursued by the government through the banking institutions that was the important leature. I turned around and voted lor it. I did not think I needed to worry too much about it. I do not know whether or not people take very much notice ol the votes that are taken in this house. The C.C.F. will surely make capital ol it just the same as they have done. I must say this, that I have been through many political campaigns in my liletime and many people have said to me, "They will surely hold that against you in the next election." I have been elected to this house five times, yet in all the political campaigns I have been through I have never had anyone come to me and say, "Why did you vote this way or vote that way in the House ol Commons"? I do not know whether people are too much concerned.
However, here we are. We are laced with a decision to make. What are we going to do? Well now, the subamendment is in reality a vote ol want ol confidence in the government. We do not leel confidence in the present government, and in saying that we do not want to say it with any vindictiveness. We do not want to be vicious. We believe they are men who, in their own consciences, leel they are doing right, but because we hold certain views we believe they are doing wrong, presenting wrong policies. Therefore, on that basis, we will have to take a chance. We are going to support the subamendment.
I do not have a great deal ol time left at my disposal but I will make the best ol it. We come to this position as we view the amendments that are before us. We observe the Conservative amendment. We observe the words used in relationship to their amendment. I must say this that our observations would lead us to believe that the Conservative party, as presently constituted, is largely destructive in its criticism. There are actually no proposals made which would give this country and the people ol this country any idea that the Conservatives represent an alternative to the present government; that is my criticism ol it. This is


something that greatly concerns me because I have some little responsibility in campaigning throughout this country. I have several organizers that 1 attempt to direct here and there. My advice to them is never to go out as destructive critics. II you go out at all, then go out and state what the government is failing to do, but it is not necessary to kick them all over the lot in order to present to the people what we have as an alternative. We want to be as constructive as we can.
It is for this reason, for instance, that the hon. member for Lethbridge, when he spoke in this debate the other day, was not overcritical of the government. He had a message to present as to what Social Credit is able to do in Canada if our monetary proposals are countenanced and adopted by any government in power. While he was speaking, ol course, there were a good many interruptions here and there by, I will not say critics but hon. members who perhaps did not have anything better to do. Those interruptions get into Hansard and our present rules of debate do not permit the hon. member lor Lethbridge to get up and refute those interruptions. Of course we do know that when the subamendment is disposed of he could speak again. But if he does so, he is taking the place of some other hon. member who also wants to speak in this debate and perhaps that is not wise. The interruptions, therefore, are allowed to hang in the air. If the hon. member takes time out of his speech to explain and answer the interruptions then he has not sufficient time left to conclude what he has to present. The interruptions cannot be deleted from Hansard.
1 regret that the hon. member for Regina City (Mr. Ellis) is not in his seat at the moment. I hope he does not think I am taking advantage of his absence. He interrupted the hon. member for Lethbridge when he was referring to the pipe line and stating that it was a monetary problem; that private enterprise could build the pipe line if the fiscal policy of this country was such that they could do it. Well, of course, the hon. member for Regina City pipes up and says, "Well, we are relying on private enterprise and that is why it is not being built." He is always interrupting by injecting into somebody else's speech the terrible features of private enterprise, blaming private enterprise; "that is private enterprise for you," he says over and over again. Well, now, this party is a private enterprise party. We believe that private enterprise has done a terrific job in this country. Let us remember this. I would dare ask my hon. friends where Saskatchewan would be today if it were not for private enterprise?


Hazen Robert Argue: We are building our own gas pipe line.


Ernest George Hansell: Well, now, let us look at private enterprise. Take agriculture itself. Agriculture itself is a private enterprise venture completely. I suppose agriculture is the basic industry of Saskatchewan, as it is in all the prairie provinces, and those provinces have become comparatively wealthy through their agricultural industry, which industry is a private enterprise industry. The same thing is true in the development of their mineral and oil rights. In Saskatchewan today that is being carried on by private enterprise and has not been interfered with in any way.


Hazen Robert Argue: The co-operatives are also developing oil.


Ernest George Hansell: The co-operatives are private enterprise.


Hazen Robert Argue: In partnership with the government.


Ernest George Hansell: Let us remember that the cooperatives are private enterprise. My hon. friends are always piping up and advocating co-operatives. So do we. Why? Because cooperatives are private enterprise ventures. You can contract out any time you want to, but co-operatives are not government ownership.


Hazen Robert Argue: There are more in Saskatchewan than anywhere else.


Ernest George Hansell: Let us remember that they are private enterprise.
I have a letter which I do not think has ever been read in this house, but let us see what the premier of Saskatchewan says about the oil and gas industry. This letter was written on April 21, 1949. It was addressed to Mr. Bryan W. Newkirk, 100 Adelaide street west, Toronto, Ontario. It comes from the premier's office and is signed by Mr. T. C. Douglas. I will read the pertinent paragraph; I will read it all if you wish.


Hazen Robert Argue: Read it all; it is a short letter.


Ernest George Hansell: The letter reads:
Dear Mr. Newkirk:
In response to your request for a statement of the policy of the government of Saskatchewan on the matter of mineral and petroleum development, I desire to reiterate the stand which we have taken and which has been expressed on numerous occasions in the past.
The government is desirous of encouraging mineral and petroleum exploration, development and production to the greatest extent possible, and to that end it has embarked upon a program designed to lend technical assistance and advice to bona fide persons and organizations able and willing to proceed with this work. In addition, it gives a firm undertaking that no steps will be taken to expropriate or socialize the mining or petroleum industry in the province.
The Budget-Mr. Hansell


Mr. Sinclair:: Real socialists.


Mr. Gillis:: Regina manifesto.


Ernest George Hansell: It is signed by the premier of Saskatchewan. There is another paragraph; I do not think I should read it.


Hazen Robert Argue: Go ahead.


Ernest George Hansell: It reads:
At the same time, the government will take all necessary steps to protect the public interest, and to that end the mineral rights in certain areas will be defined and reserved in advance to the use of the crown, and royalties will be fixed guaranteeing to the people of the province a fair return from the mineral wealth produced.
Yours sincerely,
T. C. Douglas.
This is the exact policy of the Alberta Social Credit government. I am not critical of that policy at all. All I ask is, why do the hon. member for Regina City and others always pipe up and say, "Well, that is private enterprise for you", when in their own socialist bivouac they are encouraging private enterprise to run the two biggest industries in the province, namely, the agricultural industry and the oil and mineral industry?


Hazen Robert Argue: Along with the co-operatives?


Mr. Blackmore:: That is where they get their money from.


Ernest George Hansell: Along with the co-operatives that are also private enterprise.


Hazen Robert Argue: What are you doing for cooperatives in Alberta?


Ernest George Hansell: Whatever we are doing in Alberta, we have become mighty prosperous in doing it.


Hazen Robert Argue: You do not help the co-operatives any.


Ernest George Hansell: Let us look at this matter of private enterprise. What is the function of private enterprise, anyway? Does anyone ever ask that question and does anyone ever analyse it and attempt to answer it?


Hazen Robert Argue: Ask the loan sharks, the 26 per cent boys.


Ernest George Hansell: It would appear our friends believe that private enterprise is responsible for everything. Well, it is not. The function of private enterprise-


Hazen Robert Argue: Sometimes irresponsible.


Ernest George Hansell: -is to go into business and produce, and believe me private enterprise has done a smacking good job of producing and making nations wealthy by reason of their productive resources. Take the United States, for example, one of the most powerful countries in the world. That country has been made powerful because it operates under a
2812	HOUSE OF
The Budget-Mr. Hansell private enterprise system and the same thing is true of Canada. The function of private enterprise is to produce.


John Horne Blackmore: Not to distribute.


Ernest George Hansell: Not to distribute. When it comes to the distribution of production you enter into another field, and that is the function of a monetary policy, because it is through the operation of money that goods are transferred from one person to another, from assembly lines to markets, from markets right down to the consumer. That is the function of money. Our Social Credit position is that it is along the line of monetary policy that we run into the blockade on the distribution of the tremendous production that private enterprise is able to perform. The function of private enterprise is to produce, and the function of a monetary policy is to deliver the goods. Monetary policy is something that is not determined by private enterprise; monetary policy is something that is determined by the government in power, no matter whether it is Liberal, Conservative, C.C.F. or Social Credit. The determining of monetary policy is the responsibility of governments in power.
Now, I come to another criticism that was interjected by some members while the hon. member for Lethbridge was speaking. I am sorry I will not have time to take them all up individually, but there are evidently some members sitting on the Liberal side of the house particularly, and on this side too, who seem to be terribly worried about the Social Credit proposals respecting the national dividend. I do not know why they should be worried very much about it. If they think that we are a long way off from ever gaining power in this country, why should they be so worried about this national dividend? I have a suspicion that they are worried not over the national dividend but they are worried because our Social Credit proposals are beginning to grip the hearts of their own electors, and their own electors, being Social Crediters, are coming to them and saying, "What is your position in respect of this matter?" That is what is worrying them. Of course they have to make some attempt to answer the question and the best attempt they can make is to interject a little criticism here and a little criticism there.
The hon. member for Cochrane (Mr. Habel) read a statement from the works of Major Douglas on March 28 as recorded at page 2705 of Hansard. As we recall, of course, Major Douglas was one of the first men to propose a certain monetary technique for the distribution of our vast abundances. The hon. member read where Major Douglas had stated that perhaps eventually the national dividend would displace wages and the hon. member tried to make a great big thing of that.


Well now, what is the situation? May I ask the hon. member this? I mention this in passing because I must keep my eye on this old clock that goes around here. What is the hon. member going to say about unemployment insurance? When a man is out of work he receives unemployment insurance. Does not unemployment insurance displace his wage? The hon. member does not criticize that. Why should he then criticize the possibility of a dividend? All we say is that there is a basic flaw in monetary policy and that flaw consists in the fact that there is never enough money coming out of the process of production to buy back your total production; therefore there must be an additional amount of purchasing power put into the consumer end of the system in order to equate consumption power with productive power. That is all we claim, and in an age such as the one in which we live-


Mr. Deputy Speaker:: Order. I have just been informed by the Clerk that it is 9.45 p.m.


Ernest George Hansell: I would appreciate, Mr. Speaker-


Mr. Deputy Speaker:: Under standing order 58, subsection 4, it is my duty to interrupt the proceedings and forthwith put the question on the subamendment.