1956-03-27

[Stage Direction]
Second and third reports of sessional committee on railways and shipping owned, operated and controlled by the government.
*-Mr. Cavers.


[Stage Direction]
On the orders of the day:
Hon. George A. Drew (Leader of ihe Opposition):: Mr. Speaker, I wish to direct a question to the Minister of Trade and Commerce. Can the minister inform the house if the dispatch from Geneva appearing in today's press is correct when it states that the renewal of the wheat agreement depends upon a change in the position Canada has taken?
Right Hon. C. D. Howe (Minister of Trade
and Commerce): Mr. Speaker, I read the report in the Gazette. It is not accurate. The discussions on the wheat agreement are reaching their final stage. I hope to be able to make an announcement shortly of the final decision. Mr. Sharp, my deputy minister, arrived home this morning and I have discussed the situation with him. I do not know that I can say more than that no decision has been reached as yet by the assembly.


Mr. H. R. Argue (Assiniboia):: Well, Mr. Speaker, do I take it then that the report is incorrect that Canada is holding out for a ceiling of $2.05 per bushel?


Mr. Howe (Pori Arthur):: The report is incorrect to that extent, and the report is incorrect in other directions as well. I cannot say more than that we hope to have a decision by the time the house reassembles after the Easter holidays.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Hon. Milton F. Gregg (Minister of Labour):: Mr. Speaker, I should like to answer the question asked last Friday by the hon. member for Hamilton West (Mrs. Fairclough) with
regard to the employment of Indians and Eskimos on the D.E.W. line.
The arrangements made between the government of Canada and the government of the United States provide that construction contractors will be required to give preference to Canadian labour and that the rates of pay and working conditions will be set, after consultation with the Canadian Department of Labour, in accordance with the Canadian Fair Wages and Hours of Labour Act. This applies to all Canadians employed including Indians and Eskimos.
Contractors are supplied by the Department of Labour with schedules establishing classifications of labour, hours of work and rates of pay for all Canadian workers employed.
Liaison between the Department of Labour and D.E.W. line contractors is maintained through a senior officer of my department at Ottawa, and all relations between the contractors and employees with respect to the observance of wage rates and hours of labour are under continual supervision by two northern service officers of the Department of Northern Affairs and National Resources.
These arrangements will also apply to the contract for the maintenance and operation of the D.E.W. line.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Milton Fowler Gregg: Mr. Speaker, with respect to unemployment insurance, I should like to answer the questions addressed to the Prime Minister by the hon. member for Comox-Alberni and the hon. member for Rosetown-Biggar as to how unemployment insurance applies to D.E.W. line workers.
Both United States contractors and Canadian contractors engaged in the construction or maintenance of the D.E.W. line and similar projects must comply with the provisions of the Unemployment Insurance Act of Canada. Most of the employees who have been engaged on the construction are Canadians.
The Unemployment Insurance Act requires the contractors, whether American or Canadian, to insure their Canadian civilian employees unless they are excluded by some provision of the act such as the wage ceiling.

Inquiries of the Ministry This excludes salaried employees earning in excess of $4,800 a year. However, persons paid by the hour, by the day or at piece rates are insurable regardless of the amount of earnings.
Most of the Canadian civilian employees engaged on these projects have been brought from populated areas and the regulations provide that such persons, if normally engaged in insurable employment, continue to be insured even when transferred to remote locations in northern Canada. However, persons locally employed, if the employment is north of the 55th parallel of latitude where there are only two or three isolated industrial pockets, and if they do not ordinarily work in insurable employment but depend for their livelihood on non-insurable occupations, such as hunting and fishing, are not insurable when employed on a temporary basis on construction projects of this nature. There is only employment for a very small number of such persons, and the great bulk of the Canadian employees are insured by their employers.
All workers are covered for workmen's compensation.



INQUIRY AS TO PROVISIONS FOR PERSONS DENIED BENEFITS

[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Minister of Labour. I wonder if the minister would be able to bring down tomorrow, so we may have it before we rise for Easter, the answer to the question I asked him on February 15, as reported on page 1196 of Hansard, having to do with persons who were refused unemployment insurance benefits under section 45 (2) of the act but who may have had their benefits restored under the reinterpretation of section 119 (b) of the Unemployment Insurance Act.


Milton Fowler Gregg: I will look at the question and give my hon. friend a report on it tomorrow.



INQUIRY AS TO PROGRESS MADE IN INCREASING QUOTAS

[Stage Direction]
On the orders of the day:
Hazen Robert Argue: Mr. Speaker, I should like to direct a question to the right hon. Minister of Trade and Commerce. Can the minister say what progress is being made in increasing the grain quotas in western Canada, and whether the 1 bushel quota may be increased before seeding commences?


Clarence Decatur Howe: Mr. Speaker, I have a statement as of March 21. It shows 340 stations

on a 4 bushel per specified acre quota; 570 stations on a 3 bushel per specified acre quota; 812 stations on a 2 bushel per specified acre quota; and 343 stations on a 1 bushel per specified acre quota. So far as grades will permit-and my hon. friend will realize that it is essential to get forward the grades that are required-the effort is always to raise the stations with the lowest quota.


Hazen Robert Argue: I wonder whether the minister could say whether the board has experienced any difficulty in obtaining box cars for its present commitments?


Clarence Decatur Howe: Mr. Speaker, so many people have been making statements on box cars that I hesitate to raise my voice, so I think I shall not answer.


Mr. E. G. McCullough (Moose Mounlain):: I should like to ask the Minister of Trade and Commerce if there is any significance to the press report that special quotas will be given to farmers who are in the flooded areas, in order that they might get out some of their grain?


Clarence Decatur Howe: The situation is being watched carefully. Arrangements have been made so that, if there is evidence that flooding will take place, the grain will be moved out quickly.



AWARDS AND DECORATIONS


[Stage Direction]
On the orders of the day:
Mr. John Pallet! (Peel): I should like to direct a question to the Secretary of State. Are any steps being taken to change the procedure in awarding decorations so that similar controversies to that which has arisen around the recent award of the George medal will not recur?
Hon. Roch Pinard (Secretary of State):: do not think that any change as suggested by the hon. member would necessarily prevent controversy.



THE BUDGET


[Stage Direction]
The house resumed, from Friday, March 23, consideration of the motion of Hon. W. E. Harris (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell, and the amendment to the amendment of Mr. Coldwell.
Mr. Claude Ellis (Regina City):: Mr. Speaker, the budget brought down by the Minister of

Finance on March 20 has received throughout the country the very cool reception which it deserves. It is generally accepted by the public that this is a stand-pat budget, with the obvious intention that next year tax concessions that should have been made this year will be advanced as bait before the next general election.
That such a vitally important matter as the budget of this country should depend in such large measure on the political whims of the Liberal party is a source of deep regret.
I feel that this time next year, when the pre-election budget is brought down, the public of Canada will recognize the stratagem in deferring tax relief which we had every reason to expect should have been made this year. Then everything will be placed in its proper prospective.
I feel that there is a tendency on the part of the press and the general public to view the budget primarily in terms of adjustments made in the level of taxation. Important as that aspect may be, I think we have to recognize that the budget is the chief instrument of government policy in dealing with the pressing problems facing the country at the present time; and the worth of this budget will depend upon the ability of the government to come to grips with the problems presently facing the Canadian people.
I insist that the problems which faced parliament last year are still with us. To some extent these problems have been aggravated. One need only look at the very large segment of our population that is engaged in agriculture. We find from figures released by the dominion bureau of statistics that net farm income, which stood at $1,127 million in 1951, has declined precipitously each succeeding year and that in the last year for which full figures are available, net farm income in the prairie provinces had dropped to some $376 million. That is a decline of over 67 per cent. At the same time costs of production have increased nearly fourfold. Therefore one can readily evaluate the situation confronting agriculture in this country and can determine whether or not the government, through the budget, is alive to the situation and prepared to undertake measures to bring about a reversal of this dangerous trend.
Then, of course, we have the question of unemployment. I suppose the government feels that there no longer is a problem in Canada because there are only a little over half a million people looking for employment, whereas last year the figure went a little higher. Hon. members will recall that when we discussed the question of unemployment last year it appeared quite obvious that the government was willing to accept as natural
The Budget-Mr. Ellis a very large degree of unemployment. Economists tell us that in a free labour market there will be at any given time a small group of people who are changing jobs or who, at a given time, are looking for employment. But at no time should that number exceed 2 per cent or at the most 3 per cent of the labour force, and any time unemployment figures exceed that percentage we are faced not with frictional unemployment of a regional or seasonal nature but with general unemployment.
If the government feel they can take satisfaction from the fact that this year the number of jobless rose only to 515,000, then in my opinion they are indicating a most callous disregard for this major problem. I ask all members of the house to view the budget objectively and in conjunction with any other legislation proposed by the government this year, and ask themselves whether the government is doing anything toward the solution of these two basic problems, the question of declining farm income on the one hand and widespread unemployment on the other.
It is the custom of government apologists to rationalize unemployment by suggesting that because it is regional or seasonal there is nothing that can be done about it. I question the validity of that argument. In a country such as Canada we are naturally going to be faced with the problem of regional and seasonal unemployment, and that is all the more reason the government should be taking appropriate steps to meet the situation. When we find in many parts of Canada distressed areas because of the closing down of industry, then it is the responsibility of the government to do something through a public investment program to provide alternative employment. The government cannot argue that seasonal or regional unemployment is like the weather and nothing can be done about it. Indeed, the solution of frictional unemployment in this country is of major concern to all thinking people, and it ought to be part and parcel of an over-all government policy aimed at eliminating unemployment in this country.
I think Canadians generally accept the principle that there is no reason for unemployment in the country and that full employment should be made the conscious effort of government policy. Yet what is the situation? It is far removed from the years that immediately followed world war II, when the government had enough bold plans for providing full employment, and when they had this shelf of public works that was going to be brought into being immediately unemployment became of serious consequence. We find that was just so much

The Budget-Mr. Ellis window dressing, so much talk to be conveniently trotted out before a general election and immediately forgotten when the smoke of electoral battle cleared away.
We in the C.C.F. movement recognize the need for action in these fields. I want to suggest that, in looking at the budget objectively, we must consider it in relation to the economic difficulties facing the country at the present time. Then there is another aspect to which we must give careful consideration, and that is the question of our whole tax structure. It is not my intention to deal in any detail with this matter. Our leader, the hon. member for Rosetown-Biggar, dealt very ably with this matter in his address a week ago. At that time he pointed out the most glaring inequities in our tax structure.
Specifically I believe some mention was made of dividend credits. The hon. member for Rosetown-Biggar pointed out in this house that so unfair and so iniquitous is our tax structure that a married man with no children and earning $3,000 a year is required to pay $150 in income tax, yet a man could be making $14,000 and pay only $60. He could be getting $14,000 in dividends and be required to pay only the social security portion of the income tax, namely $60. There is something wrong with a tax structure that permits those who derive their income from dividends on invested capital to get off virtually scot free while the man with a low income who earns his money is required to pay income tax. I think it is generally agreed that originally the income tax was intended as a device to tax the wealthy, but over the years there has been a tendency to reduce the level at which income tax is to be paid, so that today many families who actually are able to do no more than provide the necessities of life are required to pay income tax.
Another inequity of the tax structure had to do with depletion allowances. Here again there are tax concessions to those who could well afford to make a fair contribution to the public purse. Then of course there is the question of capital gains. Here is a field in which the reluctance or the refusal of this government to give some consideration to requiring Canadians who make money through capital gains to make their fair contribution to the tax coffers of this country indicates where the sympathies of this government lie. Certainly they are not with the low income group. They are very interested to go out of their way to extend tax concessions and to do everything within their power to assist those who are well able to look after themselves, while they consistently refuse to grant the type of tax relief which will benefit the small man in this country.


We in this group recognize that there is great need for an increase in the exemption levels which have existed over the years. We have insisted that there should be an increase of $1,000 in the income tax exemption levels for both single and married people. While we advocate that, we recognize that the only way you are going to bring about a measure of tax relief to a great percentage of the people of Canada is through a reduction in the sales and excise taxes. In spite of all the glowing talk of government apologists about the prosperous times in this country, let us not forget that there are many families throughout Canada that have never earned sufficient money to be required to pay any income tax at all. If you are to be fair, if you are to be just and give tax relief where it is needed the most, then you will have to do something about reducing the sales and excise taxes.
As far as capital gains are concerned, I was particularly interested last year in reading a little account in the U. S. News and World Report, indicating the part that capital gains play in the building up of great fortunes. They give a very good example. Executives of certain corporations there in April of 1951 had an option to buy 5,000 shares of stock at $99 a share. The option to purchase expired in five years if not exercised. In May of the same year the corporation split its stock two shares for one. Those directors could now buy 10,000 shares of stock at $49.50 a share. That was the price of the stock split. In January of 1953 the price went up to $67.38 per share. The directors took up the option to buy 10,000 shares at $49.50 a share. On a total price of $495,000 the paper profit realized in this instance was $178,800. In May of 1954 the stock went up to $129 a share and the corporation split the shares again two for one. The stock was now worth $64.50 a share and the 20,000 shares in existence had a total value of $1,290,000, and the profit was $795,000. Then in February, 1955, the market price of the stock was $132.50. The directors sold 20,000 shares at this price and received $2,650,000. This constituted a profit of $2,155,000. In the United States they have a capital gains tax of 25 per cent. Therefore the director paid his tax of $538,750 and ended up with a clear profit of $1,616,250.
The same pattern is true in this country. The only difference is that in this country there is no capital gains tax. In other words, they actually do better in these monopolies in Canada because of the absence of this very necessary form of taxation, yet

the government will hold the line in tax concessions. There are no reductions in sales tax, but at the same time the government refuses to place a proper share of the burden on the backs of those who are well able to take that responsibility.
It seems to me, Mr. Speaker, we have to look at this budget from the standpoint of the general tax structure. If we do that we will not be satisfied waiting for another year when the Minister of Finance will come out just before the next election and offer us a little bit of a tax concession. What we need is a revamping of our tax structure in order that those who are better able to bear the burden will be called upon to pay a proper share.
Now, Mr. Speaker, there are one or two comments I should like to make about the unemployment situation. I referred briefly to the need for a public investment program, because if we are to rely upon private enterprise to do it we will wait a long time. I think the resolution now before the house having to do with Trans-Canada Pipe Lines is a specific instance where private capital refused to do the job and we were forced into the humiliating position of having to go outside this country for capital. The obvious answer in that instance would be public investment, a publicly-owned pipe line. There are many projects in this country which could be undertaken at the present time which would add to the productive capacity of Canada, which would add to our material wealth and which would build up the country. These could only be done through a proper program of public investment.
In my own province we have had frequent reference to the South Saskatchewan river dam. It has been made a political football by the Liberal party. They throw it out before elections time after time in an effort to win votes, and they have played both ends against the middle. A year ago they said the province of Saskatchewan was not prepared to pay enough, and I think last year the hon. member for Rosthern (Mr. Tucker) said he thought the province was paying too much.
Figures were produced last year as to the cost of this project. The Minister of Agriculture now suggests that these figures are too high. He has indicated that he knows people who will do the job for $83 million. I suggest that he should take the house into his confidence and let us know who these people are, because if the job could be done for that amount I see no reason why there could not be an immediate agreement to go ahead with this project at the present time.
The Budget-Mr. Ellis
I realize, of course, that various opinions have been expressed in the province of Saskatchewan by supporters of this government in Ottawa. The leader of the Liberal party in the province of Saskatchewan has been going about the province making speeches. It has been his practice to pass off the dam as being of no consequence while speaking in one area, and in the next place he suggests that he is all in favour of it. He made an extremely significant statement, however, when he said that "we will never get the dam until we kick this government out of here", meaning the provincial government. When I suggest that this measure has been used as a political football by the Liberal party I think there is ample evidence to back up my statement.
I believe there are many other fields in which the federal government ought to be taking action in order to develop this country. Many of the provinces would prefer to go ahead and develop their resources but they lack the fiscal power to do the job. There is no doubt that the people in the province of Saskatchewan find themselves in that position. We want to develop our resources, but the province does not have the fiscal power. We are not unique in this respect, because no province has the necessary financial power to do a large-scale job of public investment; consequently, as second best, it is necessary to rely on outside capital. The fault lies not with the provinces, whether it be the province of British Columbia or any other province in Canada. The responsibility lies squarely on the shoulders of the government in Ottawa.
There are one or two other matters I would like to raise at this time. I want to make reference now to a matter which has attracted my attention since coming into this house. The growth of the trade union movement in Canada has of course brought about a new concept in employer-employee relationships. The old concept of master and servant has been replaced by collective bargaining between management and labour. No longer is the employee in organized industry in constant fear of unfair treatment or unjust dismissal. As a member of his union working with his fellows in the union he is able to meet with management and evolve a satisfactory working agreement mutually acceptable to both sides governing such matters as wages, hours of work, holidays, seniority, grievance procedure and all the other matters that have vexed relationships between management and labour. As a result labour has become a partner in industry, in large measure, and is working more efficiently in the industrial field.
In spite of the fact that in the early days employers fought tooth and nail to halt the

The Budget-Mr. Ellis growth ot the trade union movement, and despite the fact that some still resist it, many enlightened employers realize that unions are here to stay and collective bargaining procedures are always going to be with us. The unfortunate thing is that there are large groups of Canadian employees who are denied the rights of collective bargaining. I say they are rights because they are rights which are guaranteed by law in many instances. I believe union recognition has become more than just a sanction on the part of an employer who has to deal with the rights of the employees in his plant. Collective bargaining has been sanctioned by law in Canada.
Well, what about the civil servants? I take pride in the fact that the province of Saskatchewan is the only province in Canada which permits proper collective bargaining procedure for civil servants.


An hon. Member:: Oh, you are crazy.


Alfred Claude Ellis: I hear a dissenting voice on my left. I am going to deal with that by quoting from an organization which represents the civil service in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. I also understand that the organization is reaching into other parts of Canada and will eventually represent all civil servants at the federal, provincial and municipal levels. The Canadian council of public employee associations held a meeting in Regina-


An hon. Member:: Where is that?


Alfred Claude Ellis: -about a year and a half ago. As I pointed out, this organization represents some 40,000 public servants, employees of provincial governments, including the provincial governments of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. The council passed the following resolution:
Whereas provincial public servants in all provinces of Canada, except Saskatchewan, have no negotiation, conciliation or arbitration rights in dealing with their employers, and
Whereas, we believe this condition to be a negation of democratic principles and a denial of the right granted by law to other organized bodies of the working society,
Therefore, be it resolved that this council go on record approving in principle of the belief that negotiation, conciliation and arbitration rights be granted by provincial governments to their employees.


Clarence Decatur Howe: Mr. Speaker, may I ask my hon. friend to repeat the name of the organization?


Alfred Claude Ellis: It is the Canadian council of public employee associations. This resolution was passed on August 30, 1954.
I mentioned the fact that the provincial governments were mentioned in their resolution. This was because at that time only


provincial representatives were in attendance, and they did not go beyond making recommendations to their own governments. However, the same principle is involved in relation to the federal government. There is no reason why federal civil servants should be denied collective bargaining rights.
In my own province we placed no obstacles in the way of collecting bargaining procedures, and we also were willing and anxious to treat our public servants in the province in the same way we expect any decent employer in the country to treat his employees.


Mr. Hahn:: Then would you explain its application to the bus drivers in Saskatchewan?


Alfred Claude Ellis: My hon. friend is asking a question which I think he might more properly elaborate into a speech a little later on. I suggest that when the province of British Columbia gets around to granting collective bargaining rights for provincial civil servants the hon. member will then have a reason for making an interjection of that kind. In the meantime I suggest that you put pressure on the Social Credit government in British Columbia to do the decent thing for their public servants by granting them collective bargaining rights.
We in this group are in the position of being able to come before this house and make our point quite clear, because we have done what we have preached in this house. We have granted to our public servants full collective bargaining rights. We suggest that what has been done in our province can be done in every other province in this country, and can be done here in Ottawa by the federal government. It ill behooves anyone from a province with an anti-labour government like the Social Credit government in British Columbia to make absurd interjections like that.
The only way we are going to bring about more co-operation with and a better spirit among our public servants is to grant them collective bargaining rights. I hear these frequent interjections, and I realize that I have touched on a sore spot as far as the Social Crediters are concerned. Of course their anti-labour policies are known from one end of this country to the other. They are trying to out-Tory the Tories in their antilabour policy. This is self-evident and needs no elaboration by me at the present time.
I am suggesting that the government could avoid many of the difficulties which it now encounters when dealing with its public servants if it agreed with the employee organizations to sit around a table in a proper

spirit of collective bargaining in an effort to arrive at a settlement and wage contract which would be mutually acceptable to both sides. We would then have something in the nature of proper employee-employer relationship in this country.
There is one reference I should like to make to the budget speech delivered by the Minister of Finance, in connection with housing. The minister pointed out that in the last year there had been an increase in residential construction, and that perhaps for the first time we had reached the stage where home construction was keeping pace with or perhaps staying a little in advance of new family units in Canada.
The main problem in so far as housing in this country is concerned still remains unsolved. There are over half a million homes in this country which are certainly in need of replacement. Pardon me, I should not say replacement; according to the brief presented to the government by the Canadian Congress of Labour a year ago there were some half million dwellings needed to meet the backlog of housing requirements in Canada.
What steps have been taken by the government to meet this great backlog? We know that the population of Canada is growing, and that the new homes which the Minister of Finance talked about are needed to keep pace with that growing population. But we still face a tremendous backlog of housing need in Canada. Beyond the need for new residential construction is a great need for homes to replace older homes, many unfit for human habitation, and many in such a condition as to create a hazard, particularly with regard to fires. I think the government should take these factors into consideration.
There are almost 1,000,000 homes in Canada now overcrowded or in need of major repairs; there are some 900,000 homes with no inside running water, and almost 1,500,000 homes with no bath or shower facilities for exclusive family use. There are over 1,200,000 homes with no flush toilets; nearly 600,000 with no hot water supply; over 1,700,000 with no electric or gas stoves; 1,757,000 with no mechanical refrigeration, and over 1,700,000 without furnaces.
Think of what these needs mean in terms of jobs, when we have an unemployment situation in Canada. There is no lack of work to be done, in fact there is a vast amount of work to be done. Then we should think also in terms of the danger to human life that exists in many of these dwellings.
In recent months we have been shocked by the tragic fires which have occurred in the
The Budget-Mr. Ellis Ottawa district and throughout Canada. The death toll this year has been shocking. I think it was on March 16 that the hon. member for Rosetown-Biggar asked tbe Prime Minister whether he would not consider taking the initiative in doing something to bring an end to these tragic fires. As usual, the Prime Minister shrugged off the responsibility and said this was purely a matter for the provinces. I suggest that it is not a matter purely for the provinces. I speak only from my reading of press reports, from seeing pictures were published, but these indicate that many of these homes which were destroyed were substandard. The inquest reports and reports of inquiries that have been held almost invariably indicate that the dwellings were substandard. We are told that in many cases the walls were nothing more than pressed paper. Once a fire started there was little or no hope of the occupants escaping. Is it any wonder that we have had such an appalling loss of human life, particularly of children who have perished this winter in fires right here in the Ottawa area?
What is the answer? Apart from the precautions which an individual must take at all times, the answer seems to be to do something about the substandard housing that exists in this country. As long as people are required to live in houses that are mere shells with partitions made of pressed paper, we cannot expect to avoid tragic fires like these. If the federal government are anxious and willing to do something about this great problem they should start by doing something in the field of public housing over and above what is done under the National Housing Act.
As far as the National Housing Act is concerned, hon. members will recall that when the amended act was brought down in 1954 we of the C.C.F. group had certain criticisms to offer. We pointed out that the legislation would not assist the people of Canada who needed help, that is those in the very low income groups. We pointed out that the interest rate was excessive, particularly when the lending institutions, the banks, were having their loans guaranteed at the borrower's expense. There was a guarantee that there would be no loss to the banks.
Under those circumstances there seemed to be no fair relationship between the risk involved and the interest rate charged, as the banks were taking no risk whatsoever. There seemed to be no justification for the interest rate provided in the legislation. Sinct

The Budget-Mr. Ellis that time the government has seen fit to increase the interest rate still more.
We pointed out at the time that housing needs in Canada were such that the National Housing Act would be powerless to deal with the basic problem. What has happened since?
I have here a table based on Canadian housing statistics for the third quarter of 1955, published by Central Mortgage and Housing
Corporation, and I should like to have unanimous consent to place this on Hansard.


Mr. Speaker:: Has the hon. gentleman
unanimous consent to place this table on the record?


Some hon. Members:: Agreed.


Alfred Claude Ellis: The table is as follows:



GROSS FAMILY INCOME GROUPS AS A PERCENTAGE OF TOTAL BORROWERS UNDER THE NATIONAL HOUSING ACTS

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Gross Family Income	1948	1949	1950	1951	1952	1953	1954	1955 1st and 2nd quarters%	%	%	%	%	%	%	%Under $2,099	. 8-9	2-9	0-7	0-2	0-05	002	0-02	0-01$2,100-12,399	. 13-5	8-0	30	0-8	0-2	006	0-03	0-04$2,400-$2,699	. 21-5	19-0	10-8	4-1	0-9	0-4	0-1	0-08$2,700-$2,999	. 12-4	13-5	11-5	80	2-1	0-9	0-3	0-2$3,000-$3,499	. 18-3	23-0	25-2	23-2	13-3	6 96	3-61	2-7$3,500-53.999	.. 9-8	12-1	17-3	18-9	220	17-10	11-58	10-52$4.000-54,999	.. 8-7	12-2	17-0	21-8	30-3	36-86	34-38	32-90$5,000 and over	.. 6-9	9-3	14-5	23-0	31-3	37-3	49-89	53-52I would draw to hon.	members'	attention	informed me	that if he could raise	the down
the fact that over the years there has been a marked increase in the use of N.H.A. loans by those in the higher income groups, and there has been a gradual tapering off of borrowers in the lower income groups, so that they are almost negligible. As a matter of fact, home-owner borrowers with gross family incomes below $3,500 comprised only 4-1 per cent of total borrowers under N.H.A. in 1954. By mid-1955 this percentage figure had dropped to 3 per cent. That bears out the points we made at that time, that the National Housing Act, however it may assist a small group in the country, has failed to meet the needs of people earning less than $3,500 a year. They are the people who are forced to live in these substandard homes of which I spoke a moment ago.
The government cannot feel that the National Housing Act is meeting the problem. What we need at the present time is a housing program that will be tailored to meet the needs of the people who need the housing most. We have a tragic situation where so many of our people unable to raise the money for the down payment are paying rents greatly in excess of what they would have o pay in payments on homes. I received letter the other day from a constituent who [Mr. Ellis. 1
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payment he would only have to make monthly payments of $72 on a house; but he could not raise the down payment. In the meantime he is paying over $100 in rent, and he cannot save any money as long as he must go on paying rent.
Something must be done by this government to provide for the housing needs of these low income groups. In many instances, of course, owing to the transitory nature of their employment, low rental housing would have to be provided for some people. In any event the time has come when the government should give serious consideration to revamping its housing program to provide for the needs of low income groups in this country.
I know my time is fleeting, Mr. Speaker, but before I sit down I want to make some reference to a very important matter. I am sure all hon. members were disappointed and shocked the other day at the news that another atomic test had been held within the Soviet union. I am sure thinking people throughout the world will deplore this madness in persisting in experimenting with these horrific weapons. Members of this group have drawn this matter to the attention of the house on former occasions, pointing out that

the risks involved are not commensurate with any foreseeable advantages to be gained.
Surely we have gone far enough in this field. No one can say with absolute certainty the effects these experiments are going to have on the human race. Many scientists are very apprehensive about the genetic and other effects on human beings. There may be those who will disclaim any ill effects from these particular experiments, but I suggest, whether these experiments are conducted, as the most recent ones were, by the Soviet union, or by the United States or by Great Britain, this parliament ought to make its wishes known and make the strongest representations to the governments concerned, asking them on behalf of the Canadian people to cease forthwith any further tests of this type.
Mr. W. L. Houck (Niagara Falls):: Mr. Speaker, I would be very remiss indeed in my duty, coming from a border riding, if I did not say at the very outset a few words pertaining to the visit of our Prime Minister (Mr. St. Laurent) and the Secretary of State for External Affairs (Mr. Pearson) with the President of the United States, Mr. Eisenhower. At Niagara Falls we pride ourselves on the rainbow which is visible at most times of the day and which is a connecting link, and indeed a symbol of friendship and peace, between two great countries and two great friends. Certainly the visit of our Prime Minister and his external affairs minister with the President of the United States is a symbolization of those characteristics that we in Canada wish to extend to the great United States; peace and friendship. I know we all wish the Prime Minister well in his visit.
Contrary to what was said by the hon. member who has just taken his seat, I want to compliment the government, and indeed the Minister of Labour, for doing their utmost to maintain full employment as far as possible. It is my firm belief that the people of Canada have the ability, the courage, the determination and the ambition to produce on their farms and in their factories, as far as possible, increased quantities of goods and services for ever-increasing numbers of people.
Many people have asked, and rightly so, what does it take to make a job? In the first place it takes a man or woman who cannot be employed unless people are willing to buy the thing he or she produces or unless people need his or her services. So jobs and manufacturing are the end result of a number of things. Before there can be a manufacturing job there must be an idea for a product that people want, and there must be people
The Budget-Mr. Houck willing to risk their savings in furnishing capital to develop that idea. Then before there can be a job there must be customers. When a customer buys a product, the money he spends creates work; work for the people in the plants; work for those who supply raw materials; work for those who sell and service that product.
In the end it is the customer who makes the job. It is by careful estimates of the number of customers that management is able to plan that work and the number of jobs that will be created. To begin with, someone or some group of people must have sufficient confidence in the products, in the requirement for services of one form or another, and sufficient confidence in the people who are going to manufacture and market those products or who will be providing the various services, to risk their savings in financing the undertaking. Money must be provided for plants and machinery. This amounts to a considerable sum for every job. Everyone who has savings at work expects some return for their use. Therefore, in order that jobs may be created and may continue to exist, there must be a chance to make a reasonable profit.
So, to sum up, jobs are the end result of something; the result of a combination of capital, management and opportunity, with some catalyst thrown in to make them fuse and function. This fourth factor, however, can hardly be described in one word. Its foundation, of course, is confidence and belief in the future of enterprise that is established by sound national and economic policies.
Manufacturing as a whole provides over one and a half million jobs in Canada today. Of this total the automotive manufacturing concerns absorb a little over 350,000 men- in short, about one job in every 15 jobs in the country. This does not include, of course, garages, service stations or supplies such as steel mills, manufacturers of textiles, tires, etc. Last year in this debate I referred to the tax on automobiles, and I was in hopes that something would be done in this regard to make it easier and cheaper for the average man to buy his much needed motor car. I thought this would tend also to increase the business of the automobile manufacturers.
The outlook for the motor car business is excellent for many years to come because of the vast economic expansion we are undergoing, and the job of building cars and trucks will be a major industrial item in Canada for an indefinite period to come. Judging from the fact that this is a big business and that there are over 4,000 automobile dealers in Canada, over 14,000 independent garages and over 16,000 service stations throughout
2644	HOUSE OF
The Budget-Mr. Houck our great dominion, it is quite obvious that the sale and servicing of motor vehicles offers employment in a wide field of occupations.
I should like to say that there are countless opportunities not only in the automotive business but in industry as well for every man and woman in this country who wants to make a go of it. We as Canadians have the qualities that make for greatness. These qualities are obvious to anyone who has studied the characteristics of the people who go to make up this great nation. I am sure, Mr. Speaker, that last year's records will show that when the tax on automobiles was reduced from 15 per cent to 10 per cent it resulted in increased business, increased sales and thereby an increase in tax revenue.
I am still of the opinion that this tax is not only a special tax but that it is unfair, unjust and economically unsound. I say that if this tax could be removed it would help materially to stimulate sales and would thereby certainly maintain more production and more employment. This is not a one-way street as far as this subject is concerned, and I do not think people should expect the government to go all the way. I think the average car buyer realizes, thinks and believes, and rightly so, that the automobile manufacturer must go part of the way. Therefore I believe that if the government and the automobile manufacturer would each go part of the way it would be a lot easier for the average man to own a motor car, and to buy it within the resources of his pocketbook.
I am anxious that the Minister of Finance give consideration to the paying of taxes on all federal buildings and land. The reduction from 4 per cent to 2 per cent passed at the last session was to broaden the scope of the grants so that a greater number of municipalities might qualify. I think the two main factors in the legislation are that the percentage factor was reduced from 4 per cent to 2 per cent, and the legislation did liberalize the formula to increase the payments by relating the grant to the ratio of federal property to taxable property only, instead of the ratio of federal property to taxable and federal property combined. This, of course, removes the 75 per cent factor, so that the combined effect would be to calculate the grants at the full real property tax rate.
I felt that this bill indicated that the government recognized the fact that municipalities were entitled to taxation revenue. If this is true, Mr. Speaker, I say why not full taxation? Why not go all the way? I cannot understand why special treatment should be given to crown agencies, and in saying that I include not only federal but provincial agencies as well, since all too frequently these


agencies are engaged in activities that are definitely in competition with private agencies which, of course, must of necessity pay the full amount of taxation levied in the area in which they operate.
You cannot overlook the fact, Mr. Speaker, that federal and provincial properties are entitled to and receive exactly the same services as any other property but pay nothing toward their cost. Ninety-nine times out of 100 the federal or provincial building is situated on one of the choicest locations in the municipality and immediately it is taken out of taxation, thus reducing the potential revenue of the municipality. To supply the necessary services I have just mentioned the municipalities' prime source of revenue is the taxpayer, and certainly everyone must agree that the ratepayer can stand no further demands upon his finances.
The Municipal Grants Act amendment may sound very good in the press but I want to say, Mr. Speaker, that as far as the city of Niagara Falls and the township of Stanford are concerned, both of which I am extremely proud of and both of which are known the world over, it does not mean a thing. The federal assessment in the city of Niagara Falls, although a very sizeable sum, does not come within the required percentage to entitle that city to any grant. In Niagara Falls alone we have well over $700,000 of federal exempt assessment out of a total of some $16 million exempt assessment. I admit that of this total exemption the province has the lion's share, approximately $12,500,000, but as far as federal property is concerned nothing is received by way of federal aid.
May I crave the patience and indulgence of hon. members of the house, Mr. Speaker, to cite a case in point pertaining to the city of Niagara Falls. The loss to the city by receiving a grant from the Ontario hydro in lieu of taxes last year was almost $250,000. This was clearly shown by a study of the assessment roll. This loss has steadily increased during the last few years as the value of both hydro and other properties has increased with the grant at the same time remaining almost at a stationary level.
At the present time the city of Niagara Falls and the township of Stamford each receives the sum of $75,000 as a grant in lieu of taxes. This grant has been in vogue for many years and it does not seem fair, in view of the increase in property value and the fact that the value of our dollar has gone down, that we should have to suffer such a loss. In Niagara Falls and Stamford we simply have to face it. Through no fault of their own both these places are in a very

poor position from the standpoint of assessment value. If I might mention it in passing, the Rainbow bridge only pays the sum of $12,000 per annum in lieu of taxation. This amount was based on the assessment away back in the early forties, and Niagara Falls is dropping thousands of dollars a year in that respect.
This does not seem fair to me when the Peace bridge, which occupies almost the same amount of land as the bridge at Niagara Falls, pays to the municipality of Fort Erie- and I am very happy that it does-the sum of $40,000 a year, which will be increased by an escalator clause to $60,000 a year in the year 1962. We have a case in point of the stores under the Rainbow bridge which are controlled by the department of highways of the province of Ontario. When the stores were erected the provincial government agreed to pay the city of Niagara Falls $8,000 a year in lieu of taxation. That has continued for some years, but the city was notified by the provincial minister concerned that at the end of 1955 this sum would cease to be paid.
In comparison with the sum of $75,000 a year paid to Niagara Falls and the township of Stamford, may I say that even in the year 1953 the Canadian Niagara Power Company paid in taxes to the township of Stamford over $288,000. This plant is only rated at 100,000 horsepower, compared with the terrific amount of horsepower developed by the hydro plants.
We in Niagara Falls are very happy to have these government employees. We have over 400 federal government employees and about 850 men and women working for the power commission. We are very proud of them. They are making exceptionally fine citizens and are heartily welcome in our city. But we definitely feel that from both the federal and provincial governments we should receive some compensation for the services we have to provide. I want to say here that the premier of Ontario is continually crying to high heaven for more aid from Ottawa. Everybody knows that the municipalities are the prime responsibility of the provincial government, and I submit to the premier of the province of Ontario that he should practice what he preaches and see to it that the municipalities receive the much-needed aid they so justly deserve.
I would not want to let this opportunity go by without at least saying a word about the civil servants I have in my riding. Probably no other member of the house has more immigration and customs officials in his riding. They are the first official greeters of visitors to this great Dominion of Canada and
The Budget-Mr. Houck are doing a splendid job. They are ambassadors of friendship. I have had many tourists tell me when they come across one of the bridges that their first welcome to Canada was the one they appreciated most, and how complimentary and courteous these officers were at the various ports of entry.
I think we as members and supporters of this government can look with pride upon these officers. They are great ambassadors of friendship. I only hope that when the announcement is made pertaining to civil servants' pay, these men's services will be adequately recognized. I want to say to the Minister of National Revenue and the Minister of Citizenship and Immigration that they can be exceptionally proud of these officials.
The reaction of the Canadian people to the budget I think has been one of acceptance and, if I may use a slang expression, of "father knows best". There is a deep and abiding confidence in those charged with responsibility of office never heretofore exhibited. Some have called it a stand-pat budget. I should like to call it a "don't rock the boat" budget. There is much to stand pat about, Mr. Speaker, because employment was never higher, corporation profits were never higher, personal income was never higher and the outlook for the future was never better. Hence, Mr. Speaker, I say this. Why fiddle when Rome is not burning?
There are two great national undertakings in the wings but not yet fully on the scene. I refer to the national pipe line and health insurance. The first will make greater use of our natural resources by Canadians. The second will preserve, maintain and improve our human resources. Both undertakings are imaginative in scope, and the Canadian people can anticipate with confidence that they will benefit from both.
I think it is worthy of note that there has been no general outcry against the budget. This does not usually happen when there are no direct tax reductions. I believe it is well to read the signs. So great is the confidence of the people in this government and its monetary and fiscal policies that they are prepared to let the government deal with these matters in the way it thinks best. This deep and abiding faith has come from years of benefit derived from policies bold and courageous. Last year we budgeted for a deficit. It was unusual, yet it was accepted. This year we have budgeted for a surplus, and that is even more welcome.
I cannot help feeling, as I am quite confident the majority of the people of the dominion feel, that the economic policy of this government has been well tested and has

The Budget-Mr. Houck not been found wanting. I quite well recall that in his speech last year, as recorded at page 2733 of Hansard of 1955, the Minister of Finance said this:
I propose to recommend to the house a tax policy and a tax structure that would produce a balanced budget under conditions which represent a high level of output and employment.
This indeed was a very definite answer from the government to those critics who were predicting nothing more or less than blue ruin for our country. I feel that this government has offered the country a policy that not only acts as a safeguard but indeed is a splendid example to take us through the minor ups and downs of our economy. Many condemned the budget of last year. Some said that it did hardly anything. Some said that it did not do a thing. Some said that it did not go far enough. Some said it was too conscientious.
The budget last year was the same as that which was presented by the Minister of Finance a few nights ago, and was based on sound principles and sound business ethics. The budget of last year did everything that could be expected of it; and surely, Mr. Speaker, if the Minister of Finance was sticking to the same principles of budgeting which guided us so successfully through last year and which guided him so successfully through his difficulties of last year, we shall again obtain fine results from this budget.
There is no doubt in my mind that Canada has growing pains, and I hope these growing pains will increase. Certainly the people of this dominion, with their confidence in this government and in the Minister of Finance, realize that this is going to be one of the finest years in the history of Canada. I wonder if anyone else could have presented a different budget under these circumstances. We must realize that next year we face large expenditures not only because of the new federal-provincial tax plan but because of the prospect of the hospital insurance plan which I spoke about a few minutes ago. If I may use a vernacular expression, Mr. Speaker, I would say that when everything is going all right there is no use in upsetting the applecart.
It seems to me that at a time like this, when we are receiving bad news from various parts of the world, it was encouraging to me at least to hear the Minister of Finance predict a good year ahead of us. With employment and production at high and satisfactory rates, I think the minister rightly believes that the government, business and the people of Canada must combine in perfect harmony to ensure continued prosperity, and he expresses the hope to the people that we
[Mr. Houck.3

shall have a steady increase in business rather than an immediate upward thrust.
The imagination of the Canadian people brought this country to this wonderful full development we are enjoying, and there is no reason to believe that we cannot go ahead under these circumstances, when we have a government that offers these safeguards against any monopolistic or other practices that would prove harmful to our great dominion. We in Canada are talking today in terms of 15 million people. I think in the not too distant future we shall be talking in terms of at least 30 million people. What we need is greater faith, wider vision and indeed that thing called ambition to go ahead with the job and see to it that this country is fully developed. I think we should thank almighty God that we here in Canada have a marvellous country, a marvellous future and almost incredible potential wealth.
So I say to the Minister of Finance and to the government that our resources are sound. Those men who are elected to look after the finances and the economy of our government I know will be tested as statesmen and not found wanting. I know the many requests that are made to them and the many things they hear, but 1 know they will not adhere to any of these patent medicine ideas. I want to say to the minister-and I say this to the people as well-that as long as we have faith in ourselves, in our heritage and in our destiny, Canada will be one of the greatest countries in the world in the not too distant future.
If I might use the parlance of the baseball field I say to the Minister of Finance that just a few nights ago, in presenting his budget, he had three men on bases and although the ball did not go quite over the fence, it reached the top of the fence and bounced back into the playing field. However, the bases were cleared. I am sure that next year, when our great Minister of Finance brings down his budget, he will come up again with three men on the bases and the ball will go over the fence for a home run. I want to say to him and through him to the government on behalf of everyone in the riding that I have the honour to represent, that we are proud of you. Carry on, and we are behind you to a man.


Mr. Donald M. Fleming (Eglinton):: Mr. Speaker, many members in this house last Tuesday evening wondered what the Minister of Finance was doing on that occasion. My friend the hon. member for Niagara Falls has now supplied the answer. The minister was apparently engaged in a baseball game, some kind of sport. He certainly was not engaged in the serious business of responsible budget-making.

"The budget is not merely dull; it is defeatist. It is not merely stand-pat; it is negative. It reads as if the minister and the Department of Finance have thrown in their hands and stopped trying. No line of policy is followed to its logical conclusion. There is nothing coherent and constructive. It is fair to say that the nearest the minister got to a policy was a sort of resigned nod to the spending departments of government to go ahead and spend".
Those are not my words. Those are words that ought to be quoted in this house. They come from the Winnipeg Free Press, and will supply an effective answer to the hon. member for Niagara Falls and others like-minded who undertake to tell this house that the Canadian people have accepted the budget, and that father knows best. That attitude, of course, is one that has become typical in this house of supporters of the government. "Father knows best". You see the category in which members taking that attitude put themselves. They are the children. Father knows best and these children, as they regard themselves, are simply to follow and toe the party line.
Well, sir, it is in no personal sense that I must say to the Minister of Finance, in referring to the budget effort on this occasion, that it was unquestionably the worst failure in Canadian history within living memory. In kitchen terms this budget is as dull as dishwater, and it fell as flat as a pancake. At the outset of the budget someone should have called from the chair or elsewhere "dispense". At the outset this speech could just as easily have been dispensed with. Indeed, sir, if this represents the government's idea of a budget it might just as well have been dispensed with entirely. It might have been better for the government simply to announce that it was not bringing down a budget this year.
What is its purpose? What is its pattern? What is the thought behind it? What are the governing considerations? Sir, these are so muddled as to be utterly incomprehensible.
Nevertheless, there was one thing .the budget did contain. It ended up with praise of the Prime Minister. Well, one can see perhaps some purpose in that. It is about the only thing one can find in the budget that has purpose and pattern to it. One recalls the words of the poet:
-praise, that last infirmity of noble minds.
One of Lord Lyttleton's poems puts it this way, Mr. Speaker:
There is no weapon that slays
Its victim so surely, if well aimed, as praise.
What was the purpose of this praise? It may possibly have been to coax the Prime Minister down from the remote fence on
The Budget-Mr. Fleming which he has sat during this session, to try to stir up in him some interest in the affairs of parliament, an interest which he has not indicated in any shape or form throughout this session. What may have been the purpose may well be left to speculation. But the Prime Minister is still on the side lines. He still takes his remote, detached place, with little or no interest in the house.
Now, sir, if I refer to this document and its proposals as a budget, let me enter the reservation that I do so in name only. This is not a budget in the proper sense of the word, but I will call it a budget because that is the most convenient way of referring to it.
The first feature of this budget, sir, is that it proposes to exact an increased tax levy from the Canadian people. The tax imposition is by the government's proposals to be raised to an all-time record height, $4,763 million. This aspect of the budget has of course been covered up very subtly with a multitude of words; but it is a fact that the government proposes to take out of the pockets of the people $378 million more this coming year than it took out of those same pockets during the past year. It proposes to take something over $1 million a day out of the pockets of the Canadian people more than it took last year. That, sir, is a sum far exceeding the rate of increase in the population of this country. It means, sir, an increase of $23.62 per capita in the dominion tax levies.
The second question of interest that one can apply to this budget is, what bearing has it on inflation? The budget is extremely vague on this subject. I should be inclined to question whether this factor entered into the considerations of the government at all. The minister talks about the "renewal of inflationary pressures in many countries". He speaks of the operations of the Bank of Canada "directed increasingly toward moderating the rate of expansion in the use of credit", and then he allows himself, apparently, to relate this to some aspects of government responsibility; for the minister says at page 2327 of Hansard:
The federal government itself has a special responsibility to see that its fiscal policies continue to be directed towards economic stability. The use of the flexible instruments of monetary policy is also being directed towards this objective.
Well, sir, that was very little indeed to say in a budget speech by way of review of some facts and events that have occurred within the year. The fact is the Bank of Canada lowered the bank rate from 2 per cent to 1J per cent on February 1. On August 5 it reversed the policy and raised the bank rate from 1J per cent back to 2 per cent. On October 12 it raised it from 2 per cent to 2\ per cent; and on November 18, from
2648	HOUSE OF
The Budget-Mr. Fleming 2| per cent to 2| per cent. The policy has been confusing to say the least. If action of this kind was required, it was required before it was taken. The effects of this series of sudden increases in the bank rate have been disturbing to confidence. Every time the bank rate was raised it had the effect of subtracting millions of dollars from the value of bonds held by Canadians, including dominion government bonds.
We should like to know, and surely this house is entitled to know, what is the government's purpose in this matter? How serious is the view they take of the way inflationary forces are working? What is to be the scope of anti-inflationary policy? Give us something to judge their efforts by. Mr. James Muir, the president of the Royal Bank of Canada, in his annual speech said this on inflation, a few days ago:
Experience shows that monetary policy is more effective against inflation than against deflation. But there are dangers. As I have already pointed out, the policy may go too far. It may also be unselective, curbing healthy as well as unhealthy or excessive bank credit.
What is the government's next step, sir? The government has not told us whether it regards inflation as serious or not. The minister has talked about the stability in the cost of living. That does not seem to suggest that the government thinks there is inflation; and yet we have a series of three increases in the bank discount rate. Well, if the government has any clear thinking on this matter, Mr. Speaker, we should have had some statement on it and some expression of objective.
While the minister was laying down that role with respect to what he calls the flexible instruments of monetary policy, he did not stop there; he went on to read this lecture to individual Canadians:
But careful judgment and wise spending policies are not solely matters of concern to public authorities. They are the normal responsibility of each one of us, regardless of his role in the economy.
I do not quarrel with that as a statement, but I ask the government to apply its own medicine to itself. When it is busy prescribing for individual Canadians I say, "Physician, heal thyself". The greatest inflationary pressure that exists today is reckless government expenditure and extravagance. And, sir, if the government is going to preach the virtues of thrift and care to the individual Canadian, I say let it begin in its own house. While plucking the mote from the eye of the individual Canadian, I say to the government "first pluck the beam out


of thine own eye". There is no more inflationary force in Canada today than the full weight of reckless government expenditure and extravagance.
The next matter to be mentioned, sir, is the income tax. It is true that the rate is unchanged. It should have been reduced. Of course, we are going to have to wait until election year for those increases in the exemptions which are long overdue. It is interesting to see that the C.C.F. in their amendment have sought to urge a reduction in the burden of income tax on the lower income groups. Well, in 1953, in the general election, the Progressive Conservative party advocated in the plainest terms an increase in the income tax exemptions to $1,500 for single persons and $3,000 for married persons. I sought to put the same view forward for the consideration of the Minister of Finance when I spoke in the house on January 24. It is most unfortunate that the C.C.F. in bringing an amendment of that kind, a commendable amendment to that extent, has linked it with a hairbrain proposal to place a tax on capital gains, a proposal which if it were to be put into effect would frighten off capital and do the Canadian economy untold harm.
Canada needs capital. We need capital created out of the savings of the people. That is one reason why the government ought to be making resolute efforts to reduce the burden of taxation on the Canadian people. What other source of Canadian capital is there? If the government is not going to permit the Canadian people to retain more of their earnings in the form of savings, and therefore of capital, then Canada will have to continue to look abroad for sources of needed capital.
I wish to refer to a statement made recently by Mr. Ashforth, president of the Toronto-Dominion Bank, at the annual meeting of that bank, when he said:
Week after week one reads of foreign concerns purchasing Canadian arms or establishing new plants and factories in Canada. The same opportunities are available to Canadians. Why don t we grasp them?
Lack of capital, or perhaps I should say savings, is one factor. In some cases, it reflects greater technical knowledge on the part of the foreign company. In others, it represents the establishment of a manufacturing plant in Canada by a company that is already selling its products in this country. But this is not the whole explanation. Evidence is accumulating that Canadians are not showing enough vision, enterprise and courage in relation to the opportunities open to them.
Risk-taking is essential to a dynamic, expanding economy. In the mining field, Canadians have proven that they are prepared to take risks, and the rewards have been substantial. More of the same enterprise and courage is needed in other sections of the economy.

Let hon. members weigh well those words of Mr. Ashforth, that "lack of capital, or perhaps I should say savings, is one factor" accounting for the unfortunate and regrettable fact that Canadians are not taking advantage of the investment opportunities open to them in the development of Canada's resources.
I have some comments to make on the sales tax. This government proposes to continue the sales tax upon the necessities of life undiminished one whit. Why is it that this government insists upon placing this levy on the necessities of life of the Canadian people? There was a study made recently of the sales tax by the Canadian Tax Foundation. Some interesting facts have emerged from that and other studies. About 58 per cent of sales tax collections are from consumer goods. About 24 per cent are from industrial purchases. Based upon 1954 revenues within the consumer group the largest items subject to this tax were clothing and personal effects. They occupied 15 per cent of the total, or $110 million. We are speaking now of 15 per cent out of total sales tax collections in the neighbourhood of $650 million a year. The sum of $110 million or 15 per cent of the total represented levies upon clothing and personal effects. Another $76 million or 10 per cent of the total was levied upon purchases of household appliances, furniture and furnishings. How can any Minister of Finance justify impositions like these upon consumer necessities? So many of these articles to which I have referred come strictly within the category of necessities for the Canadian family. These impositions are to be continued by the will of this government. There will be no diminution this year. Every hon. member opposite in voting to support these budget proposals expresses his determination to continue these impositions undiminished upon the purchases of necessities by the Canadian people.
The second feature of the sales and excise taxes which is worthy of mention relates to a reduction that was made last year. The government last year actually reduced from 15 to 10 per cent the excise tax levied on automobiles. What was the result, sir? A reduction in revenue? On the contrary, there was an increase in revenue. The collections from the excise tax on automobiles actually exceeded those of the previous year by $8 million. I suggest that there is a lesson there to be learned by the Minister of Finance and by the government. A few more reductions in rate would not necessarily mean serious and crippling reductions in revenues. On the contrary they would assist the circulation of money and the expansion of business enterprise.
The Budget-Mr. Fleming
The third comment I wish to make concerning sales and excise tax relates to the report of the Carter committee. The minister made brief reference to this report in his budget speech a week ago tonight and paid very proper tribute to the worthy public service rendered by the members of this committee. The report itself came into the hands of hon. members only yesterday. That report has been in the hands of the minister and the government for weeks. Why was this important report virtually suppressed until now? I say it is typical of the attitude of the government. The minister had the report and the government had the report. It was obviously a report which required study. But in their view what does the House of Commons matter? Who are these troublesome people who call themselves members of parliament? Why should the government concern itself about such persons? Therefore they have kept the report virtually under lock and key and hon. members were not permitted until yesterday to receive copies of this report. I do not think that does justice either to the House of Commons or to the quality and importance of this report submitted to the government by public-spirited and competent men.
We have a new tax proposed in this budget, sir, a tax on advertising. Let it be understood by all that this is the government's proposal; it is not the proposal of any Canadian publisher. What is the fundamental and underlying purpose of this proposal? Like everything else in the budget it is anything but clear. It has been shrouded in fog just as the whole subject has been shrouded in secrecy until the minister made his announcement a week ago tonight, a secrecy which indeed invites the suspicion of hon. members.
Has the minister made clear the government's objectives in relation to this proposed tax? No, he has not. If the minister had come before the house and said something like this: "Concern has been expressed over the way in which the Canadian market has been deluged with a flood of American magazines and we are concerned that Canadians should be assured of Canadian magazine literature to read, so we are going to take effective steps across the board for this purpose," the situation might have been different. There would have been some rhyme and reason to that. That would have been an understandable objective.
But that is not what the government has done. Without any clear statement as to its purpose the government has chosen in this proposal to place a tax upon a particular type of magazine. It has not applied any form

The Budget-Mr. Fleming of restriction or imposed any burden upon the whole flood of United States magazines that enter the Canadian market and which are bought by interested Canadians in such large numbers. No, the government has chosen rather the discriminatory course of proposing a special tax upon a special group.
We do not like discriminatory taxes. There have been protests already from United States sources and there have been many Canadian protests. As was inevitable, there are some magazines which evidently were not within the thought of the minister when he proposed this tax and which are now pointing out that they are going to be affected by it. They are not among those which were referred to in the press or in the talk that went on around the corridors. Of such are magazines whose chief purpose is such as the dissemination of medical information, magazines edited by competent medical sources.


Mr. Harris:: I have had no intimation or indication of a magazine that I had not thought of.


Donald Methuen Fleming: The Budget-Mr. Fleming of high prosperity. This cult of imports, of which the government is a devotee, has certainly been now carried to its climax. In 1955 imports into Canada have reached an all time peak of $4,712 million. Let us remember that in 1955 Canada showed a total surplus of imports over exports of $360 million. That is the third year in a row that we have imported more than we have exported. In our trade with the United States, last year we imported $840 million more from the United States than we sold to the United States. That was an increase of 40 per cent over our import surplus in commodity trade with the United States in
1954.
Seventy-three per cent of our imports continue to come from the United States, and just 11 [DOT] 6 per cent from the United Kingdom. Sixty per cent of our exports are going to the United States; only 18 per cent to the United Kingdom. Our imports from the United States last year were up 20 per cent over 1954. The British Prime Minister has been pleading for a transfer of eight per cent of Canadian purchases from other sources to the United Kingdom to balance their trade with us.
We know that in consequence of these results, which have the full approval of the government and are created largely by its own policies, a current account deficit of $665 million was incurred in 1955 as compared with a current account deficit of $431 million in 1954. This deficit was increasing by leaps and bounds in the last quarter of
1955.
These facts and the growing domination of the Canadian economy by United States interests, which were reflected in them, are matters that ought to be engaging the serious concern of all Canadians. I should have liked to enlarge on the subject of economic domination of Canada by United States interests and trade, but I fear I shall have to leave that for another occasion.
Let me say in conclusion that this budget has been properly described in the Conservative amendment as a partisan budget. We have a repetition of the cycle in budgeting. This is the political cycle. We must wait for the year of elections for needed reductions in taxation. Meanwhile the government's policy is to soak the people and ignore their problems. It is the same old mentality so clearly revealed by the Minister of Trade and Commerce: "If we wanted to get away with it, who would stop us?" This government wants to get away with the policy of "soak the people and ignore their problems." It is the build-up for next

year, and one is left with a strong suspicion that there has been an unwarranted underestimate of revenue in this budget in the course of that build-up.
This is a cynical budget, and I say to you in my final words, sir, that this budget, with sickening features about it, as the Winnipeg Free Press has said, reveals the sickness and the infirmity and the decrepitude of this government. This government is suffering in expenditure from elephantiasis; where action is needed, it is suffering, and with it the Canadian people in consequence, from paralysis; to the voice of the Canadian people it is deaf; to its own responsibility to the Canadian people it is blind; and it suffers from a psychosis springing from its own delusions of grandeur, omniscience and infallibility.


Mr. Irvin Studer (Swift Current-Maple Creek):: Mr. Speaker, we appreciate your consideration in permitting us to be associated with other hon. members in this budget debate. The budget motion and the speech from the throne motion are two of the most important motions that any session of parliament considers. Around the activities involved in the budget and the speech from the throne all of the government revolves. The speech from the throne outlines the government's program and the budget advances its fulfilment. Of the two the budget is the more important because it includes provisions for taxation and the method of financing so that the policies that have been suggested by the government can be made effective. Without the budget the world of government would stop. The wheels would stop going around.
Included in the budget are the millions for health and social welfare all expended in this country, the millions for the dominion-provincial agreements, the millions for the necessary defence expenditures, the millions for national housing, the millions for veterans' benefits, the millions for farm loan operation, the guarantees on loans on wheat, floor prices on butter, hogs and eggs, Agricultural Prices Support Act expenditures, the payment of storage charges on grain, even the policing of the country, the operations of the experimental farms all contained in the budget. Because of the enormous expenditures contained therein and what is involved in the operations of government and the benefits to our people through the budget, I am sure that all parties in the House of Commons are going to support it.
If I were a member of one of the opposition parties I should not like to be in the position of having to go back home and say that I had voted against all these benefits for our

people, that I had voted to defeat the government so that none of these benefits would be possible. I suggest to the leaders of the opposition parties that they give their members a free vote so that they will not be held responsible by their electors and will not be blamed for endeavouring to destroy a government that has raised the national income over and above all expectations of anyone in Canada or anywhere in the world and has contributed to the greatest extent in history to the well-being of all our people.


Donald Methuen Fleming: Will the hon. member permit a question? Is there going to be a free vote on the government side?


Irvin William Studer: In connection with the budget I would hesitate to suggest-


Donald Methuen Fleming: I would think so.


Irvin William Studer: -that you should not support it.


Donald Methuen Fleming: Answer the question.


Irvin William Studer: The government has a responsibility that the opposition does not have. The government has responsibilities that the opposition do not have. There is nothing to prevent the opposition from supporting the government-


Donald Methuen Fleming: Except our conscience.


Irvin William Studer: -and I would suggest that when you have that responsibility you will be in a position to answer that question. However, you will never have that responsibility. In connection with the budget we hear about inflation. I do not know of any inflation in evidence anywhere that would not be in evidence if the socialists or the Social Crediters were in power because those two particular groups are willing to spend wealth before it is produced. I do not know of any deflation that is in existence, and if the Progressive Conservative party were in power there would be no deflation because there would be no wealth to spend.
Here we have the Liberal party which is the "flationist" party of Canada. "Flationist" means that the Liberal party maintains the balance, the equilibrium between the two extremes which makes it possible to govern the economy of the country in the best interests of all of our people. Therefore we are proud to be the "flationist" party. The people of the country can rest assured that as long as there is that balance between extremes which the people of the country know from experience is guaranteed by the government's progressive policies for Canada we will support the government. The policies of the government have created unlimited wealth and that wealth has been utilized in 67509-1681
The Budget-Mr. Studer the national interest. There has been economic advancement and that has been in evidence ever since we heard of a Liberal party in this country and will continue to be.
If I may digress for a minute, since the opening of the session we have heard a great deal in the House of Commons about who have been taking part in the debates on various proposals, and we on the Liberal side have been criticized for not taking part in debates on proposals advanced by the opposition parties who have no responsibility and will never have any because they will never have to introduce any of their proposals for which they will have to be responsible. We have been criticized because we have not taken part in various debates on propositions they have put forward for consideration in the house.	i
The reason I did not take part in the wheat loans debate was that I was waiting for the opposition to say something. They made 77 speeches and there was not a word in any of those speeches that I have not heard before and ever since I came to the house in 19491. They were all the same. They were no different from the speeches they made in 1951, 1952, 1953, 1954, and before that. Their speeches were all the same. I was hoping that possibly someone would say something that we could reply to, to which we had not already replied in years gone by.
We Liberals represent the people without continuous repetition and we obtain results. We Liberals do not speak often but when we do speak we convince the people. Why should we speak on opposition motions? Why should we speak on these members' motions? We did not invent them. We did not bring them, with their irresponsibility, before the House of Commons. We did not agree that those who did bring them before the house were representing the same line of thought out in the country that I, at least, represent or think I represent. We were elected to support the government, not to vote against it. The opposition were elected to oppose the government, but when they oppose beneficial motions brought before the house by the government they will have to answer to their people back home
I was particularly interested in remarks of the hon. member for Lethbridge (Mr. Black-more). He made some reference to Liberals who represented people in western Canada and said they were not fulfilling their duty when they did not make speeches. Not one of my people back home has asked me to vote for a Social Credit motion, resolution or amendment, but my people have told me to be on my guard against certain proposals

The Budget-*-Mr. Studer advanced for political reasons that would destroy the economy that has been built up in this country.
This may not sound just right, Mr. Speaker, but if there is any obection to it you will have to blame it on the fact that I spent a lot of my youth in Iowa pulling weeds out of the cornfields and perhaps that had an influence on me. In any event, back home on the farm there are three tools that we think are indispensable around the farm. One is a pair of pliers, another is a screwdriver and the third is a wrench. We save ourselves a great amount of trouble on the farm by carrying these three tools in our pockets, by tightening up screws if there are any screws loose, by tightening up wire if there are any haywire proposals or anything of that kind around the farm and also by tightening up any nuts that may be loose. My people told me to take these three tools with me to Ottawa because I might be confronted with the same thing down here in connection with some of the proposals that are advocated in the House of Commons.
We heard from the hon. member for Lethbridge in a speech the other day that what is financially impossible is physically impossible. That is what we heard from the hon. member for Lethbridge last week, that what is financially impossible is physically impossible. My people told me not to support that type of argument. They told me that I was elected to support the government, and I most certainly was not elected to support the Social Crediters who, the people back home tell me, are composed of a combination of Rosicrucians, Technocrats and Poujadists going throughout the country seeking the ruin of political souls. They told me not to support that group in our economy.
The people in Saskatchewan are asking me: How much is a weatherbeaten old socialist speech worth? The answer is that it is worth nothing. We have had the most humiliating experience in the House of Commons of having the socialists say to us, after having helped to bring about 77 speeches in the wheat loan debate: "Please, Liberals, make a speech. No one will believe what we are saying. We have no influence in the House of Commons. Will you Liberals please make a speech for us so that we can fulfil the promises we made back home when we told our people they should send us to the House of Commons if they wished to have benefits accrue to them."
So here we have them begging the Liberals to make a speech for them. They made 77 speeches in one debate, with what result? Nothing. The result was nothing. Zero, zero was the result of their 77 speeches. The

Liberals, without having to make one speech in this House of Commons, made it possible to grant to the farmers $32 million on their wheat. The opposition have no influence and there are no results. No one believes them. Go back home and tell your people that you have absolutely no influence in this House of Commons. I think the hon. member for Selkirk (Mr. Bryce) in his constituency is in trouble or the farmers possibly are. But if I were the hon. member for Selkirk I would go back home to my people out in Selkirk and tell them that I have no influence in the House of Commons, that I have been making these speeches ever since I have been here, and please send somebody down that will have some influence. We have had good representation from Selkirk during previous sessions. Let them just go home and tell the people they were fooling them and to send people down here that will bring results for them such as we had between 1949 and 1953 when the farmers had the best conditions they ever had and when there were the smallest number of socialists here in this House of Commons. The proof that they have no influence, the proof that they are only speaking for 2J per cent of the people is in the fact that they have told us a hundred times in this House of Commons that they were representing the farmers of western Canada in connection with those bank loans to farmers. Were they? We did not think so. We thought they were merely representing the socialists. We are more sure about it than we ever were because only last week in the Saskatchewan legislature there was before it a resolution which provided for cash advances on farm-stored grain to be made effective when the advisory committee of the wheat board recommends it. That was the amendment in the Saskatchewan legislature by the Liberals to the original motion of the government censuring the federal government on account of the bank loan bill. What happened on this amendment that it become effective when the advisory board recommends it?


Alfred Claude Ellis: Read the resolution first.


Irvin William Studer: The resolution reads as follows:
That this assembly, recognizing that the federal government guaranteed bank loan scheme Is inadequate to meet the serious financial crisis now confronting the western grain farmer and the entire prairie economy, deplores the failure of the federal government to provide a prepayment on the initial price of grain in the form of a cash advance on farm-stored grain.
And the amendment by the Liberals reads as follows:
approves the policy of marketing grain through the Canadian wheat board goes on record as

supporting cash advances on farm-stored grain, if and when this policy change is requested by the advisory committee of the wheat board.
That was the amendment. What happened? Every one of the socialist members in Saskatchewan-the socialist mice in Saskatchewan-voted against this recommendation that was to be accepted on behalf of the advisory committee representing all of the farmers of western Canada. The advisory committee consists of the following gentlemen: W. J. Parker, president of the Manitoba pool; J. H. Wesson, president of the Saskatchewan pool; Ben Plumer, president of the Alberta pool; J. E. Brownlee, president of the united grain growers; C. E. Hansen, president of the Saskatchewan farmers union and Roy Marler, president of the Alberta federation of agriculture. So the emphasis has been given to what the Liberals have held, namely that advances to farmers on approved farm-stored grain were not asked for by the farmers and those representing the farmers of western Canada. So that is why those people did not have any influence here in the House of Commons. Therefore I would suggest that they improve their technique, that they either send representatives here that the people of Canada can have confidence in or govern themselves accordingly and tell their people, as they should tell them: We Socialists have not been in a position to obtain any results for you so it is useless to send us back to parliament in Ottawa. They come down here, as we say in the west, just to shoot the breeze. They get elected by reading the Saskatchewan socialist Commonwealth but when they get in the House of Commons they begin to read the stock market page in the Financial Times. They are the biggest phonies-if you will excuse the expression, Mr. Speaker,-in all history. The farmers are going to remember that every socialist that has made a speech in this House of Commons has punished the farmers as a result of his being here.
My duty is to represent the non-socialist farmers of western Canada. A strange thing has happened in western Canada. X represent the non-socialist farmers. The strange thing that has happened is that all the socialist farmers are now rich farmers. They have accumulated all the land. There is not even any land left for the veterans who wish to establish themselves in Saskatchewan. Every socialist in Saskatchewan and every socialist in this house has bettered his position 100 per cent since he has been here and since this Liberal government has been in existence. There was a time out in Saskatchewan when you heard of the proletariat, the landless people. They were supposed to be the socialists. Now we hear of the bourgeoisie
The Budget-Mr. Studer out in Saskatchewan and they are the socialists. Now we have the most buoyant economy in all history but agriculture is not enjoying the same standard of living.


An hon. Member:: Why not?


Irvin William Studer: On account of the socialist government in Saskatchewan taxing them. After all, it would not matter whether you gave them a billion dollars tomorrow morning in Saskatchewan, Mr. Speaker. There would just be a $1 billion increase in taxation the next day. That is the way it operates. You cannot control or operate a socialistic economy for the very reason that I mentioned at the beginning. They are always spending wealth before it is created. They have good policies for spending wealth but absolutely none to create it. If they have any, I wish they would outline them to us some day, if they have time. I wish they would tell us just what the socialist countries are doing in the world and have done since they have ever been heard of to create additional wealth or any type of wealth that would be of benefit to the people. All the socialists are interested in is destroying wealth. Anyone who has wealth is an enemy to a socialist. Their idea is to bring the wealthy man down to the level of the poor man so that the socialists can control and govern his economy. In no country in the world have the poor people ever been able to rise from that burden of carrying socialism on their backs. Here at least we in Canada have a buoyant economy. We can provide wealth for all the people and bring the poorer people up to a higher level. Under their system, you bring those on the higher levels down to the lower level and create no alternative thereto.


An hon. Member:: Margarine instead of butter.


Irvin William Studer: I appreciate the government assistance we have received of $32 million on account of excess wheat storage. But that amounts to only half a month's wages to the average farmer out in western Canada. So lest anyone think that is the solution to all of our problems, let me say this. Some of the troubles are local but some of them-and we hear this even from the mouths of the socialists-are ungovernable as far as Canada is concerned in the world upon which our economy depends. The most striking thing to all the people of the world is how far Canada has advanced in spite of the abnormal, overwhelming situation where we are dependent on other countries of the world for our very existence through our exports. No country in the world has made a greater contribution in producing things than have the people of Canada, including the farmers. The

The Budget-Mr. Studer first thing we need is that the wheat move into the channels of trade. Nothing should be left undone anywhere by any department of government, the wheat board, the railways or individuals wherever they are connected with the determination of the movement of wheat. Nothing should be left undone to the end that some money will be in the hands of the farmers this coming spring by means of which they may finance their spring operations. Nothing should be left undone to see that the organizations allocate their grain orders to the various elevator companies in Saskatchewan on an equal basis as much as possible so that all can avail themselves of some of the financing, and so that it may be fairly done. Nothing should be left undone. While we are talking about box cars, let me say that some of the socialists try to make political capital out of something which may not be in existence six months from now.
We do not want to forget some of the big things regarding the future of farming in western Canada. I think one of the greatest is the international wheat agreement. I for one sincerely hope that the future will produce an international wheat agreement under which all the countries of the world, including the exporters and the importers, will agree to a price for that wheat that will make it possible for the people of western Canada, and the people of all of Canada, to produce that wheat in unlimited quantities without any shackles placed upon them through any limitations in regard to the establishment of parity prices, which immediately involve controls, not only of acreage but also of the number of farmers. Even some of the wise men of western Canada will agree with that.
Mr. Bobier, vice-president of the wheat pool, in speaking to the select committee of the Saskatchewan legislature a little more than a week ago said that the initial price on wheat of $1.40 at the lakehead works out to about 70 per cent to 75 per cent of parity. He went on to say that if 100 per cent of parity were established they would have to control production to prevent growers from going wild in production. Mr. Hannam, of the Canadian federation of agriculture, had something to say in regard to parity. We all want the equivalent of parity. If it is not called that, it should be. Who should pay the parity? Should it be the consumer, or should it be the people of Canada, including the farmers? After all, if you establish parity you have added not one thing to the national wealth. You merely distribute the wealth that there is in the country. Therefore, I say the international wheat agreement is the most important document that we can ever devise in the whole world. It convinces the consumer that the farmer should have a parity

price, not paid for by himself in his own country but by the individual who consumes the wheat. We are striving for that to increase the national wealth of Canada. That is why it is so important. In my opinion, the important thing is to have the equivalent paid by the people who eat the product. That is what we wish to have in western Canada. We farmers pay a parity price for everything used in production. The consumers throughout the whole world should pay. Eighty per cent of our production goes to the whole world. That is so important. It is important that our representatives over in Europe should continue their negotiations for an international wheat agreement so that the farmers and all the people of Canada may be able to live as they should live and so they may have the equivalent of a parity price structure. If we get that, then we shall be able to continue to feed all the people of the world and we shall be able to continue the vocation that we have adopted as producers for the betterment of mankind.
Mr. Hannam, president of the Canadian federation of agriculture, said that if we adopted parity:
We would lose our United States market for beef and pork.
Incidentally, if we adopted 75 per cent of parity we would find that the prices of all of our products are above that percentage with the exception of rye and beef. Immediately, all these prices would have to come down if we were to establish parity so that they would not be above the 75 per cent.
As Mr. Hannam mentions, it would be impossible to sell our commodities in the United States. He said:
Unless we put on an embargo against United States beef and pork, they would swamp our market.
That, of course, is logical. That is why our hog prices were established at a floor of 23 cents. Mr. Hannam went on to say:
We would compromise our whole case in the eyes of the world-because Canada has been a key supporter of freer trade.
Freer trade has been in existence in Canada because this government has reduced tariffs by nearly 40 per cent in the past decade, and it has continued doing so, and is again doing so in this budget.
Mr. Hannam went on to say:
We could not avoid complete government control and regimentation of agriculture-even to production and acreage controls.
Some hon. members say that they do not believe him, but you cannot deny economics. Mr. Hannam went on to say:
It would lead inevitably I believe, to more regimentation than our Canadian farmers would be willing to accept.

Everyone knows these things. He went on to point out some of the other pitfalls that we would fall into. Everyone knows these things except people who do not study economics. The people who are in that position just pick up discarded policies that have been thrown away throughout the world, policies that were never workable anyway, except through national support such as they have in the United States, which will eventually have to be discarded. There is no possibility of the Canadian people pulling themselves up by their bootstraps to make such a policy workable. That is why all the people of the world have to be convinced of the crying need of the farmers and that we must have a price to enable us to live, if you would care to call it that. They need such a method to make it workable and to make it possible to have a system that is not so complicated that it will defeat itself in the end. Therefore, the government is concentrating on the farmer's position.
One hears much about the national wealth and what we are to do about it. How are we to create a system that will see that all classes get their share of the national wealth? I do not know of anyone who does not think that he is getting less of the national wealth than he is entitled to. I do not know of any particular industry, occupation, or vocation that does not think along that line, human nature being what it is. Everyone thinks that the other person is better off than he is. One thing you can be sure of, and that is that the farmer is going to demand his fair share of the national wealth. Many things are needed in western Canada, but we have gone without them. I have been living on my farm for 40 years. This fall electricity came into my yard for the first time in those 40 years. The socialist government is advancing the policy established by the Liberal government many years ago in setting up a power corporation. We are responsible for putting that pole in my yard, but it cost me $580, and that is a lot of money in any man's country, especially when we are in the position that the socialists say we are in, in western Canada. The Liberals of Manitoba put in electricity for very much less and are charging half as much as we are charged in Saskatchewan for power, but perhaps that will be overcome in a year or so. Also, out in Saskatchewan no farmers are driving Cadillacs. There is not one in a thousand. There are only 12 modern homes in a thousand in southwestern Saskatchewan. Only one farmer in 10,000 in Saskatchewan takes a trip to Florida, and that was one who went because the doctor told him he had to go. Most of our troubles have been on
Private Bills
account of crop failures, and there is no compensation anywhere for lack of crops. There is no one in the world who should have a higher share of the national wealth than the producer. We now have economic commissions all over the country. Every university has its professor of economics. I think we should have a minister of economics in our government. At the same time he could be an economy minister. I think it would be all to the good because you would have someone to co-ordinate matters of production, preservation and distribution, the economy of our country in the future. I think the most important minister in any government in any country would be a minister of economics.


Mr. Small:: Better than the Minister of Trade and Commerce?


Irvin William Studer: I do not know where you would ever find a better man.


The Acting Speaker (Mr. Applewhaile):: Order. I hate to interrupt the hon. member, but it is after five o'clock. I do not think the hon. member means that he wishes to adjourn the debate.
The house will undertake consideration of private and public bills.



PRIVATE BILLS


Mr. John Hunter (Parkdale) moved: the second reading of Bill No. 209, respecting the pension fund society of the Dominion Bank.


Edward George McCullough: Will the hon. member explain the purpose of this bill?


John William Gordon Hunter: The sole and simple purpose of this bill is to change the name of the society from "The Pension Fund Society of the Dominion Bank" to "The Pension Fund Society of the Toronto-Dominion Bank". Although the explanatory notes explain the reason for this desired change of name, it may be useful to give some further information.
The Bank of Toronto and the Dominion Bank were amalgamated under the provisions of the Bank Act and became the Toronto-Dominion Bank, effective February 1, 1955. Both banks had pension funds, that of the Dominion Bank was administered through the pension fund society of the Dominion Bank, and that of the Bank of Toronto through trustees.
Following the bank amalgamation, it was naturally desirable to amalgamate the two pension funds and full authority for this action was contained in a schedule to the amalgamation agreement which, under the

Private Bills
Bank Aet, has the force of law. After full consideration, it was considered that the society was the more convenient vehicle for the amalgamated fund and all necessary steps have been completed to vest the fund of the former Bank of Toronto in the society.
New by-laws governing the amalgamated pension fund have been prepared and approved by the income tax authorities and are in operation as of November 1, 1955. These by-laws, in which the best features of the rules covering the two former pension funds have been incorporated, have been authorized by the board of directors of the Toronto-Dominion Bank. They were also approved and adopted at a special general meeting of the members of the amalgamated fund held at the head office of the bank on Friday, February 17, 1956.
The action of the society in applying for this bill to have its name changed to a name which is now more appropriate to the circumstances was approved at a meeting of the board of directors of the society held on January 25, 1956, and subsequently by a unanimous vote of the special general meeting of the members of the society held on February 17, 1956, referred to above.
This society was incorporated in 1887 by a special act of the parliament of Canada, being chapter 55 of the statutes of that year, and that statute received a minor amendment in 1899 by chapter 112 of the statutes of that year.
Notice of the intention of the society to make application to parliament as above has been advertised in four issues of the Canada Gazette commencing on the 7th day of January, 1956, and is being advertised once per week for four weeks in the Globe and Mail commencing on the 17th day of February, 1956. No indication of any objection on the part of any member of the society or any member of the public has come to the attention of the society or the bank.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on banking and commerce.

[Stage Direction]
The house resumed, from Friday, March 23, consideration of the motion of Mr. Richardson for the second reading of Bill No. 166, to incorporate the Signature Loan and Finance Company, and the amendment thereto of Mr. Ellis.
Mr. Erharl Regier (Burnaby-Coquillam):: Mr. Speaker, in this bill we are asked to give approval to the formation of another finance company in Canada. I see no need
TMr. Hunter.]
for another finance company in Canada and therefore I am unwilling to lend my support to the passage of the bill.
We have just heard in another debate a windy harangue from the hon. member who represents the constituency of Maple Creek-Swift Current (Mr. Studer) and I notice that he has often complained in this house to the effect that in his opinion the only people in Canada who are worth while are those engaged in producing something useful. His claim, of course, is that socialists are not producers and therefore do not serve a useful purpose. I would like to see him take part in this debate and convince us that finance companies are producers or that they even serve a useful purpose in Canada.
Since the hon. member sits on the Liberal side of the house and waxes very enthusiastic on behalf of the Liberal cause, I take it that he is quite prepared to support the bill before us. I shall therefore be keenly interested in hearing him prove to us how this proposed Signature Loan and Finance Company is going to add one iota to the production of Canada and-


Irvin William Studer: Mr. Speaker, I can answer that right now.


Erhart Regier: Mr. Speaker,-


Hazen Robert Argue: Close the barn door.


Erhart Regier: Mr. Speaker, I am inviting the hon. member to make his own speech. I can assure him that I will resume my seat in plenty of time in order to provide him with 40 minutes in which to prove to me how the formation of this company will add another bushel of wheat, another pound of pork or beef or whatever he wishes to see produced, to the economy of Canada. The hon. member complained that he had to spend about $500 and I am very glad that it was through the efforts of the C.C.F. that the electricity finally arrived at his farm.


Irvin William Studer: It was $550.


Erhart Regier: He complained that he had to pay $500. I hope he did not have to go to a finance company to get that $500.


Irvin William Studer: I certainly could not get it from the Saskatchewan government.


Erhart Regier: I suggest that he could have got it from the Saskatchewan government and repaid it over a number of years at an interest rate which I am given to understand is set at about 4 or 5 per cent-


Irvin William Studer: That is not true.
Mr Regier: -and not 24 per cent.


Irvin William Studer: That is not true.


Erhart Regier: Mr. Speaker, could I have a little order.


The Acting Speaker (Mr. Applewhaile):: Order. I think I should point out to the house that it is legally impossible for two hon. members to have the floor at the same time.


Irvin William Studer: Yes. Why doesn't he sit down?


The Acting Speaker (Mr. Applewhaile):: The
hon. member for Burnaby-Coquitlam.


Erhart Regier: Mr. Speaker, as I was saying, I do not like these finance companies to exist at all. They bleed the Canadian people with interest rates of 24 per cent. I was only pointing out to the house that under a socialist administration arrangements are such that when people must borrow money it can be borrowed and repaid over a reasonable period of years at interest rates of 4 or 5 per cent.


Irvin William Studer: That is a naked lie.


Erhart Regier: That is the attitude we take towards the needs of the people. I am told that in Alberta the rate is 3J per cent. I think the Saskatchewan government, not having the hundreds of millions of dollars in oil royalties of the Alberta government, on a relative scale has a more favourable rate than the government of Alberta which charges as high as 3J per cent. With the several hundreds of millions of dollars they have they are not sure of what they should be doing.


An hon. Member:: They are sure.


Erhart Regier: It has been suggested that we should allow this bill to go through because the people who make up this company should be given equal rights. When something is plaguing me I do not believe in granting equal rights and in welcoming other things of a similar nature to plague me. I do not think the Canadian people would like to see equal rights extended to parasites. We want to see them eliminated. We do not want to see all the people of Canada become victims of this type of racketeering.
I was extremely interested in reading the comments made the other day by the sponsor of the bill, the hon. member for St. Lawrence-St. George (Mr. Richardson), as found on page 2582 of Hansard. I have met him on only a few occasions and I think he is one of the most honourable members of this house. I notice that in his remarks he admits che possibility that the people who have to borrow money from finance companies are unfortunate and I would like to compliment him on that attitude. Since he is a member of the legal profession I assume that he is connected with finance companies only in the process of engaging in his occupation as a lawyer. I do not think of his own volition 67509-169
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he would have a hand in these things in any way, shape or form. I gather that from his statement to the effect that he thinks the people who must use these companies are unfortunate. He did say, however, that the majority of the directors of any such companies must be Canadian citizens. He said:
The overriding Loan Companies Act states that the administration of all these companies, including small loans companies, must be only by the board of directors, the majority of whom, as I have said, must be Canadian citizens and residents.
He again comes to the same subject when a little further on he says:
There are to be five directors, the majority of whom will be Canadian citizens and residents.
That is made to sound as if we might after all be dealing with a Canadian firm. I was pleased to find in the same paragraph as the last quotation that the hon. member made a certain admission because I intended to ask him about it. He says:
-may I say that the sponsor of the bill is the Merchants Acceptance Corporation, which has carried on business in the New England states since 1909.
In other words, the hon. member admits that the real owner of the company is this United States organization. I am glad he has supplied us with that information because one of the main issues I intended to raise was that we really do not know who is asking us to authorize the incorporation of this finance company. The hon. member goes on to say:
This indicates that the person, unfortunately if you will, who needs to borrow $100, $150, $200 or $300, can go to this company for such loan on the basis of his personal character and financial integrity as represented by his signature, and as in the case of all of us that would be his warrant for such a loan. That is the explanation of this bill.
I think the hon. member meant to say that that was the explanation for the name that the company has selected. I have no reason to say that the hon. member did not know what he was talking about when he made that statement, but I venture to predict that the Signature Loan and Finance Company, if and when it operates in Canada, will operate much along the lines that other finance companies follow. I have yet to find a finance company in Canada which will lend money on a signature only. They take security in the form of a chattel mortgage or they have the unwritten power to garnishee your wages if you are a wage earner. In the case of a married man all companies insist that the wife as well sign the note. I do not know whether they register these chattel mortgages, but that is their concern. However, I do know that chattel mortgages are widely accepted. I doubt very much the statement that this company is intending to make loans on signatures

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only without any other security. The only organizations in Canada that I know of that do that are the credit unions and there are special reasons why they are able to make loans on the basis of signatures only. The hon. member goes on to say, and I quote from page 2583 of Hansard, as follows:
This is not by any manner or means a Liberal measure, a Conservative measure, a Social Credit measure or a C.C.F. measure.
The hon. member is absolutely right when he says that this is not a C.C.F. measure because we intend to oppose this legislation to the best of our ability. I think the hon. member is a little over optimistic in saying that this is not a Liberal measure because when the votes are called I think I can safely predict that there will not be a Liberal member who will vote against this bill. After all, it might be slightly risky for a Liberal member to vote against this bill when it is realized that one of the provisional directors is no less than the president of the National Liberal Federation of Canada. I doubt very much whether any of them are going to have the temerity to so affront their national president.
There is another sentence I should like to consider for a moment, to be found in the same paragraph as the previous quotation. Apparently referring to the Small Loans Act, the hon. member had this to say:
-the act of 1939 invites people to come here and-
I doubt the accuracy of that statement. I do not find any invitation in the Small Loans Act to anyone to come here to do business as a finance company. The Small Loans Act was enabling legislation, it was not an invitation. The existence of such legislation might seem like an invitation to the hungry wolves who would like to prey upon the difficult financial situations into which our citizens sometimes get themselves; but to respectable people, to those who are producers, to those who serve in our society I do not think the existence of the act would be considered an invitation or should be looked upon as an invitation. The concluding sentence in that paragraph reads:
People in all parts of the world are being urged to enter our favourable economic climate, and it is no wonder that they want to come to Canada. They feel that they want to do business here.
This is one type of business that we in Canada can well do without. I do not think the Canadian people are inviting them. I can understand that they may want to do business here because they see the loopholes which the Liberal government has left to permit people being rooked with rates of interest of 24 per cent and more.

When I am asked to endorse the passage of a bill like this I like to look to see who is doing the asking. On looking at the bill I find the names of two citizens of the United States of America, Edward James MacDermott and Charles Thomas MacDermott, Jr., both of the city of Worcester in the state of Massachusetts. I know nothing about these and can only assume that they are the owners of Merchants Acceptance Corporation, to which I referred previously. The hon. member stated that the majority of the board of directors and the management must be Canadians who are resident in Canada, so I find three other names, Duncan Kenneth MacTavish, Ronald Charles Merriam and George Perley-Robert-son. Naturally I wondered who those gentlemen might be. I have been unable to find anything about Ronald Charles Merriam and George Perley-Robertson, except that they are solicitors in the city of Ottawa.
On looking at the latest copy of the Canadian "Who's Who" I find that Duncan Kenneth MacTavish is a citizen of considerable note, and when he asks us for the right to pluck the Canadian people at interest rates of 24 per cent and more I think we should have a look at who he is and see whether he is worthy of the confidence of this house. Reading from page 673 of volume VI, 195254, I find that Duncan Kenneth MacTavish, O.B.E., Q.C., was born in Ottawa, Ontario, 56 years ago, the son of Judge Duncan Byron and Flora. He was educated at Queen's University and graduated from Osgoode Hall Law School and is a partner in the firm of Gowling, MacTavish, Osborne and Henderson. He is secretary and director of Pitney-Bowes Company of Canada Limited; vice-president and director of British American Bank Note Company Limited; director of R. L. Crain Limited; Holden Manufacturing Company Limited; Holt Renfrew and Company Limited; the Southam Company Limited.
I suppose we can expect the Ottawa Citizen, which is owned by the Southam Company, to come out with an editorial saying that parliament ought to pass this bill. He is a director of the Ottawa Valley Trust Company, Wallace Realty Company Limited, Imperial Realty Company Limited and Red Rock of Canada Limited, whatever that is. He is president and director of Ottawa Car and Aircraft Limited; he might have some defence contracts there. He is a director of the Personal Finance Company of Canada. I cannot for the life of me understand why he wants to organize an opposition to his own finance company, but he may be a patriotic citizen and think that a little competition for the Personal Finance Company would be a good thing.

He is on the board of directors of the Associated Screen News Limited. He is a member of the board of governors of Ashbury College and trustee of Queen's University. I suppose that university students would be good clients for this finance company. He is a member of the national capital planning commission. He has been elected president of the National Liberal Federation. I suppose that, if the company will make the fortunes that other finance companies have been making, the donation to the Liberal election fund will be a very handsome one.
He read law with Colonel A. T. Thompson and E. F. Burritt, Ottawa; he was called to the bar of Ontario in 1926 and the bar of British Columbia in 1950. He was made a K.C. in 1937. He is in an organization called Zeta Psi; I do not know what that is. He is a Liberal and he is a Presbyterian. I did not think that Presbyterians allowed any church members to be on the board of directors of a finance company. However, be that as it may, for his recreation he plays golf. He belongs to the Rideau Club, the Country Club and the Royal Ottawa Golf Club. He has a home-incidentally, I do not know when he has time to go home, but he has a home-at Thorold road, Rockcliffe, Ottawa. He has an office at 88 Metcalfe street, Ottawa.
After reading that amazing list, I just wondered what his occupation might be, and so I had to take the supplement. I am rather fussy about these people who receive the right to take out of the pockets of Canadian citizens these exorbitant rates of interest, and therefore I think I should pay some attention to who they are. I find in the directory which is a supplement to this "Who's Who" that among the many occupations he lists himself as being engaged in law. I do not know where this man is going to find time to administer another finance company. I am very suspicious that the two Americans named are the ones who are going to operate this finance company and that any Canadians who might be on the board will be on it only in a very nominal manner in order to comply with the provisions of the act, which says that, out of a board of five, at least three must be Canadian citizens and residents in Canada.
Unlike the hon. member for Swift Current-Maple Creek (Mr. Studer), who says that the socialists exercise no influence in Canada, I feel that the socialists exercise a tremendous influence. A year ago this whole subject of these finance companies was first raised in this house by the hon. member for Assini-boia (Mr. Argue). In the issue of Saturday Night for March 17, 1956, there is an article 67509-169i
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headed "Tightening Up on Small Loans" by Logan MacLean, which is very well written indeed. He makes the following statement in relation to my argument that not another finance company is needed:
Licensed lenders at the end of 1954 had some $219 million of loans outstanding, including $88 million of less than $500.
We raised the issue last year, and we got such an excellent reception from one end of Canada to the other that this year the minister himself has seen fit to make some moves in the right direction. 1 am not permitted at this time to discuss Bill No. 51. However, when the hon. member says that we serve no useful purpose in our protestations, I want to say that in this instance, with this bill and other bills like it, I think we have served a very useful purpose. The article in Saturday Night shows that the interest rates on $1,200 for 12 months will have been reduced from $156 to $109.50, or a saving of approximately one-third. Taking the figures of the loans outstanding now, I think the C.C.F. is responsible for saving the people of Canada in interest alone, with even the limited measure of reform that we are getting this year, a sum in excess of $1 million each and every year henceforth.


An hon. Member:: Don't let your imagination run wild.


Erhart Regier: Someone says not to let my imagination run wild. I might say that, if it were not for the C.C.F. members in this house, the imagination of the many sleeping members of the Liberal party would run very wild indeed.


Some hon. Members:: Oh!


Erhart Regier: I have said what I want to say, Mr. Speaker. I do feel that the hon. member who has volunteered to be the sponsor of this bill is personally in no way to blame. I feel very resentful that the president of the largest political movement in Canada should associate his name in any active role at all with finance companies, and particularly with the formation of additional leeches on the Canadian people. I want to register my opposition all the way along the line to the formation of another finance company.


Mr. Roland Michener (St. Paul's):: Mr. Speaker, this is a motion for second reading of Bill H-5 from the other place, and I understand it is to be referred to the banking and commerce committee. The petitioners whose names are given in the bill, Edward James MacDermott and Charles Thomas MacDer-mott, Jr., both of the city of Worcester in the state of Massachusetts, Duncan Kenneth MacTavish, Ronald Charles Merriam and

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George Perley-Robertson, of Ottawa, and others, have brought forth a bill which, as has been explained by the sponsor, is in proper form. In supplicating parliament for incorporation by this method, they are not only following the approved method but are within their rights in every respect. The question is, then, how the matter should properly be dealt with in this house.
The merits of the case, as I see them, should be dealt with after the petitioners have had the opportunity of presenting those merits to the banking and commerce committee. If we were to attempt to prejudge the issue here on second reading and, as has been suggested, defeat what is brought forward in proper form and in accordance with proper rights, then we would in effect be making our decision before hearing the evidence, which I am sure no fair-minded member of the house would wish to do. It would be like what, I am told, has sometimes been done by an inexperienced magistrate. Coming to a conclusion after hearing a plaintiff and being advised that he could hot render his judgment at that time, he heard the defendant and then decided the case in the opposite way. We will have an opportunity, to which I for one will look forward, of hearing these petitioners present their case. I look forward to it because I should like to know what the case is for further use of United States capital in the small loan business in Canada. That is an issue which might be debated but I submit it would probably be better debated after we have heard the purposes advanced by the petitioners. We could, I suppose, spend considerable time debating the whole question of small loans, interest rates and collateral issues that are before parliament in other ways, but that does not strike me as being a useful expenditure of our time at this stage. We could debate the narrower question of whether there are enough companies in the small loans field now, but I submit that would be better debated after we have heard the petitioners.
A bill of this kind is not a government measure but is brought forward in the ordinary course of the rights of a citizen to petition parliament for incorporation, and therefore it seems to me that the only proper course to follow is to let the bill go forward to the banking and commerce committee where we shall hear the petitioners. As I say, I look forward to hearing these particular petitioners because their names and places of residence arouse an interest which I am sure evokes a full inquiry as to the purposes and merits of the proposition which they will then ask parliament to accept.


Edward George McCullough: Mr. Speaker, I want to add my voice to those who have expressed their opposition to the incorporation of another small loans company. I think that in Canada we have had enough of the kind of treatment that forces poor people in unusual circumstances to go to these loan sharks incorporated under charters similar to the one proposed in this legislation which we are now discussing. The first and most lasting education I got in Sunday school comes from something that I recall most vividly, the picture of Jesus driving the moneychangers out of the temple. From biblical times right down to the present day methods have been followed throughout the centuries by which our common people, our little people, have been exploited by another class regardless of whether or not that class was a minority.
Under charters of this type individuals are given the right to prey upon people of this dominion when they are most in need of a better form of assistance. I want to join with others who supported the hon. member for Assiniboia (Mr. Argue) when he first brought before the house a year ago any active opposition to this type of company. Since that time there has been more recognition throughout Canada of the fact that many of our people with small incomes, people who are in the most straitened circumstances, have to go to companies with such charters as the one being sought at this time. While our group may be small, while our influence may not have spread sufficiently throughout Canada to bring about widespread opposition to this sort of thing, I am quite sure it has been effective in moulding public opinion with regard to the fact that a rate of interest of 24 per cent is much too high to charge people at any time but more particularly when they are in dire need. I support the hon. member for Assiniboia and other members of the house, not only of this party, who are prepared to get up and try to bring to the attention of the government that we need a different type of legislation in order to meet the requirement for loans of people who are in dire need.
Contrary to what the hon. member for Swift Current-Maple Creek (Mr. Studer) said earlier this afternoon, in my opinion this party is having a tremendous influence on the thinking of people throughout Canada, and while we do not win every victory we are still prepared to get up and say what we think. I believe that in this instance we have something on which public opinion in Canada should be focused. I am not against any particular company. I am against the principle of anybody having to pay 24 per cent interest

on any type of loan and more particularly when they are in dire circumstances.
By way of argument, I suppose, against the views put forward by the hon. member for Assiniboia and others in the house against the present practice, certain loan companies have undertaken to put up a defence. I have here a little pamphlet issued by the Niagara Finance Company Limited. It is very interesting from the point of view of what they have to say in support of their argument and the methods they follow in making loans to people. In the foreword to the little booklet they say:
Reputable lenders-
They take it upon themselves to say they are reputable. I suppose that is because they have a charter and therefore they feel they are reputable. I do not think that sort of statement would be swallowed by all of us. I do not want to attack them personally but I certainly attack them on the matter of principle. I do not think it is reputable for anybody to demand that poor people pay 24 per cent interest. The foreword has this to say:
Reputable lenders, such as Niagara Finance, have hundreds of unsolicited testimonials that tell the real story of the value of the lender to his community. Sometimes the stories are poignant, sometimes amusing, often they leave us with a real sense of satisfaction.
I suggest that the greatest satisfaction these companies get is from their interest charges. In my opinion the most significant testimonials will come from people who have bought on time, had to go to a loan company to get a short term loan and finally have lost their furniture, their home, their equity in whatever they may have bought. The foreword goes on to say:
On the other hand, our industry has been the target for unjustified criticism by uninformed people who have never felt the need for. nor used, the service provided by companies such as ours.
Again I want to say that I do not think the criticism against this type of lending, launched particularly by members of this group, is unjustified. I question too that the criticism is uninformed. I do not think you need to have been in the position of obtaining a loan from one of these companies in order to understand what the effects are in the case of many of the people who obtain these loans. It is just as silly as to say that you have to be a hen in order to know how to boil an egg. The pamphlet then proceeds to try to describe why people borrow, and I think this is significant. It has this to say:
Frequently, when families are faced with emergencies requiring ready money (illness, accidents, expensive repair bills for cars or homes, taxes, etc.), they find it necessary to reduce payments for such outstanding bills to smaller, more easily handled amounts.
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I suggest it is a pretty facetious argument to suggest that if people take their bills, go to one of these loan companies and agree to pay 24 per cent, it will be any easier for them to repay what they owe and take care of their indebtedness. On the contrary, I suggest that such people are perhaps pledging their future to these companies and will be in direr straits than ever. The pamphlet goes on to say:
The unvarnished truth is that people want to keep their credit intact and pay promptly. If they do not pay promptly then there is a penalty exacted from them . . . worry! Doctors in candid moments say it's more harmful than tuberculosis, the common cold or any other infectious or contagious disease.
Again, what a silly argument to make! If there is any worry involved it arises when people find themselves in the position of having to go to one of these companies to obtain a loan as a result of which they know that when they get their pay cheque they are going to have to make a payment month by month on the loan and if they do not pay there will be a severe penalty. They know that they are faced with a situation where they are going to have to pay 24 per cent interest. So rather than being of any assistance to them, again if the doctors' statements are true that worry is one of the worst things facing people, these companies certainly add to that sort of condition.
Here is a very important matter. This company in particular goes out of its way to attack what, in their opinion, is one of the more important types of organization we have in this country, namely the credit union. Here they say:
Credit Unions . . . Such organizations are often formed in large plants, factories, or among social or community groups. They have the advantage of being run by the members, and their administration and other costs are therefore low. They contribute virtually nothing to the public treasury. They have comparatively no taxes to pay. They do not lend to the general public; they exist to serve their own membership. Be careful not to overlook the fact that operations of credit unions must be restricted to groups with close "community of interests". They can offer low rates of charge only because they are tax-free, can use voluntary staff and usually have rent-free or very low-rent accommodation.
Mr. Speaker, I have had some experience with credit unions because in the province of Saskatchewan we have perhaps more than there are in any other province in the Dominion of Canada. I think it would be interesting to the members of this house-


Mr. Richardson:: Mr. Speaker, I rise on a point of order. I am normally a patient man, as I think are most of the hon. members here. One does not mind remarks that are relevant to the issue. But when we are dealing with

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credit unions specifically, is that not getting a little bit far away from this bill that has been presented here?


Edward George McCullough: Mr. Speaker, I do not think that the hon. member has a point of order. Here is a pamphlet put out by a company which is incorporated under a charter of the type which we are discussing. They made an attack on certain institutions in this country-


Claude Sartoris Richardson: Mr. Speaker, I rise on another point of order.


Mr. Speaker:: Before the hon. member for St. Lawrence-St. George (Mr. Richardson) discusses the point of order further, may I suggest that the hon. member for Moose Mountain (Mr. McCullough) get a chance to explain.


Edward George McCullough: Mr. Speaker, we are here discussing whether or not it is advisable for this house to give the right of incorporation to another small loans company. I submit that the arguments pro or con, in favour of or against that argument, are relevant to this discussion. I am trying to place before the house a pamphlet put out by one of these companies as an argument that the existence of certain companies-


Claude Sartoris Richardson: Mr. Speaker, I rise on another point of order.


Mr. Speaker:: This is precisely the point on which I want to listen to what the hon. member for Moose Mountain has to say. This is the second time that he has almost reached that point. I should like to hear him. I want the hon. member to continue from the point where he said that this is a pamphlet issued by one of these companies and in which some corporations are being criticized.


Edward George McCullough: Just a moment ago, Mr. Speaker, I said that this document is put out by a small loans company. Of course I am against the incorporation of this company. I am submitting to the house what I think would be a better alternative to this type of financing. Rather than that this government or the members of this house should support the idea of the incorporation of another small loans company, I am putting before this house what I consider to be an alternative type of financing. This proposition that I am putting forward is attacked in this little pamphlet which I am discussing at the present time. First they say that this group contributes virtually nothing to the public treasury.


Claude Sartoris Richardson: May I now rise on a point of order?


Edward George McCullough: Mr. Speaker, I do not feel that I should be interrupted.


Mr. Speaker:: I want to hear what the hon. member has to say further to the point he raised a moment ago. After I have heard the explanation given by the hon. member for Moose Mountain, I shall be in a better position.


Claude Sartoris Richardson: I apologize to you, Mr. Speaker, and to the members of the house for rising if I appear to be interrupting the hon. member for Moose Mountain. But I wanted to save him the embarrassment of making an inaccurate statement if the report of the superintendent of insurance is accurate and in which are given the names of the small loan companies as of December 31, 1954. That is the latest report.


Edward George McCullough: On the
point of order, Mr. Speaker, may I say that I never made any such statement or any type of reference to that report.


Claude Sartoris Richardson: My point of order was that not once but twice and I think the third time I heard the hon. member say that Niagara Finance Company was a small loan company. Mr. Speaker, there are only four small loans companies as reported in the report of the superintendent of insurance; and in the booklet which I have here the name of the Niagara Finance Company does not appear.


Stanley Howard Knowles: Is that a point of order?


Mr. Speaker:: Are we discussing the Niagara Finance Company?


Some hon. Members:: No.


Mr. Speaker:: Not at all. I take it that what we have before us now is a motion for the second reading of Bill No. 166 entitled "An act to incorporate Signature Loan and Finance Company". Perhaps the hon. member for Moose Mountain could devote his attention to the motion for second reading of this bill. There is an amendment which has to do with the six months' hoist. The intention of it is to kill the bill. It would seem to me that the hon. member should not discuss an alternative proposal-he aims at killing the bill by the amendment that is before the house-if his remarks are to be relevant.


Edward George McCullough: Mr. Speaker, I was not proposing that this chamber at the present time accept the alternative, but I think there is an alternative. I felt that within the scope of this discussion I might be able to indicate that I felt there is an alternative method of providing short-term loans to people by means of which they would not be required to pay this exorbitant rate of

interest which is charged by the type of company which is asking for incorporation by parliament at this time.
In defence of the credit unions-if they should need any defence-I want to say that we have a community effort on their part, with no usury and no exorbitant interest rate.


Mr. Speaker:: May I suggest to the hon. member that we have already had discussion on this type of loan legislation, during the course of which hon. members have put forward the benefits to be derived from credit unions. That discussion has taken place on a private bill moved by an hon. member of this house and also on a government bill. In that discussion latitude was given. Now that we are dealing with this private bill, it seems to me that we must direct our remarks to the principle of the bill.


Edward George McCullough: Mr. Speaker, I think I have given the reason for my participation in this debate. It is certainly to register my complete opposition to the bill. I feel that what we are aiding and abetting here, if we allow the incorporation of this company, is just one more small loan company with the privilege of exploiting the hardship and the difficulties that the Canadian people suffer at this time. Rather than that this government or any member of this house should allow such a thing to take place, I think it is expedient that we give consideration to those methods which would give better standards of living to our people. Particularly at this time, when it seems that there is greater and greater need for credit in this country, I think some measure should be found as an alternative. Already this session there have been five bills dealing with increased lending facilities for many classes of the Canadian people. Small loans companies generally do not carry on very much business in my constituency except in one or two of the larger centres. However, I do feel that in protesting against this bill I am speaking for the large cosmopolitan areas where there are slums and where we find many people in the low income brackets are becoming victims of this vicious system. Therefore, I want to protest in the strongest way I can.


Claude Sartoris Richardson: Mr. Speaker-


Mr. Speaker:: Does the hon. member wish to take part in the debate on the amendment? He has spoken already. If he has spoken, he cannot speak now.


Mr. Colin Cameron (Nanaimo):: Mr. Speaker, a little earlier in the debate the hon. member for St. Paul's (Mr. Michener) spoke of the reference of this measure to the banking and
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commerce committee and said on that occasion he was looking forward to seeing and meeting the sponsors of this bill, because, in his words, "their names excited interest". Well, Mr. Speaker, the only sort of interest their names would excite in me would be rather a macabre one.
Sir, perhaps I am old fashioned. I was reared in a different sort of world when we called things by their real names before we became so very delicate as we have become in recent years, so delicate, shall I say, as to call undertakers morticians, and so forth. In the world in which I was brought up money lenders were called money lenders. They were not glossed over as lending institutions, even approved lending institutions, or small loans companies. They were money lenders and no one even pretended that they were respectable members of society. They were considered by all respectable people as being a rather disreputable element in the community. I suggest to you, sir, that if we would continue that practice of calling things by their real names those people might not be deluded into supporting some of the measures that come before us.
I am interested, sir, in the light of the exuberance of the statements of the Minister of Finance that we are in a booming, bouncing economy, to notice the ability that this sort of people show in trying to get into the small loans business, because we had better not close our eyes, Mr. Speaker, to the fact that they are coming in for one purpose and one purpose only, and that is to fatten on misfortune. It is no good the sponsors of this bill pretending that these people are coming in to perform a public service. It is the same sort of service that hyenas and vultures perform; and if there were not in our community a growing number of people who find that their regular sources of income will not pay their regular living expenses, then those people would not be so anxious to get into the field. There would not be the competition to get licences and charters to do business among the unfortunate members of our society, because those people must all be classified as unfortunate. Some of them, of course, may be unfortunate merely in the fact that they are not bright enough to realize that those so euphemistically named organizations are nothing more or less than the old-fashioned money lenders, the sharks. It is unfortunate that they are so unintelligent that they do not realize that. The vast majority, however, are unfortunate in a plainer and more readily understood manner. They are unfortunate in that they do not get enough money to live on. And they are driven at some point or another by some misfortune,

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sickness in the family, or loss of a job for a short time, into the hands of those benevolent philanthropist's who are there just waiting to lend a helping hand to their less fortunate citizens.
Now, you have suggested, sir, that it is not in order in the course of this debate on this amendment to give the bill a 6-months' hoist to suggest alternative measures of meeting this evident need in the population; therefore, I must refrain from pointing out, as some of my colleagues have done, that there are alternatives if we have to seek alternatives in this particular field. I would myself much rather see the government devoting itself to a more positive cure of this situation, a cure that would ensure that the incomes of the Canadian people were sufficient to meet their living expenses. There are, of course, a number of ways in which that could be done. One would be, perhaps, to curtail some of the incomes that are so cherished by the Minister of Finance and his colleagues and distribute the proceeds in the form of increased family allowances and increased old age pensions. But I do suggest, sir, that to attempt to cure an apparently chronic state of impecuniousness on the part of a vast number of our people by allowing old-fashioned money lenders, sharks, to get into the field with the blessing of this parliament and to fatten on that misfortune is a disastrous policy for this parliament to pursue. I would like to see this parliament very firmly put a stop to any more expansions in this disreputable business, and to take proper steps to eliminate the need of this by additions to the incomes of the ordinary citizens of Canada.
The other day the hon. member for Trinity (Mr. Carrick), when speaking on this measure, drew the rather ludicrous analogy between such an organization as the Aluminum Company of Canada and this money lending organization which he was championing.


Mr. Carrick:: May I interrupt the hon. member? I have never spoken on this measure.


Colin Cameron: It was the other related measure. However, I think it is relevant to this type of suggestion. He suggested that the objections we have made to this bill to the effect that United States capital is coming to Canada to borrow Canadian funds to lend to Canadian citizens would be equally relevant to such an organization as the Aluminum Company of Canada, which, as he rightly says,-


Mr.   Spsaker@: Order. I call it six o'clock.
On motion of Mr. Cameron (Nanaimo) the debate was adjourned.


Mr. Speaker:: This house stands adjourned until 2.30 o'clock tomorrow afternoon.


Stanley Howard Knowles: I suggest we come back tonight, Mr. Speaker.


Mr. Speaker:: I am sorry; like many of us, I am anxious to get into the Easter recess. As it is six o'clock I do now leave the chair. I hope everyone will be here with me at eight o'clock.
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.
Irvin William Studer: Mr. Speaker, at five o'clock we were discussing a situation in regard to the economy in general and in regard to the farming population in particular. In the 13 minutes or so that are left to me I would like to offer a few more comments and to suggest again that in this economic world in which we live one of the most important folios of any government at this time would be to have a minister of economics. We are living in the age of automation wherein machinery is taking the place of the labour that was formerly involved in the production of goods and services. To have such a portfolio would be advisable and of advantage. I think he would be one of the busiest ministers in our government if a portfolio such as that were to be established.
What are the objectives of this government in regard to farming? Well, the objective is to learn from the experience and the policies of all countries and to determine what has been detrimental or objectionable to the farmers' interests. What this government is trying to do is to eliminate the objectionable features of all other policies in all countries and to utilize the beneficial features that have been incorporated in any existing policy and all the policies throughout the countries of the world which have been of advantage to the farmers.
This government proposes to use the floor price structure, the Agricultural Prices Support Act and subsidies where necessary, and whatever might be beneficial in the parity price structure. The government intends to utilize all these measures and incorporate

them into one overwhelming policy, if I might call it that, which would be greatly beneficial to the farmers of this country. In doing so this government wishes to have the support of all opposition parties and all the people in Canada. Only a government such as this is capable of doing the job. This government has the interests of the farmers at heart and it has the support of all the people of Canada. Only such a government can formulate these policies and make them effective. There is no hope anywhere in a puppet or splinter government or a government that is local or operative in one province or which has only the support of people in various small sections of Canada. We have to have a government which has the support of people throughout Canada in order to make effective the beneficial measures which we hope to bring into effect. These would be of benefit not only to the farmers but to people of all occupations and classes in Canada.
We have had many speeches concerning duties and tariffs. The government is progressively reducing tariffs. It has removed them from machinery and repair parts in this budget; but we farmers will make a deal with this government and with the people of Canada. If they will remove the entire tariff structure which exists in Canada today, then we farmers will not ask for any consideration or subsidies or anything else from this government. We will be prepared to meet competition throughout the whole world. The farmers will be able to produce more in a free economy as opposed to a tariff economy. I think that would be accepted anywhere, Mr. Speaker. As the result of that we could go forward from here and formulate these policies if we have the support of the people.
In connection with a tariff economy I would suggest that the farmers themselves cannot win in a tariff battle because they are overwhelmed with regard to voting strength throughout the country. We do insist, however, that the rest of the people of Canada give consideration to the situation in which the farmers find themselves and eliminate any extra burdens which the farmers may carry through any policy that may be in evidence here in Canada. The problems of farmers never seem to end, but if they ever do end this government will be responsible for ending them. Here again I ask for the support of the Canadian people. All is not lost in Canada. We are more or less in a period of transition wherein we are moving from an agricultural economy to an industrial economy. Perhaps in the over-all picture as a result of increased industrial expansion and increased wealth the farmers can depend for
The Budget-Mr. Studer their subsistence more on that type of economy than they could if we had a depressed economy. It is in the interest of the farmers and of all the people in Canada to have the entire economy come to the assistance of agriculture when that is necessary.
All is not lost in Saskatchewan, either,, because industry is supposed to be coming, into Saskatchewan; at least the premier of Saskatchewan is telling us about it every day.
I think it should because I notice that even the licence plates for Saskatchewan automobiles are made in Manitoba. If industry is. coming into Saskatchewan in the face of the Regina manifesto which reads, "We will not be content until the capitalists have been eradicated," and with that sword of Damocles

how do you pronounce that name, anyway?-hanging over their heads, then a situation must exist in Saskatchewan which is not in evidence anywhere else. If industry is-coming into Saskatchewan under those conditions then there must be a conspiracy between that psuedo-socialist government of Saskatchewan and the capitalists to eradicate not the capitalists but the socialists in Saskatchewan. The socialist government has a. secret alliance with the capitalists to eradicate the socialists in Saskatchewan and the purge is on. It began in Swift Current last fall at a nomination meeting in which the only real1 socialist in the government of Saskatchewan was purged. He did not receive the nomination in Swift Current last fall for the socialist government. My Tory friends are quite vocal here. I would like to suggest to them that they dissociate themselves from the socialists out in Saskatchewan. They have nothing incommon. Their ideals are not only contrary but absolutely contradictory to the ideals of socialism.
There is a saying that politics makes; strange bedfellows and there is nothing stranger than what is taking place out in Saskatchewan. The Conservatives have been in bed with the socialists so often that no one knows to whom the bed now belongs. I would suggest to those Tories that when they get into bed with them, as they do so often; here in this house, they pull down the shades; and pull the sheets over their heads so people cannot see who they are.
The Karl Marx juniors on the left side should get up and stipulate what is going, on out in Saskatchewan and they should, state whether or not they are socialists.


An hon. Member:: Your time is up.


Irvin William Studer: I have five more minutes. T would suggest that the hon. member for Kindersley (Mr. Johnson) make a socialist speech in the house and forget all about the secession talk out in Saskatchewan. Imagine-
2668	HOUSE OF
The Budget-Mr. Studer the hon. member for Kindersley leading the secessionist revolutionaries here to Ottawa asking the government to set up a socialist monarchy out in Saskatchewan so that they can develop their own, and we will have to send all the box cars we are now using for grain out there with relief to keep them happy.
Let Karl Marx junior from Assiniboia get up and make a speech saying that he is in favour of socialism. Let the hon. member for Kindersley also make a speech regarding the abolition of the Senate. I think that would be a fine topic for the hon. member to discuss. And let Karl Marx junior from Assiniboia tell us about how he is in favour of socializing everything except the farms- because he owns a farm.


Mr. Speaker:: Order. The hon. member's time has not expired; he still has until 8.15 if he wishes to continue, but he should not refer to hon. members as "Karl Marx junior" from so and so, but as the hon. member for such and such constituency.


Irvin William Studer: I would be glad to do so, Mr. Speaker, but I thought they would be proud of it. All we are interested in is hearing some real down-to-earth, honest-to-goodness socialist speeches in the House of Commons. No wonder the president of the socialists in Saskatchewan, who is a teacher of English socialism in the University of Saskatchewan, Carlyle King, was pleading with the socialists to please make a socialist speech so the people of this country will know what you are and whether you are socialists or merely capitalists in disguise. Hon. members to my left frequently ask the Liberals to make speeches. We are all looking forward with pleasure, as are all the people of Canada, to hearing these hon. members make socialist speeches so the people of Canada can determine what they are.
In conclusion, Mr. Speaker, I would say that this is a good budget. It ensures progress for Canada, in which we are all in-;erested. It ensures benefits to all of the people. Nowhere in any country are there greater social services; nowhere in any country has a system been devised where we can produce to a greater extent. Nowhere in any country are there greater exporters. Nowhere in any country is there greater leadership. Where is there a greater country? Where is there a greater future? Which all adds up to this: There is no substitute for good government, there is no alternative for good government. This government has proved in the past, in the present and will in the future, that there is no end to good government.


Mr. Castleden:: Mr. Speaker, on a question of privilege, this afternoon the hon. member for Regina City (Mr. Ellis) referred to the budget as a do-nothing budget and he said he was opposed to it, but it seems that about six o'clock his wife presented him with twin daughters and I think he should be congratulated.


Mr. Michael Starr (Ontario):: Mr. Speaker, in all the accounts that have been written or spoken about the budget presented a week ago I cannot find where anybody, even friends of the government, has said that it is a good budget.


Irvin William Studer: I said it was.


Michael Starr: There were many things in it, but the most significant thing to me is that it has been accepted by everybody as being a formal government announcement that there will be no election this year. I think this is a feature which even the most ardent supporters of the government will deplore. The reason for the no-election assumption is obvious. For many years now we have had an election budget in every election year and it has been taken for granted that the long-term strategy of the government is to manipulate the taxes of Canadians to suit the purposes of the party in power. It does not matter how callous we may become to this sort of thing, it does not matter how it may be justified even in some minds as practical politics, I am sure that it does not increase anybody's respect for the government or the law of the land, and the budget is a part of that law.
If next year is to be an election year then I suppose we will have an election budget again. There is disheartening evidence in the figures placed before the house by the Minister of Finance (Mr. Harris) that there has been deliberately built up this year a surplus of revenue to provide funds for the political purposes of the party in power in the next election year. The Minister of Finance gave recognition to this surplus in his remarks to the house a week ago tonight. He excused it by pleading that it made sense in good times to budget for such a surplus. However, he made no reference to the fact that this excuse is completely opposed to the budget policies and pronouncements of recent good years.
Apart altogether from the callous acceptance of partisan demands as the basis for budget decisions by this government, there are other factors which tend to make this deliberate government practice entirely reprehensible to many Canadians. Some years ago this sort of thing might have been excused as good political sport, but times have changed. The money which the government is now jockeying around from election to election represents

one-fifth more or less of the entire productivity of all the people of Canada. What the government does about this one-fifth of our money from year to year vitally affects the whole course of the economic development of this nation. Under the present government this tax grab, to use a common phrase, has been acknowledged as part of the relentless policy of centralized government control. Taxes which were once regarded only in the light of necessary government revenue are now openly manipulated at the will of the government to force the current doctrines of the ruling economic group in Ottawa upon the nation. This use of the taxing power, developed during war emergencies, may have had some temporary justification, but it seems to me that its extension into normal times has led inevitably into its extension into the realm of party politics. Surely this is going beyond the best judgment and the best conscience of what our people expect from their national government.
There are serious drawbacks to the general economy, and by that I mean the future of Canadian development, in this hard-fisted and hard-boiled approach to budget decisions. For one thing, the economic theories of the ruling group are not entirely consistent from year to year. The result is that the planning of businessmen become subject to annual guessing about which page of what theorist the Ottawa group happens to be studying.
For some time we have been told that this government believes in free trade with a capital F and a capital T. We have read some rather funny, but certainly very positive, statements by representatives of the government at meetings of GATT and in lectures to spokesmen for the textiles and other industries who have come to Ottawa suggesting that there are times and occasions when this belief in free trade at all costs might be modified when this or that Canadian industry finds itself in serious trouble.
We will all recall the insults which were thrown at the representatives of the textile and other industries who were told in no uncertain terms that they would not be asking for protection if their own industrial management was as efficient as the Ottawa theorists thought it should be. There were many Canadians who did not agree that this all-out free trade position made much sense in the light of the facts of international marketing, but most people I think gave the government a measure of credit for what appeared to be a sincere if misguided adherence to a rather odd economic theory.
The new budget removes even that belief in the sincerity of the government in this matter. It includes what I am told is the
The Budget-Mr. Starr most complete reversal of form in the whole history of government dabbling in economic theories. I refer to the drastic measure of protection now offered to the magazine industry. Without going into the merits or demerits of the specific industry concerned, some generalities are obvious.
First, this is protection in the most drastic form. It is a tax designed to penalize the non-domestic sector of an industry in order to divert revenues to the domestic industry. I do not say that this is necessarily a bad principle, especially if it can be shown that a Canadian industry could not survive without this protection.
Second, the nature of the tax makes it a form of censorship. Its purpose is clearly to influence the type of publication which Canadians are to read. It is a clear-cut infringement of both free trade and a free press.
Third, it is the very worst sort of public relations that a young, expanding country can have. It labels Canadians in the eyes of our most important customers abroad as being small-minded parochial people who are afraid of the import of ideas, particularly American ideas. It makes a complete mockery of the huge expenditures by the government's tourist department who are trying to persuade Americans that they are welcome here in Canada.
I mention these aspects of this extraordinary tax, not to attack it as such but rather to point out the amazing about-face of the government on the whole question of protection. It has denied protection, in very high-sounding and self-righteous terms, to industries that needed protection far more than the thriving magazine industry. It may be of interest to note also, for example, that the current issue of the Financial Post, which carries an account of the budget, also carries an article headlined "Magazines Increase Ad. Sales". It states that Canadian magazines sold $17-4 million worth of advertising last year, which was an increase of more than $1-3 million over the previous year. That is an increase of 7 [DOT] 6 per cent in revenue.
In spite of this fact, the Minister of Finance had this to say about his amazing excursion into the field of protection:
The long-run continuation of Canadian magazines appears to be jeopardy.
I cannot believe that the minister meant that seriously. The facts of the matter are that the long-run continuation of Canadian magazines is not in any jeopardy whatsoever. We have Canadian magazines that have achieved circulations and revenues in recent years that are far greater than ever before in the history of this industry. They have

The Budget-Mr. Starr done so because they are good magazines, well edited, efficiently run and giving the Canadian people what they want to read.
The minister, in spite of the facts of the situation, says that what he calls very exceptional measures can be justified. How can these measures be justified? The facts are all to the contrary. Industries which have been steadily losing sales have been denied relief for years. Now, one which is increasing its revenues is given a degree of protection- a 20 per cent levy on revenues-which is unmatched for severity in the recent history of protective taxation.
I have no brief for or against Canadian magazines. I read and enjoy several of them, both in the general field and in special trade fields in which I am interested. They are doing a fine job. Two of them, Weekend Magazine of Montreal and the Star Weekly of Toronto, have in recent years developed national circulations of about a million each. No United States magazine has done so well comparatively in its own field in this period. This is not a depressed Canadian industry. On the contrary, it is a thriving, prosperous example of Canadian enterprise at its competitive best.
Yet we have this industry drastically protected. Why? The minister suggests that the decision has something to do with preserving Canadian culture. That is a laudable objective. Will the government, then, protect private Canadian radio stations against United States owned radio programs which are being brought into Canada by its own agent, the C.B.C., and which in turn are diverting advertising revenues from Canadian radio stations? Will it tax the Canadian editions of the New York Times and the Times of London, which are also owned abroad but are diverting advertising revenue from Canadian newspapers? Will it tax United States and British movies which are now diverting advertising revenues from other Canadian media? Surely it would be logical to do so, if there were any logic whatsoever in this bombshell of an excursion of the government into high protective tariff legislation.
Many Canadian businessmen are disturbed about the effects of the inconsistency of this action on foreign investment in Canada. Surely the owners of United States magazines who have invested heavily in Canadian editions were entitled to believe that our government was sincere when it said its policy was international free trade. Their investments were based on good faith in our word. How much faith can they, or any other United States businessmen, have henceforth in the declared policies of any Canadian government?
TMr. Starr.]

I do not like to impute motives. I am more willing to believe that this protective tariff venture is rather a budget "boner", attributable to the credulity of the minister, than a form of special protection for the government's propaganda machine. I sincerely hope that the minister and his advisers will be able to excuse it in this light. The alternative viewpoint strikes too deeply at the roots of political decency to be tenable even by a political opponent of the government.
Yet, no matter how we view this amazing about-face on free trade, it cannot be fairly considered without reference to the things the budget did not do. The spectacular nature of the one invites speculation about the others. The long-outmoded luxury taxes are left unchanged, in spite of the evidence of the figures placed before this house by the minister that some of these taxes could have been reduced without the loss of a single cent in revenue to the government. Two specific cases will explain just what I mean.
A year ago there was a reduction in the automobile luxury tax from 15 per cent to ten per cent. The minister at that time informed this house that this would cost the federal treasury in the neighbourhood of $26 million. The figures he gave the house two weeks ago show that the actual result has been a gain of $8 million to the treasury.
The cigarette tax is another example. I read the brief of the tobacco growers on this matter. It was supported by the expert opinion of leading economist's. It showed that excessive taxes had cost the industry and the treasury millions of dollars. It also proved, citing facts and figures from the government's own estimates, that the tax reductions of 1953 and 1954 had increased federal revenues and that a reduction this year would do the same. It is easy to say, of course, that this is only the opinion of the growers, but the facts are that for several years now the growers have been right and the Department of Finance has been wrong.
These are but two examples. With them in mind, surely it is reasonable, even for a layman, to wonder if there are other taxes which are being held at high levels for no other reason than that the Department of Finance, having built them up as a result of wartime patriotism, now refuses to reduce them, regardless of facts, regardless of fairness, and regardless of their limiting effect on the growth of our Canadian economy. The great Chief Justice Marshall of the United States once said that the power to tax is the power to destroy. In a lesser degree, but too often forgotten, it is also the power to harass, restrict and bedevil the normal growth of a national economy.

There is no evidence whatsoever in the budget of a realistic examination of the tax structure in the light of the basic needs of our whole Canadian economy. Such an examination is regarded by the majority of our leading economists and businessmen as long overdue. But no such examination appears to be within the remotest realm of possibility, under the present government or the present regime in the ministry of finance. This year it could not be done because it was not an election year. Next year it will not be done because budget changes will have to be related to the political requirements of a forthcoming election.
I am not, Mr. Speaker, privileged to speak for any political party. But I do say that there are those on this side of the house who are close enough to the Canadian wage earner and consumer and who have some knowledge of business, even if it is not big business, to promise that when we sit over there we will raise our voices and use what influence we have to see that the whole Canadian tax structure is taken out of politics and placed where it belongs, in the realm of economic realism in regard to the future of Canadian enterprise, progress and expansion.
I appreciate the difficulties which confronted the Minister of Finance this year. I appreciate even more the difficulties which will confront him next year. The minister will have to prove himself a political and fiscal miracle worker to match the election year budgets of his illustrious predecessor who gave the Canadian people the two largest tax reduction budgets in the history of Canada in the last two federal election years, namely, 1949 and 1953. They were the only two budgets in history to top the $300 million mark in tax reductions. No non-election year budget has ever been that generous.
In the years between elections we have had a different story. It has been the rule rather than the exception to add new or increase old taxes in non-election years and to remove or decrease them in election years. It is not surprising that the items which figure most prominently in this kind of manipulation are those which make an immediate impact on voters. The pattern is so clearly established, Mr. Speaker, that I venture to offer the minister a tried and true formula for his next budget. It is solidly based on the political sagacity of his predecessor. I cannot offer it at this time as the platform or even as the suggestion of any group or party in the house, so, for want of a better name, I offer it to the minister merely as Mike Starr's 1957 budget suggestions.
First, there will be reduction of personal income taxes by an average of 15 per cent in
The Budget-Mr. Thatcher the lower and middle brackets and an increase in exemptions from $1,000 to $2,000 and $2,000 to $3,000. Second, there will be repeal of the 10 per cent luxury tax on automobiles and all other personal and household items to which special excise taxes have been added since 1939. Third, there will be a decrease in the tax on cigarettes from the present $1.77 per carton of 200 to about $1, substantially cutting the 100 per cent which the government now adds to the cost. Fourth, there will be removal of the present limitations on the deduction of medical expenses from income tax. Fifth, there will be removal of the remaining taxes on soft drinks, candies and other small pleasures of children.
I trust, Mr. Speaker, that the suggestions I have just made will prove helpful to the minister next year. I make them at this time because we have often been told that the minister and his advisers start to work on the new budget just as soon as the current one has been placed before the house. I have not detailed the total cost to the treasury of these tax changes, but a rough total makes it clear that the funds are already in hand or on the way. That, in fact, appears to be the outstanding feature of the budget now before the house. It is nothing but a delayed action budget.


Mr. W. Ross Thatcher (Moose Jaw-Lake Centre):: Mr. Speaker, last year it was my privilege to vote for the first budget of the Minister of Finance (Mr. Harris). I regret very much that I cannot do the same on this occasion. Despite the well-meaning of the minister, despite his very good intentions, I feel obliged to say that this budget is a dangerous document which should cause every Canadian, and particularly every Liberal, to stop, look and listen. The high rate of Canadian taxation which has been gradually and insidiously built into our budgets since world war II is like a malignant cancer. For a few years the effects may not be apparent, but unless treated the ultimate result is inevitable.
The government professes to believe in the free enterprise system. Yet I say tonight that it is undermining that system by high taxation, just as effectively as any socialist government could do by decree. When the history of this period is written it will record that one of the great mistakes of the Liberal party after world war II was its steady and consistent failure to give a real measure of tax relief to the Canadian people.
In his budget speech of 1955 the Minister of Finance said this, as found at page 2732 of Hansard of April 5, 1955:
I am sure that all will agree that when employment and incomes are high, and the economy

The Budget-Mr. Thatcher expanding at a normally healthy rate, we should fully balance our budget, with a modest amount for the reduction of debt.
During the past year we had the greatest volume of business, we had relatively full employment, we had the highest national income in our history, and yet the Minister of Finance has given us not a surplus but a deficit. He has given us not debt reduction but debt increase. In so doing he has violated the sound budgetary principles which he himself enunciated 12 months ago.
In the coming fiscal year the Minister of Finance is proposing to take from the pockets of Canadian taxpayers the staggering sum of $4,755 million. That is an increase of almost $390 million over a year ago. Spending on this scale is without precedent in peacetime. To make a comparison one must go back to the critical years of the war, at a time when the federal government was engaged in a fight for survival.
The increased spending this year is not concerned primarily with defence spending. It is concerned with civilian departments right down the line. 1 do not think it is necessary for me tonight to remind hon. members that governments at all levels are taking today about 33 cents out of every dollar earned by the average Canadian. Nor do I have to remind the house that the standard rate of corporation taxation after certain basic exemptions is still 47 per cent.
The question which must confront parliament tonight is simply this. Can we afford to divert such a large proportion of our labour and industry to government, at a time when the country needs so much capital for its growth and development? You cannot spend a dollar of production twice. If the government is going to spend it, then individuals and business cannot do likewise. When we pay out the fruits of our production to defend countries richer and more populous than Canada, when we sell butter to the communists at the expense of the Canadian taxpayer, when we pay out millions of dollars in non-productive subsidies, let us realize that this money is not going to be available for private enterprise to develop Canada.
I have heard a good deal of criticism this session, Mr. Speaker, about the degree to which United States capital is coming into our country. Some people find it strange that we apparently need the Americans to help us finance the trans-Canada pipe line. But is it any wonder that this capital is needed when our government takes from Canadian companies almost half their earnings, which otherwise would be available for reinvestment?
I realize, Mr. Speaker, that there is a school of thought which contends that high

taxes need not necessarily affect prosperity. In support of that theory they point out that since the war we have had very high taxation, and yet instead of having a slump we have had booming economic conditions. But surely this is a dangerous conclusion. Our prosperity since the war has been caused by a number of unique factors which may or may not continue. I cite the great inflation of prices which has taken place since 1945, including export prices. I mention technical improvements and scientific progress. I cite the great growth of the United States market and of the United States population as well as our own growth through immigration and natural increase. I mention the great resources which we have discovered since 1945. All those factors have combined to give us prosperous times. As a result of those factors the Canadian gross national product increased from $11-8 billion in 1945 to $26-6 billion during the past year. That is roughly a 2 J times increase. The federal tax base, of course, increased roughly in the same proportion. Thus it has been possible for the federal government to finance greatly increased expenditures by simply appropriating a share of the rising physical production of the nation which constitutes a sort of surplus or windfall.
I think it is more than conceivable that the favourable circumstances which we have had since 1945 may not continue. A decline in national product, increased foreign competition, recession in the United States, widespread unemployment-any of those factors- could work havoc with our tax structure.
During world war II and during the Korean war, Canadian tax levels were sharply increased. But, with the end of each emergency, the voracious appetite of federal spending departments continued. Indeed in some cases it was increased. New demands and new programs rapidly devoured the sums of money which formerly had been spent on the war effort, and which might have been used for tax reduction. As a result, the level of federal government spending as a percentage of the national income has steadily risen for the past generation. In 1929 that percentage was 6-7 per cent; in 1947, after the war, it was 17-05 per cent but in 1954 it was 22-06 per cent. This budget continues that 11 year trend despite booming economic conditions.
I suggest to hon. members that there is a limit to the money which you can take from an individual without impairing his ability to keep himself solvent and to save a proportion of his earnings. I believe this limit in peacetime has been reached, and for that reason I contend the budget is a dangerous document.

The great tragedy of the present situation, as I see it, is that no one is very greatly concerned about it. Anyone who suggests that governments perhaps are spending too much money is considered to be old fashioned, antisocial or reactionary.
I blame the Minister of Finance (Mr. Harris) tonight for not combating more firmly demands for increased expenditures. He above all must realize that there are some things which may be socially desirable and which are even financially possible in this great Canada of ours, but which nevertheless, in the long run, may be economically risky or even suicidal. I recognize the fact that the Minister of Finance has great pressures put upon him, and I do not blame him completely for the present situation.
I will say quite frankly that we in the opposition must bear a good deal of the responsibility for the present ominous level of taxation in Canada. Already this session the C.C.F. group has proposed resolutions which, if passed, would have cost the taxpayer several billions of dollars. In his budget speech, the leader of the C.C.F. group advocated larger old age pensions and a health scheme more comprehensive than the one which is being contemplated. Yet at the same time in his amendment he proposed that the sales tax and income taxes be reduced.
Many people expect such motions from the C.C.F. group. But they do not expect motions and resolutions of the same nature from the Conservative party. Most people expect financial responsibility from the Conservative group. Yet with all respect I must say that from this far corner of the house it sometimes appears to me as though that responsibility is lacking. Maybe I am biased, but far too often it seems to me that the Conservative party proposes policies which seem designed primarily to show the nation that they can surpass the Liberals and even the socialists in their ability to spend the taxpayer's dollar.
I should like to cite only one example. I recall a motion moved several weeks ago by the Conservative group, which proposed Canadian parity prices for agricultural products. That was a proposal which would have been fantastic in its cost, and its success, in my opinion, would have been dubious. The Conservative premier of Ontario, Mr. Frost, recently called on the federal government on the one hand to embark on a nation-wide health scheme and, on the other hand, to give the province of Ontario another $100 million. For my part, I find it difficult to find such proposals consistent with traditional Conservative policy.
The demands of our provincial governments are not very helpful to our federal government in keeping down our tax level.
The Budget-Mr. Thatcher
This year the federal government is proposing to transfer to the provinces in special grants $384 million. Incidentally I may say that I think the figure is about $34 million more than they transferred last year. I think most people in all parties are sympathetic to the principle of these transfer payments. Yet I view with alarm the steady efforts of our provincial governments on the one hand to demand greater expenditures from the federal government, and on the other hand simultaneously to demand that federal authority absorb more of their provincial costs.
I think that such efforts are based on a fallacy, an illusion that if a province can hand over its tax burden to the federal authorities in some way the inhabitants of that province will escape from them. It seems to me that the people who pay federal and provincial taxes are the same. No provincial government should think that Ottawa is a kind of fairy godmother. It is the duty of the Minister of Finance to tell the provincial governments that for the time being at least parliament has reached the limit.
I must admit, Mr. Speaker, that I am sometimes concerned over the attitude of many individual Canadians towards high taxes. I am sometimes concerned over the apathy with which they view the subject. Today most of our citizens watch their personal finances fairly carefully. They do not make a purchase unless they are sure that they are getting value for their money. Their attitude toward government spending is usually different. In Canada today there are many hard-headed and intelligent people who see nothing wrong with the oft-repeated phrase that "government will pay half the cost". There is a tendency to forget that the government's income is money that it takes from every citizen in the land. As one finance minister said, there is no magic in government finance; before you can give a dollar to one person, you must take away that dollar from someone else.
Unfortunately governments today are criticized far more often because they are spending too little than because they are spending too much. There has been little desire for economy in public spending among most Canadians. There are some individuals who feel that because they are in the lower income groups they are escaping federal taxation. That idea is fostered by certain politicians who glibly suggest that huge spending programs can be financed simply by "soaking the rich". Nothing could be farther from the truth because, unfortunately, there are not enough rich people in Canada.
I should like to refer hon. members for a moment to a publication put out by the

The Budget-Mr. Thatcher Department of National Revenue and entitled "Taxation Statistics, 1955". Actually it applies to the year 1953. On page 27 one finds that 4,682,420 Canadians made out income tax forms in that year, and yet on page 35 one finds that out of that huge number only 28,220 had incomes of more than $15,000. In other words, 99-4 per cent of all Canadians earn less than $15,000 a year.
Again on page 35 of the same publication [DOT]one finds that the amount theoretically obtainable by confiscating all income over $15,-000, after allowing for standard income exemptions, is $673 million; but since the government was already taking $233 million from those tax brackets, the net proceeds from total confiscation would be only $440 million, [DOT]or 9-3 per cent of our current budget.
Therefore I say, Mr. Speaker, any way you look at it, it is the average Canadian, the working man, the white collar worker, the professional groups, the farmers, who are paying the large proportion of income tax in Canada today, and it is very important that they should realize this fact.
Because the taxes are so often collected as a deduction from the pay envelope, the worker never sees the money and so he is not too concerned about the matter. I think the same can be said about most of our hidden taxes. Ninety-nine out of every 100 Canadians pay such taxes as the 10 per cent sales tax, the 15 per cent luxury tax on television sets, custom duties, tariffs, excise duties of all kinds, in blissful ignorance of the amount which is being siphoned off to the federal treasury. I say that no matter how the budget is planned, no matter who the Minister of Finance might be, it is the average working man who is paying federal taxes. Whether it is corporation tax passed on in the cost of goods, whether it is hidden taxes which are also passed on in the cost of goods, or whether it is income tax, the little man pays.
I believe, and I believe this very sincerely, that if the government went back to the old way of collecting income tax, and took it from the taxpayer in one lump sum on April 30, people would realize the extent of federal levies. I would also like to see the government put all hidden taxes itemized on the purchase tag, so that people would realize the amount of these taxes. If such action were taken I would venture to say that within a year we would have some action on our budget, because there would be a very vigorous protest, a very loud outcry, right across the nation.
Apart from the attitude of individuals, apart from the attitude of the provinces, apart from the attitude of members of this house,

I think that our present tax levels are caused by two main factors: first, defence; second, social welfare. I have neither the competence nor the time to deal with defence tonight, but I should like to say a few words about our social welfare program. I am one of those who believe that Canada, with its vast resources and with its wealth, should steadily strive for better social services in all fields. But I also think that our country must proceed gradually within the bounds of economic capacity and national solvency.
At the present time the federal government is spending on social services $1,060 million. Within a year, as I understand it, we are going to embark on a new hospitalization program. We are told that the cost of that program will be $180 million for the federal government and $180 million for the provinces. If the experience of Saskatchewan and British Columbia is repeated, I suggest tonight that the cost of that scheme will be very substantially more than the figure we have been given. How far can such measures be extended within the framework of national solvency and growth? Already this session we have listened to many resolutions on social welfare. Many new expenditures have been proposed by hon. members. I should like to mention only three. First, there was the proposal to increase family allowances, which would cost $200 million. There was a proposal to increase old age pensions to $60 a month at a cost of $450 million. There was a proposal to extend the proposed hospital scheme to make it into a complete medical-dental scheme. That would cost $600 million. Since there is already a budgetary deficit, such measures could only be financed out of straight taxation increases. That would mean as usual, that the Canadian citizen would have to bear the cost from his hard work and toil.
I hope that in the years to come it will be possible for Canada to legislate for such reforms. But I am convinced that for the time being, the country is carrying a peak load of taxation. Any new advances in the 'field must await further economic development throughout the nation, or a sharp decrease in defence expenditures.
Today we are faced with a number of examples of the dire effects of overloading an economy. It has been said repeatedly by many eminent authorities that the British economy is moving from crisis to crisis, and that Britain's welfare state program lies at the heart of her economic difficulties. The economies of France and Italy are also suffering from a similar sort of social overloading. With these examples before us, Canadians would do well tonight to stop, look and think.

Here in parliament irresponsible motions made in connection with social welfare measures, which overlook economic facts and realities, serve only to arouse false hopes and bitterness. There is a real danger to the nation when any political party, using the taxpayer's own dollar, recklessly endeavours to buy political favour by outbidding other parties in the social benefits it will pay. Mr. Speaker, I strongly believe that in the next few years the government must resist further major demands for increased federal expenditures; rather, it should consolidate and strengthen its taxation base. Such action is necessary for the economic health and prosperity of our nation.
I believe that the minister's fiscal policy in 1956 should endeavour to do the following things. First, it should halt rising government expenditures. Second, it should take more aggressive action to eliminate waste, duplication and extravagance in government spending. Third, it should use the major portion of the government's share of any growth in the national product for tax reduction. Fourth, it should modify the tax laws and encourage thrift and initiative. Mr. Speaker, I believe that failure to follow such policies will ultimately mean that parliament will be forced to pay all its federal bills in the easy coin of inflation. Surely, such a result should be avoided.


Mr. B. R. Leboe (Cariboo):: Mr. Speaker, since I am a comparatively new member in the house I do not intend tonight to go into the ands, ifs and buts of the budget. I will say, however, that if one says too much at this time about the budget it will be like locking the door after the horse is stolen.
First of all, I should like to say it has been my privilege to travel across the length and breadth of this country twice in the last year. In doing so, I have been able to get more or less a rounded-out picture of what Canada is really like and what the people across this nation have to put up with in some of the provinces, what some of their problems are financially and otherwise and to get a general picture of Canadian life and economy. Naturally we are all interested in our nation but I think we are all more particularly interested in our own area, riding or province. The speeches on the floor of the house throughout the year bear that out, I think, and I am no different from other hon. members who have spoken. Tonight I would like to review some of the progress that has been made in the northern area of British Columbia known as Cariboo riding. I focus attention tonight on Cariboo riding for one particular reason and that is because it has had a tremendous growth in the last few years
The Budget-Mr. Leboe and it is still growing rapidly. I might say that the rest of British Columbia is also growing rapidly but the growth in Cariboo riding has been spectacular over the last couple of years.
Perhaps I should say now that my purpose in making a comparison between what the government survey has shown in the past years and what has actually taken place has to do with the position of the Pacific Great Eastern Railway in the development of that northern area.
Hon. members will realize, of course, that the riding of Cariboo is perhaps the largest riding in Canada, being 950 miles long and 350 miles wide. It covers an area of approximately one-third of the province of British Columbia. There is a great deal of developing to do in this area and it is already well under way.
First of all I would like to take you into the northern part of the province to the Skeena riding just outside the Cariboo riding a short distance from Lower Post in the lower area close to the Yukon boundary where we have what is known as the Cassiar asbestos development. The known reserves of this development in 1954 were some seven million tons of asbestos. Today the tonnage of asbestos is being shipped out along the Alaska highway some 300 miles by truck and then over the railway to the coast and on down to Vancouver.
When the Pacific Great Eastern Railway is pushed into the northern area within 200 miles of Fort Nelson I can visualize that the distance from railhead, without the transferring of the goods, will entice the tonnage coming from the Cassiar mines into the lap of the Pacific Great Eastern Railway freight business. It is going to mean a lot to the whole northern area once the railway is projected as far north as Fort St. John. Fort Nelson has an army headquarters and a good airport and a population in one area of approximately four or five hundred people, with three or four hundred people in another section. It is an important and active little town.
As we look around the area of Fort Nelson we find there are some 500,000 acres of arable land which could be used for agriculture and there are vast volumes of timber in the valleys that stretch forth in every direction. All this development is there waiting for proper transportation. We find that in the northern part of British Columbia, as in many other parts of northern Canada, it becomes a matter of long distances. The distance from Dawson Creek to Lower Post, for instance, is 600 miles; to Fort Nelson, 300 miles, along the Alaska highway.

The Budget-Mr. Leboe
The Alaska highway is costing the federal government a great deal of money in maintenance each year. I would like to say at this point that I think it would be well for the federal government to look into the possibility of paving at least a portion of that highway in order to save maintenance costs. The gravel which is now on the highway is working down into the mud and the base of the road and it is not very long before a complete reconstruction job will have to be done on many parts of the highway. I know this to be true because I recently travelled over a great section of that highway.
Coming further south from Fort Nelson to Fort St. John, which has a population of approximately 2,500 people, we find that in the Fort St. John district there is a terrific agricultural development. There are many thousands of acres, and perhaps I should say millions of acres, which have yet to be brought under cultivation in that area. I believe the total arable land is around 3,500,000 acres in the Peace river area and a great portion of that is in the Fort St. John district. A great deal of the grain that is shipped from Dawson Creek at this particular time, which makes Dawson Creek the largest grain shipping point in the British commonwealth, comes from the Fort St. John area. This, coupled with the great forested areas around Fort St. John, points up the fact that there is a great deal to be gained by bringing into Fort St. John the Pacific Great Eastern Railway with its outlet to the coast. This means that when the railway comes north of Fort St. John it will literally be in the front yards of many sawmill operations in that area. It will mean more money in the pockets of the farmers, the people who are working in the lumber industry and those people engaged in the exploration for oil and gas.
It was my privilege to be in Fort St. John at the time when the first British Columbia gas was turned on in the grid of the village of Fort St. John, the first town in the province to use British Columbia gas. We now find that the beginning of the west coast transmission line which will run from Fort St. John through Pine Pass and Prince George into Huntingdon and into the Pacific northwest of the United States, with a branch line into Vancouver, has its head in Fort St. John at the beginning of the pipe line. In the construction and the development that has taken place there it is necessary for the producers of gas to put in a scrubbing plant at Taylor Flats and they are now looking for
2,000	men to go to work on this project at Taylor Flats to take the by-products out of the gas before it is put into the gas pipe line. A great deal of the right of way of


the gas line has already been cleared and the pipe is being brought in from Great Britain, shipped up over the Pacific Great Eastern Railway and transported by truck and the northern freight ways into Dawson Creek and on up to Fort St. John.
At this point I would like to say that the purchase of this pipe from Great Britain falls in line with a provincial policy under which we seek to buy goods from Great Britain so that we may in turn sell to Great Britain the products of the forests, fish and fruit. It has stimulated a great deal of business for the province of British Columbia and has brought about active trade with Great Britain.
While I am on that subject I might say that locomotives, steel rails, angle bars and so on for the Canadian Pacific railway also come from Great Britain, while we in turn send them lumber, fish, fruit and other products.
At Hudson Hope there are large deposits of excellent coal. Perhaps I should not say too much about coal at this stage as in most parts of the Canadian economy it seems to be a drug on the market, but I believe the time is not too far distant when considerable power will be developed by the use of coal in high pressure water tube boilers with the steam being utilized in large turbines. We find this process being used in Alberta and I understand it is quite economical. I think the time will certainly come when great quantities of coal will be used in this way.
Dawson Creek, which is located near the Alberta border, has a population of around 6,000, whereas 20 years ago there were only 100 people there. Of course Dawson Creek is famous for its great Scottish pipe band, which is known to all Scotsmen in the country. Dawson Creek is the end of steel of the Northern Alberta railway which comes in from Edmonton and it is also mile zero on what is known as the Alaska highway. Dawson Creek is the junction of two highways, the one coming up from Edmonton and the other coming up from Vancouver through Prince George which is known as the Hart highway.
With the Northern Alberta railway and these highways that are coming through, and also the extension of the Pacific Great Eastern Railway, Dawson Creek is going to grow by leaps and bounds. The village commissioners are going to have their hands full in servicing the necessary areas to provide for dwellings and so on. The Dawson Creek airport was too close to the town and it has been surveyed into lots which are being sold for dwellings and the commissioners now have the problem of digging up a new airport site.

It will be seen that the expansion that has taken place in this part of the country is beyond description. I referred to the paving of the Alaska highway and I should like to note that the distance from Dawson Creek to Fort St. John is about 50 miles and certainly that piece of highway should be paved.
Dawson Creek is faced with other local problems. In 1952 or 1953 they got a new phone system, but today that is proving to be entirely inadequate. There are 1,000 people on the waiting list and it takes from 15 to 20 minutes or even longer to get central. The four girls on the switchboard do not know what to do about the calls coming in. The Department of Transport, which is responsible for communications in that area, is putting in a new phone system this fall which will take care of all immediate and future needs of Dawson Creek.
There is another thing that worries the people of Dawson Creek. It seems that it is taking the federal government as long to build one little public building in Dawson Creek as it is going to take the province of British Columbia to build a railroad with two branch lines into the Peace river country. I do not think that that should be. I have been here since 1953 and there was an item in the estimates for a public building at Dawson Creek before I came here. That item is still in the estimates and except for a few plans that is as far as it has gone. I understand that the plans are not yet off the drawing board, that the architects have not released them so that bids can be called. There should be a little more action in connection with some of these things. If the provincial government can build a railroad into the Peace river country, if they can do the surveying and everything else, surely the federal government can build a little old post office building in Dawson Creek in the same length of time.
Dawson Creek has an oil refinery at the present time, and I understand that another one will be put in this spring. There are some defence installations there which add to the importance of communications. All along the Hart highway and the new route of the Pacific Great Eastern Railway and along the gas line going south there is a great deal of what we call ribbon development. Little Prairie is the new junction of the Pacific Great Eastern Railway, where the branch line goes off to Dawson Creek from the main line going up to Fort St. John and on north. It will be seen that wherever there is a junction on the railroad there is generally considerable growth, particularly when it is located in a good agricultural area like this.
The Budget-Mr. Leboe
Coming on further through the Rockies through Pine pass we find at the Parsnip river crossing there will be a great lumber industry in the near future. The Pas Lumber Company have made application for a forest management licence in that area and I understand it is their intention to put in a pulp mill as well as a mill for the production of lumber.
As many hon. members know, Prince George is ideally located on the Canadian National Railways northern main line running from Red Pass through to Prince Rupert. The population of Prince George is around
12,000	and it is growing as it were by leaps and bounds. I notice from a report in a local paper that building permits are expected to total 6 million next year. The provincial government is building a government building in Prince George which will cost $1,500,000.
Prince George is a great distribution centre, being located as it is almost in the centre of the province. It will be second only to Vancouver as a distribution centre. It is located where the old Cariboo highway joins the Hart highway and is a continuing link with highway 97 which goes through to California. The traffic on this highway extending as it does from California to Alaska is out of all reason considering the population in the area because of the many tourists and truckers passing through from all parts of the country on their way to Alaska and the Yukon.
I should like to mention one or two things with regard to the growth of Prince George. Once the gas line comes in there, there will undoubtedly be many secondary industries attracted to that area. There will likely be a brick factory, and undoubtedly there will be a cement factory somewhere between Prince George and Dawson Creek, because apparently the rock is suitable for the manufacture of cement and some people are already interested in this development. Prince George is the white spruce capital of North America. It ships enough spruce lumber out in one year to build a city the size of Edmonton today. An average of 60 carloads leaves the Prince George sidings alone every day of the year; and that is a lot of lumber. That does not take into consideration the amount of lumber that is shipped from other points, such as Sinclair Mills and Penny and all the other points where fairly large sawmills are located. All this development points to the success of the Pacific Great Eastern Railway and the wisdom of the provincial government in extending that railway into the Peace river area.

The Budget-Mr. hehoe
Eighty miles south in the Cariboo riding we have the village of Quesnel, another village of 6,000 or more people. Here we have the one and only private plant in that interior part of the province. Western Plywoods have a plant there, and they put out many millions of feet of lumber and plywood during each year.
When the gas pipe line comes through there, we will have an upsurge in the development of this area in secondary industries also. We have in the area of Quesnel large quan-tites of diatomaceous earth which, I understand, are now being developed. When the gas goes through, it can be used for heating purposes to dry this diatomaceous earth. I understand it is expected to create quite an industry there in that business of getting these products out to such cities as Vancouver. I believe that Calgary is another of the markets where they expect to sell a great deal of this diatomaceous earth.
All these add up to one thing, as far as I am concerned, at this moment, and that is the necessity for realizing that communications are the gateway to development. I do not think that a country such as Canada or a province such as British Columbia should ever wait for the development to take place first and then build the railways and communications afterwards. I believe that the way to open up a country is to create the highways and railways that are necessary, and the country will then open up and develop.
The village of Quesnel also serves Wells and Barkerville. The town of Wells, of course, has gold mines-I believe they are under one management-which produce, I believe, about 1,600 ounces of gold each month. I understand that in the days of the famous gold rush of Barkerville there were actually millions of tons of gravel that were turned over by shovel. The village of Barkerville, which has 50 people now, had
25,000	people at one time. However, I believe there is a historical value in the village of Barkerville which should not be overlooked. It is my understanding that the provincial government is going to vote, or has voted, some money for the restoration of some of the buildings in that area.
I understand that the power from the natural gas, if it is converted to power, would be in the neighbourhood of 10 million horsepower, which is a lot of power. I understand that it is expected that the advent of gas is going to do a great deal towards solving the controversy that has been in existence: fish versus power. We are looking forward to great co-operation there among the federal government, the provincial government and the municipalities in connection
IMr. Leboe.l

with the preserving of the fishing industry and yet getting cheap power for the secondary industries.
Now I turn to the question of federal aid for the Pacific Great Eastern Railway. Hon. members will recall that on 3rd June, 1955, the Prime Minister announced that $25,000 would be allotted to the Pacific Great Eastern Railway for construction of 50 miles. At the same time the Minister of Transport mentioned a very much larger subsidy for another railroad in eastern Canada, of which the first instalment would be as large as the total amount to be spent on the Pacific Great Eastern Railway. The Prime Minister, on 20th of January 1956, made the statement that he did not see that there was any growth in the Peace river area that would warrant a change in the position that they had taken.
I made it my business to find out exactly on what the government based its opinion. I placed some questions on the order paper to find out exactly on what these opinions were based, so that I could judge whether or not it was worth following this thing any further, and as a result I have come up with the following information.
I placed a question on the order paper as follows:
1.	Has the federal government made any economic surveys of the British Columbia-Alberta section of the Peace river area within the last ten years?
2.	If so, when and who made these surveys?
The following answer came back from the Department of Agriculture:
1 and 2. Economics division, Department of Agriculture made the following economic surveys: (a) High Prairie area in 1951. (b) Wanham-Spirit River area in Alberta and adjoining area in British Columbia in 1953. (c) Fort Vermilion area 1953.
In looking into the surveys that were made, I find that one soil survey took in 120 farms. One survey took in 60 farms to find out how the farmers were getting along and how much everything cost them. At Fort Vermilion 26 sections of land were looked at. The area concerned was east and north of Grande Prairie in Alberta. Those were the three surveys upon which the federal government apparently based its opinions. I wanted to find out if there was anything I could get in regard to the shipments of products from Hines Creek and Dawson Creek for the year 1946 to the last year for which figures are available. I asked the following question:
1.	What was the total tonnage hauled by the Northern Alberta railways to and from Hines Creek and Dawson Creek for the years 1946 to the last year figures are available?
2.	What was the freight revenue from these points for the same years?

The answer I received was as follows:
1 and 2. The Northern Alberta Railway Company is jointly owned by the Canadian National Railways and the Canadian Pacific Railway Company and is not an agency of the Crown. Information relating to its internal operations is not furnished to the Department of Transport. Following inquiries, the dominion bureau of statistics advises that it has no record of tonnages or revenues as between particular points.
Now, I have found out what the reports were. I have them here and I have looked at them. I find that the federal government had absolutely nothing on which to base an opinion. I would suggest that possibly this would be a good time for the Minister of Finance (Mr. Harris) to take an unofficial holiday of two or three weeks, tour that great north country, see what is going on there, and then come back and advise the Prime Minister (Mr. St. Laurent) as to what actually is taking place there. In view of the taxation structure that exists I feel we are justified in asking for more assistance than has been offered. As a matter of fact, I think a great deal more assistance is justified under the tax structure we have today.
I realize it has been said that you cannot take money from here or there without getting it from the taxpayers, but there is such a thing as a redistribution of funds which are the result of favourable tax fields. No one can deny that the development taking place in British Columbia has created for the people of Canada a very favourable tax field. It is my understanding that out of the total tax revenue in the province of British Columbia the province gets 15 cents out of every dollar and the federal government gets 85 cents. Therefore I think we are justified in asking for additional consideration to what has been given, especially in view of the reports I have put on the record tonight as to what the government had in the way of information on which to base an opinion.
I am not going to say very much about the budget but I should like to put on the record a comparison of the highlights of the federal budget and the budget of the province of British Columbia. In the Gazette of March 21 there is an article headed "Budget At a Glance", a Canadian Press dispatch which reads as follows:
Finance minister Harris read his budget speech predicting a 1956-57 surplus of $113 million compared with a 1955-56 deficit of $51,700,000. There will be no changes in personal and corporation income taxes. Revenue loss from tax changes, mostly in additional exemptions from the 10 per cent sales tax assessed at manufacturers' levels, totals $12 million.
Canadian editions of foreign magazines containing some Canadian advertising will be taxed 20 per cent of gross advertising revenue starting January 1, 1957. Effective immediately, purchases
The Budget-Mr. Weselak of gold for export for safekeeping may be made without restriction. Total 1956-57 revenue is estimated at $4,763 million and expenditures at $4,650 million.
The Prince George Citizen of February 2, 1956 has the budget highlights for the province of British Columbia. Here they are:
1.	Amusement tax-cut from 15 to 10 per cent and earmarked for hospital construction.
2.	Pensioners to receive $5 a month more.
3.	Civil servants to receive pay increases of between 4 and 12 per cent.
4.	Aid to local government boosted by a total of $2,137,931.
5.	Capital works program of $80,109,000; $37,480,000 for arterial roads and bridges, forest development, roads and mining roads.
6.	Agriculture department to spend 45 per cent more.
7.	Education funds up $3,950,000.
8.	Total budget of $258,427,024 record for province.
9.	Net debt of province reduced 13-50 per capita in last year.
10.	Hospital insurance costs up $1,552,710.
I think these figures speak for themselves. I realize, of course, that the Minister of Finance has to work within the framework of the policy laid down by the government. However, in passing I should like to say that when we are considering the taxpayer the fundamental thing we are confronted with in any budget or any plans we have for the future of Canada is the distribution of the goods that we produce. If we fail to distribute the goods that we produce we can stand up in the house and talk till doomsday about the great production that we have. If the financial policy of the government is not such that the Minister of Finance can work within that framework and cause distribution of the production of the country to be made, then the financial policy has failed and not the Minister of Finance. I believe with all my heart that the fault lies not with the Minister of Finance, who has to work within the framework of a policy, but with the policy of the federal government.


Mr. A. B. Weselak (Springfield):: Mr. Speaker, in entering the debate on the budget I cannot help but reflect on the budget debate of 1955 when members of the opposition referred to the budget of that year as delightful optimism, as unsound and as an Alice in Wonderland proposition which had been put before the house. The Minister of Finance (Mr. Harris) was accused at that time of giving free vent to his imagination and his budget forecast of a gross national product of between $25J billion and $26 billion was assailed and for all practical purposes ridiculed. In addition, statements and inferences were made to the effect that budgetary deficits would accrue possibly to the extent of $400 million to $500 million.
What has happened in fact, Mr. Speaker? The gross national product has not only

The Budget-Mr. Weselak reached $25J billion, has not only reached $26 billion but has reached $26-6 billion, an all-time high in Canadian history. What has happened to the forecast of deficits? A deficit was planned by the minister of $160 million and in fact the deficit has been reduced to $52 million.
What has happened to the economic recession predicted by the opposition before and during the last budget debate? The white paper shows that the volume of nonagricultural output rose more than 7 per cent, mining output by about 16 per cent, the construction industry 12 per cent, manufacturing 7 per cent, wages and salaries 7 per cent, investment income by one-fifth, and corporation profits to a level 7 per cent above the previous high of 1951. Net farm incomes as distinguished from net cash income rose by over one-third from the previous year but nevertheless remained 14 per cent below the level of 1953, indicating that agriculture has not recovered to the extent that other sectors of the economy have succeeded in doing.
Employment in 1955 was higher than in 1954 and total employment rose by 2J per cent. This was the economic recession predicted last session by the Conservative-socialist opposition. It is no wonder that the financial critic of the official opposition had no desire to discuss the budget when it was brought down but preferred to devote his time to an examination of the estimates.
Returning to the budget itself, may I congratulate the minister upon his sensible approach to the problem. The Conservative-socialist opposition may attribute to him certain ulterior motives and have described the budget as a preview of an election budget. They have also stated that tax reductions could have been made and would have been made had an election been pending.
I presume, Mr. Speaker, it is characteristic of members in opposition to ascribe motives to any action on the part of the government and to ascribe such motives as will suit their own ends. As a result we can therefore assume that any reference to the budget by opposition members will be such as to place it in its worst light. I do not suggest that we on the government side of the house are totally unbiased, but I do say in respect of this budget that Liberals are on solid ground in giving it their support and recording approval of the government's action in this regard.
Hon. members will recall that substantial reductions were incorporated in the 1955 budget and that a deficit of $160 million was forecast. Hon. members will also recall that in April of 1955 we had experienced an unusual winter of unemployment and that the

graph of economic activity had shown a decline which had been carried over from 1954. Under the circumstances the government was justified in budgeting for a deficit to give what impetus it could to the economy by increasing the amount of money available for consumer spending and to encourage investment.
When the white paper was tabled in the House of Commons prior to the budget, press reaction-and, as a matter of fact, my own reaction-was to the effect that little could be done in the matter of tax reduction by the responsible minister. Anyone who has had anything to do with governmental budgetary accounts knows full well that a moderate surplus, whenever possible, is certainly desirable in order to provide against overestimates of tax revenues and unforeseen contingencies. Surpluses also provide a source for strengthening the cash position of the government. A surplus of 2J per cent as provided in the present budget is certainly not unreasonable, and I would agree with the minister when he describes it as a prudent surplus.
The net estimated surplus for 1956-57 in the budget is $125 million. In 1957-58 it is estimated that payments to the provinces will be increased by $110 million.
The national health plan is expected to cost the federal treasury an additional $180 million. Grain storage cost as well as costs under the Agricultural Prices Support Act-


Mr. Hodgson:: Mr. Speaker, would you ask the hon. member to read more slowly? It is hard to follow him.


Anton Bernard Weselak: -can be expected to increase by close to $30 million, with the result that the government will be faced with additional expenditures of roughly $320 million in the coming year.
In the face of these expected additional expenditures the carry-over of a modest surplus of $125 million to the next year can hardly be considered as excessive. When one considers the additional commitments which have been made by this government and which will be payable in the coming year, it is only reasonable and sound financing for the time being at least to preserve the source of revenues with which these additional payments can be met.
The philosophy underlying the 1955 budget was one of boosting the economy by encouraging spending and making more money available to the public for this purpose. The thinking on the other hand in relation to the 1956 budget, I think can best be put in the minister's own words which I think will bear

and deserve repeating. In his budget speech, as reported at page 2327 of Hansard, the minister stated:
The blessings of an economy operating at a high level are pleasant indeed to a minister of finance but they bring with them new responsibilities for all of us. The objective should be to maintain a steady growth in economic activity without the process of expansion giving rise to inflation and instability.
He further stated that "the fiscal policies must continue to be directed towards economic stability".


Mr. Blackmore:: Louder.


Anton Bernard Weselak: In spite of the fact that as a member of this house I should like to have seen some relief in taxation this year, I must confess that before the budget was brought down I could not see any room or justification for such action, and contrary to some criticism in the press now, the forecasts in almost all of the same publications at that time coincided with my own opinion.
A certain responsible daily in my own province, whose opinions I often respect, has referred to the budget as not merely a stand-pat budget but a negative budget, and this has been echoed in the Conservative amendment before the house. With this statement I would take issue and propose to do so. The budget, like any other thing within this confused world of ours, is a relative thing and must be judged in the light of the circumstances which affect and surround it.
The positive aspects of the budget are to be found not only in the printed words of the budget but also in what was not said by the minister when the budget was presented to this house. In the printed word we find certain tax and tariff relief to our hard-pressed farmers. Last summer there was criticism in the west of a tariff board ruling which had resulted in certain farm implement parts becoming liable for import duties and sales tax. Government policy has been in the past that parts like the machinery and equipment itself should enter Canada duty free and be exempt from sales tax. The action in this budget on the part of the government to reword the acts in such a way as to restore duty-free entry to these items and of adding further items to the exempt list in accordance with recognized government policy will be welcomed by the farmers of Canada, and will be of some help to them in combating rising costs. The effect of these provisions is to reduce the cost of these items by about 30 per cent which is not an insignificant figure. The removal of sales tax on certain industrial equipment and building materials will also be welcomed by those affected.
The Budget-Mr. Weselak
The recent announcement by the Minister of Agriculture (Mr. Gardiner) that floor prices are to be continued on butter at 58 cents a pound to 1958 was welcome news to the agricultural communities in Canada. The relative benefit as compared to cost fully justifies this action, which certainly is in the national interest. In this connection I note that the Manitoba government by taking advantage of butter provided by the government to institutions at reduced prices effects a saving of $21,142 a year. The Saskatchewan socialist government on the other hand has absolutely refused to co-operate in this matter and continues to use margarine in its provincially-owned institutions. The socialist members here like to refer to themselves as the champions of the farmers-


Alfred Claude Ellis: What are you reading from?


Anton Bernard Weselak: What were you reading from?


Clayton Wesley Hodgson: You knocked him right off his place.


Anton Bernard Weselak: -and decry and belittle this government's efforts to assist the farmers. In this respect I would suggest that our socialist friends in this house direct some of their attention to the Saskatchewan government itself and direct some of their criticism in that direction. When Mr. Bentley, the minister of health in Saskatchewan, was asked whether the dairy interests objected he stated: "We've had some letters from them. I sympathize with their viewpoint, but I've still got a little Scot's blood .in my veins".
I would suggest that if the Minister of Agriculture made a statement of that type in this house, he would be accused by our socialist friends of being miserly and of not being interested in the plight of the farmer, and would be told that sympathy alone put no money in the farmers' pockets. They would not hesitate to state that the government was patronizing the packing industries; which manufacture margarine rather than the dairy producers, and was adopting policies designed to benefit the packers rather than the farmers.
I was particularly pleased, Mr. Speaker, with one aspect of the budget which does not appear in the actual print. I refer to the tariff policies which can be read into the budget itself. During the past few years the cry for protection has been steadily growing from individual industries and has now been taken up by the Canadian Manufacturers Association, with the result that developments in this respect are being watched with concern not only by the agricultural industry but by the pulp and paper industry and such industries as the aluminum industry in Canada

The Budget-Mr. Weselak. which rely to a great extent on foreign markets to assure the sale of their products.
While on his tour of western Canada last fall the Leader of the Opposition (Mr. Drew) is reported to have proclaimed as Conservative party national policy the policy of the maximum processing of Canadian raw materials within Canada before export.


Alfred Claude Ellis: Slower.


Anton Bernard Weselak: This natural resources policy he is reported to have declared was a point on which there was a sharp and clearly defined division between the Conservative party and the Liberal party.
Western Canadians are not as gullible as the Leader of the Opposition may assume them to be, as the Conservative party has found out. I should like to compare this statement of Conservative policy with that enunciated by Mr. R. B. Bennett, on behalf of the Conservatives at the imperial conference of 1930 when he said this. I quote from page 277 of "Colonial and Imperial Conferences", volume III:
The Conservative party of Canada believes in, and employs, the principle of protection of the home producer of agricultural and fabricated products from harmful interference by world competitors. But it is not part of our policy to exclude from our markets foreign goods, so long as their importation does not threaten a reduction in the high standard of living which our citizens enjoy. On the other hand, it is our declared policy to provide for the consumer a cheap market by stimulating the growth of competing domestic industries to that point of development where they will be able in fair competition with others beyond our dominion, to offer to the Canadian public products of like quality and at prices comparable to those prevailing in the larger markets of other countries . . .
In pursuance of this policy, and to meet an economic situation, brought about by world and domestic causes (it is not necessary here to determine their relative responsibility) the parliament of Canada at a session called for the purpose in September of this year, enacted certain changes in the tariff, designed, in our view, to strengthen the position of the home producer. Certain measures were taken as part of this emergency legislation, to avoid the exploitation of the consumer; and in the good faith and good sense of the Canadian producers we have the necessary assurance of their rigid adherence to these measures.
As a result of the adoption of these protective policies the average ad valorem rate of duty on dutiable imports was increased from the 1929 level of 24-4 per cent to 30 per cent in 1932, and on total imports in the same period from 15-9 per cent to 19-1 per cent.
By midsummer of 1932, Mr. Bennett had found that his policy was not working to the advantage of Canada and in his statement to the imperial conference held at Ottawa in

July of 1932, he had this to say to the conference, and I quote from page 397 of the same volume:
In the past, Canada's manufactured products have enjoyed a measure of protection, though at times it is claimed by some a not wholly adequate measure of protection, in the home market. Our natural products have enjoyed little or no fiscal advantage over our foreign competitors in empire markets. It is now our hope to secure it for them. In as much as the ideal application of the principle of protection involves an equalization of benefits thereunder as between manufactured and natural products, it is the desire of this government to effect that equalization and to find a way for our exporters into empire markets by giving the exporters from these markets a way into ours.
Then, he went on to say:
I have said, before, and I do not desire to minimize the fact, that Canada must have greater export markets for its natural products. No country can live unto itself in this complex age, and with our relatively small population, with our vast and varied natural resources, with our immense exportable surplus in natural products, we perhaps above all other countries must be assured of other markets than our own.
Mr. Bennett, in so doing, recognized the importance of our export markets for raw and natural products and stated that secondary industry must support his proposals, and expressed the belief that they could not but share in the great advantage which will accrue to the exporters of natural products, and also recognized that if our exporters were to have a market we must give to the exporters of these countries a way into ours.
The tariff and trade policy of the Liberal government in 1937, and the same words apply today to the present government, were enunciated by the then prime minister, the Right Hon. W. L. Mackenzie King, at the imperial conference of 1937, when he had this to say:
The international situation will be reviewed in detail at later sessions. I shall, therefore, not make any reference to it at this point, beyond expressing our firm conviction that enduring peace cannot be achieved without economic appeasement, that political tension will not lessen without abatement of the policies of economic nationalism and economic imperialism. The countries here represented have, I feel, a definite responsibility to join with other countries willing to co-operate in a concerted effort to avoid increasing tariffs or exchange or quota controls, and to lessen, in every practicable way, the barriers to international trade.
In Canada we have endeavoured to open the channels of trade. Negotiations with the United States, and more recently with the United Kingdom, led to substantial reductions in our tariff rates.
The effect of the trade policy stated by Mr. Bennett in 1930 and that adopted by the Conservative party in 1956 is a statement of policy which had then, and now would have, the effect of restricting our primary industries that are uneconomic. Such a policy would undoubtedly suit some people, but from the point of view of the country as a whole it

is the development of Canada's great primary resources that provide, and must continue to provide, the basis of our prosperity and the prime impulse to the expansion of secondary industry rather than government interference.
Our secondary industries are coming and will come naturally and economically, but to push them artificially by limiting primary development is to limit what we can do best and most profitably. The fact that our secondary industries are coming along is indicated by the fact that the index of manufactured production of durables in 1939 was 108. In 1954 it was 297, and in 1955 it was 324.
The orderly expansion which has taken place in both our primary industries and secondary industries, which have pretty well kept pace with each other, should not, I submit, be interfered with by government action. Secondary industries are being established in Canada and will be established where the economic climate of the country or the area permit their economic development. I submit, Mr. Speaker, that the only result of government artificially pushing the expansion of secondary industry in order to process all raw materials at home would be the abandonment of the high standard of living which we currently enjoy.
The effect of such a program would be, first, the loss of our foreign markets for agricultural products, mineral production and certain industrial production. We have been reminded by Great Britain and other countries that trade is a two-way street and that unless the way is open for trade in both directions trade will suffer. Loss of our foreign markets will leave only the Canadian market available for such production rather than world markets.
Second, to compete in the export trade such industries would be faced with the problem of competing with industries in other countries where wage production and material costs are much lower. To meet this competition we would have to pay wages, at say, the German level, or perhaps curtail our social security program so as to cut the cost of the finished product by the amount of taxation saved; or make other unpopular adjustments in our way of living, all aimed at reducing the cost of the finished product, thereby reducing the benefits we now receive from selling raw and semi-raw commodities.
Third, if we were not to reduce the cost of the finished product by one of the means I have suggested, and compete with foreign production, these industries, uneconomic by nature, encouraged by government to establish themselves in this country, would have every right to come back to the same government and demand either subsidies or 67509-170
The Budget-Mr. Weselak protection, with the result that the primary producer would not only have lost their markets but the cost of the things which they require would rise, and the cost price squeeze now complained of by them would reach the point of strangulation.
Fourth, the restriction of the development of our primary industries, which would be bound to result from such a policy, would result in the economic development of the four western provinces and the maritimes being slowed down to a level where their only market would be their own local market and that of the central provinces. The development of forest and mineral resources in Manitoba has resulted in a substantial increase in industrial development within that province and has seen the establishment of many industries in the greater Winnipeg area. Similar developments have taken place in Saskatchewan, Alberta and British Columbia. These developments have followed as a result of the expansion of the primary industries in these areas which in turn have created a demand not only for labour but for material, and have thus provided a market for local industry within the area itself. This has had the effect of strengthening our provincial economies, which certainly is in the national interest.
I can see nothing, Mr. Speaker, in the Conservative policy of maximum processing of raw materials within Canada which differs substantially from Mr. Bennett's isolationist tariff policies of 1930.
In contrast, the attitude of the Liberal party and of the government has been to encourage international trade and of the two I submit that this is the sounder policy. In 1932, when Conservative policies had gone into effect, these duties were increased on dutiable imports to 30 per cent, and on total imports to 19-1 per cent. They were subsequently reduced by a reversal of Conservative policies by the subsequent Liberal policies to 18-1 per cent, or a reduction of 40 per cent.
On motion of Mr. Weselak the debate was adjourned.


Mr. Speaker:: While I fully realize the difficulties of enforcing the rule against the reading of speeches, I notice with regret that several hon. members since the beginning of this debate have indulged in this very undesirable practice. I would like to appeal to all hon. members to desist from the reading of speeches. I want to say now that as soon as the debate on the budget is over I shall make a very sincere effort to have the rules respected.


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

[Stage Direction]
The following answers, deposited with the Clerk of the house, are printed in the official report of debates pursuant to standing order 39:

Mr. Rea: 1.	What invitations to tender were issued for rectifier units for the Department of National Defence?
2.	What was the price named by each person tendering and to whom was the contract awarded?
Answer by: Mr. Howe (Port Arthur):
Tender No.	Successful tenderer


F.33-43-735
[Stage Direction]
F.18-38-77/Pt.A8/l

[Stage Direction]
Eastern Electrical Supply Co., Montreal, P.Q. Canadian Line Materials Ltd., Ottawa, Ont. W. W. Wells Limited, Toronto, Ont.
T.M.C. (Canada) Ltd., Ottawa, Ont.
Northern Electric Co., Ottawa, Ont.
Tender cancelled due to change in specification
F.18-5P-10/Pt.2
F.18-4G-111/FD.1

[Stage Direction]
Canadian Line Materials Ltd., Ottawa, Canadian Line Materials Ltd., Ottawa, Canadian Line Materials Ltd., Ottawa, Industrial Electronics of Canada Ltd.,
Toronto, Ont.
F.18-5P-15	Industrial Equipment Co. Ltd., Montreal,
Y.33-47-199/3	Pitt Distributing Co. Ltd., Toronto, Ont.
P.33-40-1782 (recalled) Northern Electric Co., Ottawa, Ont. P.33-40-2009	Northern Electric Co., Ottawa, Ont.
Ont.
Ont.
Ont.
[Stage Direction]
Value of order $99,360.00 18,008.00
2.690.00
3.440.00
3.434.00
61.685.00
4.635.00 14,727.30
58,428.25
25,061.75
673.85
59.880.00
6.242.00
Note: It is not the policy of the department to disclose other than the names and prices quoted by the successful tenderers.
The above listing represents only those rectifier units procured directly by the department in Canada, and does not include procurement on a subcontract basis by prime or subcontractors.

Mr. Johnson (Kindersley): 1.	Who is the deputy transport controller?
2.	When was he or she appointed?
3.	Under what authority was the appointment made and who made the appointment?
4.	What is the salary of the deputy transport controller?
Answer by: Mr. Marler:
1,	2 and 3. No deputy transport controller has been appointed since the resignation of the former deputy transport controller was accepted on July 2, 1953. Mr. Frank T. Rowan has been performing the duties of deputy transport controller since August 1, 1953.
4. Mr. Rowan receives no salary for his work in connection with transport control but is remunerated as an official of the Canadian wheat board.


POPULATION BY MILITARY COMMANDS
Mr. Bell: What is the population of Canada by military commands?
Answer by: Mr. Howe (Port Arthur):
Information not available. Statistics of Canada's population are compiled by counties and census divisions, not by military commands.


TUBERCULOSIS CONTROL MEASURES
Mr. Huffman: What has been done under the federal health grants program toward the control of tuberculosis in Canada in the way of:	(a) providing better
detection facilities; (b) providing more hospital or sanatoria bed accommodation; (c) making drugs more cheaply available to patients?
Answer by: Mr. Martin:
(a)	Funds provided by the federal health grants program are playing an important part in stimulating and maintaining the fight against tuberculosis. Increased emphasis on early diagnosis and expanded facilities directed toward early case-finding have proven to be some of the most striking developments since the inception of the federal health grants program. These improvements have occurred particularly through the expansion of clinic facilities, the extension of mass surveys and the introduction of the general hospital admission X-ray program. X-ray equipment, films, fees for interpreting the films taken, mobile vans and other clinic equipment and the assistance toward the employment of additional clinic personnel have

268&
been provided under the federal health grants program. Grants have also been made toward research into quicker and more accurate methods of diagnosing tuberculosis.
(b)	Since 1948 more than $5,150,000 has been made available under the hospital construction grant to assist the provinces to provide more hospital and sanatoria bed accommodation involving the construction of space for 4,292 additional beds.
(c)	Prior to the introduction of the federal health grants program, streptomycin was restricted in use and in many cases was not provided free of charge. Since 1948, more than $3,390,000 has been made available to the provinces to provide streptomycin, P.A.S., isoniazid and other antimicrobials free of charge to all sanatoria patients requiring them. The free availability of these drugs has played an important part in the reduction of the mortality from tuberculosis in the past few years.
Newfoundland	
Prince Edward Island	
Nova Scotia	
New Brunswick	
Quebec	
Ontario	
Manitoba	
Saskatchewan	
Alberta	
British Columbia	
Yukon and Northwest Territories
Total	
Figures for the fiscal year ending March 31, 1956 are not yet final and have therefore not been included.
*See amended answer, page 2936.


NATIONAL GALLERY
Mr. Murphy (Lamblon West): 1.	Did the government purchase a painting by Carl Henry Ahrens, and if so, when?
2.	What was the price paid?
3.	Was the painting ever exhibited, and if so, when? If not, for what reason?
4.	Upon whose recommendation was this picture purchased?
Answer by: Mr. Pickersgill:
1.	The trustees of the national gallery purchased a painting, "The Road" by Carl Henry Ahrens in 1923.
67509-170J
Questions


SOCIAL SECURITY PAYMENTS, TAX COLLECTIONS   ATLANTIC PROVINCES
Mr. Brooks: 1.	How much money has been paid from the-federal treasury to each province in the past ten, years under provisions of (a) Old Age Security Act; (b) Family Allowances Act?
2.	How much money has been collected by the federal government from each of the Atlantia provinces by way of taxes, customs duties, succession duties, or by any other means in the same period?
*Answer by: Mr. Martin:
The following table shows the total net payments made to individuals in each province in the past ten fiscal years. With the exception of Newfoundland payments under the Family Allowances Act commenced in. July 1945, and payments under the Old Age Security Act commenced in January 1952. In Newfoundland payments commenced in. 1949-50.
(a)	(b)
Total net old age	Total net family
security payments	allowance payments
to March 31,1955	to March 31,1955
$ 23,395,340	$ 65,089,410
10,376,000	23,408,757
57,235,370	148,663,574
40,742,425	129,093,637
232,907,626	949,739,815
404,349,252	857,402,814
64,581,490	156,294,551
64,750,325	186,881,212
64,634,356	200,380,888
127,675,750	207,315,310
736,640	5,792,400
$1,091,384,574	$2,930,062,368
2.	$1,500.
3.	Gallery records show the painting was exhibited in various cities in 1925, 1928, 1929, 1930, 1931, 1935, 1936, 1941 and 1952.
4.	A committee of the board of trustees of the national gallery.


NATIONAL GALLERY-PURCHASE OF LIECHTENSTEIN PAINTINGS
Mr. Murphy (Lamblon Wesl): 1.	When the paintings of the Prince of Liechtenstein were obtained for the national art gallery, were they obtained directly from the Prince of Liechtenstein or were they obtained through some agent, broker or dealer?
2.	What was the amount paid for each picture?
3.	Did the federal government pay a commission for their purchase? If so, how much?

Questions
4.	If the pictures were obtained through a dealer, agent or broker, or anyone other than the Prince of Liechtenstein, who was that dealer, agent or broker?
Answer by: Mr. Pickersgill:
1.	Paintings obtained through dealers.
2.	The paintings were purchased in two groups as follows:
(a)	1952-53 fiscal period-three paintings. Price $276,400 for three. "Esther at the Palace Gate", by Filippino Lippi; "Mordecai led by Haman", by Filippino Lippi; "Bath-sheba at her Toilet", by Rembrandt van Rijn.
(b)	1953-54 fiscal period-five paintings. Price $360,000 for five. "The Madonna and Child with St. Anthony of Padua and a Donor", by H. Memling; "The Crucifixion", by Quentin Massys; "Portrait of a Prince of Bavaria", by Barthel Beham; "Santa Maria della Salute in Venice", by Francesco Guardi; "The Lacemaker", by N. Maes.
3.	Yes. The commission was paid at a rate
of 5 per cent on each group (a) and (b): Group (a)	$276,400.-Commission $13,770
United States funds; Group (b) $360,000.- Commission $18,000 Canadian funds.
4.	Dealer for group (a) $276,400.-William H. Schab, New York, N.Y.; Dealer for group (b) $360,000.-Thos. Agnew & Sons Ltd., London, England.


IMPORT AND EXCISE DUTIES ON U.S. AUTOMOBILES
Mr. Pommer: 1.	What was the duty collected by Canada In 1955, on the 27,392 passenger automobiles imported into Canada from the United States?
2.	What was the amount of the excise tax collected on these automobiles?
Answer by: Mr. Pinard:
1.	$10,305,153.
2.	No division of excise tax collections is made as between automobiles imported from Great Britain, from those from the United States or from other countries, hence the information requested is not available in excise.


NATIONAL GALLERY PAINTINGS
Mr. Thatcher: 1.	Approximately, how many paintings are owned by the national gallery?
2.	Approximately, how many of these are on exhibition?
3.	Approximately, how many are in storage? Answer by: Mr. Pickersgill:
1.	1,300 (not including the Canadian government war collection entrusted to the care of the national gallery).
2.	300 at the national gallery, 400 elsewhere, total 700.
3.	The remainder (600).


BOOK CENSORSHIP
Mr. Diefenbaker: 1.	What are the titles of each book banned or prohibited entry into Canada by the Department of National Revenue in 1955?
2.	Which of said books was prohibited because of
(a)	its treasonable or seditious nature; (b) its immoral or indecent character?
3.	What officials made the examination of each of the said books, and who made the final decision to ban or prohibit in each case?
4.	(a) Are such officials given special training to qualify them to decide what is proper, from a literary, moral or political standpoint, for Canadians to read; (b) If so, what is the nature of such training?
Answer by: Mr. McCann:
1.	It has been the continued policy of successive governments to not make public the titles of books classified as immoral, indecent or seditious under tariff item 1201 which has been in the tariff since confederation. It has obviously not been felt that the government should be the supplier of a list of selected works of this character. Furthermore, the publication of such titles could serve as a catalogue for those interested in the clandestine importation, distribution or sale of this kind of merchandise. When a publication is classified under this item the importer and the publisher are both personally advised of its classification and have the right of appeal to the tariff board or, with the approval of the minister, adjudication by the exchequer court, li the hon. gentleman asking this question wishes to have a list of the books classified under this tariff item during the year 1955, I will be glad to make it available to him for such use as he may see fit.
2.	The 140 books referred to in No. 1 above were all prohibited as being immoral and/or indecent in character.
3.	Publications are reviewed for purposes of tariff item 1201 by various departmental officers, but the final decision to classify a publication under this item is, as a matter of policy, assumed by the minister, who takes the responsibility before parliament. Depending on the nature of the publication different reviewers are selected within the department and in some cases outside opinions are also obtained.
4.	There are no known courses given in Canada for the purpose of qualifying persons to decide what is proper from a literary, immoral or political standpoint. Where immorality or indecency has to be weighed against literary, scientific or political values in a publication, every effort is made to weigh such values in the method described in No. 3 above.

Questions


CHEESE IMPORTS
Mr. Robinson (Bruce): 1.	What are the characteristics of the Garry No. 27 oat?
2.	How many bushels of registered certified seed was grown in 1955 in Canada?
3.	How is this seed obtained at present?
4.	Has any of this seed been exported?
5.	If so, to what countries and what quantity to each?
Answer by: Mr. Gardiner:
1.	The Garry 27 oat is a high yielding variety of medium early maturity well adapted to oat growing areas of Canada. It is resistant to Victoria blight and crown rust and highly resistant to stem rust and loose and covered smuts.
2.	Up to February 29, 1956, 104,655 bushels of Garry seed oats were graded by inspectors of the Department of Agriculture as registered and 264,427 bushels as certified, all produced from crops grown in Canada in 1955.
3.	Seed may be procured from seed growers or seed dealers. Information with respect to seed growers producing Garry seed oats may be obtained from the Canadian Seed Growers' Association, P.O. box 548, Ottawa, Ont.
4.	Yes.
5.	Information not available.


POWDERED MILK IMPORTS
Mr. Tuslin: What were the total imports into Canada during the year 1955, of (a) powdered whole milk; (b) powdered skim milk, indicating volume, value and country of origin?
Answer by: Mr. Howe (Port Arthur):
Imports into Canada are recorded in trade statistics by country of consignment and not by country of manufacture.
Imports by country of consignment, year 1955: -
(a) Milk, whole, powdered (item 2286)
Country	Lb.	ValueAlaska 	.. 116	$ 62United States 	. .16,712	12,231Totals	16,828	$12,293(b) Milk, skim, powdered (item	2280)Country	Lb.	ValueUnited Kingdom . .	. 2,625	$ 195Australia 	.636,097	54,498New Zealand 	.156,800	12,654United States 	4,680	983Totals	800,202	$68,330
Question No. 359-Mr. Tustin:
How much cheese was imported into Canada during the year 1955, and during January and February, 1956, indicating volume, value and country of origin?
Answer by: Mr. Howe (Port Arthur):
Imports into Canada are recorded in trade statistics by country of consignment and not by country of manufacture.
Imports for months January and February, 1956, not yet available.
Imports by country of consignment, year 1955:-Cheese (item 2284)
Country	Lb.	ValueUnited Kingdom	39,109	$ 20,976Australia 	11,126	1,996New Zealand ....	5,501,230	1,210,188Argentina 	128,340	54,395Austria	1,834	681Denmark 	1,472,798	561,246Finland 	14,161	6,253France 	359,178	180,303Germany West ..	46,261	25,573Greece 	11,656	4,510Italy 	1,482,194	746,614Netherlands ....	1,009,566	409,941Norway 	76,577	29,588Sweden 	7,822	2,847Switzerland ....	1,629,186	963,378United States ...	923,988	439,401Totals ....	12,715,026	$4,657,890TRIUMPH	MOTOR CYCLES	
Question No. 364-Mr. Hodgson:
1.	Did the government recently purchase a number of Triumph motor cycles?
2.	If so, how many did they purchase?
3.	Were the motor cycles purchased direct from the factory?
4.	If not, were they purchased through an agent?
5.	If so, what is the name of the agent?
Answer by: Mr. Howe (Port Arthur):
1.	Yes. (January 4, 1956)
2.	2,005.
3.	No-motor cycles purchased from Her Majesty's government in the United Kingdom.-ministry of supply, who in turn place a contract with Triumph Engineering of the United Kingdom.
4.	Answered by No. 3.
5.	Answered by No. 3.

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2689

Wednesday, March 28, 1956


RAILWAYS AND SHIPPING
[Stage Direction]
Second and third reports of sessional committee on railways and shipping owned, operated and controlled by the government.
*-Mr. Cavers.