1957-04-01

THE ROYAL ASSENT

Mr. Speaker:: I have the honour to inform the house that I have received the following communication:
Ottawa, March 29, 1957
Sir:
I have the honour to inform you that the Honourable Patrick Kerwin, Chief Justice of Canada, acting as Deputy of His Excellency the Governor General, will proceed to the Senate chamber on Monday, the 1st April, at 5.45 p.m. for the purpose of giving the royal assent to certain bills.
I have the honour to be, sir,
Your obedient servant,
J. F. Delaute,
Secretary to the Governor General (Administrative)



BUSINESS OF THE HOUSE


Hon. W. E. Harris (Minister of Finance):: Mr. Speaker, I have spoken to hon. gentlemen opposite, and I think it has been agreed that notices of motions for the production of papers may stand for today.


Mr. Speaker:: Notices of motions for the production of papers; shall they all stand?


Some hon. Members:: Agreed.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver-Quadra):: Mr. Speaker, on Friday I asked the Secretary of State for External Affairs some questions about a caution which the United States government had issued to United States shipping concerning the use of the Suez canal, and the minister replied that he was in touch with Washington and that he hoped to give the house a report at a later date. Is it possible for him to give us that report today?


Hon. L. B. Pearson (Secretary of State for External Affairs):: Mr. Speaker, the statement made by a representative of the United States government on this matter last Thursday or Friday to which the hon. gentleman referred
was that ship owners had been advised by the United States government to exercise prudence in the immediate use of the Suez canal. But the United States spokesman added that the state department did not desire to prescribe and prohibit such use at that time. This was interim advice to ship owners which I think might well be accepted by ship owners of other countries. As for Canada, there was no use made of the canal in the 12 months before last July by any ships of Canadian registry.
The question of a more permanent policy with regard to the use of the Suez canal, especially by those countries which are its main users, is now under consideration by the governments concerned, and no decisions have yet been reached by those governments. We are in touch with them on this issue.


Howard Charles Green: A press report in today's Globe and Mail is headed, "West Seen Accepting Nasser Terms on Suez." Can the minister say whether or not that is correct?


Lester Bowles Pearson: No, Mr. Speaker, it is not correct, so far as I know, that the governments of the main users of the canal have yet taken any stand in regard to the terms, if you like to call them that, laid down last week by the government of Egypt. That matter is under consideration and, as I have just said, according to our knowledge no final decision has been reached by any government.


Howard Charles Green: What is the significance of the statement by Nasser in Egypt over the week end that Israeli shipping will not be allowed to use the canal unless and until the Arab refugees are allowed to return to Israel?


Lester Bowles Pearson: I cannot attach any particular significance to that statement, which I have noticed in the press. A statement of that kind, if it were the official position of the Egyptian government, would in our opinion be running counter to resolutions of the United Nations which have previously been passed dealing with free navigation of the Suez canal, and as such certainly would not be approved by us. Also I cannot agree that there is any connection between freedom of navigation of the Suez canal and an appropriate disposition of the refugee problem, important as that problem is.

Inquiries of the Ministry CANADIAN BROADCASTING CORPORATION



PUBLIC AFFAIRS PROGRAMMING


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may 1 direct a question to the Prime Minister. In view of the disclosures that came out last week following Arthur Blakely's charge of last Monday, will the Prime Minister give consideration to the further charges made by this same gentleman in this morning's Montreal Gazette and inform the house which of his cabinet colleagues have made stiff representations to the C.B.C.?


Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, I do not know that any of my colleagues have made stiff representations to the C.B.C.


Stanley Howard Knowles: Will the Prime Minister
ascertain from his colleagues whether or not they have done so?


Louis Stephen St-Laurent: Well, all my colleagues are members of parliament, and if the hon. gentleman sees fit to do so each one can be asked whether or not he has made stiff representations. I do not see why I should be required to investigate the accuracy or otherwise of all newspaper comments.


Stanley Howard Knowles: In view of the fact that the Minister of National Health and Welfare was named a week ago as one of those who had tried his hand at direct intervention- and may I ask him to think carefully before he answers-


Some hon. Members:: Oh, oh.


Stanley Howard Knowles: -will he say whether he has at any time communicated with the C.B.C. by letter, telephone, conversation or in any other way regarding its programming?


Hon. Paul Martin (Minister of National Health and Welfare):: At no time have I
sought to direct anyone in the C.B.C. to do anything, for the simple reason, among others, that I know it would be ineffective.



RECOGNITION OF ATTENDANCE OF NEW &quot;HANSARD&quot; REPORTER

[Stage Direction]
On the orders of the day:
Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, I can readily understand why all hon. members have applauded in recognition of the ability and the beauty of our new Hansard reporter, Mrs. Blair.


Some hon. Members:: Hear, hear.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Harold Edward Winch: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs and perhaps the Minister of National Defence, as to whether their attention has been drawn to the statement in this morning's Globe and Mail that there was an agreement between the Prime Minister of the United Kingdom and President Eisenhower upon the use of atomic weapons, but that the warheads will be kept under lock and key by the United States. If so, are we now giving over our offensive weapons from the United Kingdom to the United States?


Lester Bowles Pearson: Mr. Speaker, the only knowledge I have of this matter is that which is contained in the communique which followed the meeting between the Prime Minister of the United Kingdom and the President of the United States, and which indicated that in the future atomic missiles would be made available to the United Kingdom defence forces from the United States under certain conditions.


Harold Edward Winch: Mr. Speaker, may I ask a supplementary question, as to whether there is any truth in the statement in this morning's Globe and Mail that the warheads are to be kept under lock and key by the United States?


Lester Bowles Pearson: I do not know of anything which would substantiate that statement, Mr. Speaker, because I am not sure what would be meant by "keeping the warheads under lock and key," in reference to atomic weapons.



MERCHANDISING


[Stage Direction]
On the orders of the day:
Mr. F. S. Zaplitny (Dauphin):: Mr. Speaker, I would like to ask the Prime Minister if he has received a letter from the retail merchants' association of Canada, claiming that the situation is rapidly approaching "where a few large corporations are gaining a stranglehold on the retail trade of our country". If so, will the government give consideration to the appointment of a royal commission to investigate retail practices and to recommend appropriate remedial action for this dangerous situation?


Louis Stephen St-Laurent: Mr. Speaker, since I came into the house I have received a printed circular with my typewritten address at the top of it. I have not had time to read the whole of it but there is one paragraph which reads:
The situation is serious. Within the next five to ten years, unless action is taken now, these large corporate retailers may well control the supply and price of all retail goods to all Canadians. We have seen similar developments in the automobile industry, and in the gasoline business.
The matter has not yet been considered by the government, but from the looks of this circular I would imagine it has probably been addressed to all the members of this house. I will read it, and after having done so I will see if there is any reason why the government, as a government, should give the matter consideration.



DOMINION-PROVINCIAL RELATIONS TAX RENTAL AGREEMENTS    INQUIRY AS TO PAYMENTS TO PROVINCES

[Stage Direction]
On the orders of the day:
Mr. J. A. MacLean (Queens):: Mr. Speaker, I wish to direct a question to the Minister of Finance, notice of which has been given. My question is, have any payments been made under the 1952 tax rental agreements by the federal government to any provinces during the last quarter of the fiscal year just ended? If so, what was the amount paid to each province?


Walter Edward Harris: Mr. Speaker, my hon. friend did give me notice this morning, but I would prefer to have it as a written question so I can put on record what payments have been made, because I understand that some were made at the request of the provincial governments so that the payments be made before March 31.


John Angus MacLean: I should like to direct another question to the Minister of Finance, and perhaps if he is not prepared to answer it at the moment he can take it as notice. In an answer to a written question appearing on page 2763 of Hansard for March 27, 1957, it is stated that during the fiscal year just ended an amount of $4,163,981 was paid-the past tense is used-to Prince Edward Island under the tax rental agreement. There is a note which says that this figure is subject to recalculation. Would the minister say whether or not that amount has actually been paid and any overpayment might be required to be refunded, or does it mean that is the initial calculation of what might have been paid during the fiscal year?
Inquiries of the Ministry


Walter Edward Harris: It is the total paid during
the period of time on an estimated basis. As my hon. friend knows, since he asked a question about it last week, a final calculation is made only after a certificate is received from the dominion bureau of statistics with respect to the population. We have not yet received that certificate, but in the meantime we do make advance payments on whatever information we have. The final calculation does await that certificate, and so far as I know it has not been received as yet.


John Angus MacLean: I am aware of that, Mr. Speaker, but my point is this. Has the amount of $4 million actually been paid to the province of Prince Edward Island?


Walter Edward Harris: I have not before me the
return to which my hon. friend is referring, but if it is over my signature and it says a payment was made, I think likely it was made.



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbili (Oxford):: Mr. Speaker,
I would like to address to the Minister of National Revenue and also the Minister of Labour a question which I will ask them to take as notice. The question is as follows. Are employees of the Department of National Revenue and the unemployment insurance commission paid mileage and living expenses when compelled to be absent from their respective offices on government business? If so, are these extra allowances considered as income for the purpose of taxation?


Hon. J. J. McCann (Minister of National Revenue):: Our employees are, on occasion,
paid extra for their travelling expenses, and that becomes part of their income.*
*See also page 2956.



NATIONAL PARKS


[Stage Direction]
On the orders of the day:
Mr. W. G. Dinsdale (Brandon-Souris):: should like to direct a question to the Minister of Northern Affairs and National Resources. Is the government going to assist in the establishment of a winter sports playground at Riding Mountain national park? If so, what plans are under way in this regard?


Hon. Jean Lesage (Minister of Northern Affairs and National Resources):: Mr. Speaker, the possibility of a ski development in Riding Mountain national park is under active consideration.	:

Inquiries of the Ministry GRAIN



BOX CAR ALLOCATION-ESTABLISHMENT OF TRANSPORT BRANCH BY WHEAT BOARD

[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: Can the Minister of Trade and Commerce say whether the transport department or branch that is to be set up within the Canadian wheat board structure has now been completed; and if so, is it in control of box car distribution?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: The wheat board is in control of box car distribution, as it always has been. I consulted with the chairman of the wheat board last Friday, and he told me that the wheat board has had fewer complaints about box car distribution this crop year than at any time in the history of the board.


Hazen Robert Argue: May I ask a supplementary question. Do I take it from the minister's answer that the branch or department of the wheat board to control box cars is not to be established? It was the minister who made the announcement about it some time ago.


Clarence Decatur Howe: The board, as a board, is doing the work of the branch for the moment, and the results seem to be so satisfactory that no further step is being taken at this time to formally organize the branch.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question either to the Prime Minister or to the Minister of Finance, with reference to the business of the house. In view of the expectation that this session will end, not in the usual way by all the business on the order paper being completed but on a date to be chosen by the government, can we be given an indication as to which of the items on the order paper have top priority? Could we be told what the general plan is regarding the business of the house for the remaining days of the present session?


Walter Edward Harris: I shall try to do that, sir, very shortly.


Stanley Howard Knowles: Maybe tomorrow?


Harold Edward Winch: Mr. Speaker, I should like to ask the house leader a question in similar vein. Is it the intention of the government and himself as house leader to call the bill on narcotics
[Mr. Lesage.l

passed by the Senate and referred to the House of Commons? Will that be passed at this session?


Walter Edward Harris: Mr. Speaker, as I say I will take the time, perhaps today or tomorrow, to go over the order paper with hon. gentlemen opposite who would be interested in this, and see whether we can work out a priority as to those things that really should be done before we prorogue and those that can wait over until the fall.



INQUIRY AS TO FINANCING OF WHEAT SALE

[Stage Direction]
On the orders of the day:
Mr. H. A. Bryson (Humboldl-Melforl):: Mr. Speaker, I should like to address a question to the Minister of Trade and Commerce with reference to the answer he gave to the house on Wednesday last in regard to the Polish wheat deal. Can the minister now report to the house that satisfactory financial arrangements have been made?


Clarence Decatur Howe: Mr. Speaker, I am assured that satisfactory financial arrangements have been made. At present negotiation is continuing, since Poland has asked for a larger quantity of wheat for shipment before the end of July, and I am assured that finances have already been arranged for the larger amount.



THE BUDGET


[Stage Direction]
The house resumed, from Saturday, March 30, 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. Macdon-nell.
Mr. G. R. Pearkes (Esquimali-Saanich):: Mr. Speaker, when the house rose last Saturday I was discussing defence expenditures in their relation to the present budget, and I had come rather reluctantly to the conclusion that no matter how heavy the burden of these expenditures might be, it seemed that Canada and the other western powers had no option but to maintain so-called conventional forces as well as nuclear deterrents.
The cost of our defence is heavy. The main estimates already tabled show that for national defence itself $1,700 million is to be spent, for defence production nearly $17 million and for civil defence over $7

million, making a total of $1,746,692,039 or 33.4 per cent of the total government expenditure. There seems no likelihood of any substantial reduction being made in those estimates in the foreseeable future for, in spite of this heavy expenditure, all services lack many essentials, such as arms equipment, transport, both ground and air, buildings and other accommodation. The personnel of our forces is excellent, and it will be recalled that when I returned from Europe last year I praised the efficiency of our troops there; and during the past few months I have seen a good deal of our navy, army and air force in Canada. The men in these forces are splendid, but all units are short of essential armament and equipment. There is just not enough money to go around in the manner it is being distributed at present.
Distribution of the defence dollar among the services is as follows: navy, 15.8 per cent; army 23.2 per cent; air force, 48.5 per cent; mutual aid, 7.55 per cent; research, 3.75 per cent. The remainder is spent on administration. The outlay for R.C.A.F. aircraft and engines alone is $215,603,000, this being within $60 million of the total amount devoted to the navy, and more than half the army's total allotment. If our troops are to obtain the weapons they require to reach the standard of efficiency they deserve, and if the taxpayer is to receive something approaching full value for his defence dollar, there is no room for moneys to be spent on any armament or equipment which is not required for an essential role. All duplication of effort must be removed and interservice rivalries eliminated.
There are so many things the forces need now that we are entering upon the atomic era. Field Marshal Montgomery said last October that in his opinion 50 per cent of all strategic tasks would be performed by missiles in less than ten years, and about 75 per cent of the present type of aircraft used for the support of land armies will have been replaced by nuclear weapons in the hands of land forces. Some of these weapons now urgently required are short-range missiles, guns and howitzers with small atomic heads. There is also the whole field of guided missiles, vertical take-off aircraft, etc., weapons which science has developed and is rapidly making available for those who would use them.
If we are entering the atomic age, as indeed we are, we must approach the problem of defence from a new angle. There must be an honest searching for the truth. It is now time to take a new look at the jobs to be done and the forces and weapons with which to do them. We need to make a most critical
The Budget-Mr. Pearkes investigation to find out the kind of defence we must have. Other countries are reorganizing their forces, and if our organization requires revamping we should not hesitate to take it in hand.
I referred earlier to duplication. Of course there is duplication among the services. For example, both the navy and the R.C.A.F. hunt for submarines. All services have to move their personnel about the country, yet instead of a one-movement staff there are three directorates of transportation. There are so many areas of controversy today brought into existence by the interlocking roles of the three services. Take for instance surface to surface missiles. The army looks upon these as long-range artillery, the air force as pilotless bombers. Helicopters and transport planes are beginning to appear in the army, a sphere of activity belonging until recently to the air force.
The degree of emphasis placed on new aircraft, warning lines and larger airfields, etc. at the expense of development of air portable forces, causes concern amongst the other services. We were told recently that an expenditure of $2 billion would be required to develop a system which would commute the information which would become available through the warning line.
Service rivalries occur annually during the contest over the estimates and the amount of money which is available for each service. In addition there is also duplication between allies. A few years ago we heard a lot about unification. The word is seldom used today, yet in this atomic age national wars are a thing of the past. We cannot do without allies no matter how irksome they may be at times.
Some years ago we embarked on the construction of the CF-100 all-weather long distance fighter. At that time it was the intention to equip regular and auxiliary squadrons with these aircraft. Experience has shown that auxiliary squadrons cannot maintain and navigate these aircraft. The production of the CF-100 therefore has proved more costly, in that we have fewer squadrons to equip. Of course it has always been recognized that intercepter squadrons from the United States air force would augment our fighter squadrons in any battle over Canada. They use a United States built aircraft very similiar to the CF-100. For this and other reasons it has not been possible for Canada to sell abroad her CF-lOO's over and above the requirements of her more limited number of squadrons.
Now we are embarking on the development of the CF-105. The United States is working on a similar type. The missile age is upon us, and the price of a CF-105, if a prototype is

The Budget-Mr. Pearkes accepted, will be many times the cost of the CF-100; it will run into millions. I understand, according to press reports, that the Minister of National Defence stated only on Saturday that this type of aircraft would cost $2 million a plane. That is a moderate estimate, because even the electronic equipment required for this aircraft runs into a cost of hundreds of thousands of dollars.
1 We must keep in mind the fact that fighters are of diminishing value now as a deterrent. -In the United Kingdom the select committee -on the estimates was called upon to ascertain whether value has been, and is being, obtained for the large sums of money voted for the Supply of aircraft. Their report reviewed the changing military and economic situation since world war II, and related this to the decisions to order and produce particular aircraft at *various times. The conclusions and recommendations of this committee are worthy of careful study. The first conclusion reads as follows:
Although understandable in the economic circumstances of the time, the money spent on developing aircraft which were unsuccessful in competition and which therefore never went into production, seems excessive, and the system itself one which should not be resorted to in other fields, such as missiles or equipment, without its objectionable features being fully taken into account.
With the advent of the atomic and missile era upon us, we must ourselves carry out a critical examination of each new project originating either with a service department or a research establishment, in order to ascertain its effect upon our aircraft construction industry. The relative value of production from original designs, buying direct from another allied country, or building in Canada from foreign designs under a licence from the designer must be weighed in the balance.
On March 11 the Minister of Defence Production advised that a tentative agreement had been entered into with the de Havilland company for an advance of $2,500,000 to promote the development of an army transport plane referred to as the Caribou. In view of the fact that the United States army is also interested in this type of aircraft, this deal would seem to indicate a degree of co-operation between Canada and the United States not so noticeable heretofore. I have advocated in this house over and over again that our land forces should be airborne or air-transportable, but today a suitable aircraft is not available.
I have mentioned this field of aircraft development mainly because great sums of money are involved, and because of the complexity of the problem. But in many other fields great changes are pending; that is, if we are to have modern defence forces. There
	i i

are many of these interservice problems connected with the future upon which decisions cannot be given without the most careful and searching review. The Minister of National Defence said on March 12, in answer to a question about streamlining our forces, that we are "constantly studying the condition and strength of our forces, and, keeping in mind all the relevant factors, we are making changes as changes appear to be warranted." The minister added, "As a matter of fact, I have announced changes in the house on one or two occasions recently."
These changes have, of course, been of a minor nature, and have the appearance of being introduced to meet some immediate problem rather than as part of an over-all pattern. It is all very well for the minister to say that all relevant factors are being kept in mind, but the means for future planning are hardly available to him. He must rely upon advice from his service chiefs. These are excellent men; I know them all personally. They are all very busy men immersed in the day to day questions affecting their own service. They have little time to work out a broad plan to meet future requirements. Then again, there are certain inherent difficulties in the way of the devising of an over-all defence organization by the chiefs of staff.
Each is the head of a military service and feels responsible for the state of readiness and the morale of its personnel. He instinctively resents any encroachment upon the prerogatives of his service and his own lifetime loyalties. Chiefs of staff hold their appointments for relatively short periods, and assume office at different times. Therefore there is no continuity of planning.
Because these interservice battle areas exist, it must not be assumed that each chief of staff is an inflexible individual. I know the contrary to be the fact. However, each has grown up in the traditions of his particular service, and each no doubt feels that in addition to his broader responsibilities as a member of the joint chiefs of staff committee he has an individual responsibility to his own service.
We have seen in the past that it has been necessary for other countries to set up independent inquiries, not composed of Colonel Blimps nor of members of parliament, but of high judicial personnel who are capable of hearing and interpreting evidence. I refer to such committees as the Esher committee which was formed in Great Britain at the beginning of this century, the result of whose deliberations was the complete overhaul of the war office and an adjustment of duties as between the royal navy and the army of the

United Kingdom. I do not say it would be possible for us to set up a committee with any thought of reducing over-all expenditure, but I feel it is essential that there must be long-term planning in order that we may get full value from the defence dollar which is voted, and also that the services themselves may get the types of equipment which it is so essential for them to have and which they do not have at the present time.
Because a lot of service controversy results from competition, various measures have been suggested to solve the problem. The idea of a single service has been advanced; our tri-service colleges have proved a successful experiment in this direction. Perhaps Canada is in a position to experiment further in that direction. Alternatively there is the possibility of a unified command. A step in that direction would be to make the chairman of the chiefs of staff committee the chief of staff of the defence forces. Anyhow, every senior officer to whom one speaks stresses the need for closer integration among the services.
With two great power groups, west and east, each able to destroy each other with the weapons science has produced, we cannot permit a situation to develop which would provide the opportunity for these powers to commit national suicide. Our aim must be peace; but as things stand today it seems that the best way to secure peace is through strength, and' in co-operation with other nations having similar views. This means that for the foreseeable future we must continue to maintain our defence force at a high standard of efficiency and in a state of readiness to meet an emergency. They cannot meet an emergency, they cannot be efficient, if they are not given the essential weapons.
The same thing applies not only to the regular but also to the reserve forces of the country. Today our Canadian militia has no clearly defined role. Its role and organization are in no way related to those of the regular forces or to anything it might conceivably be called upon to carry out. It is still based on the old system of divisional organization which, as I explained on Saturday, is now a thing of the past.
Our civil defence system is far from efficient. It has comparatively little money devoted to it. If there is a danger of Canada being used as an air pathway to the United States, then there is a grave danger that bombs may fall on this land. Therefore civil defence is required. We have spent time and money in order to secure the report of the Gordon commission, which is based on the assumption that there will be no war for
The Budget-Mr. Poulin 20 years, and has planned the economic development of Canada with that in mind. It seems to me that consideration might well be given to establishing some commission which, having in mind the long-term planning, would see what could be done to ensure that there is no war in the next 20 years.
As I have already stated, in my opinion the only assurance that can be given is through strength. Therefore we must see to it that the available money is used to the very best advantage, and that there is some means by which long-term planning can be carried out. That means does not exist today. That is my feeling on this subject. We are spending a lot of money on national defence and will have to continue to spend a lot of money. We have fine forces, but they are lacking in modern equipment. Therefore in order to provide them with the equipment and arms they need it is essential that all duplication between services and between allies be eliminated.
(Translation):


Mr. Raoul Poulin (Beauce):: Mr. Speaker, last Thursday evening, when I had to interrupt my remarks so that this house could proceed with the vote in accordance with the rules, I was dealing with the position of the sugar industry in Beauce county. I was asking the government to restore the subsidy for the replacement of sap-pails, and I added that a price support for the sale of maple products should be established. I had to stop right in the middle of a sentence which I am going to repeat to-day, in order to connect last Thursday's remarks with those I am going to make now.
I understand from the contents of a letter the right hon. Minister of Agriculture (Mr. Gardiner) wrote to me, in answer to a request I had made, that the officials of his department were considering the possibility of resorting to the Agricultural Products Cooperative Marketing Act in an attempt to reach a financially acceptable arrangement in respect of the sale of maple products.
I know that this act was resorted to in some cases, particularly for the sale of turkeys in the county of Dorchester, for instance, to help producers out of their difficulties arising from a slump in the marketing of their product. I am not sure, however, that the case of the sugar producers who are not grouped as co-operatives-and there are still too many of them-could be solved in this way. Yet they should get the same help as the others. I do hope the issue will be considered quickly and effectively and that, if my humble suggestions prove impracticable,

The Budget-Mr. Poulin our experts will come up with other and sounder ones to solve these very important issues.
As a matter oi fact, maple sugar producers would not be the only ones to benefit from special assistance legislation, for by now, the wheat, butter, bacon, egg, apple, fish and turkey producers are in the same position. In view of the fact that the federal government has entered the field of production, it would be all the more justified in entering the field of marketing, since a considerable percentage of this produce in particular is meant for export and sale across the border.
On the other hand, there is every reason to believe, as I pointed out last year to the producers of Beauce county, that the new marketing office legislation in the province of Quebec will be able to help in this respect, but some might also wonder about its powers with regard to fixing a price for a product that is to be sold outside the country.
A few years ago I was instrumental, along with some others, in getting an inquiry and report made under the Combines Investigation Act, on the sale price of maple products. I am happy to say that some good work has been done. On several occasions, during two or three years, I personally called on the director of investigation; I always found a kind welcome, and all cases I submitted, with adequate indications and details, were seriously looked into. So there is no lack of good will, and I am sure that if the minister were to give instructions to do so an objective research would be made. That is why I am anxious for the Minister of Agriculture to grant my request, and I can assure him that the whole county of Beauce will be grateful to him for it.
On January 10 last the hon. member for Bellechasse (Mr. Laflamme) put before the house the need for decentralization of administration as far as unemployment insurance is concerned and asked for a larger number of offices, so that the unemployed would not have to travel long distances at their own expense to submit their claims.
I am happy to agree with that proposal. In Beauce county, for example, the unemployed often have to travel some 25 or 30 miles to the local office. And when they get there, they often find officials who would be only too glad to help them but are swamped with work due to the great number of people who have to go to that office. In these circumstances the employee does not have the time to give the worker all the explanations he would need to properly understand his own


case. As a matter of fact, I do not know what the majority of the members of this house think about it, but I know that, as far as I am concerned, I have a lot of trouble finding my way through that mess of regulations and sometimes I have to look for a long time before coming across the one that fits my particular case. Small farmers and lumber-jacks cannot make head or tail of it. The claimant, especially when he is turned down, should be able to understand why his claim is disallowed. Otherwise he goes away grumbling, and not without cause. But, in those cases which it is often quite difficult to straighten out, how can we expect the employee who is continuously hustled and dazed by all that crowding and overwork to take the time to give his client the elaborate explanations he would need?
I do not blame the employees, far from it; they are doing all they can under conditions which are often hopeless. Nor do I blame the worker, the lumber-jack or the small farmer. After all we cannot ask them to get a university degree so that they may be able to understand the legislation. I put the blame on the organization.
Quite often, precisely because he did not understand the explanations and is not satisfied, the claimant feels he should make a second trip to the office for further explanations. This of course means additional expenses, often to no good purpose because the employee, who is getting more and more overworked, is still unable to give the client all the time that would be required in the circumstances. And the more unsatisfied claimants you get, the more often you see them go back to the office, where the crowding gets worse, the harder it is to clear up each case and the greater the dissatisfaction of all concerned. It becomes sort of a lasting vicious circle, with some acute phases at certain times of the year.
I am convinced that the administration of an unemployment insurance office is much more difficult in the country than in a city. At least it is so in the region I represent. Why? Because more often there than elsewhere, you meet particular classes of wage earners who come under a category of insurable employment governed by extremely complicated regulations.
In my humble opinion, there should be more offices. This would cut down expenses considerably for the claimants; it would make it easier for them to call at the office, and in the



I, 1957

[Stage Direction]
second place it would relieve the crowding and make it easier for the office employee to give the unemployed all explanations necessary to properly understand his case, which would make for a satisfied client, even when his claim had to be turned down. Besides, I am quite sure that fewer claims would be rejected if the employees could take the time to make a more thorough study of each particular case.
I may add that the unemployment commission experts should again consider the case of the small farmers who are working for wages outside their farm, as well as the case of the bush workers. Some important changes should certainly be made in those two categories. I think I can grasp the meaning of the words: off-season, small income, main occupation and various others. Yet, I shall never understand why a farmer who, in one or two years, has accumulated as many contributions as a city worker, should not get the same benefit. If he has worked long enough outside his farm to accumulate the minimum payments that are required of a worker, his farm necessarily becomes a secondary matter and his salaried employment is his main job. Let him therefore be treated accordingly.
Despite its complexity the case of fishermen was settled by the commission in a sound and practical way. If the same efficiency and intelligence is put to work in the case of the small farmer, everybody will be satisfied. As to the bush workers in my area, they very often ask me if the government will manage to enter into a mutual agreement with certain American States with regard to an exchange of unemployment benefits. There are, indeed, in the county of Beauce, a great many bush workers who are employed in Maine, and some also in New Hampshire. If I understand the position rightly, these are the only two states that have no agreement with Canada as yet.
I know that, on January 15 last, the hon. Minister of Labour (Mr. Gregg), stated in answer to a question on the orders of the day, that there had been some progress in these agreement negotiations. I want to thank him, in the name of our bush workers, for the effort he is making in this field, and I also ask him to pursue this effort so as to hasten matters, if possible, as he may be assured that the day this happy result is reached, he will have rendered a considerable service to a whole category of workers who are numerous and significant throughout the country, more particularly in my county of Beauce.
The Budget-Mr. Poulin
In conclusion, Mr. Speaker, I want to add a few words more particularly connected with the budget speech of the hon. Minister of Finance (Mr. Harris).
I readily admit that better conditions now exist at the national level, at least as far as the position of the farmer is concerned. However, we have to recognize that this favourable change is mainly noticeable in western Canada. As a matter of fact, I cannot see, for instance, in what respect the lot of the Beauce farmer has advanced. The price of animals and butcher's meat has not improved at the producer's level, nor has the price of bacon, butter, eggs or maple sugar. About the only improvement has been in the price of wood. And if we compare the rise in the price index for goods and services bought by farmers, we are forced to the conclusion that the position is worse than it has been for the past few years, and it certainly is at least far from being as interesting as in 1951 and 1952.
What of the price of farm implements, feed and labour? The agricultural costs index, which I was mentioning a moment ago, has gone from 224.5 in 1955 to 229.4 in 1956.
As far as manual workers are concerned, I must admit that the skilled worker gets good wages, but the unskilled labourer is still in a most difficult position, the increase in the cost of living having quickly wiped out the increase in salary scales. The position of office workers, store clerks or industrial workers is hardly better, for the same reason.
And what of the father of a large family?
I think that one should be in intimate contact with these people and have occasion to go into their homes to be able to judge with any accuracy at all what their situation is. Prices are constantly going up. Bread, milk, medicine, shoes, clothing, everything is going up. I wonder if the hon. Minister of Finance was taking himself seriously when he granted a $1.00 a month increase to a certain limited number of children already in receipt of family allowances, but not to all, as it might be well to remember at this point. A large number of fathers and mothers will wonder whether they have not been having nightmares when they find out that not one child in the 6, 7, 8 and 9 year group or in the 13, 14, 15 and 16 year group will receive one solitary cent increase in family allowances. Using as a basis the figures provided by the Minister of Finance,
[Stage Direction]
The Budget-Mr. Poulin it is not surprising then to find that families in receipt of family allowances will benefit from an average increase of no more than $16.80 a year, that is $1.40 per month. If the thousands of taxpayers from the constituency of Beauce who have signed and forwarded requests to me demanding an increase in family allowances, and even requesting the amount to be doubled, are satisfied with this result, I will say to them that there must be only one explanation for this and it is because they are easily satisfied, or else are used to getting by on mighty little. They asked for a 100 per cent increase. A 50 per cent increase might have been acceptable, but what they have received is an increase of approximately 10.5 per cent.
Another excellent way to help the low income groups of taxpayers would have been to reduce the sales tax, without touching, of course, the 2 per cent which is used to set up the old age pension fund. I have made that suggestion more than once since I have been in this house. According to the budget speech, under this heading, fiscal revenues for 1956-57 have been $725 millions, a very tidy sum indeed.
A noteworthy fact is that, of all sources of indirect taxation, this is by far the most productive; in fact, among all direct and indirect taxes it ranks third, immediately after individual income tax and corporation income tax. Well, who is paying this 10 percent tax? The consumer, of course. And who is the consumer? It is everybody, no doubt, but including the poor chap who cannot even afford to pay income tax, it is the disabled, the blind, the needy mother, the subsidized settler, the old aged pensioner, all people who cannot fully provide for themselves and have to rely on the government which takes back with one hand part of what it gives with the other. But the real consumer is, above all, the head of the family; and the bigger his family the heavier his burden. As far as the head of a large family is concerned, exemptions and compensations in proportion to the number of children will never restore a fair and equitable balance, as long as the government does not radically reduce the rate of that sales tax, a tax which nobody sees but which is paid by everyone and which will, this year, deprive the consumer of $751 million, a tax which affects the small taxpayer as well as the wealthy and often more, precisely on account of his situation as head of the family. Instead of appropriating a sum of $100 million for the Canadian Council of Arts the government could have used that money to reduce the sales tax.

The provinces have the duty and the power to deal with the cultural problem, and they could do it much better than the central government if only that government had left them the necessary sources of revenue.
I wish to add that the government should have raised to $2,000 and $3,000 the income tax basic exemption for bachelors and married people respectively. That too is a request I have made on many occasions in the last few years. I will leave it at that.
In conclusion may I say that if I felt it my duty, last year, to show my confidence in the government by voting in favour of the Minister of Finance's budget, this year, for the reasons I have just given as well as for others, I feel that I must vote against the government.
(Text):
Mr. D. S. Harkness (Calgary North):: Mr. Speaker, I do not propose to spend a great deal of time on the budget as such. There is, of course, not too much in it on which to spend time. I intend, rather, to deal with some of its implications and omissions.
The budget is characterized by increased social security benefits and scattered tax concessions, spread as thinly as possible in order to give a very small amount of help to the greatest number of people without cutting too much into the minister's large surplus. It is obviously a pre-election budget, in which the Minister of Finance has tried to give the illusion that the government is deeply concerned about the welfare of our less well off citizens, thereby providing the opportunity for Liberal candidates to tell their electors about the gifts, so-called, which the government has given them.
This has been Liberal strategy during the last three elections, and evidently it is to be the basis of their campaign this year. I do not think it will be as successful as it has been in the past, because an increasing number of our people have come to realize that the government can give them nothing; it merely returns to them a certain proportion of the money it has previously taken out of their pockets by taxation. The increase in the old age pension is miserly. I have no doubt that some of the recipients would not agree with this statement. I am sure, for example, the Prime Minister believes the increase is adequate. I am quite sure both the Minister of Trade and Commerce and the Minister of Agriculture believe the increase is adequate. I would agree with them that it is adequate so far as they are concerned, because they do not need it at all. But it is not adequate for

those who are wholly or almost wholly dependent upon it. The increase in the cost of living has left these people in a hopeless situation, in which they cannot live at a decent level. The increase of $6 per month is not enough to correct the situation.
The same thing, of course, applies to those on old age assistance and those who are blind. It is this considerable segment of our population who desperately need help, and it is this segment who do not get help to any great extent from this budget. I was particularly sorry, Mr. Speaker, to find that the special guidance allowance, without a means test, requested by the blind was not provided in this budget. I would hope the Minister of Finance might still provide for it at this session. The cost to the treasury of a guiding or special blindness allowance would not be too great and these, the most seriously handicapped of our citizens, are surely entitled to this small special consideration.
I was glad to see that there were some increases in benefits for the veterans in this budget. However, once again they fall far short of what was requested by the Legion and other veterans organizations, and what is necessary to compensate the veterans for the increases which have taken place in the cost of living. The veterans organizations of this country asked for a 33J per cent increase in pensions, but the budget provides for an increase varying from nothing for a single man on war veterans allowance to a maximum increase of 20 per cent for a single man on full disability pension.
These meagre increases allowed to the war pensioner puts him in a far worse relative position than he was in away back immediately after the first great war. In the February, 1957, issue of the publication put out by the Canadian Legion, called the Legionary, there is a chart which shows the relative position of the 100 per cent single disability pensioner, back in 1920, at the time this was put out before the introduction of the budget, and the position the pensioner is in at the present time until the increase provided for becomes effective.
In 1920 the single man on full pension received $900. The theory when these pensions were put into effect was that the rate of pension would be the same as the income a labourer would receive and, as a matter of fact, the pensions at that time were comparable. At that same time, in 1920, for example, a civil service cleaner and helper received exactly the same amount, $900, and the pensioner and the common labourer were on a par.
The Budget-Mr. Harkness
At the present time we have this situation. A single man receives $1,500 a year. The civil service cleaner and helper, who is taken merely as an example, receives $2,760 a year. In other words, his position has become nearly twice as good as that of the single man on full disability pension.
What the figures produced by the Legioii indicate is that after this budget goes into effect a single man will receive a total of $1,800 a year, just under two-thirds of what the cleaner and helper receives, or in other words two-thirds of what the ordinary common labourer is able to receive and does receive at the present time in our economy. It is, I think, a very clear indication to what extent the pensioner has suffered from inflation, and it indicates also very clearly the refusal of this government to recognize the debt owed by the country to these men and the government's failure to maintain the level of pensions which was established back at the end of the first world war by a Conservative government.
I call upon the Minister of Finance and the government to restore veterans pensions to their original position in purchasing power and relative to civilian wages. Until this is done I think it is futile for government speakers, as they have done so frequently in the past, to go about this country boasting that our treatment of our veterans and returned men is the best of any country in the world.
The largest section of our people, namely the average householder and his wife, are the very people for which this government does practically nothing. The abolition of the sales tax on tea, coffee, pickles and a few other items does, of course, affect this average householder and his family and grants him an infinitesimal amount of relief. Similarly, depending on the number of children he has] the amount he will receive of $1, $2, $3 a month, because of the increase in family allowances, provides an infinitesimal measure of relief and help to him. The increase in children's allowances is sufficient to buy five additional quarts of milk per child, and that is all.
Perhaps the person who has been hit as hard as anyone in this country by the rise in the cost of living and the increases in prices that we have had is the average householder, the man on $3,000-odd a year, or something in that neighbourhood. In other words the average consumer is the forgotten man. He is the forgotten man in this budget; he is the forgotten man generally as far as the government is concerned.	t

The Budget-Mr. Harkness
I should like to turn to another matter, Mr. Speaker. One of the notable omissions in the budget speech of the Minister of Finance is any review of the present situation in regard to housing construction, or any measures designed to improve it. During the latter part of the 1956 session we had many indications that the tight money policy of the government was having, and was likely to have, very serious effects on the housing industry. The replies of the Minister of Finance and the Minister of Public Works to inquiries made in this house last summer, and again throughout this session, as to what measures were contemplated to prevent a great decline in house building were really nothing more than a sort of soothing syrup. They reiterated statements that house building was not declining to begin with, and later, when the fact that it was declining became inescapable, their statements were that the decline was not serious and that the situation would correct itself shortly.
The fact that all these statements we have had were incorrect is shown up quite conclusively by a publication which I received just a few days ago entitled, "Canadian Housing Statistics", put out by the Central Mortgage and Housing Corporation, dated March, 1957. It shows that the decline in housing starts has indeed been very serious. If we look at page 7 we find the statistics in regard to this. In the 'last quarter of 1955 the total number of house starts was 32,069. In the last quarter of 1956 the total number was 23,874, or a decline of 8,195 in the actual number of houses started in those three months.
When we look at the right hand side of the statistics provided in this same table, which gives the annual rate of decrease, the seriousness of the situation shows up even more definitely. In the last quarter of 1955 the rate of dwelling starts was 142,700; in the last quarter of 1956 the rate was only 106,200. Now, this is the rate; they were started at that rate. I have given the annual figures before. In other words there is a decline in the annual rate of construction of 36,500 houses, a very large number of houses. Similarly, the decline in the annual number of houses constructed in those two comparative quarters of 1955 and 1956 is at a percentage rate of 25.5.
These figures, I think, show quite clearly that we have had what anyone, except this government, would consider a very serious decline in house building. That presents us, of course, with a situation to which I think the government, the house and the country need to pay particular and serious attention. However, Mr. Speaker, I have reason to
IMr. Harkness.]
believe that the situation in this year of 1957 is much worse than that shown by the figures up to the end of 1956.
I have a few statistics and opinions of builders in various parts of Canada to back up this statement. For example, on February 20 of this year at Windsor, Ontario-


Paul Joseph James Martin: Hear, hear.


Douglas Scott Harkness: I see that reference wins the attention of the Minister of National Health and Welfare.


Paul Joseph James Martin: Canada's first city.


Douglas Scott Harkness: Well, on February 20 this year in the minister's city of Windsor, Ontario, only 18 National Housing Act loans had been processed since the beginning of the year, compared with several hundred at the same date last year, 1956.
Last year in Windsor at the same date approximately 1,600 N.H.A. loans were made available to people to build houses, whereas on February 20 this year, although the exact number was not available, it was estimated that there would not be any more than 200 at the most. That is some indication of the seriousness of the housing situation in Windsor. My information is that no loans at all were available in Newfoundland at the middle of February this year, and very few were available in the maritimes generally.
The statistics concerning housing in my own city of Calgary appear on page 10 of this report, and I find them extremely interesting. In 1955 a total of 3,129 houses were started, and in 1956 a total of 3,742 were started. This represents a considerable increase, and is contrary to the general trend across the country. From reading the statistics one would gather the impression that the housing picture in Calgary is quite bright, but as a matter of fact the picture given by the statistics is quite misleading with relation to the period we are now in.
The sum total of N.H.A. loans expected to be available in Calgary for the entire year, as estimated at February 15, was only 450. There was a possibility that a reallocation of funds from other areas might increase this total slightly, but little hope was offered that this would improve the situation to any marked degree. There was also available in Calgary as at the middle of February from 300 to 400 conventional loans, some of them with interest rates as high as 7 per cent per annum. If you add the limited number of houses which will be built by individuals under their own financing arrangements it develops that unless something is done to improve matters the total number of houses

built in Calgary this year will be decreased to 1,100 or 1,200 as compared with the 3,742 built last year. In other words less than one-third of the number constructed last year will be built in 1957.
This estimate of the total number of houses likely to be built in Calgary this year unless steps are taken is confirmed by the action of the Calgary city commissioners in curtailing their land expansion program by over 50 per cent. The total number of lots that were planned to be ready for use this year in Calgary was approximately 4,000 and about 3,500 lots were expected to be built on. This figure has now been cut back to 1,500 lots which will be made available in 1957, and the Calgary builders feel this will be more than adequate for the building which will be done there this year.
This presents a picture which is much more serious than the figures for 1956 and previous years would indicate, and the situation is much more serious than the government will admit. It is one that calls for immediate and definite action on the part of the government to ensure that funds are available for the housing that our rapidly increasing population needs.
There are of course several things that might be done in order to ease this situation, and I would suggest two. The first is direct lending on the part of the government or its agencies. A certain amount of this has been done in the past, but it presents various difficulties especially for prospective home owners and builders, who find it difficult to make adequate use of such funds because of the restrictions imposed on them and because of the percentage of the loan which is allowed as against the total cost of the house. However, it is a course which may have to be resorted to if mortgage money is not available otherwise, and one which the government should resort to if no other means can be found to correct the situation which has developed.
The second course of action I would suggest is the institution of a system of buying up loans and brokeraging them out to sources of money which ordinarily do not or cannot readily take up housing loans. Such a system exists in the United States under the nickname "Fanny May". It is carried on through the federal national mortgage association, which I understand has purchased an average of about $22 million worth of mortgages a week for the last two or three years and then sold them to other investors. I believe the system is working very well. At the middle of January last the association had only $43,500,000 of mortgages on hand for sale in spite of the billions they have handled.
The Budget-Mr. J. A. Power
There are, of course, other ways of improving what is rapidly developing into a dangerous situation, but this government does nothing about it except to issue soothing and misleading statements. Before this session is ended the house and the country are entitled to a statement by the Minister of Public Works as to what the situation is at the present time, and what steps will be taken to ensure the continuance of home construction on an adequate scale.


Mr. J. A. Power (Si. John's West):: Mr. Speaker, I would like to add my word of praise to the Minister of Finance for the excellent budget he has produced this year. Despite what has been said here about overtaxation or about tax receipts outdistancing government expenditure, a surplus on the year's operations is a much more comforting thing than a deficit.
1 suppose in one sense government finan-ing is like personal financing. The man who allows his annual spending to exceed his income has to expect real trouble some day. Importunate creditors are equally tough at either level. Mr. Micawber expressed it well after a lifetime of deficit financing when he said that saving or overspending ten shillings a year constituted the difference between happiness and misery. Starting a new financial year, the government is able to apply some of last year's surplus to tax reductions and to significant increases in social benefits.
Living costs in Newfoundland are affected to a great extent by freight costs. The bulk of food and other commodities forming part of ordinary family consumption in Newfoundland are purchased, in the main, west of the maritime provinces. It is obvious that freight charges are a big factor in the ultimate cost to the consumer. It is encouraging to see that there is a substantial increase in the freight subvention on goods moving out of Newfoundland into other parts of Canada, though it must be admitted that this subvention increase will not have nearly the same effect on the Newfoundland economy as an increase in freight subventions moving in the other direction.
It is encouraging to note that the government intends to make an immediate review of all transportation in the Atlantic region, and that it is sympathetic toward further substantial improvements in the freight rate picture.
Today is the eighth anniversary of the union of Newfoundland with Canada. 1 do not think any one can deny that the economic position of the average Newfoundlander is much better today than it was eight years ago.
[DOT]2922

The Budget-Mr. J. A. Power Quite apart from the effect of really substantial payments in the various forms of social welfare benefits, Newfoundland has profited from the ordinary operations of a number of federal departments and agencies there. Canadian National Railways has spent large capital sums in the improvement of railway and Shipping facilities. The Department of Public Works has done a lot-more, I think, than is generally realized-in building up dock and harbour facilities, even in the very smallest fishing settlements. I can think of a number of places in St. John's West where construction of a breakwater or a wharf has had the effect of materially lengthening the fishing season and of allowing cheaper entry of some of the heavier commodities.
The port of St. John's is the oldest in North America. It was extensively used by the fishing fleets of all the maritime European nations at the time that Sir Humphrey Gilbert took possession of Newfoundland in the name of 'the first Elizabeth. It is a historical fact that the port was the centre of the English western Atlantic fishing industry long before that date, and indeed, from only a few years after John Cabot's first voyage in 1497.
From the beginning, St. John's has been, and still is, the commercial centre of the island. The Department of Transport has realized this fact and is now engaged in an extensive survey of the harbour with a view to the construction of harbour works toward its improvement and more economic utilization. There is a strong feeling in St. John's that the port should be made a national harbour and come under the management of the national harbours board. The value of this [DOT]secure port was more than evident during the two world wars when it gave sure refuge to large convoys of merchant ships and was used as a point for the assembly of these fleets to the British Isles.
In addition to the survey of the harbour now under way, there is strong reason to believe that this will lead to the construction of a million dollar project by the Department of Transport to house the marine agencies now in existence there, including docking facilities for a large ship, now under construction, to to used for the purpose of placing and servicing buoys and other aids to navigation.
The budget forecasts aid in power development in flic Atlantic region, particularly in Nova Scotia and New Brunswick. I would like to draw the attention of the government to the vast hydro electric power potential in Newfoundland. Newfoundland is the ninth of the provinces in population, the seventh in [DOT]area and the fourth or fifth in water power. The provincial government, through the British and Newfoundland corporation, has

undertaken wide surveys of the water resources in Labrador, assisted in this regard by a very thorough mapping project done by the Department of Northern Affairs and National Resources. In Sweden, hydro-electric power has been carried economically for a distance of over 600 miles. Surely it is within the bounds of possibility that future research should increase this distance to the extent that power developed on the Hamilton river in Labrador could be put into use in the central part of Canada at a price that should allow it to compete with power developed from coal, natural gas or atomic energy.
As I mentioned earlier, today is the eighth anniversary of the union and in this connection I would like to draw the attention of the house to term 29 of the terms of union. Term 29 deals with a projected review of the financial position of Newfoundland after her entry into confederation. It reads: In view of the difficulty of predicting with sufficient accuracy the financial consequences to Newfoundland of becoming a province of Canada, the government of Canada will appoint a royal commission within eight years from the date of union to review the financial position of the province of Newfoundland and to recommend the form and scale of additional financial assistance, if any, that may be required by the government of the province of Newfoundland to enable it to continue public services at the levels and standards reached subsequent to the date of union, without resorting to taxation more burdensome, having regard to capacity to pay, than that obtaining generally in the region comprising the maritime provinces of Nova Scotia, New Brunswick and Prince Edward Island.
To give effect to this term the government recently established a royal commission consisting of the Chief Justice of New Brunswick as chairman, and the Chief Justice of Newfoundland and Mr. John Deutsch of the staff of the University of British Columbia, and a former senior civil servant, as additional members. Public comment in Newfoundland has expressed full confidence in the make-up of the commission. About two years ago the provincial government set up a committee to make a study of the financial position of the province and to present the Newfoundland case to the commission. This committee has functioned continuously since then and I understand has recently completed its task. People in Newfoundland are hopeful that the report of the commission will result in considerably increased financial aid from the treasurer to the government of the province.
One too evident fact is that the province, with an area of 150,000 square miles and a population of only 415,000, requires much larger per capita sums for the provision of ordinary public services than does a province with a more concentrated population. To illustrate this, the trans-Canada highway in

Newfoundland runs for a distance of 610 miles. Provision of the provincial share of the cost of construction bears to a much greater extent on the individual Newfoundland taxpayer than the provincial share of the cost in any other province, although population figures show that the inclusion of Newfoundland in the larger picture did not bring about what a great many people feared. It was thought that with the removal of immigration barriers consequent upon the union large numbers of Newfoundlanders would take advantage of this to migrate to other parts of Canada. The fact is that our population has increased by nearly 100,000 since union and the figures of the census taken last year show that Newfoundland's increase of population in the preceding five years was almost exactly equal to the rate of population growth of Canada as a whole.
The union with Newfoundland has brought to Canada a province with immeasurable wealth in resources of land and sea, and the people of the new province are entitled to expect that they will have every just assistance in converting these potentials into added wealth for our nation.


Mr. E. G. McCullough (Moose Mountain):: Mr. Speaker, I rise at this time to discuss what I think is a very important matter having to do with the administration of the Department of Agriculture. I was very happy, sir, to see that the Minister of Agriculture (Mr. Gardiner) has returned from his sojourn in western Canada. I presume it is well-known he was out there using political haywire to mend political fences in that province; but I think he will find that hay-wire or any other Liberal wire will not do much good in that province for the Liberal party from now on.
It is well known in this chamber that last year there was an important discussion which was, I think, of great public importance.
Last week I asked the Minister of Finance (Mr. Harris) if it would be possible to give the assurance that the estimates of the Department of Agriculture would be discussed by the house before the end of the session. Because no assurance was given and the fact that the session is drawing to a close, I want to bring this very important matter to the attention of the house at this time. I refer, of course, to the compensation of over $100,000 paid by the Department of Agriculture for 674 sheep slaughtered last year. To whom was the $100,000 paid? It was paid to Mr. P. J. Rock, a well-known breeder and one of the most prominent Liberal supporters in Alberta. The average price paid was $150 per sheep.
1. 1957	2923
The Budget-Mr. E. G. McCullough
Never until last year had such compensation been paid for the destruction of sheep. I have figures here as to the numbers slaughtered and average amounts paid under the compensation policy. In 1945-46, 102 sheep were destroyed with an average payment of $20 each. In 1951-52, 65 sheep were destroyed with an average payment of $34 each. In 1952-53 there were 11 sheep destroyed with an average payment of $47 each and finally, in 1954-55 there were 108 sheep destroyed with an average payment of $75 each.
But last year the minister came before the house and could not give us any substantial reason why he should take over $100,000 out of the public funds and pay it to one individual. He tried to appear so naive as to leave the impression that he was not aware that this man was a Liberal supporter and perhaps one of the greatest Liberal supporters in the province of Alberta. From examining last year's records it appears that the truth of the matter is that many lambs were born after the disease was diagnosed in this flock, and rumours persist that some of these sheep have not been destroyed. Rumours persist that substitutions have been made and also that some of the sheep were moved from P. J. Rock's flock to a farm in Manitoba. I am inclined to believe these rumours. In going through Hansard of last year I find that on July 13,1956, as found at page 5960, the Minister of Agriculture was asked a question and gave the following answer:
Mr. Rock in 1955-56 had 674 sheep slaughtered and they were all registered. There is not any question about them being slaughtered or of their being substitutions. The compensation paid was $100,050.
The hon. member for Battle River-Cam-rose (Mr. Smith) then said to the minister:
I would like to have some assurance from the minister before we end this discussion that the registrations of these purebred animals have been turned in to the department. Have they been turned over?
The minister replied:
Yes, they were all turned in to the department.
Then, at page 5962 I find that the hon. member for Brant-Haldimand (Mr. Charlton) asked this question of the minister:
I should like to know if the meat was used when these sheep were slaughtered, and who got the value of the meat.
The minister replied:	"They were all
buried." The hon. member for Brant-Haldimand then said:
It has been suggested that there were some substitutions made in this flock before the date the animals were slaughtered and buried.
2924	HOUSE OF
The Budget

Mr. E. G. McCullough
The minister replied: "They had all been checked." As found at page 5963, the minister went on to say:
Right from the time the disease was diagnosed the ear tag numbers were taken.
I comment here that if that is the case and the information given by the minister is true there should be metal tags on the carcasses of these buried animals. At page 5964 the minister went on to say:
The ear tag numbers are all here, as my hon. friend knows. Those sheep were all registered, and the ear tag numbers were all known here, no matter when they were sold. The transfers are all registered.
I comment here that the minister should then have the actual registrations. If the minister will not take action to clear up this matter it is a certainty that rumours will persist that some skulduggery has taken place involving the misappropriation of public funds. Not only is $100,000 in public money a very questionable sum to pay for 674 sheep, many of which were lambs, but the minister's actions and responsibilities with regard to making sure that there were no substitutions are also before the bar of public opinion. The minister was using public funds and I say that action should be taken by the minister to clear up the matter.
I should like to make several suggestions. First, a special investigating committee of the house should be established to investigate thoroughly everything connected with this matter. Second, the minister should table in the house immediately the 674 registrations. I do not believe that the minister can produce the registrations for all these sheep. The minister has said the registrations are in the hands of his department. I challenge him to produce them. While I do not believe the minister can produce the actual registration certificates, even if he does the air will not be cleared of the suggestion of skulduggery. Third, the minister should be able to table all the correspondence between government officials, P. J. Rock and the appraisers to show, among other things, the date on which the first inspection of the flock was made and the date on which the flock became subject to scrapie.
The minister has stated that the sheep were buried, and in order to clear the minister I say that in the fourth place the carcasses of the sheep should be exhumed and examined to see if the metal ear tags are on them corresponding with the certificates which the minister claims are in the possession of his department. I say that when and only when the minister is prepared to go this far can he be cleared of the persistent rumours that substitutions have been made with regard to these sheep.


Members of the house who are familiar with the purebred livestock business know that a metal tag as well as an India ink tattoo is placed on the ear of every purebred animal. Together with the tag of the health of animals branch, there may be a metal tag used by the owner for the purpose of identifying each animal. I think I have indicated to the minister and to the house that it rests with the Minister of Agriculture to clear the air regarding the allegations I am making with reference to the persistent rumours that there has been skulduggery in respect of this huge payment to one individual. I think the wool has been pulled over people's eyes and it is up to the minister to follow the suggestions I have indicated.


Mr. Shaw:: Fifty dollars a head was a very high price for these sheep.


Edward George McCullough: This man was paid $150 for each sheep. I agree with the hon. member that $50 would probably be a fair and reasonable price, but in this case the minister saw fit to bring in appraisers and pay the amount of $150 for each sheep. After what I have said I think this matter rests with the Minister of Agriculture. There have been persistent rumours that some of these sheep have been removed to a Manitoba farm. I do not think it rests with any member of the house to go any farther than I have done. It is now up to the minister to clear the air so that he can face the bar of public opinion.
I am interested in one or two other matters that I should like to bring to the attention of the house this afternoon. First, it will be recalled that we of this party have asked for a better deal for our older citizens. I refer to the request we have made that the old age pension be increased to $75. In my opinion that would be a fair amount to pay them and certainly would be commensurate with our gross national product.


Walter Edward Harris: Did we not dispose of that last week?


Edward George McCullough: The
minister says he has disposed of it. It will not be completely disposed of as long as there are C.C.F. members in the house and there will always be some of us who will ask for a better deal.


Walter Edward Harris: Not on this debate. You are out of order.


Edward George McCullough: That is perfectly all right. I am amazed at the niggardly increase that was granted. I have also noticed an article in the Leader-Post

stating that the Leader of the Opposition (Mr. Diefenbaker) had said that a figure of $75 was not realistic.
To him as the leader of the official opposition party I want to say that in my books neither is the figure of $46 for our older people realistic, nor is it realistic to expect them to live on it in decency and security with the cost of living as it is today. Therefore I am rather amazed that the Progressive Conservative leader should come out and say that the figure of $75 is not realistic. I am even more interested when the hon. member for Calgary North (Mr. Harkness) said a few moments ago with respect to the pensions for veterans that he and his party-and I believe he was speaking for his party as well as for himself-wanted an increase over the $150 now paid to our war veterans. I go along with him, as I still think that this is not adequate. However when you compare that figure with the $900 which we of the CCF are asking for our old age pensioners, I think you will agree that this too is not realistic.
I therefore cannot see why the Progressive Conservatives voted against our amendment in that connection.
I have a letter which came to my desk this morning from the Retail Merchants Association of Canada. I am very happy to have this letter because it would appear that these people are now awakening to the situation prevailing in Canada. The C.C.F. have long been saying that we have an unbridled monopoly growth in Canada. It has now become apparent to the Retail Merchants Association of Canada that they are the victims of this unbridled free enterprise or capitalist system.
I just want to say that I sympathize with them. We have in this country, under the Combines Investigations Act, means by which certain monopoly growths are investigated, but I believe that there are not sufficient teeth in that legislation to prevent the unbridled growth of free enterprise and monopoly in this country. I am sure that all that has resulted from the numerous investigations we have had is a great many minor prosecutions, and more and more monopoly growth throughout Canada.
It reminds me of an article I saw some years ago in Time magazine on the barbotte games which were purported to be running in Montreal. Apparently down there the authorities would fine the barbotte gamblers in one place, and they would take their gambling to another part of the city and the game would go on. So it is with these people today. There is always some way in which they can squeeze out from under the act and continue their monopolistic functions in this country.
1, 1957	2925
The Budget-Mr. E. G. McCullough
Now what is the proper place for the retailers in Canada? We have two financial tycoons in this country grabbing more and more of the retail business of Canada. One of them is prominent in the bakery trade; another is a prominent distiller in this country. Here we have three or four monopolistic chain stores with their interlocking directorates which are going to control the biggest portion of the Canadian retail trade. Nothing is going to stop it as long as we have a government opposite which does not take any sufficient action to prevent this sort of thing.
I believe that the small retail people have their backs to the wall. We have this growth of chain stores and monopoly retailers who have many things to their advantage. This of course is causing the liquidation of the small retailer. The idea is always put forward by the old party spokesmen that we do not and should not have planning in this country, but I say that there is planning now. There is planning, a great deal of planning, by the big boys, the chain stores and their interlocking directorates. Therefore we are having the small retailer pushed to the wall and this government sits idly back just making punitive efforts to prevent it. A handful of large retailers will soon control the bulk of the retail trade of Canada. These companies have practically unlimited financial resources and the small retailers are handicapped by the lack of adequate credit for modernization.
I would like to put a word in for the prairie merchants because there is nothing that concerns me more than the situation which is facing many of our small retail merchants in the prairies. They have over the years been giving their farmers and their other patrons credit by means of which they can carry on until the grain is sold from the farms. These small retailers are the backbone of our western communities and they often give credit, but this government has not seen fit to give credit to the farmers through cash advances to enable the farmer to get some money until he can sell his grain and meet his obligations.
The C.C.F. stands alone on the policy of national planning. Other parties believe in and support unbridled free enterprise, but I believe that the time is coming when we have people like the Retail Merchants Association of Canada realizing that only through national planning can we have a system by which the small enterpriser can be protected. I therefore hope that this government will take into consideration some of the things I have mentioned this afternoon and that it will not allow our small enterprisers-among them our retail merchants associations-to be driven to the wall simply through the growth of monopoly which combines its interlocking

The Budget-Mr. MacLean directorates. I think this is a grave need; there is nothing in the budget and nothing in federal legislation to prevent this and it is a question which has to be answered by this government.
The C.C.F. believe in the protection of the small businessman; they believe in planning. We believe in three types of public ownership, as well as in private ownership. We believe in national ownership of those things which lend themselves to national ownership and which by their national importance and nature can properly be handled by national government. Equally so, we believe in provincial planning and provincial ownership of those things such as power and transportation of certain kinds, which lend themselves to provincial public ownership. Furthermore, we believe in public ownership through cooperation. One of the finest ways of living is for people to join themselves together in co-operative organization, to give themselves service at cost. I am happy to say that our province is going forward by leaps and bounds through co-operative ownership of various types of retail sales and enterprises.
Of course, last and tremendously important is our belief in private ownership; but as long as we have the unbridled free enterprise system, with the government taking no part in the prevention of the growth of monopoly and where we have, as I say, these interlocking directorates, they become so powerful that they finally push the small enterpriser to the wall. That is what is taking place.
In conclusion, Mr. Speaker, I would like to say this. Now that we are coming to another election I hope that more and more people will see that national planning is necessary in order to give them protection and security in their homes and businesses.


John Angus MacLean: Mr. Speaker, as I rise to take part in this debate I would like first to consider what is the proper thing that one might expect to find in a budget. I think I am correct in assuming that a parliamentary budget is, or should be, a collection of the proposals which the Minister of Finance (Mr. Harris) puts before parliament for adjusting the revenue of the country to meet the expenditures. It should be, I think, nothing more and nothing less, traditionally and historically, than what it is, and these proposals are put forward in the form of resolutions to be considered by the committee of ways and means. As everybody knows, originally the committee of ways and means was a committee set up for the purpose of considering ways and means of providing supply to be granted to Her Majesty. This being the case, the proposals for


the expenditure of extra funds strictly speaking, in my opinion, are not proposals which properly should find their way into the budget.
When preparing a few notes for this brief speech, I looked over in a cursory manner the budget speeches of the last 50 years and I found that up until very recently there was nothing in the budget speeches except those things which properly belonged there, such as proposed changes in various taxes, tariffs and so on, together of course with a review of the economy of the country for the year before. This year's budget includes some proposals for extra expenditures. So far as the members of the house are concerned, those are very welcome proposals but they are proposals which do not come under the jurisdiction of the committee of ways and means and therefore should not properly be part of the budget. They are proposals that, more properly, might have been made in the speech from the throne. As the situation stands, these proposals having to do with increases in pensions of various kinds, cannot be brought into effect by the committee of ways and means but will have to be brought into effect by separate pieces of legislation. It is not my intention, therefore, Mr. Speaker, to dwell at any length on such proposals made by the Minister of Finance in the course of his budget speech. I suspect that possibly one of the reasons for putting them there was to clothe what might be the program of the party to which the minister belongs with the prestige of being part of the budget proposal which, in fact, they are not.
Many of these proposals will not be effective until a new parliament is elected. They can only be brought into effect by the next parliament or by legislation passed by this parliament before it prorogues. This legislation is not dealt with by the committee of ways and means. It is possible that the Minister of Finance might have assumed that since these proposals will not become effective until later in the year the general public might be persuaded to give some hostages to fortune with regard to them, and might confuse in their minds the return of this government with the coming into effect of these resolutions.
I am not suggesting from a parliamentary rules point of view that it is out of order for the minister to discuss such things in his budget speech, because we are given very wide latitude in this debate, but I am suggesting that it is not very good practice from the point of view of presenting a budget. I do not intend to give very much attention to the proposals contained in the minister's speech concerning the additional expenditure

of money except to say that the increases in old age pensions, family allowances, veterans pensions and so forth, although very small, are a step in the right direction. Nevertheless, it should not be forgotten that even with these increases the purchasing power of the pension and family allowance received will not be anything like as great as it was when these various measures came into effect. This is, of course, due to the inflationary trend in which we are living. So far as veterans are concerned they are still not in a satisfactory position, even when these increases come into effect, as compared to other segments of the country so far as income is concerned.
Having said that, I want to turn to some subjects which could properly, I think, be placed in a budget. One has to do with tariffs and in that connection I refer to one aspect of tariffs, a proposal which I hope will be put forth in the near future for some adjustment of the tariff between Canada and the United States on potatoes. This adjustment should be made at the earliest possible moment. I realize that negotiations may not be complete and the government may not be in a position to introduce an amendment to the tariff on United States potatoes coming into Canada in the committee of ways and means. If that is the case, I sincerely hope that the government will find some means whereby authority may be given to the governor in council to impose a tariff as soon as negotiations are completed. If that cannot be done and there is no protection given our potato growers until the next session of parliament, it will be too late to effect any benefits for the next crop year.
As hon. members know, United States potatoes come into Canada duty free for all but six weeks of each year, while Canadian potatoes going into the United States pay a tariff of 37.5 cents per hundredweight for a certain quota and then a greater tariff over that quota. Under this situation we have the protection of a tariff so far as the United States is concerned and free trade so far as Canada is concerned. This situation is intolerable because when there is overproduction of potatoes in the United States and the price falls they just push their surplus on to the Canadian market depressing the price on the Canadian market below the cost of production.
The threat of the import of United States potatoes under those conditions has a very destructive effect upon our market, even if there are no actual imports, and at the present time there are very considerable imports of United States potatoes into Canada. I hold in my hand the daily report on the potato market for the days of last week, and I should like
The Budget-Mr. MacLean to quote some of the figures. As far as the Montreal market is concerned the arrival of potatoes there is expressed in terms of carloads. The figures for last Monday, which include the arrivals for the previous Friday, were: from Prince Edward Island, 21 cars; from New Brunswick, 27 cars; from Maine, 2; and from California, 3. The next day on the Montreal market we have again, from Prince Edward Island, 9; from New Brunswick, 20; from Florida, 1 only; from Maine, 9. The next day we have, from Prince Edward Island, 7; from New Brunswick, 26; from California, 1; from Maine, 3. The next day we have, from Prince Edward Island, 11; from New Brunswick, 15; from Maine, 1. On Friday of last week we find in parenthesis "C.N. only". I am not sure of the significance of that. It shows from Prince Edward Island, 5; from New Brunswick, 3; from Maine, 7; and from Florida, 1.
I think that makes a total of about 30 carloads of United States potatoes arriving on the Montreal market in the space of one week and that tends, naturally, to have a very depressing effect on the market. As a matter of fact, it puts the Canadian producer at a disadvantage compared with the United States producer because of the rate of exchange. Although the potatoes may be sold for the same amount of money, the United States grower gets slightly more for them than the Canadian grower, even if their costs are equal, owing to the rate of exchange. Then as far as Prince Edward Island is concerned, the freight charges to the Montreal market are no doubt greater than they would be from Maine. That puts the Prince Edward Island grower in an unfavourable position. As far as prices are concerned, the Maine potatoes are underselling Prince Edward Island potatoes by a matter of 5 cents to 10 cents, or something of that sort, for a 50-pound bag.
I just wish, as forcibly as I possibly can, to point out to the government the vital importance of correcting this situation as far as the Canadian producer is concerned and as far as the general consuming public of Canada are concerned because if, for lack of protection, the Canadian potato producer is forced out of business, then the Canadian consumer will have to pay through the nose for United States potatoes at a later time because the supplies required will not be produced in Canada much longer under present conditions.
Having said that, I wish to turn now for a little while to the question of federal-provincial finances and the tax-sharing agreements between the provinces on the one hand and the federal government on the other as they affect the province from which I come, namely Prince Edward Island. I do

The Budget-Mr. MacLean not raise this subject in any partisan way or for any partisan purposes, but merely to point out to the government the desperate situation-and I do not think that is too strong a word-that my province finds itself in as far as provincial finances are concerned.
Since 1949 the provincial debt of Prince Edward Island has gone up from $15.4 million to $22.5 million at the present time. The other day the provincial treasurer, when bringing down his budget, budgeted for a deficit of $1.8 million, I think it was. It is true that the province of Prince Edward Island receives a considerable percentage of its budgetary income from the federal government in the form of subsidies and taxes gathered for it under the tax-rental agreements; but, unfortunately, fixed charges on the provincial government for services which it cannot avoid are so high that the province is constantly going deeper and deeper into debt. This naturally means an increased cost for servicing that debt. At the present time the cost of servicing the debt is almost equal to the forecast deficit for the year ahead.
Under the present tax-rental agreements- and I have studied them fairly carefully- I find that an adjustment of the payments made over the last five years must be made on the basis of the last census of 1956. During the last five years the dominion bureau of statistics has badly over-estimated the population of the province, with the result, as far as I can calculate it, that the payments to the province of Prince Edward Island under the last tax-rental agreement are considerably greater than they should have been. These agreements require that in such a case adjustment must be made between the last day of February and the last day of April this year. I do not know what the actual figures are, but on making a rough calculation on the population of Prince Edward Island that was made public from the 1956 census I came to the conclusion that the overpayment has probably been of the order of $1 million.
If that is so, this overpayment, when adjusted, would wipe out entirely the quarterly payment which would normally fall due at about this time under the tax-rental agreement. I believe that must be so, although the Minister of Finance has not yet given the details. I would not be surprised if the whole quarterly payment would not be enough to meet the requirements of the readjustment. It may be, although I do not know, that the government of Prince Edward Island will still owe the federal government some amount to compensate for the adjustment in the payments.


This is a very sorry and difficult state of affairs for my province because this will mean that it is not only poor but it is over $1 million poorer than it thought it was. In this case the province will be in debt by the end of next year not by $23.9 million but by something over $25 million which is a very heavy debt considering the small population of the province.
It may appear strange to some that I am devoting so much time to this question and it may be considered that it is not even a suitable question to be discussed on the budget because, as some may say, this is a matter to be worked out by the provincial government on the one hand and the federal government on the other. According to newspaper reports of proceedings in the legislature in Charlottetown, the premier has indicated that he considers this is a responsibility of the members of the federal parliament who come from that province. I am glad to assume at least a little of the responsibility in bringing to the attention of the federal government the necessity for more favourable terms as far as provincial-federal tax agreements are concerned.
The other day I saw a leading editorial in the Globe and Mail the heading of which was, "Mr. Garson, Meet Mr. MacDonald", and it started out by referring to a statement made by the Minister of Justice in the house to the effect that he thought the difficulties under which some provinces laboured were caused, to paraphrase the phrase he used as I recall it, by an occupational disease of Conservative governments. When I saw this heading, "Mr. Garson, Meet Mr. MacDonald", I could not think what Mr. MacDonald was meant. First I thought of Sir John A. Macdonald and another possibility was the late Angus L. Macdonald but I found that the gentleman referred to was the Hon. Earl MacDonald, the provincial treasurer of Prince Edward Island, who expressed views entirely different from those expressed by the Minister of Justice. The explanation given by the Minister of Justice for the difficulties encountered by some provinces cannot possibly apply to Prince Edward Island because there has been in power in that province for over 20 years a government which no doubt would be his choice if he were a resident of that province.
I am not suggesting for one moment that the provincial government there is entirely free of blame as far as the financial situation of the province is concerned; I think it would be unfair to do so. On the other hand I think it would be even more unfair to suggest that they are mostly to blame because I think most of the responsibility for this situation rests with the federal government in that the tax rental agreements are calculated on a formula

which is unfair to those parts of Canada which are not experiencing any degree of prosperity at the present time.
The adjustments which I feel will have to be made in the payments at the present time are due to the fact that the province of Prince Edward Island has not been able to retain the natural increase in its population because of the unsatisfactory economic conditions existing there. If the economic conditions were improved the tax rental agreements as they exist would come nearer to being satisfactory because if the natural increase in the population of my province could be retained there the per capita debt would be much lower and that increased population could be serviced at a cost the increase of which would be much less than the potential increase in revenue resulting from that situation.
If steps were taken by this government to give equality of opportunity to all Canadians regardless of whether they live in the mari-times, Ontario, Saskatchewan or elsewhere, the tax rental agreements might then function as they were intended to or more nearly so, but the maritimes have been experiencing difficult times economically and this adds to their difficulties as far as financing provincial governments is concerned.
My province is in the unhappy situation where the provincial government states it is unable financially to accept the hospital insurance proposals of the federal government. That creates the situation where the poor are made poorer so to speak, because although the provincial government of Prince Edward Island cannot go into this scheme neither can they wave a magic wand and prevent people from having to go to hospital. The result is that as individuals the people of my province will be worse off than the rest of the people in this country because they will have to pay their hospital costs themselves and still contribute to the normal taxes which are paid into the federal government, none of which will be paid back for this hospital scheme in their case.
It seems absolutely imperative to me, that steps be taken at the earliest possible time to give equality of opportunity to all Canadians. As far as the maritimes are concerned steps must be taken to encourage industry there and to protect the agricultural industry so that the natural increase in population can be retained in those provinces.
As a direct assistance to the maritime provinces I would strongly recommend that the statutory subsidies to the various provinces be readjusted in the light of the decreased value of the Canadian dollar. I believe the subsidies are completely unrealistic not
The Budget-Mr. Holowach only because of the fact that the value of the dollar has decreased but also because the cost of government has increased tremendously since these subsidies were last adjusted. If that were done on a generous scale the maritime provinces would then be in a less unsatisfactory position as far as the tax rental agreements are concerned, but I believe there is room for adjustment in both fields.
I think it is vitally important as far as tax rental agreements are concerned that a more accurate system be devised for estimating population, especially of the smaller provinces, so that they do not find themselves in the position where they have overpaid in the past and then have to make up for it when the readjustment is made. After all, in my province the budgets have been made for the last five years on the basis of the estimated payments made over these years. The readjustment of over $1 million places the province in a most unsatisfactory situation at the present time.
I should point out that I reached that figure as the result of my own calculation. I am not absolutely sure that my calculations are accurate, but I think they are, and if that is the case I do feel that the Minister of Finance should try to find some emergency means for softening the blow, at least so far as the provincial government is concerned, or, better still if it is possible, work out some formula whereby this figure, whatever it is, will not have to be deducted from the aggregate payment made to that province during the life of the 1952 tax rental agreement, because we are the province which of all provinces can least afford it.


Mr. Ambrose Holowach (Edmonton East):: Mr. Speaker, among the important debates we have had so far this session this present discussion takes a leading place. The 1957 budget proposed by the Minister of Finance (Mr. Harris) on March 14 is the largest in Canada's peace-time history. It calls for federal expenditure amounting to $5,170 million for the fiscal year 1957-58. Last year the surplus was $300 million, and this year a further large surplus is proposed, a surplus far in excess of anticipated expenditure, which means an ever-rising tide of federal taxation.
There are several very serious implications in these figures, and I welcome the opportunity of joining my colleagues in the Social Credit group in a further presentation of our convictions and of some indisputable facts. I do so because we were sent here by our citizens to fight for a positive program for all of Canada, and I believe, sir, that not even by the widest stretch of imagination

The Budget-Mr. Holowach can we say that such a program is before us now. The budget under discussion is in fact a statement of the social and fiscal policies of the present Liberal administration.
For several days now we have heard arguments for and against these proposals. It is natural in a debate of this kind that members who support the government should consider it their main function to congratulate the Minister of Finance. It is their privilege and their right to do this. But we cannot take their remarks too seriously when we consider the number of impressive facts and harsh realities which have been swept under the carpet.
We have examined the budget carefully, and I cannot help but feel, such is the impression it leaves, that it meets the requirements of only those who are financially secure-the fortunate and privileged few in this country. But we are not here to legislate only on behalf of one particular group. As for myself, I was sent here to represent all the people, and to act on their behalf, particularly that element which believes that government policies are denying it a fair share of well-being and the rights it should possess. Analysed in the light of the economic situation which affects my constituents-and I think this applies generally in Canada-in the light of the situation which faces the labouring man, the white collar worker, the small businessman, the old age pensioner, the blind, the veteran, all those who depend for their livelihood on fixed incomes, and the womenfolk of Canada who have the heavy responsibility of building happy homes in this country, 1 say that these proposals are nothing more than a cynical act of unreality.
The people are aware of their problems. Why is this government not aware of them? It has always been my conviction that the purpose of government is to make life easier for the people. It has always been my belief that governments should help in solving the economic and social problems which need solution. There is no evidence in this budget before us to indicate that this government is so inclined.
It is time to take stock of our national affairs. Instead of tackling the problem by introducing safe and sane policies, it seems to me that the government's attitude is one of unreality and wishful thinking. I recognize that shortage of time will make it impossible to cover many of the issues to which I would like to refer, but I wish today to consider two basic issues arising from this budget. One is economic, the other is moral. With respect to the first, I draw attention to the ever-rising cost of living, the menace

of price inflation, the lessening of purchasing power of the dollar, tight money, the credit squeeze, usurious interest rates, the high operating costs of business, the increasing burden of excessive taxation, the unretarded growth of government and its monopolies, the centralization of more and more taxation power in Ottawa and the hypothecation of future income to pay for instalment living.
These are the problems that are left unanswered and unchecked by the latest budget. It is with this in mind as background that we are obliged to join with all the rest of those who have condemned the budget. Let us look at some of the items I have mentioned a little closer. With respect to the increasing cost of living and price inflation, we read of this each day in our newspapers. Here is a clipping from the Edmonton Journal of December 4, 1956, with the heading: "Cost of Living Index Climbs to New Record." A few weeks later, in an edition dated January 4, 1957, of the same newspaper we find this heading: "Living Cost Index is Still Climbing." And a few weeks later still: "Living Index Hits New High".
An article in the Edmonton Journal of March 5, 1957, reads as follows:
Ottawa (CP)-Living costs rose again in January pushing the consumer price index to a record 120.5, an increase of one-fifth of a point from 120.3 in December.
Main propelling forces for the rise which followed a slight decline in December, were higher prices for gasoline, drugs, personal care items and alcoholic beverages, the bureau of statistics reported today. The index is based on 1949 prices equalling 100.
A substantial advance in hospital room rates also contributed to an increase in the other commodities and services sub-index from 123.1 to 123.8.
The over-all index figure of 120.5 at February 1 represents a gain of 4.1 points over the same date in 1956.
The food sub-index in January rose to 117.2 from 117.1. Numerous slight increases for most foods were nearly offset by somewhat larger price decreases for coffee, eggs, lettuce and tomatoes. The only food item to register a significant price increase was sugar.
The shelter sub-index moved up from 133.6 in December to 133.8 in January as a result of small increases in both the rent and home ownership components.
The only sub-index to decline was clothing which dropped from 107.6 in December to 107.4 in January. Sale prices for women's winter coats and overshoes and boys' parkas outweighed a further increase in the price of men's suits.
Price increases for fuel oil and a number of items of furniture, textiles and utensils pushed the household operation sub-index to 119.1 from 119.0.
What do all these figures indicate? They simply mean, Mr. Speaker, that the workingman's hard earned dollar is buying less and less for him and his family. They mean that higher prices for food, clothing and fuel are hurting the poor much more than the well to

do. Where is all this going to lead us? I predict that if these increases continue to mount we will soon all have to hold out our palms to Ottawa. Is there an answer to this problem in the budget? There is no evidence that there is.
We cannot go along with the government's claim that the situation is due to too much money chasing too few goods. Will someone name any consumable goods that are in short supply in our country?


Walter Edward Harris: I never said that.


Ambrose A. Holowach: Quite the contrary, the only thing that we have in short supply is a sane and sensible economic policy at the administrative level. There are plenty of goods, as evidenced by our gross national product, goods of every variety and kind. We have the paradox of consumers facing ever-rising prices while producers and farmers are facing falling incomes. In what way is the budget resolving this paradox? The fact is that government taxation and monetary policies have contributed to it more than anything else. Excessive fatty layers of invisible taxes incorporated into the prices of goods have raised the prices of these goods to an all-time high.
In addition to the heavy taxation policy of the government, taxation which is far in excess of required revenues, the government authorities have instituted a tight money policy which has resulted in Bank of Canada interest rate hoists seven times during the last year and a half. It is difficult for any Canadian to understand on what authority the minister thinks this is desirable. For one thing, it has already resulted in higher everything, including an increase of some $22 million in the interest charges on the public debt. In 1956 the interest on the public debt was $492,600,000 and it is estimated that in 1957 it will cost $522,200,000. For another thing, it has resulted in higher interest rates on loans for school and hospital construction, and the same applies to municipal borrowings. Our newspapers are full of such items.
I should like to say a little more about this business of inflation. Speaking in Toronto on January 28, the Minister of Finance (Mr. Harris) stated that Canadians ought to save more and spend less. I refer to an article which appeared in the Ottawa Citizen of January 29 headed, "Must Save More and Spend Less." The article reads in part as follows:
Finance Minister Harris says Canadians should save more and spend less to maintain the present economy and prevent inflation.
On March 14 the minister again implied that this was the cure for inflation. It would be commendable if the government for which he speaks would practice exactly what he
The Budget-Mr. Holowach preaches but instead it advocates tight money for the little man on the street back home and plenty of flush money for the ever-growing bureaucracy at Ottawa. It just does not make sense. Furthermore, it is a little hard for the public to feel happy when the government extracts over $5 billion of their purchasing power and then piously whispers to them, "Spend less, save more."
There is no issue more paramount so far as our people are concerned at this time than the incredible burden of direct and invisible taxes they must carry. In the first place, taxes are at the bankruptcy point. They are weakening the people's capacity to save and manage their own affairs. In spite of this the government persists in demanding heavy taxation even though it collected a budgetary surplus of $300 million in 1956-57 and is budgeting for a surplus of $152 million in 1957-58.
I say to the minister in all earnestness that a continuation of the present rate of taxation is more dangerous to the preservation of our way of life than any outside threat. If this sounds a little too harsh, let me say to the minister that more and more centralization of taxation powers in Ottawa will place us on the same road as that which has taken many nations into serious trouble. All we have to do is to look at the pages of history to justify the truth of that statement.
But there is another matter. There is something wrong about a situation which is not a reflection of the people concerned. The harried taxpaying public are widely aroused that their pleas for reasonable reductions have been ignored. In making a plea for a fairer tax structure I again urge the minister to reconsider the matter. I again urge that there should be a complete overhaul of our entire taxation structure and a substantial reduction in those taxes that are a detriment, first, to saving, second, to consumption and, third, to production and investment.
One of the greatest needs of all is tax exemption on essential foodstuffs, clothing and materials of shelter. These are the things which the Canadian people want, but the government answers by doing away with the 10 per cent sales tax on chewing gum, candy, soft drinks, septic tanks and window screens. The vast surpluses which the government is piling up indicate that the government seems to believe that lowering taxes will result in the public undertaking unessential spending. What sort of conceit is this? This attitude ignores the fact that the people of Canada are honest and have greater wisdom than the wisdom of their government. Tax reductions will be used to extract people from debt and will provide

The Budget-Mr. Holowach future security for many of them. They will create capital for new business ventures and provide jobs. They will enable people to make sound investments instead of looking on helplessly while foreign capital takes over what should have been their own investments.
But economic considerations are not the only issue before us. There is a moral issue. We founded our country upon the basic principle that governments will be enlightened and apply high, ethical standards in high office. In this connection it is right that we should evaluate the plight of our senior citizens, the blind and the veterans. I know that the old age pensioners will be pleased to receive the extra $6 proposed in the budget, but the ratio of inflation to the cost of living makes that a niggardly amount. It is only a tiny patch on what has always been a threadbare pension. Surely this administration knows that $46 does not even provide enough money for a proper subsistence diet. The total cost of this boost in payments to old age pensioners 70 and over will be some $45 million, the price of one nuclear-powered submarine or half a dozen heavy jet bombers.
Why has the government waited so long, until the eve of an election, to come forward with a helping hand? That is a question which I should like to have someone answer. The advancing of $6 and the offering of it on the eve of an election show that the administration gives not on the basis of merit or need, but simply on the basis of political expediency. Good government ought not to be playing with the welfare of the old age pensioners and the veterans.
The Ottawa Journal of March 15, 1957 contains an editorial in which I think the writer strikes the nail right on the head. It is entitled "The True Nature of the Budget". I should like to read a brief quotation from it:
The true measure of responsible social security is in a balance between what is socially desirable and economically feasible.
The measure to social security applied by Mr. Harris' budget is what may be politically profitable -profitable for the government in an election.
Relief of need is of humanitarian importance. On that ground no one can or should oppose an increase of pensions for the aged, for war veterans, or for the blind.
But the aged, the war veterans and the blind have been in dire need of help these past three years; have had to struggle for existence under a dollar worth less than two-thirds of its value only a few years ago.
Why did the government, taxing and spending and still reaping large surpluses, wait until now to offer relief?


Walter Edward Harris: Because it is obvious. My hon. friend is reading from an editorial, I believe; and thereby I take it that he is sponsoring the accuracy of that editorial.


Ambrose A. Holowach: I am sponsoring-


Walter Edward Harris: The accuracy of the editorial.


Ambrose A. Holowach: -the idea and the ideal for which this editorial stands.


Walter Edward Harris: There were not large surpluses in the last two years, as the editorial says. There were deficits in the last two years.


Ambrose A. Holowach: There were surpluses last year, and the government is planning for substantial surpluses for the coming year. The article further states:
All of us know the answer. The government could have done last year or the year before what it did on Thursday-the money was in its till. But there was no election last year or the year before and there is one this year.
That is what is happening to social security in this country:	A desirable thing, a humanitarian
problem, something which should be weighed in the scales of social justice and economic possibility, is being degraded into a political weapon.
Governments in days past had to raise election funds. There is no need for that now. The present government gets its campaign funds by dipping into the public treasury, timing social security measures to general elections-the needy only incidental beneficiaries.
And then the Journal further comments:
The Journal would like to think, dares even to hope, that pensioners and others thrown at the eleventh hour of the election what they should have been given long ago will resent this attempt to buy their votes-scorn this insult to their intelligence.
I should like to tell the minister that we were pleased that he has given some attention to the needy and to the problems of the veterans; they certainly deserve it. May I tell him this. In any further consideration of their needs let us remember that it is not enough to dislike poverty amongst them and to denounce it. The government must put some conscientious effort into improving their lot in the same way that these people put conscientious effort into winning the war.
There are several other matters upon which I should like to touch briefly. The first is the question of discriminatory freight rates about which I have spoken on previous occasions in this house. We were glad to hear that some assistance to the maritimes on the matter of freight rates is now being considered, but I must confess that I was disappointed to learn that such assistance and review are not being given to the western provinces. On previous occasions I have pointed out the discriminatory freight rates against my own province which are impeding our industrial growth. The fact is that no other place in Canada has such exorbitant freight rates and this state of affairs has been going on for a long time. The people of Alberta demand that something be done to halt the unfairness of our whole freight rate structure. With that in mind, I was amazed



[Stage Direction]
when the other day on the orders of the day this question was asked by the hon. member for Assiniboia (Mr. Argue), as reported at page 2640 of Hansard:
Mr. Speaker, I should like to address a question to the Minister of Transport. Now that the government has announced that a comprehensive examination of the entire transportation system of the Atlantic provinces will be made in order to determine what can be done to contribute to their welfare, will a similar comprehensive examination of the system on the prairies be carried out in order to assist the economic welfare of that region and to remove the discriminatory freight rates?
Here is the answer given by the Minister of Transport:
Mr. Speaker, I would repudiate the suggestion that there is any possible comparison outside of the mind of the hon. gentleman between the two areas which have just been mentioned. I cannot think at the moment of any reason why the government should consider making an inquiry into transportation conditions in the west.
That is an amazing statement. Everyone knows that one of the most vicious inequities in our country is the freight rates which Canadians of western Canada are paying at this time. This is what the Liberal government has condoned and supported:
On March 30, 1948: the transport board authorized a general freight rate increase of 21 per cent.
October 12, 1948: the federal cabinet disposed of the appeal against the 21 per cent increase by refusing to revoke the increase.
May 11, 1950: the transport board authorized a further general increase in freight rates of 20 per cent.
June 24, 1950: the provinces-all but Ontario and Quebec-presented an appeal to the federal cabinet against the 20 per cent increase.
November 29, 1950: the federal cabinet dismissed the appeal of the provinces.
January 25. 1952: the transport board authorized a further general freight increase of 17 per cent.
December 20, 1952: the transport board authorized a further general freight rate increase of 9 per cent.
March 6, 1953: the transport board authorized a further general freight rate increase of 7 per cent.
May 1, 1953: the provinces-all except Ontario and Quebec-appeared before the federal cabinet upon an appeal against the 7 per cent increase.
Last year the federal government authorized a further 11 per cent increase. We are paying freight both ways. We are paying on everything coming in and on everything going out; and the Liberal government which has supported all these increases over a short period of time pyramiding freight rates to an all-time high gouging western producers and consumers tells us there is no inequity in the situation. How in the world does this Liberal government expect to elect any Liberal members in the province of Alberta?
Mr. Cardiff:: They don't.


Ambrose A. Holowach: Members of the Liberal government in this house, no matter how well meaning they are, must support and condone these discriminatory policies against the western prairie provinces.
The Budget-Mr. Holowach
What about the small businessman, the mainstay of the free enterprise system and effective competition? In my own community I know of several businessmen who have gone out of business because of the credit squeeze. We in the Social Credit group will continue to voice our determination to end the economic squeeze. The government should extend some tax relief to the small businessman and give priority to him in the matter of the small loans that he needs to stay in business.
The hardest hit field is residential construction. With respect to this my own community of Edmonton is experiencing one of the worst homebuilding snags in its history. Since it is one of the fastest growing cities in Canada homes are urgently needed but statistics show that discriminatory federal policies and high finance charges have resulted in fewer houses being started in Edmonton than the average number in any other place in Canada.
It is all very well for the Minister of Public Works (Mr. Winters) to talk about the number of homes that were built in 1955-56, but the fact remains that this government is dragging its feet and not enabling Canadians to secure mortgage money on attractive terms so that they can acquire homes. In what way does this budget propose to solve this serious problem. I say to you that if this budget is the Liberal government's answer to some of the serious problems I have mentioned then the people of Canada must resign themselves to the solemn conviction that this government will not act differently. It is confused and does not know what to do or else it has been in power for so long that it now feels it is boss and can defy the will of its own people.
The lesson to be learned is that there is indeed the need for a political alternative. We earnestly hope that the people of Canada will seize the only practical and sensible alternative, and that alternative is the principle and the platform of the Social Credit party. We have demonstrated what a businesslike government can accomplish in the provinces of Alberta and British Columbia. No other provinces in Canada enjoy such a healthy economic climate. With such an alternative, with a country that is so richly endowed with a vigorous and talented people, endowed with vast resources; with the vision and the will to do it, Canada can not only remain the country of the free but the people of this country can be the envy of the entire world.


Walter Edward Harris: I should like to ask the hon. gentleman a question, if he does not mind, before he takes his seat. It is only in the interests of accuracy and not a matter of opinion. I thought he said I had removed the sales tax on candy and chewing gum. If

The Budget-Mr. W. M. Howe that is so, I ask him does he not realize that it was the special excise tax on candy?


Ambrose A. Holowach: I appreciate the correction. I meant the excise tax.


Mr. W. M. Howe (Wellington-Huron):: Mr. Speaker, I rise to take part in this budget debate feeling that it is one of the most important annual debates to take place in this House of Commons. Since this is the fifth budget of this 22nd parliament of Canada, no doubt it has special significance for all parts of Canada because of the fact this is an election year. The budget is doubly important in that it not only sums up and gives a resume of the year's financial events but it also makes a forecast as to the financial events of the coming year. The bringing down of the budget is an event that is looked forward to by people from all walks of life whether they represent big business or little business; whether they be professional people or ordinary workers, farmers or industrialists, because changes or proposed changes in the budget can affect the income, prosperity and happiness of every individual in Canada.
As I indicated previously, the budget has been looked forward to with greater anticipation this election year than in any other year because individuals and organizations, wage earners and small industrialists, pensioners and farmers are all looking forward to long-awaited changes. The pensioner is looking forward to changes in the pension setup, whether it be old age, veterans, blind or disabled pensions. The farmer is looking forward to some revision in the price support legislation in order to balance the selling price of his products with his cost of operation. The small businessman, and the farmer as well, are looking forward to an easing of credit restrictions which are just about driving them out of business.
I feel that this year also the members on the government benches were looking forward to the budget in the hope that the tremendous surplus indicated in the white paper of a few years ago would be used to reestablish their positions all across Canada which have been so shaken and so disrupted by the defence production bill of 1955 and the pipe-line debate of 1956. They were hoping that the Minister of Finance (Mr. Harris) would pull a few rabbits out of his budgetary hat to relieve the pressure and ensure their return. But what did they get? They did not get a rabbit to allay all their fears and worries but a rarebit-a bits and pieces budget that tries to do all things for too many people. No doubt every member in the house welcomes the fact that at long last

the government is beginning to appreciate and have consideration for the old age pensioners, as well as every other type of pensioner who has been caught in the terrific squeeze created by the mounting prices of the necessities of life. However, I cannot see how an additional $6 a month or approximately 20 cents a day is going to do very much for those on old age security.
The other day I had a letter from a constituent of mine who is 83 years of age and who has been living alone. He had been paying $36 per month board and his landlady wished to raise it to $40. Now that he has an increase in pension he will no doubt have to pay the $40. He will have, therefore, the magnificent sum of $6 per month additional. If he saves all his money for two months, he may have enough to buy a pair of shoes and a shirt. It will take another two months of saving to buy a pair of trousers. If he wants to buy a suit of even the cheapest quality he will have to save all his money for at least six months. When we get down to the facts and figures this increase is very unrealistic and will do little to ease the burden of those who are in the sunset of life.
There is no doubt that the reduction in the price of tea and coffee will assist some of those who have the regular coffee and tea breaks, but the reduction in the price of chocolate bars, candy and pop will be of no great advantage to the old gentleman of whom I spoke because he will not have any money to spend on them anyway.
It is interesting to note that bit by bit the government is listening to the requests of the opposition members with respect to the exemption from sales tax on articles and goods purchased by municipalities and associated boards, because a year or so ago certain road-building equipment was exempted, and now we find this year school desks and chairs, structural steel for bridges and precast concrete shapes have been exempted from sales tax. I still cannot understand why this government could not have gone the whole way and assisted the already over-burdened municipal taxpayer by abolishing this iniquitous form of double taxation of sales tax on municipal purchases.
In speaking of the people who were particularly looking forward to the bringing down of the budget this year, I mentioned the farmers of Canada. In the four years that I have been a member of this house there is one thing that I just cannot seem to understand, namely, the indifference of this government to the problems concerning the farmers from coast to coast. One wonders whether it is the wish of this government that more

and more farmers should be driven off the land. This action and this attitude are rather hard to understand. In a recent speech by the Minister of Agriculture (Mr. Gardiner) he advised young farmers to stay on the land. I feel the Minister of Agriculture is right; that farming is a very healthy and satisfactory way of life, but of what value is it to be healthy if one cannot make a living, if one cannot earn enough money to hold up one's head in the community? He must be a part-time farmer in order to get enough cash to pay his interest and taxes, with the result that his farming operation fails. That is what is happening. Many of our young people are leaving the farms. To me this situation is becoming critical.
Our year book for 1956, brought up to date to 1954, quotes a few figures. The first one must have been inspired by the Minister of Agriculture, because it is in his usual way to gloss over a situation by quoting a five, six, seven or eight-year average. In the first paragraph on agriculture it is mentioned that in the last few years, from 1946 to 1953, farmers realized a net income of $1,611,600,000 from farming operations. This was for a seven-year period.
Farming represents the greatest basic industry in our country. When we realize that the value of farmlands and buildings, implements, machinery and livestock represent capital invested in some two-thirds of a million farms to a total of almost the $10 billion mark we understand how important this industry is. But it is also rather hard to understand just why so little has been done. Goodness knows, there has been enough said in this house about it. Year after year our farmers' organizations have appeared before the cabinet and caucuses of different parties with briefs, applications and suggestions for assistance that might be given. Practically every farm paper you pick up, or every editorial on farming, would indicate that something is wrong. We have experts saying that the small farmer is done, that he is inefficient. I resent that. I know that in my riding some of the most efficient farms are the small farms, where father, mother and children work together in trying to make a success of it. Men who have followed agriculture all their lives, good farmers, are selling their farms, as I learned last week, because they just cannot see any future in farming.
We find that in spite of their restricted numbers farmers are producing more and more each year, and if this government had a more realistic trade policy, if they had made greater efforts to retain the British markets for butter, cheese, beef and pork, the
The Budget-Mr. W. M. Howe farmers would be producing more than they are producing today, because they would realize that when it came time to market their produce there would be a foreign market for their surplus production. But in spite of all that I have said, in spite of all these representations, what do we find in the budget that will help the farmer, that will help him become more self-sufficient?
Reference is made to the fact that if conditions are normal this year it is expected that his income will equal that of 1951. Between 1952 and 1954 his income dropped practically $800 million, as indicated in the year book. Some reference was made to tariffs in the budget to assist the maritimes with the potato situation, and then to salve the feelings of the farmers' organizations that sent wires to practically every member of parliament representing an agricultural riding asking for an additional tariff on skim milk powder and cheese. The government's reply was that they are having continued talks with the Australian government on trade matters.
I might make this further comment. What do we find in the legislation this year? Practically no help is given to this industry which has reached such a sad state. There have been amendments to some acts, in fact, there is an amendment to the Canadian Farm Loan Act. The parliamentary assistant himself indicated that the reason it had to be amended was the accelerated demand for farm loans which in itself is an indication that farmers need assistance.
The other evening at the milk producers' banquet in the Chateau Laurier the Minister of Agriculture (Mr. Gardiner) made a big fellow of himself by announcing a new floor price on skim milk powder. If he really wanted to do a job on dairy products why did he not go right across the board and raise the floor price on butter? This policy of the government of setting floor prices for butter two years ahead of time is definitely unrealistic. Fifty-eight cents was a fair price for butter probably last year, although I have a chart here which indicates that the average hourly income of a dairy farmer who sends his milk to creameries is 13 cents. However, this year, whether it is owing to the fact that we had too much rain, or to the fact that the farmers have not been able to afford to buy the necessary fertilizers, the grain and hay crops in eastern Canada did not contain proper nutritional values so that the farmer to maintain his cream production had to buy western feed grain and concentrates at $90 a ton, which many of them were unable to do, and so butter production has been dropping.
2936	HOUSE OF
The Royal Assent
Once again, turning to the order paper and wondering what is going to happen, we remember that a week or so ago a group from the federation of agriculture asked that amendments be made to the farm products marketing act to ensure that farmers can carry on their self-help program through the producer marketing boards.


Mr. Speaker:: Order.



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by Major C. R. Lamoureux, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the Honourable the Deputy Governor General desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the house went up to the Senate chamber.
And being returned:
Mr. Speaker informed the house that the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bills:
An act for the relief of Joseph Ricardo Bouziane.
An act for the relief of Grzegorz Niski, otherwise known as Gregory Niski.
An act for the relief of John Masson Garland.
An act for the relief of James Frederick Green-grass.
An act for the relief of Theophila Yanishewski Lazoryk.
An act for the relief of David Hutcheson MacKay.
An act for the relief of Karl Heinz Grube.
An act for the relief of Waltraud Feronika Thorwart Servay.
An act for the relief of Elizabeth Krawchuk Yovdofchuk Ripchinsky.
An act for the relief of Gweneth Vernice Blackman Waterman.
An act respecting The Western Assurance Company.
An act respecting The British American Assurance Company.
An act to incorporate The North Waterloo Farmers Mutual Insurance Company.
An act respecting Equitable Fire Insurance Company of Canada.
An act respecting The Bishop of the Arctic.
An act respecting Les Reverends Peres Oblats de Tlmmaculee Conception de Marie.
An act for granting to Her Majesty certain sums of money for the public service of the financial year ending the 31st March, 1958.
At six o'clock the house took recess.

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 [Mr. Howe (Wellington-Huron) .1
[Stage Direction]
the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell.
William Marvin Howe: Mr. Speaker-


Some hon. Members:: Hear, hear.


William Marvin Howe: -I do
appreciate the applause-


Walter Edward Harris: Party solidarity.


William Marvin Howe: -from the government benches. Before the house rose at six o'clock I had referred to the request made by the federation of agriculture that amendments be made to the farm products marketing act so that farmers might carry on their own self-help programs through producer marketing boards. Although this legislation has been promised, it has not yet appeared on the order paper. This indifference, this procrastination, this unrealistic approach to agricultural problems cannot continue or the time may come when we in Canada, despite our millions of acres of rich, arable land bequeathed to us, will become dependent on other countries of the world for food.
As I indicated previously, the small businessman and the small industrialist were also looking forward to some assistance from the budget and hoping that the tight money policy might be relaxed so that they could obtain the necessary credit to expand and improve their businesses in competition with the great chain organizations and shopping centres which, by means of give-aways, special discounts and trading stamps, are squeezing the small operator out of business, the man who has always been the backbone of the community, who has given not only service to his customers but has paid a major share of municipal taxes, has taken his place on municipal councils and associated boards and has donated to every worthy cause. The budget offers very little, if any, assistance for him.
Then there is another group I should like to bring to the attention of the house, the average wage earners, the white collar man and the factory employee whose incomes are low and who should have had consideration. I should like to join with all other hon. members who have suggested that the statutory exemptions should have been raised from $1,000 to $1,500 for a single man and from $2,000 to $3,000 for a married man in order to help these people to meet the increased cost of living.
The 20-year old age security residence rule is going to affect many new Canadians who

have become good citizens and are contributing to our increased production and to government revenues. In my opinion it should be changed to ten years. In fact, I know of a case involving a former constituent of mine who died recently and who came to Canada in 1923. In 1939 he returned to the Isle of Man for a visit. Because of the war and transportation difficulties he was not able to return to Canada until 1949 and therefore was not able to get the old age pension. He died last year at the age of 73. However, his widow is still alive and is living in straitened circumstances simply because of the 20-year residence rule applying to old age pensioners.
All these people whom I have mentioned are ordinary folk, but apparently they have been forgotten by the members of the government who appear to hide in their ivory tower. Do not forget that these are the people who decide elections and will be deciding on who shall form the government of Canada after June of this year.


Mr. Claude Richardson (St. Lawrence-Sl. George):: Mr. Speaker, from the time of confederation until the year 1957, there have been something like 90 budgets presented to parliament and countless numbers of words have been uttered. It is not the purpose of the member for St. Lawrence-St. George to add to that great flow of words to any great extent. First of all, if the member for St. Lawrence-St. George has not participated in those debates of particular interest to our western farmers it is not because the people of my constituency are lacking in a genuine interest in the problems of those who come from western Canada. In addition, if I as the member for St. Lawrence-St. George have not participated in debates of particular concern to members from the Atlantic provinces, involving particularly the fishermen and the miners, it is not because the citizens of St. Lawrence-St. George or their representative are unmindful of the particular problems of that section of the country.
One does not need to be a great student of economic affairs to say that if the farmers of western Canada, the fishermen on both coasts and in the inland waters of Canada, the trappers, those engaged in lumbering, if all these primary producers do not apply their labour to the natural resources of Canada we shall not long have economic well-being. Those of us who live in the city of Montreal just as those who live in the great city of Toronto or the city of Winnipeg-


Mr. Mclvor:: Fort William.
The Budget-Mr. Richardson


Claude Sartoris Richardson: -or Fort William-


Mr. Fraser (Peterborough):: Or Peterborough.


Claude Sartoris Richardson: -are particularly concerned and genuinely interested in those problems which are of immediate concern to miners, fishermen and all others throughout Canada whom we regard as primary producers.


An hon. Member:: And then you vote against them.


Claude Sartoris Richardson: It also does not take a very profound student of economics to realize that in this era we have now come into what might be described as the stream of production. We find that our younger people, those in their late teens and early twenties, are out of the immediate stream of production because they are preparing themselves for their professions or occupations so that they may earn a livelihood. Then you find people all over the country who are immersed completely in the stream of production. They are active people who are applying their efforts and talents to the natural resources of Canada. Essentially it is they who create the economic wealth of the country.
Then there are those who are in their middle or late sixties or the seventies and have stepped out of the stream of production and are more or less sitting on the banks. They are retired, as is their right, while those in the middle part of the stream, in the active part of the stream of production, are producing the economic wealth from which and only from which this or any other parliament can find the ways and means, the revenue with which to provide for the estimates and pay for the measures of supply upon which we vote. We have encouraged our young people, and rightly so, to get more and more education and to prepare themselves better for the active part of the stream of production. Because of medical science and research people are living longer and can enjoy a greater portion of their lives in complete or semi-retirement.
But my only point here is that those of us who are charged as trustees in this principal legislative forum of Canada must not lose sight of the fact that the only place where we can obtain the taxes, the ways and means by which we can grant the estimates of supply and discharge what we regard as our social obligations, is from those people engaged in the active part of the great stream of production of the country, whether they be manual workers, entrepreneurs or people in the professions. Therefore when we are asked by the government of this country at this time to adjust the old age pensions and other

The Budget-Mr. Richardson pensions of the people who are in that third part of the stream, almost on the banks, certainly anybody who is at all sensitive to human needs is glad that these pensions or retirement benefits can be adjusted. As for myself, I do not know whether it should be $6 or whether it should be $10.


Mr. Castle  den:@: What is the cost of living increase?


Claude Sartoris Richardson: Mr. Speaker, I will give you my answer; just be patient for a moment. I put a figure before the Minister of Finance (Mr. Harris) announced it the other night and my hon. friend who sat beside me saw the figure. That figure, so far as I can mathematically adjust it, would be approximately $8.


Mr. Castleden:: Is that the cost of living increase?


Claude Sartoris Richardson: Approximately; that is right. That is my answer in any event and I give it for myself. Certainly I should like to see many older people get many dollars. There is no doubt about that, and there is no great difficulty about discussing it. However we must remember that it is only from those people who are actively engaged in the production of the economic wealth of the country that we can raise the taxes, the revenue, whereby the educational grants to help the younger people and whereby to help the older people who have served their day, -let us not argue about that matter at this time-and who deserve first our compassion and second, all that we can pull from the stream of production to help them. There is no difficulty in arriving at that conclusion.
While Montreal is not a great land of waving corn, while it does not have many mines under the streets, and while the fish that are there are certainly not ones that you would want to eat, we are interested in all the problems of those who are in the field of primary production and in the extent to which we can make our contribution in the field of transportation, whereby we unload the grain that comes from western Canada; and whereby we unload the coal that comes from the mines of Nova Scotia; whereby we take the newsprint or the pulp and send it on its way to all parts of the world; in the fields of trade and commerce, distribution, transportation, finance and insurance. To the extent that we can grow with the rest of Canada, we are glad; and also to the extent that Canada grows even faster than Montreal, I am sure that man for man most of the constituents which I have the honour to represent would be glad in every way.
I want to deal at this juncture with one point raised by the hon. member for Nanaimo


(Mr. Cameron) who has just retired from the chamber, and this shows one of the difficulties of dealing with matters of finance. I do not pose as an expert in the field of banking or finance but the hon. member who was the first speaker for his party on this budget debate at page 2471 of Hansard referred to the question of what he calls the inequities in the 20 per cent rebate on income derived from Canadian corporation dividends. He went on to say this, if I may quote him for just a minute; and I do not want, Mr. Speaker, to be unkind to him. He can take care of himself.


An hon. Member:: You are unkind.


Claude Sartoris Richardson: He said this:
I want to put on record at this point some figures with regard to this because I have had great difficulty in persuading those citizens oi Canada whom I have had the opportunity to address that the government is actually doing what it is doing.
I have no doubt the Minister of Finance will be very pleased to know that the average Canadian citizen whom I have encountered virtually refuses to believe me when I recite the facts of the 20 per cent dividend income rebate. I have been told repeatedly by audiences that I must be confused, I must be wrong, . . .
Mr. Speaker, if you will be patient with me, I would like to show wherein he is confused and wherein he is wrong. It is a simple escape from a simple fact. He took two hypothetical taxpayers and adjusted their tax payments, one whom he said derived his income from dividends, the other from salary. I wish to take those two same hypothetical taxpayers and to over-simplify the problem for my hon. friend.
Of these two taxpayers, called A and B, A has saved some money, either through hard manual work in the coal mines or the steel mills or out on the western prairies-


Mr. Regier:: Or stolen it.


Claude Sartoris Richardson: No. My hon. friend may have friends who get their money in that way but I do not have them. If my hon. friend wants to ask another question I will sit down and take it. The first taxpayer, taxpayer A, has saved some money usually from hard manual work-I stress the word "usually"-perhaps by dint of some education, perhaps by leaving school earlier and having taken an I.C.S. course or by working as a newsboy or in the steel mills, has made it on the side, but not as my hon. friend has suggested, stolen it at all.
That is taxpayer A and he gets together, as have many people throughout this Canada, a little sum of money and he starts a business; he chooses a corporate form of organization, not a sole proprietorship, not a partnership

but a corporation. For the purpose of oversimplification, but nonetheless the truth, he forms a company with himself as sole shareholder and then, because he wants somebody to work with him, he employs taxpayer B, the other hypothetical taxpayer referred to in the speech of the hon. member for Nanaimo. He employs him and he employs him at the figure suggested by the hon. member, namely, $11,133. The figures which I shall use are round figures but the principle is exactly the same.
This taxpayer A now has formed a company; he is the only shareholder and he has one salaried employee, namely the other hypothetical taxpayer B. Now it follows that in order for there to be a dividend there must be a company. In order for there to be a dividend there must be a net profit and so that the record will be clear, and so my hon. friend will read it carefully in Hansard tomorrow, may I point out that A as shareholder of the company takes all the business risks and employs B, guaranteeing his salary of $11,133.
Now what happens? To make a dividend for A the company has to have a gross income of $25,050; B is paid his salary of $11,133, leaving $13,917 net taxable income on which a tax at the rate of 20 per cent is paid, that tax amounting to $2,783. That then leaves a profit in the hands of taxpayer A, the sole shareholder of the company who is employing B, and that is paid to him as a dividend of $11,133.
The net result then is that A takes his remuneration by way of dividend, in effect as a sole shareholder, and pays $2,783 in tax, while B, the paid employee, pays, as the hon. member said a few days ago, $1,877. On reflection and upon reading this tomorrow, my hon. friend will find that, unlike the illustration he gave the other day in which he suggested the Minister of National Revenue (Mr. McCann) should remit four cents to one of his hypothetical taxpayers, we now see that because he takes into account the fact that the company in order to have dividends must have profits, must have some work behind it, the taxpayer who takes the business risks will have paid something like $906 more in taxes than the other hypothetical taxpayer.
I do not make these remarks for the edification of my fellow friends here. I do not pose as any great expert in the field of economics, in the field of finance or even in the field of taxes. I simply believe it is only right that we who have been granted the right and the privilege of speaking for the 16 million people of Canada should hesitate every time before we speak in order that we may not tell to
The Budget-Mr. Richardson the people of Canada or to our colleagues in this house what is worse than a lie-this has no reference to my hon. friend and I apply it to myself as quickly as he would apply it to himself-and that, I suggest, is that we do not tell half truths.


Mr. Ellis:: That is what we are hearing now.


Claude Sartoris Richardson: Not at all, but if the hon. gentleman or one of his colleagues wants to speak after me I shall stand to be corrected. I might say that is one way in which these suggestions go out to the country. May I preface this remark by stating that ever since I started to work at the age of 11 my remuneration has been much more by way of manual or mental service than by way of dividends. I do not stand here holding any brief for the dividend payers of Canada as against those who make their salary or wages by means of mighty brawn or mental power, not at all. However, I think it is only fair when we have these statements circulating throughout the country as suggestions that this government is paying more attention to those who get remuneration by way of dividends than by way of earnings-


Alfred Claude Ellis: That is right.


Claude Sartoris Richardson: Then, you give your answer in due course. I suggest it is time we reflected very seriously, not only that the people of Canada may know what are the facts but that we as the elected representatives may justify the great trust that they repose in us.


Mr. Cameron (Nanaimo):: Would the hon. member permit a question?


Claude Sartoris Richardson: Yes, surely.


Colin Cameron: Does he deny that those who draw their income or part of their income from the dividends of Canadian corporations are permitted a deduction of 20 per cent of their dividend income, not from their taxable income but from their income tax?


Claude Sartoris Richardson: Certainly, I do not deny it at all. If he will read Hansard tomorrow he will see my statement. It will not make any difference in the statement I have made. I only draw that as an illustration and, as I said, not in any unkind sense of reflecting on my hon. friend at all, but so that he may see that after all the statement that he made-


Alfred Claude Ellis: -is quite correct.


Claude Sartoris Richardson: -is not quite accurate. Certainly if he wants to put himself up as an authority in respect of every problem that engages our attention, he has not commended himself to me as an authority, if that is the

The Budget-Mr. Richardson basis for his authority and prestige in respect of the matters with which he deals. I suggest on this occasion he was wrong.


Alfred Claude Ellis: You admitted he was right a moment ago.


Claude Sartoris Richardson: No, I did not. Would you care to ask me another question?


Alfred Claude Ellis: I would simply repeat the question asked by the hon. member for Nanaimo (Mr. Cameron). Is it not a fact that this 20 per cent deduction is permitted under the Canadian income tax law?


Claude Sartoris Richardson: Certainly, and I said so to the hon. member who left the chamber just a minute ago. Does the hon. member wish me to emphasize the point?


George Hugh Castleden: I should like to ask the hon. member a question. Would he admit that capital gains amounting to hundreds of millions of dollars are exempt from income tax in Canada?


Claude Sartoris Richardson: I shall be glad to answer that question. It is quite irrelevant to the question I was discussing and by saying that I am not trying to dodge it. I was not in any way, nor were my hon. friend's two colleagues, discussing the question of capital gains. They were discussing the very simple question of the taxation of corporations and the dividend rebate which is allowed to shareholders, thousands of them throughout Canada. They receive a 20 per cent dividend rebate by way of reducing to the extent of one-fifth of the income which is charged to them as shareholders throughout the artificial entity, the corporation.
I have stated my case on that. I only make it in order that, while I myself as one member in this house who refrains, perhaps with not too much modesty but' enough for one of my profession, from discussing problems of wheat, mining and fishing about which I feel I know extremely little, I think it is also becoming for all of us at times to remember that there are people who have not only become the primary producers of the economic wealth of Canada but have through a process of law become corporations and kept a great deal of the trade and commerce of this country at a relatively high level. That is the whole point I wanted to bring to the attention of the house in answer to the hon. member for Nanaimo.
I come again to the fact that these people of Canada from whom we have to garner the revenue with which to pay all the bills, this revenue which parliament will disperse throughout the length and breadth of this country for the coming year, is coming from a narrower and narrower segment of society.

The older people continue to be a large group and the younger people are becoming a larger and larger group. We must remember that it is from these people that we get the ways and means whereby to discharge these duties and obligations of a collective society, not necessarily of the government or even of the members of parliament because we are only a small body called a government or a parliament. It is not from parliament or the government that these revenues come to pay our friends their old age pensions or the other pensions or to pay the younger people their supplementary grants for education; this revenue comes from the taxpayers of Canada. So long as we frequently come back and reflect on that, the better we will discharge the obligations imposed upon each of us.
In closing, may I point out a strange phenomenom. If you go back to 1867 and, for example, take 10 year periods, 1877, 1887, 1897, 1907, 1917, 1927, 1937, 1947, and this year 1957-


Mr. Hodgson:: And 1967.


Claude Sartoris Richardson: -and 1967 to come, you will find that the budgets presented by every one of those ministers of finance, the illustrious predecessors of the present minister, with the exception of 1887 and 1917, have been presented by a minister who was a member of this particular party.
( Translation):


Mr. Fernand Girard (Lapointe):: Mr. Speaker, the budget just brought down by the government has been coldly received by the Canadian public. While the government lavished advice on the Canadian people on ways to prevent inflation, the government itself failed to take any really practical steps along those lines. Government restrictions will seriously hinder residential construction: they will embarrass municipalities and school boards and strangle small industries.
All economists agree that, in times of inflation, more money must be put in the hands of the consumer, and that attempts must be made to lower the cost of living. Therefore family allowances should have been doubled, at least, to increase the buying power of the consumer. Actually this would only have brought back the value of the family allowances to the level of 1945. A government which boasts of a fantastic increase in Canadian prosperity, which spends untold millions every year and even manages at that to accumulate huge surpluses, suddenly feels incapable of paying family allowances on the scale of 1945 when its revenue was considerably less.
The insistence of our requests, which merely echoed the thousands of requests



I. 1957

[Stage Direction]
made by the families of our various constituencies, has no doubt constrained it to yield something, but the benefits offered are so measly that we are tempted to refer to them as "electoral allowances". The government, in all its own expenses, is prodigal to an alarming degree but where the family is concerned, it is downright miserly. Averaged out over all the families already in receipt of family allowances, this increase comes to only $1.40 per month per family. There are two and one half million families at present in receipt of family allowances and they are to be voted $3,660,000 per month. Moreover, according to the new conditions, not all children will benefit from this $1.00 a month increase but only those in the 1 to 6 year group and those in the 10 to 12 year group. This means that the children aged 6, 7, 8, 9, 13, 14, 15 and 16 will receive absolutely nothing more. As the increase will take effect only on September 1st, chances are that most families will realize only after the elections how few children will be entitled to it.
The same niggardliness was shown towards our old people, $6 a month being granted when it should have been $15. The 55-year old man can no longer find employment in industry today because he is too close to retirement. The cruel and inhuman rule of retirement at 65 throws him out of the labour market. At 70 he will have to be content with a miserly $46 a month to clothe and feed himself, to find lodgings and to live. Such is the gratitude of the state towards its older citizens who have made our country what it is today and who have sown the harvest of millions of dollars which are being spent under their noses while they are given a few crumbs. The poor old man whose pension is inadequate will at least find some solace in the thought that he is getting a little less because his government has decided to give the pension to all those who have reached the required age, and that he is sharing it generously with those who do not need it.
Why does not the government stop its extravagant expenditures, in order to reduce the income tax paid by workers in the low income brackets and by the corporations? That would be an efficient way of reducing the cost of living and of further increasing the purchasing power of the consumer. Just look around everywhere federal money is being spent and you will be impressed by the liberality with which use is made of the taxpayer's money, whereas the taxpayer would soon be called a prodigal son if he acted the same way.
The Budget-Mr. Girard
There is however a field where civil servants suddenly become thrifty. That is the field of unemployment insurance. In that field, the iron rule is applied and people are driven from pillar to post and treated as poor relatives by those who administer the worker's money. Because of a few hundred lazy people, who want to live off this fund accumulated by the workers, the others are shifted back and forth to the point of bewilderment. Some civil servants, themselves victims of the complexities of a law capable of many interpretations, too easily become repeating machines for which true human problems are dealt with in legal terms and are classified by numbers. Under the law as its stands, a specialized worker may very often get what he is looking for, but the unfortunate labourer has to accept any work anywhere, at the risk of being deprived indefinitely of unemployment insurance benefits.
I take this opportunity to ask the hon. Minister of Labour (Mr. Gregg) to amend the Unemployment Insurance Act to cover the staff of our hospitals and educational institutions. Those people suffier just as much as industrial workers from unemployment. These exceptions are discriminatory and impossible to explain. I make this request on behalf of 6,000 employees of the aluminum union of my constituency who urged me to do so as they are concerned, and rightly so, with the situation of their fellow-workers in other fields. They have thus given an example of solidarity of which they can be proud.
I also wish to say a few words about the agricultural problems which have been omitted from the budget. I read in the press that potato growers of New Brunswick are planning a march on parliament to ask of the government that it finally put a stop to the flow of American agricultural products flooding our markets. The potato growers of my own riding would surely like to endorse those representations, if they could only hope that the government would at last think of agricultural producers other than the wheat growers.
Recently a member complained in the house that American turkeys in Canadian packings were being imported into this country. As far as the Right Hon. Minister of Agriculture (Mr. Gardiner) is concerned, this seems to be normal.
We have the same problem for cheese imports from New Zealand. In a country with too much wheat, livestock producers are crushed by the prices of feeds while they continue to suffer from uncontrolled fluctuations in the price of their products.
2942	HOUSE OF
The Budget-Mr. Girard
When will the little farmer be free from the unemployment insurance red tape? If some farmers cannot live on their land and have to take jobs off the farm, this is a definite proof that they are entitled to unemployment insurance. To say that they are not eligible for unemployment benefits because they live on a farm is to make them the victims of a cruel injustice. The entitlement to benefits should not be determined by the area of a farm, but according to the income it brings to the owner.
Mr. Speaker, again this year I introduced a bill that I had submitted to the house last year, one that would grant a certain preference to bilingual applicants in civil service examinations. I would like to say a few words on this matter while we are discussing the budget.
The hon. Secretary of State (Mr. Pinard) has given me the assurance that something would be done in line with the purposes of this bill, but since the promises of the hon. minister have not yet begun to materialize, I come back to that subject, always confident that the hon. minister will finally give in.
When answering my question in this respect while the estimates were being discussed last year, the hon. Secretary of State even went so far as to congratulate me on my humble case for bilingualism. In the light of this encouragement, I dare bring the matter up again, not to annoy the government but in the hope of finding a solution to this unthinkable anomaly whereby, after 75 years of confederation, the public service has not yet found a way to determine whether a candidate is bilingual or not in a bilingual country.
Even though, to all appearances, my bill was quietly killed, as some newspapers put it, because an ominous silence has followed the encouraging words of the minister, I believe that the debate has served a useful purpose. That is why I would like to quote a statement of the Secretary of State as the starting point for a new discussion.
I quote from Hansard of July 4 last, page 4 of the English translation:
Just as my hon. friend, I am convinced that bilingualism is making notable headway in this country. I agree with him that there is still room for improvement. Some time ago, the hon. member introduced in the house a bill containing certain suggestions. At that time, I opposed the bill as it was drafted but I clearly stated that I approved it in principle. By what means the suggestions made in that bill could be implemented remains to be seen. Personally, I believe, as my hon. friend, that bilingual employees should receive not a preferential but a different treatment, on account of that extra qualification, and that they
[Stage Direction]

should therefore be given preference over any nonbilingual candidate to a civil service position. Some system might be devised to achieve that end. Following the introduction of my hon. friend's bill,-indeed I had done so before that-I discussed the matter at some length with representatives of the civil service commission and I asked them to suggest as soon as possible some amendments to the civil service regulations so as to do justice to the employees concerned.
So the minister himself recognizes that there is a serious deficiency, that bilingualism is not yet recognized by the civil service as an extra qualification. Moreover the federal civil service has not yet had proper regard for the spirit of confederation; it has failed to realize that Canada is a country with two races and two cultures. Its practice of bilingualism has gone no further than a concession to a single province and to certain French groups in particular. It does not look upon it as a prerogative of the whole Canadian nation.
Bilingual in the province of Quebec and unbilingual in the remainder of the country, this has been the separatist formula applied to date. Yet, whenever isolationism is mentioned, we Quebecers are accused of fostering it.
In my opinion, there are two kinds of bilingualism in Canada.
First, there is practical bilingualism, the one which is required for contacts with the French or English group, and which becomes a useful concession for the smooth operation of the civil service. By nature, it is inevitably restricted to the province of Quebec and a few important French groups. But there is, to my mind, another bilingualism, whose letters of nobility come out of the very spirit of our constitution and which ensures an exchange between the two ethnic groups who are the distinctive feature, not only of Quebec Canadians, but of Canada as a whole.
It is for this latter form of bilingualism we must fight, since French culture is not only the heritage of the people of Quebec but also of all Canadians, from Halifax to Vancouver.
That is why I am opposed to the mentality which is evidenced even in the speech of the minister who only consents to bilingualism in so far as it ensures proper relations with the French-speaking group.
We must not learn French and English only because this would be a useful accomplishment, but we must learn the two official languages to be more truly Canadian, to be more apt to possess this double culture which is the main national resource of Canada and the basic element of its national character. To say that for an English-speaking Canadian

from Vancouver a knowledge of French is not necessary is to give French-Canadians the right to make similar claims. This means the destruction of the bicultural character of the nation. The civil servants are the trustees of the constitution and they must remain so wherever they may live. I do not hold that bilingualism should be extended to every Canadian without exception. I am of those who believe it necessary to have an adequate knowledge of one's own mother tongue before learning another. But for those whose role has consequences on the life of the Canadian nation, bilingualism is indispensable to a fair and universal representation of this nation of ours, with its dual mentality.
These people see in bilingualism not only a sign of competence, nor a concession made to good understanding but a sign that our nation has no business being anything but a country with two cultures.
When, Mr. Speaker, will we cease to be content with words, promises, or high sounding principles? When will we take practical steps to show how sincere these fine words can be?
When will the end come at last to the exploitation of popular feelings by resounding symbols outside the house, while the last positions of the French group in the constitution are being destroyed in parliament?
How can some people decently give recognition to the principle of bilingualism in fine speeches, and refuse to approve a bill which merely requests constitutional confirmation of that fine principle? The symphony of the pompous speeches on national unity has been so well orchestrated that national centralization can be substituted to them without any change in the music. To that are added some professions of good intentions and the trick is done. Our constitutional rights can be destroyed with impunity, approval of legislation aiming at bilingualism of cheques and civil servants can be refused consistently, there can even be intrusions in the sacred sanctuary of education, etc., and the people are completely hoodwinked.
On January 23rd last, the federation of all St. John the Baptist societies of Quebec submitted to the Secretary of State an eloquent brief supporting the principle of my bill on bilingualism. As reported in the newspapers, the Secretary of State replied that he would seriously consider the matter. Yet, last year, according to the minister himself whose words I quoted at the beginning of my remarks, he had had talks with officials of his department, 82715-186J
The Budget-Mr. Girard he had requested suggestions for the purpose of amending regulations as soon as possible.
The minister's silence has forced me to-raise that question again, and his answer to the St. John the Baptist Society closely resembles a withdrawal.
Yet, I have faith in what the minister said to me and I believe he is as anxious as I am to promote the vital interests of his own people. Could it be then that the Secretary of State, like so many others, has met with the fanatical stubborness of some senior civil servants whose almighty power resists the authority of a member of the cabinet?
I would rather wait for the explanations of the minister himself before I pass judgment.
In his statement of July 4 last the minister stated clearly that he was in favour of the principle of this bill. That is why I could not understand, unless one knows nothing of the meaning of words, how the Secretary of State could object to the second reading of this bill, since the second reading binds the house only as far as the principle of the bill is concerned, and he had said he was in complete agreement on that principle.
For 20 years we have been talking about national unity, and Canadians are still waiting for a distinctive flag.
The way Nasser snubbed our troops in the Middle East has shown the world that Canada, which acts as a referee in the great international controversies, does not seem to have developed enough in the national field to have its own flag.
This is how the Liberal party fosters national unity, by doing nothing but lull the voters with fine promises.
And what about our national anthem? Again it must be in the name of national unity that we have two of them!
After 20 years, we are still waiting for the appointment of an ambassador to the Vatican.
Never would the government have tolerated, and rightly so, that a French name be put in Toronto on a Canadian National hotel. But when Quebec is provoked in this manner then this one-way national unity must be protected, and we must say amen to the whims of Mr, Gordon.
In the opinion of the government it is normal that French-Canadian people should occupy only 13 per cent of responsible positions in the civil service, when they are entitled to 30 per cent. Meanwhile, our English speaking fellow citizens, who represent only 48 per cent of the population of this country, hold over 85 per cent of key positions, again owing to the great party which prates about national unity.
2944	HOUSE OF
The Budget-Mr. Castleden
When cheques are not bilingual in a bilingual country, which contradicts the spirit of confederation, and which is discriminatory to the French group, it is of no importance. The Liberal party has prepared a first class burial for the Poulin bill and still proclaims itself the advocate of national unity. Twice I have tried to introduce my bill granting a preference in the civil service to bilingual candidates. The bill was quickly destroyed by the great party which advocates national unity.
For many years, the Canadian government has organized its immigration so as to drown out the French element in the country, by not heeding the ethnical percentage. This is probably again in order to preserve national unity.
Every time a dramatic fight has earned us some slight recognition of one or the other of our prerogatives we are given that song and dance treatment about patience and conciliation, as if it were a favour to obtain these humble victories.
When, at last, will the Liberal party work concretely and openly for the establishment of a two-way national unity. If we have no rights, let us know the truth, and if we have, let them be respected.
Seventy-five years after confederation, the Canadian nation should be mature enough to recognize straight and to the point the rights of everyone, so that our prerogatives should 'not be handed out piecemeal any more.
(Text):
George Hugh Castleden: Mr. 'Speaker, listening to the government's presentation of the budget one might have been under the impression that Canada's prosperity was something that is going to be guaranteed for a good many years. The government talks about this prosperity in terms of. the gross national product, as if that were an indication that everyone in Canada must be very prosperous. I doubt very much whether a proper analysis of the situation in Canada would reveal that to be true.
Bruce Hutchison, in a recent article in Canada's great magazine Maclean's, says "the true state of the nation has tended to decline in direct proportion to the rise in the gross national product." A little analysis will probably prove him nearer the truth than government spokesmen indicate in their statements. The fact that all is not well in Canada is admitted in some quarters, sir, and if you read between the lines you can find statements by various ministers to the effect that something is troubling the Canadian economy, and troubling it very seriously.


The Minister of Finance (Mr. Harris), in his speech, admitted that there is inflation; he admitted that there was an increase in the cost of production. The rapid increase in the cost of living is having a very serious effect on the Canadian economy, and on the way of life of almost everyone of us.
The minister admits also that something must be done to stop this inflation, but, oddly enough, he gives us no recipe for its cure; he does not tell us how he is going to stop it. All he says is: "We are going to put a little pressure on here; we are going to make a little increase in the cost of borrowing money." He does not know where to start; he does not know what the effects of his actions are going to be. But for the Canadian people the true state of affairs is this: inflation is on the rampage. The next three or four years are going to provide very serious effects in Canada unless something is done to bring about a remedy. Ineffective palliatives are of no use when a major operation is required. We need a government which is going to perform one, and I maintain that the present government with its vast majority is not going to do so because it does not have to do so.
I note that no increase has been made in corporation taxes, so the government is apparently going to do nothing about taking money from the source where it is available. There has been no reduction of income tax at the lower levels to give the little fellow help in meeting the increase in the cost of living. If the gross national product is a measure of the wealth of Canada, then the amount of increase granted to old age pensioners is trivial. A little while ago the hon. member for St. Lawrence-St. George (Mr. Richardson) said that he was hoping that the pensioners would get an increase of $8, but the minister would not listen to him. All he got out of the minister was $6.


An hon. Member:: Why not give them a handful of peanuts?


George Hugh Castleden: It is a ridiculous state of affairs. The gross national product has almost doubled, yet the amount of this great wealth and prosperity which is to be shared by the old age pensioners amounts to a mere $6 a month. Either the minister is wrong in one place, or he is wrong in the other. This kind of conception is ridiculous. It does not take care of the increase in the cost of living, nor does it take care of the increased cost of production.
One of the hon. members from Montreal expressed himself as being concerned about the man who must work to provide us with food and clothing out of the natural resources

of this country. He displayed great concern about these people who are working in primary production. But when we say that inflation has increased the cost of production by an amount up to 42 per cent, and contend that something should be done to give farmers a parity price, or some return which would be in line with the cost of production, as is done in the United States, the hon. member who was so concerned about them simply voted the way this government told him to do against those measures. That is the working of the political machine in this house which, though it has a big majority of about 80 members, can do nothing about these problems.
Last summer we saw the disgraceful spectacle of men who know better sitting here voting for closure, men who have helped in the creation of the United Nations. No Liberal member dares go out of line or vote against his party. Thus the hon. member who had such sympathy with the primary producers votes against the very things which would give the primary producer a chance to live properly and stand on his own feet. That shows how concerned he is about this problem.
The seriousness of the situation can be seen by reference to another source. The Retail Merchants Association is beginning to feel the pinch; they cannot compete in the money market today. Its members, too, are finding that the increased cost of living, the increased cost of production and the increased cost of doing business are practically wiping them out. As to the hon. member for St. Lawrence-St. George, I don't know what type of constituency he represents, but I will guarantee it is not a rural one. But whatever happens Liberal members from rural constituencies vote along with the government despite the difficulties which farmers are now facing. The Minister of Finance himself comes from a rural constituency and knows something about conditions in agriculture, but he does nothing about supporting a parity price policy which would keep people working on the land and keep the land in production.
Thousands of people are leaving the agricultural industry to move into the industrial areas. Industry has its difficulties, it is true, but industry is in the position that it can pass its increased cost on to the consumer. The farmer is not in that position. He has to sell in a market where there is keen competition without any assistance from this government such as his counterpart in the United States would obtain. The policy of this government is to leave him to the mercy of the conditions which he is now facing, and he is now facing bankruptcy.
The Budget-Mr. Castleden
I have a letter here from the Retail Merchants Association of Canada which was addressed to every member of the house. There are one or two paragraphs that make very good reading, and as my hon. friend has not read his I should like to quote part of it. It reads:
During the last ten years a condition has been developing in Canada which is rapidly approaching the point where a few large corporations are getting a strangle-hold on the retail trade of our country. Unless there is fast legislative action to counteract this trend, small business, the mainstay of free enterprise and effective competition, may be elbowed out of existence.
The association puts its finger on one of the basic things that is happening to our country, the taking over of our economy by big business. When big business monopolizes things there is no competition and when there is no competition your private enterprise system is gone. Does the government not see where we are heading? The small businessman is being wiped out. The letter goes on to say:
The situation is serious. Within the next five to ten years, unless action is taken now, these large corporate retailers may well control the supply and price of all retail goods to all Canadians. We have seen similar developments in the automobile industry, and in the gasoline business.
Every member of the house knows what has happened in the case of those two businesses in recent years. The letter continues:
If this is permitted to happen to the supply of food and merchandise it will change the whole complexion of our economy, and will have the most far-reaching effect on our country and our way of life. The fact is that competition between the large corporate retailer and the independent retailer is unequal in our present system. The reason for this is that the large corporation has access to millions of dollars in the stock and bond market, which is quite beyond the reach of the small merchant.
The results of this inequality are clearly visible in every Canadian city today. The corporate or chain outlet has vast, new, expensive buildings, parking lots and equipment. The independent merchant is found in old buildings and with out-of-date equipment.
The balance of the letter continues in a similar vein. One thing that is wrong is the fact that these companies have access to large sums of money through the issuing of bonds and stocks and large amounts of money are not available in this way to the little fellow. One great source of income which was available to the country and to the government in this situation if it had wished to do so was through placing a tax on capital gains on stock transactions, and the budget is the place where the government should have done it. With the rising market that this country has witnessed for the last four or five years the
2946	HOUSE OF
The Budget-Mr. Castleden government could have secured large quantities of tax revenue from this source and could not possibly have lost anything by doing so.
There should be a capital gains tax on stock transactions, but the government will have nothing to do with it. Even the great country to the south has a tax on capital gains made on the stock market. No wonder that Americans like to bring their capital here and invest it in Canada, thereby getting control of our industries and buying up our natural resources such as the ore mines of Quebec, the Kitimat development and similar enterprises. They come here, get large concessions and take our iron ore, one of our great natural resources, out of Canada. They haul it past our mills to the United States where it is used in the manufacture of steel. Then the Minister of Trade and Commerce (Mr. Howe) tells us that we are short of steel. We are forced to pay the prices that the United States monopolies demand. No wonder there is a shortage. No wonder the cost of living increases.
The minister tells us that the present inflation is due to the fact that there is too much money making a bid for goods, that gradually the supply of goods is consumed and then prices go up. Prices are going up but there is very little decrease in the supply of goods. The governor of the Bank of Canada says that the inflation is not due to a shortage of supply. Consumer spending has not caused inflation. Inflation continues and the big boys just raise the prices of everything when they *wish to do so. Why did the government not institute controls over prices so that we could meet the problem? The government is doing nothing effective about it at all.
It was interesting to notice that in my own constituency in Saskatchewan there was quite a considerable increase in the cost of sugar, as was the case in the rest of Canada. There was no shortage of sugar in the stores. There was an advertisement in a local paper telling people to buy their supplies of sugar now before the price went up. It was said that the price would increase because of the Suez situation. Phooey! The reason is that a few companies control all the sugar. The sugar used in Saskatchewan was grown in Alberta and shipped a couple of hundred miles to Saskatchewan, but we are told that because of the Suez situation we are going to have increases in the price of sugar.
Company profits were never greater than in the last few years. The cost of living goes up and the increase in the costs of operation has wiped out the opportunity of the little fellow to make sufficient to carry on. Many families in Canada cannot exist on the wages being IMr. Castleden.]

paid today. Two members of a family have to go to work. Almost one-third of the labour force in Canada is represented by wives who have to go to work, or it may be a son or a daughter who has had to help out.
Right in the constituency of the Minister of Finance (Mr. Harris) the minister will find, just as in the Ottawa valley, that about 80 per cent of those engaged in agriculture can only continue to maintain their farms because a son or daughter has the opportunity to go to work on the St. Lawrence seaway or in some of the industrial centres where business is booming. United States capital coming into the country is creating an artificial prosperity. The day will come when the Americans will pull out, and I warn the government that that day is going to come and Canada will be faced with great difficulties.
The kind of gains that are made by certain privileged people in this country should not be permitted. I refer to the fact that a person can invest a small amount of money in a concern like Trans Mountain Oil Pipe Line Company, the evidence concerning which is on the records of the house. This company started off with 5 million shares of no par value. It got permission from the house to build a pipe line from Edmonton down the Thompson river to Vancouver with no lead-off into the United States. Under those conditions a charter was granted by this house and the company built the line.
A few years later the company came to the board of transport commissioners, not to the House of Commons, and got permission to push a branch line down into the United States enabling them to boost their daily capacity to some 200,000 barrels of oil. The company is going to expand and since it practically has a monopoly on the transmission of oil the value of its stock has risen. The line is not being used for what Canadians thought it would be used when the charter was granted by the house. The oil is now going down into the state of Washington and is also being shipped by tankers, and the oil situation brought about by the Suez difficulty is having a real effect.
What about the value of these 5 million shares? They went up from no par value to $115 each. What has the company done? It has issued 1J million shares to the public and is hanging on to the balance.


Mr. Fairey:: On a point of order, Mr. Speaker, the subject which the hon. member is now discussing is before the house at the present time in a bill which is in the committee stage.


The Acting Speaker (Mr. Applewhaite):: may tell the hon. member that I was listening carefully to the hon. member for Yorkton

(Mr. Castleden) and if he will not mind my saying so I expected that he would soon reach the point where he would be discussing a bill which was before the house. However, I do not think I can honestly say that he has reached that stage. I do not think that the fact that a company has a bill before the house prevents him from using that company as an example of the money that can be made under certain conditions. He will, of course, not discuss the merits of the actual bill before the house.


George Hugh Castleden: No. It is not my intention to discuss the merits of the bill before the house. I am using this merely as an opportunity to show to the Canadian people that excessive profits are being made out of this kind of transaction and that this company which still holds 34 million shares and has not issued them could now sell those 34 million shares at $100 per share, and make $300 million on them, and there is not one dollar of that $300 million which is taxable under this government and under the present Minister of Finance. Those would be capital gains and there is no tax on them. There is no capital gains tax. They take it. What about the poor little farmer about whom my hon. friend is so greatly concerned, working on the farm for 20 years, who during the war years even under price controls made a few dollars? There was an army of tax collectors running around his backyard inquiring how many potatoes he ate, how many chickens he ate and how many ducks he gave to his friends, hounding this man from pillar to post for a few dollars tax because he has made a few more dollars more than the maximum allowed the married man on the farm. Now he has no tax to pay because the cost of production has wiped it out. The same government, however, refuses to put a capital gains tax on stock transactions allowing these boys to get away with $300 million of tax-free money.
I am talking about the capital gains tax of a man who buys shares at $2 per share and sells them at $115.


An hon. Member:: Have you any?


George Hugh Castleden: No; 1 have not any; I do not deal in that kind of stuff-I do not believe in it. Have you any? You brought in the bill. You should know. If you are asking me and are trying to be personal about it, I say I have not any.


An hon. Member:: Go and see Tanner.


The Acting Speaker (Mr. Applewhaite):: Order.


George Hugh Castleden: That is not so bad as another pipe line company. At any rate
The Budget-Mr. Castleden Trans Mountain are handling their own business; they are building their own pipe line. They should be able to, with the interlocking directorates which hook them up to Standard Oil of California, Imperial Oil of Canada, and Shell Oil of Canada. No wonder they are getting oil down across the border. But Trans-Canada Pipe Lines have come to the government of Canada to build the line for them and the government lends them $60 million.


An hon. Member:: And Howe!


George Hugh Castleden: Before the pipe line gets to Winnipeg the government paid $60 million in one end and the boys sit down at the other end pulling out profits, all kinds of it. There is no capital gains tax on that. The president and the vice-president of that company clean up $14 million and there is no capital gains tax on that.


An hon. Member:: An old system.


George Hugh Castleden: It is an old system if you can get the support for it from the right places. I say again it is wrong. The Canadian people will never rectify these things as long as they elect to this house a government with a large majority. The only time you will get good government is when you have a narrow majority. It is time the Canadian people changed all that or we will go on in the way the Retail Merchants Association of Canada is going, or down the drain where the little farmer is going, taking along the freedom of speech of this House of Commons cut off under closure by a minister who got the whole 169 Liberals to vote with him to a man. There was not one who dared step across the line. Surely they know in their hearts that they were wrong last May and June. They know they were wrong. They were not men who knew the value of democratic procedure and the right of free speech in the House of Commons. Who were they supported by? Not even the government itself. There was even one opposition party which supported them all the way through.


Some hon. Members:: Which party?


George Hugh Castleden: The Social Credit party to my left. Of course one of the ministers, a man who has been minister of mines and resources for Alberta for 15 years, turned up as president of the company.


An hon. Member:: He bought a share and made a million.


George Hugh Castleden: The vice-president comes from the Tennessee Transmission Company. The two of them cleaned up $14 million tax free.


Hazen Robert Argue: That is not hay either.

The Budget-Mr. Castleden


George Hugh Castleden: I know there was a day that the Social Credit party posed as the common man's party and went out against the 50 big-shots who own Canada.


Hazen Robert Argue: That was a generation ago.


An hon. Member:: You changed your
bigshots.


George Hugh Castleden: I can tell them this. If they ever get tied up with big business, they can never serve the people.


Mr. Byrne:: Will the hon. member permit a question?


George Hugh Castleden: I will talk about your
province in a little while. If you have no more contribution to make than the questions you have asked in the past, sit down.


James Allen (Jim) Byrne: Does the hon. member know that Premier Douglas has very substantial shares in Trans-Canada pipe line, his share running into four figures?


An hon. Member:: Nonsense.


George Hugh Castleden: You put it on the record when you have some proof and documentation for it.


An hon. Member:: He cannot answer.


George Hugh Castleden: In a portion of British Columbia-some 40,000 square miles-I understand they have certain rights. I understand that a man by the name of Axel Wenner-Gren in British Columbia receives rights to certain lands and timber and the right to apply for mineral rights in an area of development; that is about one-tenth of British Columbia.


An hon. Member:: Right to survey?


George Hugh Castleden: I am quoting from an article in MacLean's magazine which is fairly reputable and I am reading the very words. If you wish to correct them you will have the chance to do so. At any rate, they say this, and they use quotation marks,
Wenner-Gren receives "rights to certain of the lands and timber" and the right to apply for mineral rights in the area of development.
Those are the exact words and I put them on the record for your benefit.


An hon. Member:: The right to apply.


George Hugh Castleden: I said the right to apply.


An hon. Member:: That does not say they have it.


George Hugh Castleden: The article states:
. . . "rights to certain of the lands and timber", and the right to apply for mineral rights in the area of development.


An hon. Member:: They have got the right to apply but they have not got it.


George Hugh Castleden: I did not suggest that.


An hon. Member:: Yes you did.


George Hugh Castleden: I read exactly the words from page 17.


An hon. Member:: They are going to sell out anyway; just a matter of time.


An hon. Member:: When Tanner moves west.


George Hugh Castleden: Who is Axel L. Wenner-Gren?
This government had something to do with him during the war, and I find a proclamation-


An hon. Member:: Stick to your brief.


George Hugh Castleden: I find a proclamation issued on the third day of February in the year 1942, and I read here from the proclamation: Included in the list of persons, which list is annexed hereto, are persons who, although not resident in or carrying on business in enemy territory or in any territory occupied by the enemy, are by reason of enemy nationality or enemy association, persons with whom trade is prohibited; that entering into transactions or doing of any acts with, to or on behalf of such persons is trading with the enemy; and that such persons shall be deemed to be and to have been enemies from and including the second day of September 1939 for the purposes of the regulations respecting trading with the enemy, 1939.
In the list which follows in the Canada Gazette of that day we have Mr. Axel Wenner-Gren from Mexico and Mr. Axel Wenner-Gren-the same person I presume- in the list of people from Peru in South America.


An hon. Member:: And Electrolux of
Canada?


George Hugh Castleden: I am just putting on the record what is in the proclamation.
Yes; he has been in that business for quite some time. I was suggesting that it was only recently; the Social Credit party seem to have as much money as they have for elections. When they came into our province last summer they were pretty well heeled. Once you are tied with big business, then your ability to work for the little man has gone. I claim that is what has happened to the government opposite and at least the results show that.
What else does the budget contain? What is the government going to do to try to fool the Canadian people into returning them with a still larger majority than they have at the present time? They are going to introduce a hospitalization insurance scheme. This is not the great health plan that they used

to advocate in the days when they were speaking for the common man, the days when their majority was rather small. Back in 1919, the Liberal party had a national health plan for the people of Canada. They had the plan in 1919, 1952 and 1953, but it is still a plan. Saskatchewan introduced a hospitalization insurance scheme in 1944 and made it work; that was 13 years ago. They popularized the idea and showed the people of Canada it could work. Similar things have been done in Alberta, and somewhat the same plan has been adopted in British Columbia. We now find that the people of Canada want it. This government is going to bring it in. It will be one of the carrots dangled in front of the Canadian people in order to attempt to return this government with another vast majority. The govemmeht will probably have the money for it.
It was the C.C.F. in Saskatchewan who demonstrated that a hospitalization plan would work. They introduced it and made it work.


Mr. Mang:: On a Liberal foundation.


George Hugh Castleden: It took you 39 years to make your foundation, and you did not put any building on it. You were in power long enough to do it, why did you not do it? I notice the Liberal members in the provincial house are criticizing the increasing costs. The cost of building and administering hospitals in Canada was put on the record by the hon. member for Lanark (Mr. Blair). The cost of operating general hospitals in Canada went up from $33 million to $94 million during the last seven or eight years. It was for that reason you had to increase the tax and that is why the plan will cost the people so much. The plan will have this humanitarian effect, that whoever falls ill, will go to a hospital. This will be good for all the people. As soon as you are ill, you will go to a hospital. The value of the plan is that you pay a small tax each year and if you have to go to a hospital then your hospital bill is marked paid; you pay nothing more on it. The Canadian people want this plan. I think this is the result of the fact that you have had a party in this house that has advocated these things over the years. We have had good government in this country for 20 or 25 years, but only when the government majority was small and there was a little ginger group sitting in this house.
At the time old age pensions were advocated in this house, the two sides of the house were almost equal in number. The half dozen members in the ginger group said, "We will support that side which introduces this piece of socially progressive legislation reflecting good for all the people of Canada".
The Budget-Mr. Castleden


Henry Philip Mang: You joined the Liberals.


George Hugh Castleden: If we keep on joining at this rate, it is going to be another 1900 years and you will not be here.
The Minister of National Health and Welfare (Mr. Martin) who comes down here and gives us a dog's breakfast every day says that the record of the Liberal party shows it has always been in the lead in so far as national health is concerned. Since 1919 it has always been in the lead in promising things. Then in 1957 on the eve of an election, they come out with a hospital insurance scheme. By prodding and by experimentation we have made it work. We have forced progress for the people of Canada and we will continue to do so. We have pleaded the case of the farmers in this house. We have tried to prevent the bankruptcy which faces the primary producer and the worker in this country.
This government is like the hon. member for St. Lawrence-St. George (Mr. Richardson), it lives much too comfortably in the shadow of Jesse James street, Montreal, to appreciate what the situation is like. I think the hon. member represents that portion of the stock exchange very well. It is the height of inconsistency for him to come here and pour out his heart about these poor people and then vote against any measures that would help them. I notice he does support the measure for freedom from taxation of the dividends. I shall tell this government what they ought to introduce. They ought to come out with a program saying we are going to tax capital gains on stock transactions. But they would have to do more than promise it, because they promised a health plan in 1919 and they are only introducing it in 1957. If they promised that, we might expect it by the year 2000.
I am going to close my remarks by mentioning radiation because I understand there may be no opportunity to discuss that on the estimates. I noticed, according to a press report, that Dr. Edith Summerskill. physician and labour MP, charged in the House of Commons in Great Britain that people are being harmed by minute doses of radiation given off by television sets. Health Minister Dennis Vosper told her a panel of experts had been set up to study the effects of such radiation. He quoted a report by the government's radioactive substances advisory committee which he said showed that television sets do not constitute a personal or significant genetic hazard. Mr. Vosper said the panel would consider a recommendation by the medical research council that the radiation from television sets be reduced as far as possible.
2950	HOUSE OF
The Budget-Mr. Boucher
I would suggest to the Minister of National Health and Welfare and the minister in charge of the National Research Council that they investigate this thing to the full. Surely, by this time research has revealed sufficient facts to enable them to assure the Canadian people there is or is not danger from this kind of thing. We do not want hearsay or a story put out by some official who is told what to say, but we want the facts explained by someone with authority and knowledge who can make a statement that will have weight and which we will know is true.
I would say that this house will probably be dissolved in the next couple of weeks. People all over the country will be going to the polls. I suggest to them that the greatest service they can render Canada is to wipe out the vast majority this government holds in this house. I suggest they send back a government without this vast majority and a government that does not demand from every member the slavish adherence to voting on behalf of machine government and the party whip from whom these 160 men dare not turn.
(Translation):


Mr. Jean Boucher (Chaleauguay-Hunling-don- Laprairie):: Mr. Speaker, in rising to take part in the budget debate, I cannot help but to express my most sincere congratulations to the hon. Minister of Finance (Mr. Harris) for the courage he has shown in proposing this budget to the country.
It is obvious that, with such a huge surplus the Minister of Finance, taking into consideration only the immediate interests of the Liberal party, could have considerably reduced the present taxes or increased the social security grants.
We are now faced with a problem faced by every country whose expansion and development are making giant strides, the problem of inflation. Our economy and the confidence it inspires in the whole world has considerably progressed in 1956.
Therefore, although this may seem paradoxical, the prosperity which Canada is enjoying at the present time, a prosperity which has never been surpassed at any time in our history, involves certain problems. In fact, the requests for money from our municipal governments, our school boards, our companies, our industries and so on result in inflation, a problem which the Canadian people must solve. To remedy that situation, the hon. Minister of Finance deemed it his duty to propose to the members of this house as well as to the country as a whole a budget which, though it may seem austere, does


nevertheless lighten the burden of Canadian taxpayers to the extent of about $135 million.
Everybody knows that the social security program of the St. Laurent government is admired by almost all foreign countries. The present budget continues along that line. For example, by increasing family allowances, a truly social measure, the government once more indicates that it realizes its duty to the Canadian family. Those who are entitled to old age pensions will also get a substantial measure of assistance, which will cost the government nearly $60 million a year. The veterans also get additional assistance of nearly $25 million. All that means that the Minister of Finance, though conscious of the danger of inflation, was anxious to help our older citizens, the Canadian mother and those who have fought for our country in the two world wars which unfortunately we had to go through.
Mr. Speaker, the riding I have the honour to represent in this house, i.e. the constituency of Chateauguay-Huntingdon-Laprairie, is perhaps among those Canadian counties which have the most promising future before them. Indeed, it has already been said of the Laprairie area that it will be to Montreal what Brooklyn is to New York.
This transformation of a rural district into an urban centre cannot be painless, and, at this point, I have to commend and thank the chairman of the St. Lawrence Seaway Authority, Mr. Lionel Chevrier, for the understanding he has shown up to now in settling the various issues pertaining to the seaway project. I want, more particularly, to thank him on behalf of the people of the Cote Ste. Catherine d'Alexandrie parish, and of Caugh-nawaga, who have only to congratulate themselves on the contacts they had with the St. Lawrence Seaway authority in respect to the claims that were obviously of interest to them.
However, the St. Lawrence seaway authority later decided that it would have to expropriate other parts of farms alongside the St. Jaques river, in Laprairie parish. The farm owners affected by such expropriations as well as all those who are aware of the commercial value of the farms agree that the offers made by the seaway authority are definitely insufficient. I should like to confirm that statement by quoting a few particular cases. One of the most striking is certainly that of the Brothers of Christian Education whose mother-house has been in Laprairie for many years and to whom the population of the province of Quebec is so greatly indebted. The reverend brothers, because of



I, 1957

[Stage Direction]
their charitable work, are obliged to extend their activities continually. As owners of a lot that has not been used so far but which was intended for the erection of a building necessary to the expansion of their institution, the reverend brothers, due to the expropriation imposed on them, have been forced to acquire an adjacent lot. This lot was sold to them by the reverend Jesuit fathers at a cost of $1,000 an acre, which is considerably more than the amount offered by the officers of the St. Lawrence Seaway Authority as compensation for their own lot.
I might add that the sale carried out by the Jesuit Fathers to the Brothers of Christian Education took no account of the market value. Rather was this transaction carried out in a spirit of charity and conciliation. As it happens I do know that the Jesuit Fathers asked between $1,500 and $2,000 an arpent for the property they have at Laprairie. It might also be pointed out that the property purchased by the Brothers of Christian Education had no access to the highway, being situated in the rear of the parish cemetery and consequently could be of no conceivable use for any future buyer with the sole exception of the brothers who were the owners of the adjacent land.
I might also point out here the case of a land owner whose farm was situated within the limits of the town of Laprairie and who was offered approximately $600 an arpent. About a year ago this man sold two lots, with a total area less than one arpent, for $40,000. How can the owner accept the offers now being made?
Cases such as the one I have just mentioned are numerous. However, knowing the fairness which the officials of the seaway authority have shown in the transactions they have had to make with the expropriated owners of Caughnawaga, of Cote Sainte-Catherine and elsewhere, I have no doubt that the rights of the owners of the Laprairie area will also be respected.
I said a moment ago, Mr. Speaker, that a most brilliant future is in store for the south shore area and I wish to thank the hon. Minister of Transport (Mr. Marler), who is now at his desk, about the construction of a new bridge between the island of Montreal and the south shore. This undertaking, which is to start soon, will help considerably towards the solution of traffic problems between the metropolis and the south shore.
I wish also to congratulate the Minister of Transport in connection with the improvements made to Victoria bridge.
(Text):
Mr. Deputy Speaker:: Order. I am sorry to interrupt the hon. member but this being 82715-187J
The Budget-Division
the seventh appointed day of the budget debate, and having just been advised by the Clerk that it is 15 minutes before ten o'clock, it is my duty to put the question on the amendment to the main motion.


Mr. Speaker:: I declare the amendment lost.


Louis Stephen St-Laurent: Mr. Speaker, I was paired with the Leader of the Opposition (Mr. Diefenbaker). Had I voted, I would have voted against the amendment.
On motion of Mr. Tustin the debate was adjourned.


[Stage Direction]
It being three minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.