1957-03-27

Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I rise on a point of privilege to correct a monstrous error made by Mr. Clark Davey in reporting my remarks in this house yesterday. I can only explain the error by making the assumption that he failed to distinguish my voice from those opposite in the seats of the mighty. He reports in this day's Globe and Mail as follows:
H. W. Herridge (C.C.F. Kootenay West) wasted no time in reminding the government that the policy of co-operation-at least on the Columbia river in British Columbia-was first advocated in the Commons by himself supported by "the Pharisee group of colleagues" around him.
Hansard reports correctly what I said and it was the "far-seeing group".



RAILWAYS AND SHIPPING

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


Right Hon. L. S. St. Laurent (Prime Minister) moved:: That this house shall sit on Saturday, March 30, 1957, and on every Saturday thereafter until the end of this session; the hours of sitting shall be as are now provided for Fridays; the order of business and procedure shall be the same as now provided for Thursdays: and that the provisions of standing orders 2(1) and 6(3) be suspended in relation thereto.


Mr. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, I do not rise for the purpose of opposing this motion. It represents, as usual, the approach of the end of the session. However, before it is put I think the Prime Minister should place before the house the legislative program for the rest of this session, and in particular indicate whether or not there are any measures contemplated other than those that appear today on the order paper, or to which reference has already been made. In particular, I would like to ask him, with reference
to increased war veterans pensions, war veterans allowances, old age pensions, pensions for the blind, and the like, is it intended to have them implemented at the present session? If not, what is the intention with respect to them? I would think it would be preferable to have them in legislative form at this time. There would be no serious objection or unnecessary delay and in that way we would be proceeding in a manner in keeping with our responsibilities.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, when the Prime Minister speaks in closing the debate, as I presume he will be doing, I hope he will indicate to the house how many Saturdays it is expected to sit. I recognize that this sounds like a request for certain specific information which, of course, we would like to have. But it does seem to me that before we are asked to sit on Saturdays we should be informed as to what the government has in mind as to the probable length of the session.


Louis Stephen St-Laurent: Mr. Speaker-


Mr. Speaker:: If the Prime Minister speaks now he will close the debate.


Louis Stephen St-Laurent: Mr. Speaker, we do not expect to sit for many more Saturdays, and I hope within the next couple of days to be able to be much more precise as to the number of Saturdays to which this motion might apply.


Stanley Howard Knowles: It would not be more than two or three?


Louis Stephen St-Laurent: It certainly would not be more than two or three after the one that is specifically mentioned in the terms of the motion. I am sure we would all prefer, if it was felt that that might be possible, to have in regular legislative form the provisions required to implement the pension changes.


John George Diefenbaker: Is that the intention of the government?


Louis Stephen St-Laurent: The intention of the government would be to discuss with the gentlemen on the other side the possibility of disposing of these measures in regular legislative form with reasonable dispatch, and if that did not appear to be possible, to have the item in the supplementary estimates apply to the situation in

Questions
the meantime. I hope that within the next couple of days I will have an opportunity of speaking to my hon. friend, the Leader of the Opposition, and to the leaders of the other groups about the manner in which we might dispose of the business that requires to be done before there is a dissolution of parliament, and then be in a position to state to the house what the program would be to that end.


John George Diefenbaker: Mr. Speaker, what about further legislation other than what is contemplated in today's order paper?


Louis Stephen St-Laurent: Mr. Speaker, as the hon. gentleman knows, I have been away for a couple of days and I would want to look at the order paper and see just what has reached the order paper.
There is one other measure that I do not think it would be possible to deal with at this session but that had been previously mentioned, and that is the revision of the act dealing with the federal district commission. There may be something else but I think that at half past two tomorrow I will have met with my colleagues in the meantime and will be able to be quite positive in that regard.


[Stage Direction]
Motion agreed to.


Mr. Purdy: 1.	Did the province of Nova Scotia, through its premier, make representations within the past two months to the federal government to increase old age pensions and old age assistance allowances in the province?
2.	If so, did the province of Nova Scotia indicate its willingness to share the cost of such increases?
3.	Does the province of Nova Scotia pay anything towards (a) old age pensions; (b) old age assistance allowances; (c) blind pensions; (d) disability pensions, paid in the province?
4.	If so, what is the proportion in each case?
Mr. F. G. Robertson, Parliamentary Assistant, for the Minister of National Health and Welfare: Mr. Speaker, the answer to the first part of this question is yes. The federal government receives many representations. Furthermore, the federal government has announced increases in old age security, old age assistance, blindness allowances, disability allowances and family allowances.
In answer to the second part of this question, the premier of Nova Scotia did indicate his willingness to share in the cost of old age assistance allowances in the province but not, of course, in old age security pensions. The federal government now awaits agreement for participation by the government of Nova Scotia.

The answers to questions three and four are as follows:
(a)	Old age security-No.
(b)	Old age assistance

Yes, 50 per cent.
(c)	Blind persons allowances-Yes, 25 per cent.
(d)	Disabled persons allowances-Yes, 50 per cent.


INCOME TAX RETURNS, 65 YEARS AND OVER
Mr. Fulton: Of individual taxpayers filing returns in 1956, how many were aged 65 and over?


Hon. J. J. McCann (Minister of National Revenue):: Mr. Speaker, I am sorry to state that the information asked for in this question is not available.


TAXPAYER STATISTICS, 65 YEARS AND OVER
Mr. Fulton: 1.	Does the Department of National Revenue maintain itself, or report to the bureau of statistics, figures which will show the number of taxpayers of 65 years and over who were in receipt of incomes (a) over $1,000 and less than $1,250 per annum; (b) $1,250 and over but less than $1,500 per annum; (c) $1,500 per annum and over?
2.	If so, what were the numbers of taxpayers in these respective categories according to individual returns filed in 1956?


James Joseph McCann: Mr. Speaker, the answer to question 1 (a), (b), and (c) is that the Department of National Revenue does not maintain itself, or report to the bureau of statistics, figures showing the number of taxpayers of 65 years and over in any income group.
The second question is answered by No. 1.


D.E.W. LINE PERSONNEL
Mr. Knowles: 1.	Is the distant early warning radar line to be manned entirely or principally by Canadians?
2.	If not, for what reason?
Mr. Paul Hellyer, Parliamentary Assistant, for the Minister of National Defence:
Mr. Speaker, the answer to part 1 of this question is as follows: Statements have already been made on several occasions in this house concerning the employment of Canadians in the manning of the distant early warning line. It will be recalled that on March 22, 1956, as reported at page 2486 of Hansard of that date, the Minister of Defence Production (Mr. Howe) said there was reason to believe that at least 80 per cent of the requirement for the Canadian section of the line could be recruited in Canada. On the basis of the numbers engaged to date this estimated percentage should not only be reached but will very likely be exceeded.
In view of what I have just said, part 2 of this question is not applicable.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. MacEachen: What were the federal collections and disbursements in the province of Nova Scotia, for each of the periods: 1930-35; 1940-45; 1950-55?


VETERANS PENSIONS AND ALLOWANCES
Mr. Kirk (Anligonish-Guysborough): What amounts have been paid out for each fiscal or calendar year, 1936 to 1956 inclusive, under the following headings: (a) veterans pensions, (i) in Canada; (ii) in Nova Scotia; (b) veterans allowances, (i) in Canada; (ii) in Nova Scotia; (c) veterans dependents' allowances, (i) in Canada; (ii) in Nova Scotia?


MEDICAL RESEARCH EXPENDITURES
Mr. Nicholson: 1.	How much has been spent on medical research by the national research council, in each of the past five fiscal years?
2.	How much has been spent by the defence research board on medical research, during each of the past five fiscal years?
3.	How much has been spent by the Department of National Health and Welfare, in each of the last five fiscal years on (a) public health research; (b) medical health research?
4.	How much of the federal funds made available to Canadian universities has been used for medical research, in each of the past five fiscal years?
5.	What are the estimated amounts to be spent on medical research, during the year 1957-58 by national research council, defence research board, the Department of National Health and Welfare, and joint programs shared by the federal government and Canadian universities?



INDIAN AFFAIRS, SASK.  FISHING AND TRAPPING RIGHTS

[Stage Direction]
Question No. 257[DOT]-Mr. Nicholson:
1.	Were any payments made by the Indian bands of any or all of Indian reserves No. 165, No. 165A or No. 165B, or by the Indian affairs branch, to the Saskatchewan department of natural resources for fishing rights on Keeley lake?
2.	If so, what amount, and what rights were acquired by or on behalf of the Indians?
3.	Is any payment being made by the government of Canada to or on behalf of each Saskatchewan treaty Indian affected, as compensation for the loss of income from fishing and trapping due to the establishment of the Primrose lake air weapons range?
4.	If so, what is the average annual payment?
5.	Is any payment being made by the government of Canada to or on, behalf of each Alberta treaty Indian affected, as compensation for the loss of income from fishing and trapping due to establishment of the Primrose lake air weapons range?
6.	If so, what is the average annual payment?
7.	Is any payment being made by the government of Canada to each white, metis and nontreaty Indian affected, who is resident in Saskatchewan, as compensation for the loss of trapping and fishing income due to the establishment of the Primrose lake air weapons range?
8.	If so, what is the average annual payment?
Inquiries of the Ministry
9.	What criterion or formula was used in determining compensation payments to (a) treaty Indian fishermen and trappers; (b) white, metis and nontreaty Indian fishermen and trappers, to establish compensation payments for loss of income from fishing and trapping due to the establishment of the Primrose lake air weapons range?


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I should like to direct a question to the Prime Minister arising out of the conference in Bermuda. Would he say whether or not discussions took place relative to the European common market and its effect on Canadian trade, and the nature of those discussions, and in particular will he assure us that the results will not be discriminatory to Canadian trade?
Would he also say whether or not, when discussing matters of commonwealth interest, he extended an invitation to the Prime Minister of Great Britain or suggested the convening of a British commonwealth and empire trade conference to the end that our trade areas may be extended and that lost trade may be retrieved?


Louis Stephen St-Laurent: Mr. Speaker, with respect to the first question dealing with the common market, there was a long and most interesting and I hope fruitful discussion with the Prime Minister of the United Kingdom and the Foreign Secretary about the common market and the proposal that the United Kingdom might participate or be associated in some way with that common market arrangement which is being set up, as my hon. friend knows, by six western European countries.
We discussed also the other related suggestion that there might be uniform tariffs within even a larger area of European countries with which the United Kingdom might also be associated.
As we had reason to expect, we found that such anxieties as we had about the possibilities of this common market and the uniform tariff arrangements were anxieties that were very present in the minds of the Prime Minister and the Foreign Secretary of the United Kingdom. We found that they shared our own view that this common market with a reasonably low tariff wall around it could be most helpful in promoting further multilateral trade throughout the world because it would enable a larger market to be available for the manufactured products of any one of the countries and

Inquiries of the Ministry thereby would be apt to bring about a reduction in their costs with the greater possibility of those countries selling products outside the common market.
However, it was felt that a very different situation might be created if instead of having this common market designed to increase the economic strength and the ability of these countries to trade with the rest of the world it was designed to be a closed market with a tariff wall around it which would prevent other countries from trading with the common market area. The United Kingdom authorities felt that there was little likelihood of that latter alternative being the one resorted to and in that way confirmed the view which the premier of France had expressed when we had similar talks with him during the course of his visit to Ottawa. I say again that we were not surprised but happily confirmed in our impression that the United Kingdom would have about the same anxieties we had. As they are participants in the negotiations we felt that those anxieties would be voiced there and would receive consideration.
As far as the United Kingdom is concerned, this would not apply to raw materials, foodstuffs or like things. We hope it could be established and implemented in a fashion which would strengthen the economies of the participating nations and make it easier for them to do away more rapidly with the present restrictions which exist against multilateral trade generally.
With respect to the second part of the hon. gentleman's question, it was not necessary to issue any invitation. I found that the Prime Minister of the United Kingdom had actively in mind the advisability of having a conference of prime ministers at a relatively early date.


John George Diefenbaker: A trade and economic conference?


Louis Stephen St-Laurent: There was no discussion about a trade and economic conference. We were satisfied from our talks, by the degree to which there had been an improvement over the last calendar year both in our imports from the United Kingdom and our exports to the United Kingdom, that much had been done. We pointed out to the United Kingdom some small matters that were inconvenient, and which would not be apt to affect in any serious way their balance of payments, and which would help to maintain and increase the cordiality of the trading relations between our two countries; and note was taken of those matters.
I do not know if this has been publicly announced, but there is to be a meeting of


the permanent Anglo-Canadian committee on trade questions here in Ottawa during the month of May. The committee is to meet here in Ottawa for one of its periodical meetings and, as I say, notes were taken on the matters to which their attention is to be called, so that the officials may be properly briefed in relation to these matters, and prepared to discuss them, and to discuss their possible advantageous or disadvantageous repercussions.
With respect to the meeting of the prime ministers, I found that the Prime Minister of the United Kingdom felt quite strongly that on this occasion the meeting should again be held in London, but that we should at that meeting arrange for a system of holding some of these meetings in other countries of the commonwealth.


John George Diefenbaker: Mr. Speaker, the suggestion that the prime ministers' conference should be held in various parts of the commonwealth would naturally meet with the support of Canadians and, I am sure, of members of the other nations of the commonwealth. It should be encouraged.
However, returning to this question of trade, did the Prime Minister not consider, the opportunity being there, that an invitation should be extended not only to the United Kingdom but to all the other parts of the commonwealth to take part in a trade conference in order to build up our trade with other parts of the commonwealth, and to consolidate and expand trade relations which today are being challenged by the U.S.S.R. and communism in general? Did the Prime Minister not bring up at all the question of a trade and economic conference?


Mr.   SI Laureni@Quebec East: No, Mr. Speaker, I did not. We discussed trade relations between Canada and the United Kingdom and the matters which it would be desirable to have this permanent joint committee of officials consider at its next meeting which is to take place here in Ottawa during the month of May.



UNITED KINGDOM


[Stage Direction]
On the orders of the day:
Mr. H. A. Bryson (Humboldl-Melfort):: Mr. Speaker, I would like to ask a question of the Prime Minister; possibly he feels that in his answer to the Leader of the Opposition he has in part answered the question that I will now ask.
Is the Prime Minister in a position to inform the house of his discussions with the Prime Minister of Great Britain regarding

future sales of Canadian wheat to the United Kingdom, and did he receive any assurances that the United Kingdom would purchase increased quantities of wheat from Canada?


Louis Stephen St-Laurent: Mr. Speaker, wheat for the United Kingdom is not bought by the United Kingdom government.


Hugh Alexander Bryson: Mr. Speaker, I should like to ask the Prime Minister a supplementary question arising out of his answer to the question I asked a moment ago. I can assure him I ask him this in all sincerity. If what the Prime Minister said a moment ago in answer to my question is a fact, then what is the point in calling a trade conference of the kind he referred to a few moments ago?


Louis Stephen St-Laurent: Well, Mr. Speaker, that may be a matter of opinion. As the hon. gentleman knows, grain for the United Kingdom is purchased by the grain dealers and not by the United Kingdom government. Now, it might be that some would feel that there are provisions in the laws or regulations, or in the way in which they are implemented in the United Kingdom, that could make it easier or more attractive for grain merchants there to purchase in Canada. That is a matter of opinion.



ALLEGED REFUSAL OF CHARTERED BANKS TO FINANCE WHEAT SALE

[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. Would the minister care to comment on reports in the press that Poland has been unable to obtain a loan from the Canadian chartered banks for the purchase of wheat? If that is so, will the minister look into the matter and see whether this sale might be expedited as much as possible?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, as my hon. friend knows, I returned to Ottawa within the last 45 minutes and I have not had time to inquire into the present status of the transaction. The loan is somewhat unusual in that it is a longer term loan than the banks regard as short-term money. When I left the matter was being explored and I have not heard the outcome, but I can assure my hon. friend that the matter of financing is not going to stand in the way of the sale of our wheat to Poland.
Inquiries of the Ministry



URANIUM


[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver-Quadra):: Will the Minister of Trade and Commerce tell the house the extent to which the uranium which is to be purchased by the United Kingdom will be processed in Canada? At the same time, can he tell us what significance is to be attached to the visit here of the West German minister for atomic affairs, Dr. Siegfried Balke?


Clarence Decatur Howe: I cannot say the exact
extent to which uranium will be processed. It will certainly be processed to a concentrate. Whether or not it will be processed further is a matter of arrangement. The expert for the United Kingdom who attended in Bermuda is on his way here to arrange details of that kind. The only question is as to whether it will be sold as concentrate or in a more refined form.
The other question was-


Howard Charles Green: About the visit here of Dr.
Siegfried Balke, the German minister for atomic affairs.


Clarence Decatur Howe: I have been a
little out of touch with newspapers and I did not even know the gentleman was coming, but I shall be glad to see he is well treated. Perhaps we can sell him some uranium.


Howard Charles Green: Perhaps the minister could
let us have a report on that at a later date.


Clarence Decatur Howe: Some day, yes.


Howard Charles Green: The minister says, "some day". Now, that is not a proper way to answer a question. My question was a perfectly proper one. This-


Some hon. Members:: Order.


Howard Charles Green: This dispatch says it may
involve the sale of uranium to Germany shortly.


Some hon. Members:: Question, question.


Howard Charles Green: Surely the house is entitled-


Some hon. Members:: Order.


Howard Charles Green: Surely the house is entitled to an answer to that question.


Clarence Decatur Howe: Mr. Speaker,
as I said previously I was not aware that the gentleman was visiting Canada. I am not aware of the purpose of his visit, and I do not think it will improve the conduct of any business we have to take up together if daily bulletins must be issued in the House of Commons. When I said "some day"

Inquiries of the Ministry I meant if any negotiation is completed I will be glad to announce its nature. If no negotiation is completed, I will not announce that fact.


Mr. Roland Michener (St. Paul's):: May I
ask a supplementary question with respect to the reported sale of uranium to the United Kingdom. Is it correct that the uranium now purchased or under purchase order from Eldorado is all committed to the United States contracts and that this sale to the United Kingdom will involve additional production or does it come out of the existing contracts?


Clarence Decatur Howe: The sale that
was announced has been under negotiation for many months. Additional production wa~ arranged some time ago which would make delivery of the uranium possible in addition to the amount contracted for by the atomic energy commission to the United States, so that this is the completion of a sale made possible by production arrangements going back over 12 months.



UNITED KINGDOM


[Stage Direction]
On the orders of the day:
Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, I should like to direct a question to the Prime Minister. Can the Prime Minister tell the house whether he or the Minister of Trade and Commerce had discussions in Bermuda with respect to maintaining and expanding Canada's lumber export trade with the United Kingdom, or whether any reference of this subject was made to the joint Anglo-Canadian committee to which he referred?


Louis Stephen St-Laurent: No, Mr. Speaker, we did not discuss specifically any special commodities; we discussed the improvement that was taking place in trade and the hope that that improvement would continue. These matters respecting different commodities will be discussed by the permanent Anglo-Canadian trade committee at its next meeting which is to take place in Ottawa during the month of May.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Howard Charles Green: May I direct a question to the Secretary of State for External Affairs. Is Canada taking the position that Israel should permit the United Nations emergency force to operate on


her territory? I ask that because a dispatch this morning from Tucker's Town, Bermuda, printed in this morning's Globe and Mail, is headed: "Canada Believes Israel Holds Key to UNEF". What is Canada's position on this question?


Hon. L. B. Pearson (Secretary of State for External Affairs):: Mr. Speaker, I am not responsible for that headline. But it is true, and it has been stated publicly more than once, that a resolution of the United Nations assembly which was passed some weeks ago provided for the deployment of the United Nations emergency force on the demarcation line. At that time we stated that in our opinion "on the demarcation line" meant on both sides of the demarcation line.


Howard Charles Green: Then Canada is still taking the position that Israel should allow the United Nations emergency force to operate on the Israeli side of the line.


Lester Bowles Pearson: I think my answer is perfectly clear in that regard.


SUEZ CANAL
[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Secretary of State for External Affairs. Has the Canadian government any up to date information as to whether or not a settlement regarding the Suez canal has been reached between the Egyptian government and the Secretary General of the United Nations?


Lester Bowles Pearson: No, Mr. Speaker, we have no up to date information in the sense that we have not yet received a report from the secretary general on the negotiations in Cairo. We have had some preliminary reports, but his final report on these negotiations is to be submitted to the United Nations committee of seven later this week. I understand that the secretary general returns to New York tomorrow and we will get a report from him then on his negotiations with respect to this matter.


Stanley Howard Knowles: Do the preliminary reports contain any information that could be given to the house?


Lester Bowles Pearson: I think, Mr. Speaker, that on a matter of such importance it would be well to wait for his final report which will be given before the end of this week.



[Stage Direction]
On the orders of the day:
John George Diefenbaker: I should like to direct a further question to the Secretary of State for External Affairs. Does he agree with the statement purportedly made yesterday by Mr. Dulles that the denial to Israel of the right of freedom of shipping in the Suez canal is an unlawful act on the part of Egypt? Second, what stand does Canada intend to take with reference to the submission to the international court of justice at The Hague of the question of the right of access of Israeli ships to the gulf of Aqaba?


Lester Bowles Pearson: Mr. Speaker, in regard to the first question the policy of this government has already been stated, that in its view navigation of the Suez canal should be free to the ships of all nations, and that would include Israel. With regard to the second question, I think we have already indicated our approval of the procedure by which this legal matter would be referred to the international court for an advisory opinion.


EXTENSION OF COLOMBO PLAN BENEFITS
[Stage Direction]
On the orders of the day:
Mr. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs. Can the minister inform the house whether the government is planning to extend the benefits of the Colombo plan, or a similar plan, to the new commonwealth state of Ghana? Was this question a topic for discussion at Bermuda?


Lester Bowles Pearson: No, Mr. Speaker, this
matter was not discussed at Bermuda. Whether Ghana would be brought within the terms of the Colombo plan arrangement would be a matter for discussion at the next meeting of the Colombo plan council later this year.


INCOME TAX
[Stage Direction]
On the orders of the day:
Mr. E. D. Fulton (Kamloops):: Mr. Speaker, I should like to direct a question to the Minister of National Revenue arising out of his oral answer to starred question No. 15 in which he said there were no statistics as to the number of individual taxpayers filing returns in 1956 aged 65 years and over. I will put it in the form of a question. Is the
Inquiries of the Ministry minister not aware that there is a special exemption of $500 per annum from the income of those 65 years and over and that when they file their returns they have to show their age in order to claim that exemption? In the light of that fact, how can it be that there are no statistics of the number of taxpayers aged 65 and over who filed returns in 1956?
Hon. J. J. McCann (Minister of National
Revenue): Mr. Speaker, I am well aware of the regulation and the statute with reference to the additional exemption for people who are 65 years and over. The point I make in answering the question is that statistics are not kept in each office with respect to this matter. It would be possible to figure out just how many were 65 years and over but it would be an enormous task as there are 29 offices across the country involving millions of people. It would cost a lot of money and require a lot of work. If the question is of sufficient importance it can be done, but at the present time statistics are not kept in that particular way.


REQUEST FOR CLARIFICATION OF GOVERNMENT ANNUITY EXEMPTION
[Stage Direction]
On the orders of the day:
Mr. G. K. Fraser (Peterborough):: I should like to direct a question to the Minister of Labour. As the answer of the Minister of Finance to my question of Monday, March 18, was not very definite with respect to whether government annuities would qualify for deductions under the new income tax exemptions, could the Minister of Labour say if there are any unusual provisions in the annuities branch of the Department of Labour that would bar any of these annuities from deductions under the new income tax amendments?


Hon. Milton F. Gregg (Minister of Labour):: I thank my hon. friend for sending me notice of his question. In reply to it, I may say that with certain minor limitations the annuities sold under the Government Annuities Act may comply with the requirements of the registered retirement savings plan which are obtained in section 11 of the resolution for amendment of the Income Tax Act, page 2 of Votes and Proceedings No. 43, March 14, 1957.
Canadian government annuities sold after March 14, 1957, will comply and tax exemption will be granted on the premiums in accordance with the provisions of the plan,
(a)	if the annuity is on the life of the purchaser, or taxpayer;
2738	HOUSE OF
Inquiries of the Ministry
(b)	if it has a guaranteed period of not more than 15 years;
(c)	if it matures no later than 70; and
(d)	if it should be a joint type of contract between husband and wife, payable first to the husband and then on his death to his wife, if she survives.
Premium payments made since January 1, 1957, on contracts issued prior to March 14, 1957, will be exempt, in accordance with the provisions of the plan, if the contract complies with the above-mentioned limitations, except that such contracts are not restricted to the 15-year guarantee but may carry a guarantee period up to 20 years.

Mr. John Pallet! (Peel): Mr. Speaker, I should like to direct a question to the Minister of Labour. In view of the government's policy having forced up interest rates in other fields of activity, is the government now considering increasing the interest rate on government annuities?


Milton Fowler Gregg: Mr. Speaker, I am not sure I understood my friend's question but I shall take it as notice and give him an answer later.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Milton Fowler Gregg: On Friday, March 22, the hon. member for Peterborough, as reported at page 2593 of Hansard, asked whether it is true that a man who has been in the armed services for three years is entitled to unemployment insurance but is not entitled if he signs for a further period. I said then that involved in that question was whether or not the man who serves in the armed forces had or had not served in a theatre of action. I asked my hon. friend whether, if he had a special case in mind, he would let me have the details and he very kindly sent me the details of the case.
In reply to this question, I may say it is true that no unemployment insurance contributions are payable by the Department of Veterans Affairs on behalf of a veteran who enlisted between July 5, 1950, and July 1, 1955, and who served more than three years unless part of that service was in a theatre of operations, for example, in Korea. It follows that unemployment insurance benefits could not be paid for such service. Service in the armed forces is not an insured employment under the Unemployment Insurance Act. Provision is made, however, in the


Veterans Benefit Act, which is administered by the Department of Veterans Affairs, for the payment of contributions in respect of certain categories of veterans having shortterm engagements.
Specifically, this matter is covered in section 12 of the Veterans Benefit Act, and for the veteran whose name my hon. friend has given to me it is set out in subparagraph 2 (d) of section 12.



FISHERMEN


[Stage Direction]
On the orders of the day:
Thomas Speakman Barnett: Mr. Speaker, I would like to direct a question to the Minister of Labour. Can the minister tell the house whether he has informed the chairman of the industrial relations committee when officials of the unemployment insurance commission will be available to discuss unemployment insurance for fishermen? If not, can he indicate to the house when he expects that officials will be available for a meeting of that committee?


Milton Fowler Gregg: Mr. Speaker, if the chairman and members of that committee are agreeable I would hope that it might be possible within a very few days.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Milton Fowler Gregg: Last Friday, the hon. member for Hamilton West asked me whether an investigation is being made into alleged violations of the Canada Fair Employment Practices Act by federal government agencies. I stated I would look into the matter and reply later. On the same day as the question was asked I received in the mail a copy of the same report which the hon. member sent across to me last Friday.
However, before receiving this particular report I had taken some steps to have one of the matters referred to investigated. Last Friday's inquiry regarding the national employment service was the first time this point had come to my attention. The complaint involved the administration of provisions of the Unemployment Insurance Act relating to non-discrimination by the national employment service. I have asked the commission to have the substance of the complaint and the issues raised thereby referred to the national employment advisory committee for consideration and advice.

With respect to the complaint relative to the Bank of Canada, I may say the department will undertake further discussions with the management of the Bank of Canada concerning the complaints in that connection which are contained in the communication.



NATIONAL PARKS


[Stage Direction]
On the orders of the day:
Mr. C. E. Johnston (Bow River):: I should like to direct a question to the Minister of Northern Affairs and National Resources. Could he tell the house what progress is being made toward the construction of a civic centre in Banff national park, and if the government is now going to pay 50 per cent of the cost?


Hon. Jean Lesage (Minister of Northern Affairs and National Resources):: I have not seen that file for some time and I should like to look at it before I make a reply. I shall take the question as notice.



ATOMIC ENERGY


[Stage Direction]
On the orders of the day:
Mr. Colin Cameron (Nanaimo):: Can the
Prime Minister tell the house if he took any action in response to the appeal of the Liberal party of Great Britain that he intercede with the Prime Minister of Great Britain for the cancellation of the H-bomb tests scheduled for Christmas island next month?


Louis Stephen St-Laurent: I read in the newspapers that there was an appeal to the Prime Minister of Canada from the Liberal party of Great Britain, but I have not yet received it. The matter was discussed and the communique that was issued reports that we felt there was some progress being made in the direction of safeguarding, perhaps in a more specific way, against the dangers to health that might be involved in further experimental explosions.



HEALTH INSURANCE


[Stage Direction]
On the orders of the day:
Mr. D. S. Harkness (Calgary North):: Mr. Speaker, I wish to address a question to the Minister of National Health and Welfare. What is the position of the people in the Northwest Territories in regard to the hospital scheme which the legislation now
Inquiries of the Ministry before the house envisages, and particularly are the white people in those territories to be included? In view of the fact that the Indians and Eskimos are now entirely a dominion responsibility, if the scheme is put into operation in the territories, will the white population have to contribute to cover the cost of hospitalization of Indians and Eskimos?


Hon. Paul Marlin (Minister of National Health and Welfare):: Mr. Speaker, I am sure the hon. gentleman would want me to say that several days ago the hon. member for Mackenzie River (Mr. Hardie) indicated that he intended, when the bill was discussed, to ask the same question, and I am grateful to the hon. member for asking it today. Under the Interpretation Act the Northwest Territories is regarded as having the status of a province. Under the same act I believe that an ordinance of the territory is regarded as equivalent to a "provincial law", so that there would be no difficulty, given the necessary acceptance of the conditions, of the application of the hospital insurance proposal to the area.


Douglas Scott Harkness: Mr. Speaker, a supplementary question: has any arrangement been made with the council of the Northwest Territories, or with the Yukon council, in regard to putting this hospital scheme into effect? The minister did not answer the latter part of my question as to whether in fact there was to be any change as far as the hospitalization of Indians and Eskimos is concerned.


Paul Joseph James Martin: I think these questions ought to be discussed when we reach the bill later on; I think it is more convenient.


Stanley Howard Knowles: May I ask the minister a question? Since the Northwest Territories is regarded as a province, will the agreement of the Northwest Territories to this scheme mean that we have six provinces agreeing to it?


Douglas Scott Harkness: Mr. Speaker, the minister has not answered these questions. He said it would be more convenient when the matter was under discussion. I presume he meant at the committee stage, but I think it is essential that we should know the answers to these questions to be in a position to discuss them at that time.


Paul Joseph James Martin: I think, Mr. Speaker, it is clearly not within our rules to discuss the terms of a bill that is currently before the house.


Mr. Hardie:: Mr. Speaker, I should like to ask a question supplementary to that of the hon. member for Calgary North.

Inquiries of the Ministry


Edmund Davie Fulton: We have been told we cannot discuss it.


Mervyn Arthur Hardie: I will discuss it.


Some hon. Members:: Oh, oh!


Gordon Knapman Fraser: That is a new one.


Mervyn Arthur Hardie: Mr. Speaker, for the past year consideration has been given by the officials of the Department of National Health and Welfare and the Department of Northern Affairs and National Resources to the question of health insurance for the Northwest Territories. I should like to ask the Minister of National Health and Welfare whether that is not the truth?


Paul Joseph James Martin: Mr. Speaker, of course it is true.


Douglas Scott Harkness: Mr. Speaker,-


Mr. Speaker:: Order. The hon. member for Assiniboia.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. J. A. Byrne (Kootenay East):: Mr. Speaker, I should like to direct a question to the Minister of Citizenship and Immigration. What is the latest development in the case of the now famous wayfarer, Christian George Hanna?


Hon. J. W. Pickersgill (Minister of Citizenship and Immigration):: Mr. Speaker, a decision was made yesterday in the supreme court of British Columbia to the effect that the deportation order was not effective. It seems to me that until there has been an opportunity for the Department of Justice to consider the judgment very carefully I should say nothing about it.
About Mr. Hanna himself, I am told he is gainfully employed in the country, and it seems to me the best thing to do with him would be to leave him undisturbed for the time being without-


Some hon. Members:: Oh, oh!


John Whitney Pickersgill: Perhaps I might be allowed to complete my sentence-without his being landed as an immigrant or without any action being taken to deport him, either.


John George Diefenbaker: It is wonderful that we have the courts.


Colin Cameron: Mr. Speaker, I should like to ask the Minister of Citizenship and Immigration a supplementary question. Can he inform the house as to how


many decisions of the courts in the last 18 months have gone against actions of his department?


John Whitney Pickersgill: A considerably smaller
number than we have won in the courts.



COMBINES INVESTIGATION ACT


[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I should like to direct a question to the Minister of Justice. Has the minister had an opportunity of looking into the matter I asked him about last Monday, as reported at page 2636 of Hansard of March 25?


Hon. Stuart S. Garson (Minister of Justice):: Yes, Mr. Speaker, I have had an opportunity to do so. On the occasion referred to my hon. friend asked me three questions, all without notice. I expressed certain views then offhand as to the distribution of constitutional responsibility in this matter. I find upon looking into the question that the views I expressed on that occasion are quite correct and I have nothing to add to them at the present time.


Wallace Bickford (Wally) Nesbitt: Mr. Speaker, I should like to direct a question to the Minister of Justice. Has the minister given any further consideration as to whether any proceedings should be instituted under the Combines Investigation Act in view of the report of the restrictive trade practices commission concerning the production, purchase and sale of flue-cured tobacco in Ontario?


Stuart Sinclair Garson: Mr. Speaker, I think perhaps in view of the fact that my previous answers have not appeared to register upon my hon. friend I had better briefly review this matter and bring into relation with one another the various parts of it.
It will be recalled that when the combines report was published on the Ontario flue-cured tobacco marketing association in November last I said I was confident the association, after carefully reading the report, would review its own arrangements in the light of the report's recommendations; and that we in the department would review the matter after the expiration of a reasonable time.
It has now become apparent that the association has reviewed its position in the light of the report which was made concerning it, and that a move has been announced and made by some of the members of the association to come under provincial marketing legislation. In connection with that move a vote is being taken by the farm products marketing board of Ontario on April 1 next.

It seems to me since that vote is being taken under provincial marketing legislation, which I am sure my hon. friend as a former crown prosecutor would agree, is provincial legislation it should follow therefore that any impropriety in the matter of influencing the vote and the like that might take place in connection with the vote is a matter to be dealt with entirely by the provincial authorities.
I know that this matter has excited a great deal of interest. The hon. members for Norfolk (Mr. Anderson), for Kent, Ont. (Mr. Huffman), and for Essex South (Mr. Clark) have discussed it with me almost daily during the last week. But our federal authority in the matter is confined entirely to the administration of the Combines Investigation Act and all the matters that arise in connection with the taking of votes under provincial marketing legislation are those for which the provincial authorities are responsible.



PUBLIC BUILDINGS


[Stage Direction]
On the orders of the day:
Mr. C. W. Hodgson (Victoria, Ont.):: Mr. Speaker, I would like to direct a question to the Minister of Public Works. In view of the congestion in the post office building at Haliburton could he give me a guess as to how soon tenders might be called for the construction of a new post office, and if local contractors would have any preference.


Hon. Robert H. Winters (Minister of Public Works):: Mr. Speaker, as a guess, I would say before the middle of the year.



ROYAL VISIT


[Stage Direction]
On the orders of the day:
Mr. F. S. Follwell (Hastings South):: Mr. Speaker, I would like to ask the Prime Minister if when he was in Bermuda he had any discussions with the Prime Minister of Great Britain with regard to the proposed
visit to Canada Elizabeth?	of	our Queen,	QueenRight Hon. L.	S.	Si. Laurent	(Prime
Minister): Mr. Speaker, I was informed of the conversations between the President of the United States and the Prime Minister of the United Kingdom about the possibility of Her Majesty's visiting the United States this year and I was informed that no decision had yet been reached but that the Prime Minister agreed with us and felt confident that Her Majesty would also feel the same about it
Inquiries of the Ministry that if she did come across the Atlantic she would first come to Canada for a short visit before going elsewhere.



COLUMBIA RIVER


[Stage Direction]
On the orders of the day:
Mr. F. G. J. Hahn (New Wesiminsier):: Mr. Speaker, I should like to direct a question to the Minister of Northern Affairs and National Resources. When can a decision regarding the agreement between the government of Canada and the government of the United States in respect to the rights on the Columbia river be expected so the province of British Columbia may take advantage of the splendid offer of assistance amounting to $300 million?


Jean Lesage: Mr. Speaker, I have nothing to add today to the replies I made last week to the hon. member for Vancouver-Quadra (Mr. Green).


James Allen (Jim) Byrne: Mr. Speaker, I should like to direct a question to the Minister of Northern Affairs and National Resources. In view of the views expressed by the premier of British Columbia regarding the announcement made by the Minister of Fisheries, would the minister say whether that announcement had the whole concurrence of the cabinet of the federal government?


Edmund Davie Fulton: Where were you yesterday?


Jean Lesage: Mr. Speaker, I am not aware of the views expressed by the premier of British Columbia; but I can only repeat what I said yesterday that, subject to the rather minor qualifications I made then, the statement of the Minister of Fisheries to the press in Vancouver the day before yesterday represents government policy.


Frederick George Hahn: A supplementary question, Mr. Speaker. Would the minister indicate if the money will be made available before the election?


Jean Lesage: I believe that if the hon. member will read yesterday's Hansard he will find a reply.



CITIZENSHIP AND IMMIGRATION


[Stage Direction]
On the orders of the day:
Thomas Speakman Barnett: Mr. Speaker, I should like to address a question to the Minister of Citizenship and Immigration. Will the minister table in the house

The Budget

Mr. Hansell or have published what is reported as a thousand-page report on Indian affairs prepared by a 20-man research team under the leadership of Dr. Harry Hawthorn of the University of British Columbia?


John Whitney Pickersgill: The answer, sir, is no, but lest I should seem to be rude in giving so abrupt an answer I might explain that this study which is very lengthy was prepared for my department by a group of distinguished social scientists in the University of British Columbia. Some months ago I gave permission to have it published by them in a condensed form. I understand they are condensing it so that they can find a publisher who will feel that it can be published in a form in which it will get the wide circulation it merits.
It is an excellent report but it is rather too lengthy for popular consumption. When the document is published in an abridged form I should be glad to give consideration to what can be done to make it available to hon. members who are particularly interested.



THE BUDGET


[Stage Direction]
The house resumed, from Friday, March 22, consideration of the motion of Hon. W. E. Harris (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell, and the amendment to the amendment of Mr. Cameron (Nanaimo).
Mr. E. G. Hansell (Macleod):: Mr. Speaker, I believe I was about half through the speech which I started last Friday afternoon when I was interrupted by the private bills hour starting at five o'clock. At that time I had reached the point in my speech where I was referring to the announcement by the Minister of National Revenue that the dividend which the Alberta government proposed to pay to its citizens by reason of oil royalties would be taxable for income tax purposes.
I had said that I was rather surprised that the Minister of National Revenue had not adopted a little different attitude when replying to several questions which had been asked on the matter and indicate that he would be willing to receive representations from the Alberta government or even from taxpayers as to whether or not such dividends should be taxable under the Income Tax Act. I was disappointed that the minister was somewhat hasty although he said that his officials had looked into the matter. I felt that he should have taken the attitude that even if he thought those dividends were taxable
[Mr. Barnett.)
the tax on them would not be collected for a year anyway, which would give plenty of time for the Alberta government or other interested parties to make representations.


James Joseph McCann: Mr. Speaker, on a question of privilege, may I say to the hon. gentleman that my answer was in response to a question asked by an hon. member from Alberta and you cannot defer for a year the answering of a question. We will be glad to receive representations from anybody in connection with this matter. Probably an official representation is being made now by a resident of Alberta and if it is it will be taken into consideration.


Ernest George Hansell: I was quite prepared to have the minister jump up any moment and attempt an explanation because I saw him in his seat. Of course I will take his remarks for what they are worth. Several hon. members have asked questions on this matter and I was particularly interested in the question asked by my leader on March 8, as reported on page 2008 of Hansard. The question was as follows:
I should like to put a question, to the hon. Minister of National Revenue arising out of some questions that were asked yesterday. Will the minister, until he has given the whole matter full and earnest study, keep an open mind on the subject of whether the dividends announced by the Alberta government last week are to be considered as taxable income and, rather than prejudge the matter, will he carefully consider that this dividend might be a return of capital or, possibly, be in the same class as certain co-operative payments to shareholders that are free from income tax?
I shall not take the time to read all of the minister's reply, but the pertinent part was as follows:
As I said, this is highly technical; the basis of payment will have to be determined upon review of the provincial legislation or regulation authorizing payment. As yet, we have no copies of the legislation, but the matter will be considered when that information has been received.
We were quite prepared to accept that answer made on March 8, but on March 18 the minister gave another answer, as reported on page 2398 of Hansard, as follows:
Taxability:	It is the opinion of officials of my
department that these dividends are income and taxable as such under the Income Tax Act.
There you have it. I was simply indicating to the minister that he should not be in too much of a rush. I wonder if the minister asked the Alberta government whether they would have anything to say in case the decision was what the minister declared it to be? I do not think I am straining at a gnat, but it does occur to me that the government wants to get their fingers into the pot. I should not say "pot" because in the past the Social Credit proposals have been pictured in cartoons and jest as being pie in the sky. If

they are pie in the sky then it seems to me that this centralized and powerful government is trying to dip their fingers into the pie.
If these dividends are to be taxable under the Income Tax Act then I suggest that this government are putting their fingers into the pie to the tune of about $2 million. That figure may not be exact, but I calculate it on the basis of the average income of those who will receive this yearly dividend from Alberta as being in one of the lowest brackets. Referring to the T form I find that the tax on a taxable income of $1,000 is $150 plus 17 per cent on the next $1,000. I think I am reasonable in calculating that the average taxable income will be in the range of $1,000 to $2,000. That being so 17 per cent of the dividends will be collected by this government in the form of income tax, and if my calculation is correct that would amount to around $2 million.
Now, Mr. Speaker, let us go a little further. It is quite possible that this dividend being received by the people will be regarded by them as just a little extra windfall, not too much, $22 per person. And they may immediately say: It is pretty nice to have that extra money that we have been needing to buy shoes for the youngsters. Or, maybe, the wife will be able to buy a new dress. Perhaps something may be needed for the home. In other words, I suggest that most of it, coming in the way it does, will be spent by the citizens of Alberta; and when they spend it, this government will also receive the sales tax on that whole amount -not less than 10 per cent.
And if some of the citizens say we can have a little extra liquor, or we can spend it on smokes or on something that carries an excise tax in addition to the sales tax, then the government will be receiving still further revenue on that money. Once again I want to say that the job of the Minister of National Revenue is to collect taxes. I would not want his job because it is a thankless one. And after he has been in the same job for a number of years he gets "tough". I think that at heart he is a tenderhearted man, but when it comes to tax collection he likes to receive the honours, and the honours from his government depend on how much he has been able to collect-how much he has been able to squeeze out of the people. He glories in the fact that he has been able to collect every penny piece; and he is going to get every penny piece out of this extra money that is coming to the people of Alberta by reason of the fact that the natural resources belong to the people.
Now, Mr. Speaker, I do want to say a word about the nature of this dividend, because when this was first announced the
The Budget-Mr. Hansell newspapers and the politicians said this was a far cry from the dividend of $25 a month which was promised the people of Alberta in 1935. Now I will not take time to go into the implications of that $25 a month. As a matter of fact I was on the ground at the time, and took some part in those pre-election days when Social Credit was first proposed to the people. I know something about those proposals and I doubt very much whether that $25 was actually promised to the people. The fact of the matter is that we were talking in terms of a national dividend and the fact that in the ordinary process of the economic system there was never enough money in the pockets of the people to buy back their full production. Therefore, there should be some supplementation of that money. The figure of $25 was grasped at and it stuck and, of course, forever afterward we were accused of promising $25 a month. The howl went up the other day that this was a far cry from that $25 a month, and the payment of the present dividend was ridiculed.
Now let me put the record straight, here. This dividend which is being given by the Alberta government to the citizens of the province of Alberta is not, in actual fact, a Social Credit dividend as proposed by Social Crediters. The recent announcement of the payment of an annual dividend to all citizens of Alberta from one-third of the oil royalties must not be regarded as a Social Credit dividend in the true sense but must be regarded as a return to Alberta citizens of a share of the income from the natural resources of that province-resources which really belong to them. The need for an actual Social Credit dividend as proposed by Social Crediters arises from the fact that there is never enough money coming out of the process of the nation's production to buy back the nation's total production at given prices. This results in a shortage of purchasing power, and to bring about a balance it is necessary at intervals to make a direct issue of additional new money and put it in the hands of consumers. This additional amount of money, created for this purpose and distributed among the citizens of Canada. is known as a Social Credit dividend.
Provincial governments do not have the constitutional power to create new money. The proposed Alberta dividend is simply a return to the people of money already issued and circulating through the regular channels of industry. As Premier Manning stated at a public meeting on the evening of March 1, the government is taking one-third of the revenues from the oil royalties and returning them in cash to the individual citizens of Alberta in their capacity as shareholders in "Alberta Unlimited".

The Budget-Mr. Legare
British Columbia announced last year that they would pay to the home owners of that province an amount of about $28 for the purpose of easing the tax burden, and action is now being taken with regard to this. This money is paid out of the consolidated revenue fund of that province. With dividends out west, and increasing taxation in the east, many thousands of people are becoming aware of the advantages of Social Credit administrations.
We have heard a lot in this debate in respect of inflation and, as the leader of this party said on one occasion, the generally accepted definition of inflation is too many dollars chasing too few goods. Now if that is a correct interpretation of inflation, I fail to see that we have inflation in Canada today, because of the fact that there are no goods in short supply. If there are any goods in short supply, I would like the minister, or any responsible minister of the government, to tell us exactly what goods are in short supply. Are we short of radios? Are we short of television sets? Are we short of musical instruments? Are we short of furniture? Are we short of clothes? Are we short of men's suits, or women's dresses? Are we short of boots and shoes? What are we short of? I have not been able to find out what we are short of.
I call upon the Ottawa Journal here,-a very good paper, sometimes,-and I note the advertising which it contains. Here is a whole page which Simpsons-Sears, trying to beautify our women, have taken to advertise women's dresses and things. Another page is advertising towels, another one, stockings; another one, draperies; another one, fur coats; another one,-oh, oh, I will not mention that,-and another one furniture, dining room suites-


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


Ernest George Hansell: I am awfully sorry; I did not get to my punch line. However, perhaps I can continue a little later on at another stage of the debate.
(Translation):


Mr. Gerard Legare (Rimouski):: Mr. Speaker, I have a few remarks to offer on the budget now before the house and on certain matters relating to it.
Since the budget was introduced, about ten days ago, I have had occasion to meet many of my constituents and to discuss with them the contents of the budget speech. I have found that by far the great majority of them were only too glad to accept it as

it is, because of the peculiar conditions now prevailing. I have also had occasion, like the rest of my colleagues, to read the newspaper comments on the budget speech. I have noted that some of the papers expressed the view that this budget was that of a brave man while others called it a family budget. Still, in the view of the opposition, this budget is supposed to be insignificant.
I wondered why the opposition chose that particular epithet, but soon realized that this budget was insignificant for them, since this year, as in other years, they were left with little else to do but to voice sterile criticism, thus remaining faithful to their own traditions.
To my mind, this is a realistic budget presented by a government which has only one concern in mind: the proper discharge of its mandate. It does so while continuing to work for peace and while ensuring a fair distribution of the revenues at its disposal and drawing ever closer the bonds which must unite, in justice and charity, Canadians of all tongues, races and creeds.
The Minister of Finance (Mr. Harris) deserves our appreciation and our compliments for the understanding which he has never ceased to show, and for the intelligence which he brings to bear on the problems of the hour as well as for the well considered solutions which he proposes.
No one can claim that this is an electoral budget. It hardly errs on the side of excessive generosity. It cannot be called extravagant. It was based on prevailing conditions, and again, its value is found in the suggested distribution of profits.
In the field of social security, it is less generous than we would have liked it to be. However, we may hope that, during the next sessions-as the government is going to stay in power-an ever-increasing amount will be earmarked for pensions and allowances. But, even if it were done, I do not believe the provincial governments should consider themselves freed from every responsibility in this respect.
The tax exemptions which shall now benefit contributors to a registered savings fund in view of retirement are a direct encouragement to thrift. Such action, on the part of the government, is a welcome step which should be followed by many others.
Too many people no longer have the sense of thrift and thoughtlessly spend income which could some day prove very helpful.
Mr. Speaker, though I was given the opportunity to be present at the eleventh

session of the United Nations which ended recently in New York, I do not propose to comment on the external policy of the Canadian government. The Secretary of State for External Affairs (Mr. Pearson) and the Prime Minister (Mr. St. Laurent) have on many occasions stated our position. On the other hand, all members in this house have had occasion to observe the devices of the official opposition, specially in these last few weeks, with regard to the explosive situation in the Middle East. However, if members of our armed forces of the last wars covered themselves with glory on all battlefields and did honour to their country, an honour which they continue to enjoy, I have no hesitation in stating that our Secretary of State for External Affairs also covered himself with glory in all fields of diplomacy and that he has been a great credit to all Canadians.
I can understand that the opposition is jealous of his success and fame but I do not understand quite so readily why the same opposition is continuing to jeopardize the good relations of Canada with so many countries.
I cannot help but emphasize again the prestige enjoyed by our country at the United Nations. According to information I gathered from several delegates and from my own observation on the spot, I have not the shadow of a doubt that Canada is held in high esteem by nearly all countries of the world and that she has gained a prestige which even the greatest powers envy.
But this reputation our country is enjoying the world over, is not a mere accident. On the contrary, it is the result of the wise and cautious policy which has been followed for a good number of years. Its leader today is the worthy successor of the distinguished ambassador the leader of the government used to be and continues to be.
The hon. Secretary of State for External Affairs has played an unequalled part at the last session of the United Nations. I want to pay him my tribute as well as I want to emphasize the great work accomplished by his colleague the hon. Secretary of State (Mr. Pinard), and I must also mention the great extent to which we are honoured in New York by the permanent representative of Canada to the United Nations, our ambassador, Mr. McKay. I have much pleasure therefore in pointing out the good relations he is maintaining with all the member countries of the United Nations. I have also been able to notice that he enjoys the finest of reputations among the representatives of the various countries.
The Budget-Mr. Legate
I will even go as far as to say, with respect to the Secretary of State for External Affairs, that by proposing and obtaining the creation of a police force, he prevented the aggression of last October from degenerating into a world conflict. If you just consider the thousands of people killed by the intervention of the Russian army in Hungary, you can easily realize how many lives have been spared through the cease fire in Egypt.
The sub-committee on disarmament is now meeting in Great Britain and our country, apart from the big five powers, is the only one to sit there as a member. The sub-committee is a division of the Security Council of the United Nations and, as such, is considering any suggestion which could lead the universe to real peace.
To my mind it would be an important further step towards peace if it were possible to obtain from every member state of the United Nations that they file with the general secretariat of that organization their sales, purchases, exchanges and even gifts of conventional weapons and others. Canada has already offered a useful suggestion with regard to the giving of previous notice of atomic or nuclear tests. It would be a useful contribution to disarmament to bring about an end to the sale or secret gifts of weapons, this being a policy which threatens the balance of power of the smaller nations.
Mr. Speaker, during the last few weeks I had occasion to be present at the meetings of the committee on agriculture and colonization. It has been making particular study of Bill No. 157 which relates to assistance to be extended to the western farmers by the government. Incidentally, in the course of our discussions, we have once more touched upon the matter of crop insurance. The Minister of Agriculture (Mr. Gardiner) who was present at the meetings of the committee has repeated that crop insurance was a matter for the provinces and that the federal government had no business in that field.
Even if the matter is under provincial jurisdiction, I think we have now come to the point when the federal government should enter into negotiations with the provinces in view of some agreement which would protect our eastern farmers, whose crops also sometimes suffer from adverse climatic conditions.
Since I have been in this house I witnessed some rather sad experiences. Indeed, I remember that in the spring of 1955, farmers in eastern Quebec asked for federal assistance because, during the previous season, their crops had been almost totally destroyed by

The Budget-Mr. Legare the drought. I approached the Minister of Agriculture, and the right hon. member told me that the matter came under provincial jurisdiction, but that the federal government would be happy to intervene if the provincial government asked for such action.
And, since the province had made no request to them, the federal government could not help those who had thus suffered.
During the spring of 1956 new requests for assistance were made because, this time, the heavy rainfall of the preceding year had destroyed practically all crops in several counties of the lower St. Lawrence region; as a matter of fact, a survey made by the U.C.C. revealed that damages had reached the astronomical figure of $5 million in two or three counties of my region. I tried once more to get assistance from the federal government, but the answer I got was that nothing could be done unless the request came directly from the provincial government. However, as we all know, last year was an election year in the province of Quebec, and the provincial government agreed to give seed to the farmers affected by the loss of their crop the preceding year, but they got no assistance whatsoever to make good the double loss they had suffered the previous year.
I believe we have reached the point where we cannot let so great a section of the agricultural class depend on the whims of the weather. If, for instance, an area is afflicted by crop failure, the whole economy of the area is affected. First of all, the farmers themselves sometimes have to meet loan payments or have to make payments for agricultural machinery. They are then completely paralysed and can no longer meet their obligations. That is why I strongly urge the government to consider the advisability of negotiating with the provinces with a view to establishing some sort of crop insurance or to amending Bill No. 157 so that it would apply not only to the western provinces but all provinces of the country.
On the other hand, the government could introduce a new bill to assist eastern provinces just as western provinces are assisted when the weather damages or destroys then-grain crop.
Before concluding my few remarks, Mr. Speaker, I should also like to point out to the government the importance of considering further the possibility of promoting winter navigation between both shores of the St. Lawrence river. The population of the north shore increases at an incredible rate.
[Mr. Legare.l

It is even predicted that within ten years the population of the Saguenay area could double. Now then, that population which is already fairly large and which is expected to double suffers from a shortage of agricultural products. Its land is not suitable for cultivation whereas, on the south shore of the St. Lawrence river, there are beautiful farms where crops are abundant and for which a market must be found. The north shore market would be the most appropriate one.
Unfortunately during the winter months the only means of communication between the north and south shore of the St. Lawrence is by plane. This means that the economy of these two areas is to all intents and purposes paralysed during that season. The time is not far off when shipping companies will be able to establish a continuous yearlong service between the two shores but this service will not be efficient unless the government provides icebreakers. I know that the Department of Transport already has icebreakers on the slips and that it will be in a position to answer the representations which will be made by the shipping companies maintaining this year-round service. Moreover, port facilities will have to be ensured to those companies. I once more express my confidence that the government will bring to this subject the attention it requires. I am convinced that the government will give most active consideration to the requests which I have already had occasion to bring to its attention and which have also been voiced by my colleague from Saguenay, who is here and who is most happy to join with me in this. If our requests were implemented by the government, they would most certainly make it possible for a year-long service to be maintained to both shores of the St. Lawrence, between my constituency and the constituency of Saguenay.
Mr. Speaker, since I am on the subject of shipping, I would also like to say that the Minister of Public Works (Mr. Winters) should continue to study the advisability of improving the port facilities at Trois Pistoles and Ste. Flavie, at either end of my constituency.
Now, Mr. Speaker, since it seems that we are nearing the end of the last session of this parliament, and since I will probably have no further opportunity to speak in this house before the opening of the next parliament, I would very much like to thank the Right Hon. Prime Minister (Mr. St. Laurent), the ministers and their parliamentary assistants for the assistance which they have extended to me in the carrying out of my

mandate. On behalf of my constituents, I express the hope that all will be back here since the country still needs them.
(Text):


Mrs. Ellen L. Fairclough (Hamilton West):: Mr. Speaker, the first thought which comes to mind in discussing the budget for this year is that there was really no major concession made to the taxpayer. What concessions there were were so small and so unimportant as to make one wonder whether or not they were seriously made. Personally, I feel that the budget was an unrealistic document. In fact, there seemed to be no pattern to the minister's tax exemptions. It seemed to be rather a hit-or-miss sort of procedure which resulted in tax exemptions on a wide variety of articles, the importance of which can best be judged I think by the fact that out of sales and excise taxes presently collected of about $1,330 million, the tax saving to the consumer in this field will be something in the nature of $20 million.
It is true, Mr. Speaker, that $20 million is a sizeable amount of money in itself. But I am sure that all would agree it is a mere drop in the bucket compared to $1,330 million which is presently collected in the form of sales and excise taxes. There is no doubt that the effects of high prices have taken their toll of the living standards of those who exist on fixed incomes. Meanwhile, the government goes placidly on its way spending more and more money, extracting more and more taxes from the taxpayers which, in latter years, has meant larger and larger surpluses despite the very considerable and very effective efforts of the Minister of Finance (Mr. Harris) to bury them here and there.
Probably the most disappointing aspect of the budget was the failure to recognize the plight of old age pensioners, and other pensioners, who have watched rising prices in the last few years completely outdistance their purchasing power. I was convinced that the government would introduce some sort of increased pensions to those people, but it never entered my mind that they would be so unrealistic as to confine the old age pension increase to the sum of $6 a month.
I am sure, Mr. Speaker, that as the members of this house go back to their constituencies they will find a growing uneasiness; they will find also an ill-concealed resentment against this small increase. Frequently in
The Budget-Mrs. Fairclough this house when we are called upon to accept what we consider to be less than had been expected in any field, the phrase is heard, "Well, while we do not approve we must consider that half a loaf is better than no bread". I submit, Mr. Speaker, that this is not even half a loaf; in fact I think we would be stretching the point if we said it was even a slice of bread.
I was rather disappointed also that the minister, together with the Minister of National Health and Welfare, did not consider some other amendments in the field of old age pensions. Possibly, Mr. Speaker, the matter about which I am going to speak more properly belongs to the Minister of National Health and Welfare, but since I am speaking of old age pensions at the moment I should like to draw the attention of the Minister of National Health and Welfare to representations that have come from several quarters for a reduction in the residence requirements for the recipients of old age pensions and those in receipt of old age assistance. It was in October or November of last year, at the federal-provincial welfare conference, that the minister of public welfare for the province of Ontario asked the federal government to reduce the residence requirements for recipients of old age pensions and old age assistance from 20 years to 10 years. It was pointed out at that time that two other acts which are sponsored by the federal government, namely the Disabled Persons Act and the Blind Persons Act, both require residence qualifications of 10 years. I draw this to the minister's attention once more, and I hope he will see fit to make this amendment to the Old Age Security Act and the Old Age Assistance Act.
I was somewhat surprised, Mr. Speaker, at the provision in the budget for a $100 exemption from taxable income of all taxpayers in lieu of charitable donations, medical expenses, and so on. I must say I heard this rumour about three or four years ago. I was told that the government was considering giving blanket coverage of a certain amount to all taxpayers. A couple of years ago in this house-it may have been last year, I am not too sure of the year-I asked the minister if it was true that taxpayers were permitted to deduct from taxable income $25 in lieu of charitable donations. At that time he said no. Yet, I knew that taxpayers were doing just that and that it was being accepted in three centres. I knew that.
Subsequent to the reply to me in the house I had several people come to me and say, "That is wrong; we do deduct $25 in lieu of charitable donations". Well, my reaction was

The Budget-Mrs. Fairclough that if that was so, and was generally accepted in three centres, certainly there were a great many taxpayers across Canada who had been gypped out of their rights in this regard. However, apparently it was not a part of the law. I could not find it anywhere and the minister had said no, it was not true. Now in like manner a $100 donation coverage has been announced and will be brought in by the minister in the form of a resolution, I expect.
This brings up a point which might very well be considered by this house, Mr. Speaker. Although tithing is now a rather outmoded form of gauging one's charitable contributions, nevertheless there are many people who, to the best of their ability, give from their earnings to charitable causes, to their churches and to other religious organizations. In my own office I have clients who, strangely enough-I suppose some people would consider it strange-give so much to charity that they are unable to deduct all of their contributions. That is, they actually give to charity more than 10 per cent of their income. When we come to the point where we are making up their income tax returns we find we have to disregard some of the contributions they make to charity. On the other hand there are a great many people with quite substantial incomes who never contribute a nickel. Yet these persons who have heretofore given nothing are now going to be allowed to deduct $100 from taxable income because the department says it is more trouble to look for the receipts for the first $100, and it costs too much to examine them.
It has long been the belief of charitable organizations that one of the incentives to charitable giving, quite apart from the good will of the giver, was the fact that this amount was deductible from income for tax purposes. Now it is not necessary for a person who would be inclined to give a small amount to charity to give anything. He can claim $100 anyway, whether he gives anything or not. I think it is a backward step. Even if it costs the department more to examine those receipts than it would gain in taxes, I still believe the receipts should be produced; people should be forced to prove that they have actually expended this amount of money. The same is true of medical expenses, about which I wish to speak in a few moments.
It seems to me that instead of giving $100 additional exemption for charitable donations which do not exist, the government might have raised the statutory exemptions from $1,000 and $2,000 to $1,500 and $3,000. That would give relief where relief is needed. While it would have been a larger exemption, it would not have been that much larger. The slack would have been taken up to some

extent by the $100 exemption which is now given to those persons who in the past have given little or nothing to charity, because those are the people who are going to benefit. The taxpayer who previously gave $200, $300, $400, $500, $600 and more to charity still has to produce all his receipts. He does not get $100 in addition to the receipts he produces. He must still produce all of his receipts to claim the first $100. The chap who gives nothing, or less than $100, does not have to produce any receipts; he just claims the $100.
While I agree with the provision allowing $200 additional earning allowance for students-and I am sure this will be welcomed by many taxpayers who are finding it difficult to educate their sons and daughters, particularly in higher institutions of learning, where it becomes more and more expensive -yet I think the ceiling on permissible earnings could have been raised for the blind pensioners, for the war veterans and for old age pensioners under the Old Age Assistance Act.
However, although the Minister of Veterans Affairs and the Minister of National Health and Welfare made some slight adjustments in the ceilings, they were made only to about the extent of the increase in the old age pensions and other pensions. It seems to me that if $200 additional earning allowance could be given to students it could also have been given to those in receipt of old age assistance, war veterans allowance and blindness pensions.
I said a moment ago that I intended to say something about deductions for medicines. In this case again the person who spends a small amount will have his expenditure covered without any question being asked and yet the repeated requests on the floor of this house for the abolition of the 3 per cent floor for medical expenses have gone unheeded.
I had a few instances brought to my attention recently. In one case the taxpayer is obliged to pay $15 per month for medicine which is not included in those medicines now recognized by the department the expenditure for which is deductible from income. An expenditure amounting to $15 a month or $180 a year is a sizeable sum and yet the taxpayer cannot deduct any portion of that and the price of this particular product is steadily rising. This drug is keeping the taxpayer in question alive and yet he can deduct no part of the $15 a month expenditure.
In another case of which I have knowledge the taxpayer is a woman. I hold in my hand photostatic copies of invoices from the pharmacy from which she purchases the

drugs she needs. I also have a letter from the doctor who attends this patient and he indicates that for the rest of her life she will be required to take these two drugs, anso-lysen and trawill. These drugs cost her $31.25 per month but the amount so expended is not deductible from income for the purposes of income tax.
In both instances these people are of moderate circumstances and live in a part of town where ordinary working people dwell. You would not call it an area where those in higher income brackets live. Both are required to meet this expense in order to maintain themselves in good health and they receive no compensation whatever by way of income tax exemptions.
I do not wish to be unfair, Mr. Speaker, and I must point out that there are a couple of things in the budget with which I am pleased. For instance, I was pleased to see that the government is now prepared to permit self-employed persons to deduct from their taxable income the premiums which are paid for retirement pensions and annuities. I realize that this is a problem which requires a great deal of study but these deductions are permitted in other countries and now at long last our own government has seen fit to permit them. I am sure this will result in savings by self-employed persons which they otherwise would not be able to make and if there is anything at all in the budget, which is anti-inflationary in nature, Mr. Speaker, this is it.
I was also glad to see one other small item which I think is long overdue and I believe it has passed unnoticed in the discussion which has taken place on the budget so far. I am referring, of course, to professional fees paid by professional people which are now to be allowed as an exemption from salary.
In the rapidly changing world in which we live more and more people of professional status are employed on a salary basis by hospitals, in industry and in commerce. Such people including doctors, lawyers, accountants, engineers, and others find that in order to maintain their status it is necessary to pay fees to the professional group to which they belong in much the same manner as members of unions pay dues to their unions. Heretofore it has not been possible for professional people to claim exemption for the fees so paid. Representations have been made on their behalf repeatedly and I am pleased to see that the government now proposes to bring in an amendment which will permit this deduction.
Last year I referred to the interpretation that has been placed on clause 11 (1) (j) 82715-174
The Budget-Mrs. Fairclough with respect to the payment of alimony and the claim therefor from taxable income and with your permission, Mr. Speaker, I wish to refer to it again. Speaking on this subject last July, I referred to the appeal which had been heard by Mr. Fordham, and to that part of his judgment where he said:
The matter reveals for the first time, where the board is concerned, what appears to be a remarkable and unfortunate oversight or omission in the drafting of the foregoing enactment.
Mr. Fordham pointed out that whereas alimony as such is quite clearly deductible when it follows a decree of divorce in cases like the one I referred to last year where there is merely a separation-even though the separation agreement had been executed by the husband and wife-the husband seeking to claim the alimony which he had paid iri pursuance of the terms of the separation agreement found it was disallowed.
Mr. Fordham made a very simple suggestion which would have rectified the situation had the minister seen fit to amend the act in the way it was suggested by him. I wish to raise this matter again this year because not only is it a question of the amounts paid in the way of alimony pursuant to separation agreements, but it is also a question of amounts that are paid into the family courts by persons who have not gone through a form of legal separation but where a husband continues to maintain his wife and child, usually under an order of the court. It seems to me that where these amounts are paid and can be proved to have been paid they should be deductible by the taxpayer.
There are many other cases that have come up in the course of the year, Mr. Speaker, where there appears to be considerable doubt as to the justice of the act with regard to specific taxpayers. Of course it is always the case that any law is likely to work a hardship on someone because it is almost impossible to draft an act which will give impartial treatment to all persons; but it seems to me that is why we have a board of appeal and persons in authority who are charged with the responsibility of making decisions in difficult cases. When those persons in authority find their sympathies are with the taxpayer but the very wording of the act itself prohibits their giving a decision in favour of the taxpayer, and when the board points out this fact and makes suggestions, it seems to me those suggestions should receive favourable consideration by the minister.
I have an account in my hand which was quoted in the Canadian Tax Journal dealing with a case where a woman lived apart

The Budget-Mrs. Fairclough from her husband in a self-contained domestic establishment. She maintained therein herself, two children and her mother. During this one year she earned $3,200 in wages and received from her husband in accordance with an order of the family court-we have the family court coming into it again- $1,140 for the maintenance of herself and her two children.
She claimed the marital exemption of $2,000 as a person who had a child wholly dependent upon her. She claimed also the dependent's exemption of $150 for the second child and $400 in respect of her mother who was also wholly dependent upon her. The minister contended that her status was that of a single woman with one dependent, her mother, and that the payments made by the husband were not alimony since the parties were not legally separated and that the children were not wholly dependent upon her by reason of the payments made by the husband. When this case was reported in the tax journal it was headed with two words "Rough Deal?" It seems to me that people in these circumstances have enough to contend with without being penalized by the tax collector.
Some two or three weeks ago I placed on the order paper some questions with regard to revised assessments for 1950 and 1951. These questions were answered subsequently by the Minister of National Revenue (Mr. McCann) and disclosed that a number of re-assessments had been made in the dying days of 1956 before the amendment to the act brought in last year by the Minister of National Revenue became effective. Subsequent to those answers being received I also received a considerable amount of correspondence from various places in Canada as well as other information with respect to assessments which had been made at the end of 1956.
Some of these are extremely interesting because it seems to me that if an original assessment is made the department should be able to find out whether anything is wrong within a period of four years. When most people receive an assessment from the department and are told that they owe so much additional tax or are eligible for a refund, as occasionally happens, they consider that to be the final assessment. To all intents and purposes it is the final assessment unless within a reasonable length of time further information comes to light or unless, without regard to time, fraud is suspected.
The dates of some of these original assessments and subsequent re-assessments are extremely interesting. In one case the original assessment on the 1950 return was made

on May 30, 1951, the re-assessment being made on December 21, 1956. In another case the original assessment on the 1951 return was made on May 23, 1952, the re-assessment being made on December 21, 1956. I should like to point out that the instances which I propose to cite are all cases where had the re-assessment not been made by December 31 it could not have been made unless fraud had been indicated.
In another case the original assessment on a 1951 return was made on April 25, 1952 and it took the department until December 28, 1956, to make the re-assessment. I might point out that that was the last working day in 1956, the very last day before the revision of the act came into effect.
From another source I have a 1950 tax return which was assessed on May 23, 1951 and re-assessed on December 28, 1956, again the very last working day in 1956. I have another 1951 return which was assessed on May 16, 1952 and re-assessed on December 28, 1956. Another 1950 return was assessed on May 14, 1951; a 1951 return was assessed on May 27, 1952, and in both cases there was a re-assessment again on December 28, 1956.
So it goes on. I have in my hand an original assessment on a 1951 return which was made on May 23, 1952 and the taxpayer received a small rebate on May 28, 1952. His 1952 assessment was received on May 7, 1953 and it was indicated that there was no unpaid balance or refund. Both returns were reassessed on December 14, 1956.
It is a sad commentary to make to say that the Department of National Revenue and the Department of Finance do not see eye to eye on these matters despite the protestations of both ministers that they do. When this amendment to the act was brought down last year we expected that it would remove one of the difficulties in connection with tax payments and I refer to the trouble and expense caused to a taxpayer who receives a reassessment five or six years after his return has been filed. By that time he may have forgotten what was in the original return and it is difficult for him to disprove the reassessment. When the new act came into effect on January 1 of this year the Department of National Revenue tried to keep that door from closing by reassessing. It is then up to the taxpayer to prove that he does not owe the amount charged.
I would also direct the attention of the house to the fact that interest on these assessments is added yearly and in some of the cases I have the interest added to the assessment was more than one-third the amount of the assessment. Quite apart from

the justice or otherwise of last minute assessments of this character, it seems to me that the interest should date only from the date of the reassessment and not from the date of the original assessment. It means that the business life of a taxpayer is disrupted while he proceeds to prove that he does not owe these amounts. He must stand the cost of an appeal, and even if he does win he still owes these sums of money. It seems to me that the time lapse, which has now been corrected, should have been allowed to stand until the new year, rather than the old practice which meant the department had to scurry to get them in in the last month.
I would like to draw attention to another matter which was discussed at the conference of the Canadian tax foundation at Montreal last autumn. It bears on the interpretation which is placed on the word "misrepresentation" as it appears in section 46 of the act. I think I can do no better than quote one of the gentlemen who was on the panel. After attention had been drawn to the fact that the word "misrepresentation" was capable of several interpretations this gentleman, Mr. Macdonald, pointed out that the courts had already interpreted misrepresentation to include innocent misrepresentation, innocent omission and even innocent miscalculation.
It was suggested at that time that some certainty could be put into the section either by qualifying the word "misrepresentation" and making it read "fraudulent misrepresentation" or by removing the word "misrepresentation" entirely so it could be left to the courts to determine whether or not the taxpayer had committed fraud. It seems to me that with such wide latitude, even with the present four-year limitation on assessments, this particular section of the act should be cleaned up in order to make it more understandable to those who are charged with the responsibility of collecting taxes.
There is one other matter, Mr. Speaker, which I should like to mention with regard to taxes, and that is the field of succession duties. A revision of this act is, of course, overdue, and this was recognized a year ago by the minister when he indicated-probably I should not say "promised"-that he expected to bring down an amendment to the act, or otherwise revise the act, this year. It was in 1954 that the Minister of Finance referred in his budget address to a contemplated revision of the Dominion Succession Duty Act and now, three years later, we are still waiting for that revision. True enough he made one slight concession-it might almost be called a nod in the direction of the taxpayers-but he has paid no heed to the repeated demands 82715-174J
The Budget-Mrs. Fairclough which have been made for a straight exemption basis rather than the present basis which, amounts practically to confiscation of sums ini excess of the ceiling set.
In considering this matter we might gO' back to 1941, when the Dominion Succession Duty Act was first passed. The exemption allowed then to a widow was $20,000. Since that time, Mr. Speaker, the cost of living has increased by approximately 80 per cent and, as pointed out in the Canada Trust bulletin,, if $20,000 was considered to be a fair exemption for a widow in 1941 then $35,000 at least should be a fair exemption at the present time. It has long been contended that the contribution made by a man's wife to his estate is equal to his own and, accordingly, she should be allowed to claim half the estate free of duty. This contention is given effect where the deceased was resident in the province of Quebec, in some jurisdictions outside Canada, and in certain other cases.
Although some general measure of relief was provided in 1948, when the act was revised, and although the ceiling now is $50,000, we must still consider that since that time there has been an increase in the cost of living of more than 31 per cent; and if that is so, if that was a reasonable amount in 1948 then estates not exceeding $65,000 should be exempted from duty now. Whatever the amount, Mr. Speaker, it is my contention that the amount so designated should be a straight exemption for the purpose of succession duty.
I see that my time is rapidly running out, Mr. Speaker, so I would just like to ask the Minister of Finance in collaboration with the Minister of National Revenue to give heed to some of the matters I have mentioned today. Also I would like to reiterate the request I made to the Minister of National Health and Welfare with reference to the residence requirement for old age pensions.
In the beginning of my speech I called this an unrealistic budget, Mr. Speaker, and I think it is. When you take taxes off motorcycles but leave them on automobiles, which have become a necessity for most working people in this country; when you find the government spending its millions recklessly and at the same time urging every individual to cut down his spending, you begin to wonder in just what kind of a haze the government mind works; whether, indeed, the government has not taken leave of its budgetary senses.
Canada is a great and vital nation, and is growing rapidly. According to the preliminary report of the Gordon commission we should have by 1980 a population of nearly 27 million people in Canada. Certainly the next 20 or 25 years will see remarkable changes

The Budget-Mr. Lusby in all phases of our economy. But the big question today is, will it be a Canadian economy? If we continue to levy such excessive taxation as we are levying today, and the adverse trade balance continues as it is continuing at the present time, then I fear it will not.


Mr. A. R. Lusby (Cumberland):: Mr. Speaker, I am very glad to have this opportunity to express to the Minister of Finance my sincere congratulations upon the outstanding and statesmanlike budget which he presented in this house on the evening of March 14.
One needs no special insight or knowledge, of course, to assume that the work of formulating the contents of this budget was not that of the minister alone; that the final result represents a vast pooling of energy, experience and thought, participated in, indirectly at least, not only by the various members of the cabinet but by many other brilliant Canadian intellects. None the less, I think it is proper to regard the Minister of Finance as the chief and responsible architect of the completed structure. Therefore to him is the praise. This involves, naturally, the corollary that the criticisms of the opposition are directed primarily against him. But the irresolute weakness of those criticisms, as we have so far heard them, is itself a species of praise.
Of the three budgets the minister has now brought down it can be truly said-and I prophesy that it will prove equally true of his fourth, in 1958-that each has been designed for the greatest good of the greatest number, without departure, however, from sound economic and financial principles applicable to existing conditions.
The present budget admirably meets that test. Obviously, of course, as opposition critics are clearly aware, a wide downward revision of taxes would have curried a considerable meed of popularity. And I wonder whether those critics, given the opportunity to use and misuse the powers of a minister of finance, could have resisted the temptation to trip gaily along that pleasant path, ignoring the danger that its inevitable terminus under existing conditions would be ruinous inflation.
The minister in this respect has chosen to adopt the right, if not the easiest, course. On the one hand he has extended benefits where they can safely be extended; on the other he has adhered to those measures necessary to keep in curb the surging forces of inflation. I predict that the good common sense of the Canadian people will ensure their approval, and that during the next 12 months a continuing onward march of our economy at a sound and proper pace, and an equally

sound increase in our national prosperity and well-being, will provide full and ample justification of the combination of forethought, experience, prudence, and generosity which has gone to the making of this latest budget.
Speaking first from a national point of view, without regional implications, I wish to express my wholehearted approval of the steps taken to better the scale of various social benefits, which of course apply to Canadians from the Atlantic to the Pacific.
The monthly increases in old age security and assistance payments and in pensions for the blind and disabled bring a very welcome measure of additional help to those receiving them.
I do not wish to imply that what has been done in this respect in any sense renders the field static. Far from it. But the action which has been taken now, within the ambit of sound financial and economic considerations, constitutes in my opinion a real assurance to present and future recipients of social security benefits that in this field, where the Liberal party has been the great and almost the sole Canadian pioneer and creator, that party will continue in the forefront of progress toward its ultimate goal, the complete shielding of every deserving citizen of the country from the evils of actual want and destitution.
Let us not forget that the attainment of such a goal involves far more than the mere wish and will to attain it. It requires also the development and strengthening of the economic and financial sinews of the nation to the point at which they can safely bear the attendant and necessarily tremendous fiscal burden thereby imposed upon them. The continuing growth and economic expansion of this country under the wise policies of the present government, combined with the record and declared aims of the Liberal party, are the firmest guarantee our people can have of steady advance and improvement in the whole field of social security until the ultimate goal I have mentioned is fully reached.
In assessing recent advances in the social security field, one must add to the current increases in payments the advantages of the hospital and diagnostic services plan devised by this government and now, we hope, near the point at which it can be prepared for operation. Another new measure initiated by this government during the life of the present parliament and now scheduled for increased payments is the disability pension. Let me say in this connection that I hope that in the near future, with the necessary provincial co-operation, it will be

possible to relax the stringency of the provisions covering the degree of disability required to qualify for this pension. As I said before, the field of social security is not static, nor will it become so in future years while this government remains in power. The achievements I have mentioned are, I believe, the surest earnest of continuing Liberal progress in that field.
Of the various upward revisions of pensions and other payments provided for by the budget, none, I think, will meet with stronger approval by the Canadian public than the increases in the rates of the war veterans disability pensions, including widows' pensions and married war veterans allowances. In ancient times the old or disabled soldier was all too often left to shift for himself. It seems to me that the situation that prevailed in earlier days perhaps can best be expressed in Kipling's lines:
All the world over, nursing their scars,
Sit the old fighting men, broke in the wars . . . Dust of the battle o'erwhelmed them and hid. Fame never found them for aught that they did; Wounded and spent to the lazar they drew, Lining the roads where the legions roll through.
To the shame of mankind war has lost nothing of its horrors. Science, which should be devoted exclusively to human welfare and advancement, has only too largely been perverted to the devising of novel and more dreadful methods of destruction. Nevertheless many nations have experienced a great awakening of the conscience as to their duty to care and provide for those who have fought their battles. No longer is the old soldier left to languish by the roadside.
Canada prides itself upon the manner in which it has accepted and is discharging its duty in this field. Its record in that respect is unsurpassed by any other country in the world, and this latest provision of more generous assistance to the veterans and their dependents shows clearly that the determination remains that the record shall continue to be unsurpassed. With such an aim every loyal Canadian citizen is in full accord.
On this general topic I should like to make one suggestion. It is in regard to veterans of the first world war who served in the United Kingdom but not on the continent, and who are therefore not considered to have served in a theatre of actual warfare, as is required in order for non-pensioned world war I veterans to qualify for the allowance. It seems to me that any Canadian soldier who crossed the submarine-infested Atlantic in the days of 1914-18 ventured his life far in the defence of his country. Whatever the theory of hardship and shortening of life expectancy may be, I have always considered it somewhat anomalous that any such soldier
The Budget-Mr. Lusby should be deprived of the benefits of the War Veterans Allowance Act merely through the often purely fortuitous circumstance that he saw no service in France.
The budgetary matters upon which I have so far touched are of general application to Canadians in whatever section of the country they may live. Inevitably, however, members of the house representing constituencies in the Atlantic provinces must focus their attention upon those parts of the budget and of the minister's budget address which set out the far-reaching measures now to be undertaken for the purpose of stimulating the economy of those provinces.
In my opening remarks, Mr. Speaker, I described this budget as outstanding and statesmanlike. From the point of view of the Atlantic provinces I can go further and say it is a truly memorable budget. It represents, I submit, a new, active and eager acceptance by the government of the challenge presented by the differential in economic levels and general prosperity as between the Atlantic region and the other parts of Canada. During my term of membership in the house perhaps my most dwelt-upon topic has been the necessity of substantially reducing that differential if Canada is to become a really great, really united and really fortunate nation.
The solution is not an easy one, and it has grown increasingly evident that in view of the limited financial and economic resources of the provinces concerned, a substantial measure of federal co-operation and assistance is essential if the problem is to be effectively grappled with. The measures which the government is now ready to undertake are, in my opinion, both beneficial and substantial and in themselves will carry us an appreciable distance toward our ultimate goal.
The preliminary report of the Gordon commission, in so far as it dealt specifically with the Atlantic region, was greeted in my part of the country when it came out some two months ago with considerable misgiving, alarm and even denunciation. This was most evident with regard to its suggestion that under certain circumstances residents of the Atlantic provinces might be assisted to move elsewhere. Unfortunately the meaning and intent of the report were subjected to marked distortion and misinterpretation, often, I regret to say, by public figures who knew or should have known better.
I am glad the chairman of the commission has taken the opportunity, in an address in Halifax last month, to correct this state of affairs which, indeed, had already been largely corrected. He has shown what was evident to any serious student of the report

The Budget-Mr. Lusby in the first place, that the document contains a careful and realistic appraisal, a valuable appraisal, of the special economic problems confronting the Atlantic provinces. Certainly nothing is to be gained by an ostrich-like ignoring of the inescapable fact that such problems exist.
It has been made clear too that, far from being held up as a desirable policy, any assisted movement of people from the Atlantic region was mentioned only as a last resort if it proved impossible for them to earn there what they considered an adequate living. The real aim of the report, in outlining our problems and suggesting means of overcoming them, was to chart a road for the avoidance of any such last resorts. The chairman of the commission in his Halifax speech showed confidence that such a road can and will be followed into a bright future, a confidence I am happy to share with him and with the great majority of thoughtful people in the Atlantic region.
As Mr. Gordon also pointed out, the report indicated that much can be essayed at the federal level to eliminate or alleviate the difficulties which beset the Atlantic economy. It also outlines specific courses of action which may be taken by this government for that purpose. There were not wanting voices from the opposition benches in the house to prophesy that whatever the merits or demerits of the report, it would be promptly relegated to some dusty governmental pigeonhole and forgotten. Where are the mouths now that uttered that false prophecy? They are closed, Mr. Speaker, shut once and for all, on this particular point at least, by the budget. As we study the measures the government now proposes to undertake for the betterment of the Atlantic provinces, we can turn to any such opposition critics and invite them to view the first fruits of the Gordon report.
The Minister of Finance in his budgetary address outlined among other things two concrete measures of the utmost importance to the Atlantic region. One is the increase in freight subventions under the Maritime Freight Rates Act. The other, which awaits only agreement by the provinces of New Brunswick and Nova Scotia, is the creation of a general grid system for electrical power covering those two provinces, with the federal government providing the main interconnecting facilities and building and operating such large thermal plants as are required to generate the electricity.
Neither government nor individual can alter the geography which separates the maritime provinces and Newfoundland from the markets of central Canada. But the 50 per

cent increase, from the previous 20 per cent to 30 per cent of the total cost, in the freight subventions on goods bound for those markets from the Atlantic region will go far to offset the untoward effects of geography. The benefits of this increase will accrue to every section of the region and nowhere, I believe, more than to my own constituency. Almost every phase of the much diversified economy of Cumberland county will experience a stimulus; the farming, the lumbering, the industries of Amherst, the coal mining of Springhill and elsewhere, and many of the numerous other economic pursuits my constituents follow.
It may be that the second concrete measure I have mentioned will have an even stronger appeal to the people of my county. Certainly it will to some. The exceedingly generous offer of this government to facilitate the creation of a general grid system for electrical power throughout Nova Scotia and New Brunswick, with such large central thermal generating plants as may be needed, represents the implementation of recommendations not only of the Gordon report but of the earlier Christie report as well, which we also owe to federal initiative.
The present proposal leads one to think first of cheaper power. Thermal generation of power on the large scale contemplated will certainly lower the cost substantially, and undoubtedly cheaper power is a prime need of the maritime provinces. I believe it is estimated that power may be as much as 30 per cent cheaper. Everyone there who uses electricity in any way, whether an urban householder or a farm operator, will share in the benefits. But the greatest boon will be to the industries of the area. Cheaper power, by placing maritime industries in a stronger competitive position, can do much to stimulate that industrial expansion which is a growing need of the region. Here again much advantage will accrue to the town of Amherst in my constituency, one of the leading industrial centres of Nova Scotia.
But this is only one side of the story. The world-wide decline in the use of coal as a source of heat and energy seems to have been, for the time being at least, arrested. In fact the trend even shows signs of reversing itself. In the long perspective coal is probably assured of a place of continuing, perhaps even increasing, importance. This emphasizes the national need to bolster the Canadian coal industry. None the less, I need hardly tell this house that the Nova Scotia coal industry faces serious marketing problems. The drawbacks of the lengthy haul to markets in central Canada, though eased by the freight and coal subventions, still remain. Increasing competition from other forms of fuel is inevitable.

The ceaseless need to lower costs of production will, to some extent at least, be met by the cheaper electrical power resulting from the contemplated interprovincial grid system. But apart from that, the use of coal in generating plants of the system will provide an expanded domestic market for Nova Scotia coal, a need foreseen by the Gordon report.
I wish to call particular attention, Mr. Speaker, to the fact that for the combined territorial unit of Nova Scotia and New Brunswick, and in fact for all three maritime provinces, the coal fields of my constituency are the most centrally located of any. A large central pithead power plant at Springhill, augmenting the plant already established in the Joggins-River Hebert area, seems to be a logical development in connection with the proposed interprovincial grid system. Incidentally I might add, as a sort of historical note, that the first pithead power station in Canada, and I rather think in North America, was established at Chignecto in my constituency early in this century. Every branch of the Nova Scotia coal industry will occupy a prominent place amongst the numerous beneficiaries of this promising power program. Add to those beneficiaries the many who will reap substantial advantage from the increased freight subsidies, and the two measures put forward by the federal government will together constitute as potent a stimulus to economic and particularly industrial activity in the maritimes as we have seen in many a day. For that reason I call this, Mr. Speaker, from the Atlantic point of view a memorable budget.
It is not suggested, of course, that it provides a complete answer to all the economic problems of my part of the country. It is thus gratifying to know that, as the Minister of Finance has said, the government is conducting further active studies on the possibilities of stimulating the development of the Atlantic region. A generally improved transportation system is, as the Gordon report states, an evident need of the region. In this connection I wish to mention one subject which was not touched upon by that report, the Chignecto canal.
Advocates of the canal are fond of using the argument, which is founded on fact, that the canal was promised at confederation. No doubt that argument is entitled to some weight. I have never concerned myself so much with the question of whether it was promised or needed in 1867 as with the question of the need for it now and in future years, and of the advantages it would confer upon the Atlantic region and, indeed, upon many other parts of Canada. It seems to me that a map is one of the strongest arguments
The Budget-Mr. Lusby in favour of the Chignecto canal, for it shows at a glance how in this instance unfavourable geography can be largely circumvented.
As an addition to the internal transportation system of the Atlantic provinces the canal, by providing a short, cheap water passage between many parts of the four provinces now linked only by long and circuitous sea routes, would in my opinion be of inestimable value. Then, again, the canal would afford to all those areas of our Atlantic region bordering on Northumberland strait and the gulf of St. Lawrence a direct and vastly shortened water route to the New England states. May I point out that only very recently a prominent spokesman of those states declared that there is developing in New England a need, a crying need he termed it, for many primary products of the Atlantic provinces. The possibilities here of enhancing trade by means of the canal are obvious.
Moreover, Mr. Speaker, we now see Canada in the process of unprecedented growth and economic expansion. Bearing this in mind; bearing in mind the swiftly advancing development of the vast iron ore deposits in northern Quebec and Labrador, the mineral discoveries in northern New Brunswick and the coming completion of the St. Lawrence seaway it is, I submit, as inevitable as sunrise that there will be a hugely increased volume of seaborne traffic between the river and gulf of St. Lawrence and the Atlantic coast of the United States. The Chignecto canal can shorten the route of such traffic by hundreds of miles. Remember, too, that in the event of war this canal would enable this great volume of strategic shipping to avoid the perils of a long voyage through the open Atlantic.
The U.S.S.R., as we know only too well, is concentrating on building modern submarines in vast numbers. If war comes their menace will dwarf that which even Hitler's U-boats offered. We may be certain that a large proportion of the Russian submarines would be detailed to haunt the waters of our Atlantic coast. The Chignecto canal would offer to shipping between the gulf of St. Lawrence and American ports, in place of the long, exposed route which is now the only one available, a far shorter and easily protected and defended one. In a brief period of war our saving in shipping losses would soon exceed the entire cost of the canal.
In view of what I have mentioned, I consider it of the utmost importance that the question of the Chignecto canal be thoroughly reviewed once more in the light of modern conditions. Such a review, involving careful examination of many economic, engineering, strategic, and other factors, should in my

The Budget-Mr. Lusby opinion be entrusted to a special royal commission. I hope that in its study of the transportation problems of the Atlantic provinces the government will bear this in mind.
I said earlier, Mr. Speaker, that both the increase in freight subsidies and the provision of cheaper electric power in the mari-times through the proposed grid system would prove a valuable stimulus to industry in the area.
In this connection, however, I hope that another recommendation of the Gordon report will not be overlooked. That is the recommendation that a greater number of defence production orders be placed in the Atlantic region.
The town of Amherst in my constituency is, as I said before, one of the leading industrial centres of the maritimes. Its diversified manufacturing plants are capable of undertaking a very considerable range of defence production orders. I have in mind particularly the two chief industries of the community, the aircraft division of Enamel and Heating Products Limited, and Robb Engineering Works Limited, a subsidiary of Dominion Bridge Company Limited. These industries are no strangers to defence production contracts which have, indeed, constituted a most important factor in the industrial activity of the town both during and since world war II. That they have the capacity, the experience, the knowledge and the reliable skilled working forces necessary to carry out any defence production contracts assigned to them is amply demonstrated by their past records, which will stand comparison with any in Canada.
A definite policy of assigning to the Atlantic region a more generous share of defence contracts would ensure the operation of these and many other industries at a steadier and reasonably high rate of activity. Further, it would be a definite factor in combating the over-concentration of industry in the central provinces. We have heard much in this house in the past of the evils of such overconcentration, and I submit that a wider spreading out of industry across Canada would bring nothing but benefit to the whole country. In peace it would mean a broader general diffusion of prosperity. In time of war a wide decentralization of vital industries would be of superlative importance in the interests of national safety and the defence effort.
Occasionally even authorities in the central provinces express themselves as concerned with the undue concentration of industry there, though they never seem to entertain such views quite forcefully enough to prevent their grabbing for every new


industry they can get. But the federal government, by means of such a policy as I mention, can do something to rectify the situation. Even if the carrying out of such a policy should involve a moderate increase in costs, I submit that this would be more than offset by the resulting benefits to the nation viewed as a whole.
In concluding, Mr. Speaker, I should like to leave that suggestion with the government.


Mr. William Bryce (Selkirk):: Mr. Speaker, a few days ago I had occasion to disagree with the Minister of National Health and Welfare.


Paul Joseph James Martin: No.


William Scottie Bryce: I want to take this opportunity to put it right. I might say that His Honour the Speaker told me that I could not do it when I wanted to do it and felt like doing it. I want to straighten it out now before I say anything else. The minister said, as reported at page 2609 of Hansard of March 22, 1957:
With regard to disability allowances, no one in this house who has criticized the government, including the last speaker who spoke so amusingly, has mentioned the increase provided for disability allowances, and I am not aware that anyone in this house in this session or in the last session has ever asked the government to increase the basic amount of disability allowances.
From questions I have asked the minister from time to time he must be aware of my keen interest in disabled and blind persons and the old age pensioners. If the minister would care to look up page 313 of Hansard for January 16 of this year, when I spoke in the speech from the throne debate, he will see where I went into the matter in detail. I will quote a few passages from that page to prove that I dealt with this question:
I wonder whether the Minister of National Health and Welfare, who was here a minute ago, has any information to give the house regarding the Disabled Persons Act. I have spoken to the minister at different times and asked him if he was sure that every province was administering the act in the same way. I said that some provinces were very strict in their administration of the act while others seemed more human, although the minister had previously explained that the regulations were drawn up in co-operation with the provinces.
Further on I said:
I do not wish to take the time of the house by dwelling further on the subject of old age pensions as most hon. members have already drawn the attention of the government to the need for an increase in the pension rate. I think that feeling is widespread in this house; people everywhere have been getting up and asking for increased old age pensions. When everybody is agreed, and the attention of the government has been drawn to this matter, then I think a reform is long overdue. The $40 which an aged citizen gets today has the value of only $20 compared with purchasing power in the past, and in the light of the continual rise in the cost of living which is taking place it is

essential that the government should give immediate consideration to providing a decent living for those people who have helped to build the Canada that we inherit today.
Then a few lines farther down the page I said-


Mr. Benidickson:: There is no reference to disability and blind pensions there.


William Scottie Bryce: Lastly I appealed to the Minister of National Health and Welfare to give serious consideration to the plight of the disabled person, the blind person and the old age pensioner. I said:
It appears that in our efforts to build a better Canada we are inclined to forget the people who need help most.
I hope the minister is going to withdraw the statement he made that nobody was worrying about the old age pensioner or the disabled pensioner. I have tried in as short a time as I could to prove-and I am speaking for myself-that I am one of the members of the house who raised this matter not only this year but last year. I am going to say no more about it, Mr. Speaker. I think the minister will give me credit for having brought the matter up.


Paul Joseph James Martin: I always like to extend credit to a Scotsman like my hon. friend.


William Scottie Bryce: I see the minister smiling; he must be saying something pleasant.
I was indeed pleased to see that the Minister of Veterans Affairs saw fit to increase the veterans pensions. I personally think the Minister of Veterans Affairs stopped short when he did not carry this through to include single veterans and widows' allowances, as their present allowances are inadequate to provide them with decent living conditions. While the permissible income of the single veterans and widows has been raised, the unfortunate thing is that most of these people are getting too old to go out and earn more income. I hope the minister will give this matter some consideration.
I was pleased to see in the budget that an amendment will be made to allow claims for the care of retarded children to rank as medical expenses. I come from the town of Selkirk, where there has recently been set up a class for retarded children. One of the great problems they have is the transportation from their homes to the school each day. I wonder whether the Minister of Finance will make a note of it and let me know if this is regarded as medical expenses for the care of these retarded children.
I have some remarks to make on the Prairie Farm Assistance Act, but I shall leave them until the amending bill is before the 82715-175
The Budget-Mr. Bryce house. Every day one finds on his desk a complaint of some kind dealing with farm problems.
During the last ten years the farm has undergone great changes; we have seen the horse disappear and everything become mechanized. Mechanization has cost a lot of money, and farm machinery is so expensive that it is no longer good business to have just a quarter section. One has to have more acres to work in order to make farming economically sound. When a young man buys a farm on which to get started it represents a big undertaking today. The mechanization has vastly built up the cost of producing cattle or grain compared to what it was when we were in the horse era.
A few days ago we had a discussion in the house concerning eggs and the floor price. According to the report of the poultry products marketing board of the Department of Agriculture of Canada, imports of dressed poultry in 1955 were 15,255,823 pounds, and in 1956 they were 22,816,809 pounds. Up to March 8 of this year 1,467,424 pounds had been imported. Looking at the importation of eggs as at the week ending December 29, 1956, the report shows that 68,321 cases were imported, and for the same period a year ago 20,921 cases were imported. This importation of poultry and eggs must have a depressing effect on our market, and the farmer is wondering how long this sort of thing will continue.
While I am dealing with the subject of poultry I would like to draw the attention of the Minister of Agriculture to the grading of turkeys. I shall confine my remarks to turkeys and shall not deal with chickens, but the same thing could be applied to them. On other occasions I have suggested that when a turkey is graded it should maintain that grade until it reaches the consumer's table. If it is graded an A turkey it should have this grade stamped on it, perhaps by a disc or a clip of some kind on the corner of its wing, and the same thing would apply to the other grades. If this was done the farmer would be satisfied that he was getting the proper grade for his turkeys, and the consumer would also be satisfied that he was getting a square deal.
Farmers in the interlake area are of the opinion that it does not pay them to produce eggs if the price goes down to 30 cents per dozen. The floor price on eggs should be 38 cents at the producer's level instead of 30 cents per dozen for grade A large eggs f.o.b. Winnipeg. From what I read in briefs and farm magazines and from what I gather in talking to producers it is evident that the

The Budget-Mr. Bryce price of eggs is a sore point with poultry farmers in many parts of Canada, and something should be done about it.
The marketing of livestock also presents a serious problem, and with the rise in the farmer's costs he will have to find a system that will give him the highest possible return. The interprovincial farm union council in their presentation to the government of Canada on February 19, 1957, said this: Merchandising and marketing-
In designing a marketing system for farm products, certain requirements must be met. In our opinion, the more important of these are:
1.	Cost should be at a minimum so that the producer can obtain the greatest possible share of the consumer's dollar.
2.	Adequate supplies of high quality produce should at all times be available to the consumer.
3.	The price received by the producer should quickly reflect changes in production costs.
4.	The presence of temporary surpluses should not be allowed to depress domestic prices.
The farm unions believe that these requirements can best be met by provincial producer-controlled marketing boards, operating in the domestic market -and national boards operating in the export market. The primary responsibility of the national boards would be to remove and dispose of surplus production so that these surpluses would not interfere unduly with domestic marketing.
We appreciate the fact that the farm organizations must accept primary responsibility in this field but, because of the magnitude of the task and the legislative basis of any action, we would respectfully request assistance on the following matters:
1.	We request the fullest co-operation of the federal government with the provincial governments in paving the way for establishment of producer marketing boards. We realize that this government, by establishing producer marketing board legislation, has recognized the value of such a marketing system.
2.	We request expanded economic research in marketing problems so that marketing schemes can be established on the soundest possible economic basis.
3.	We request continued research on the storage of farm products. Any improvements in techniques would greatly facilitate the orderly marketing of these products.
4.	We request the fullest co-operation of this government and the provincial governments in whatever new or amended legislation may be necessary to place marketing schemes on a sound legal basis.
5.	We request a review of the grading situation. A fairly comprehensive system of grading has been established for most farm products, but we have reason to be concerned over the interpretation and application of these grades from time to time, and over the fact that the benefits from rigorous application of these standards at the farm level are not always passed on to the consumer.
I have another matter which I should like to discuss, concerning which I have been receiving many complaints. I would like to draw the attention of the Minister of Agriculture or perhaps the Minister of Trade and Commerce to the importation of powdered milk and cheese, which is worrying the cream producer and the small creameries that are the backbone of the dairy industry. This problem is of concern not only to the

producers in the interlake country but to those in many districts in Manitoba. Perhaps I can best illustrate this problem by quoting from the brief of the Canadian Federation of Agriculture presented to the cabinet on February 15, 1957, which I think will explain the situation fairly well. On page 11 of the brief the following statement appears:
With respect to skim milk powder and cheese dairy producers are convinced that not only are the special duties of one cent per pound on imports from Australia and New Zealand completely unrealistic, but also that the present regular British preferential tariff on these products is unreasonably low. This is especially evident in view of the very favourable natural conditions for dairy production which exist in New Zealand and Australia and especially in the former country.
In the case of skim milk powder the Canadian Federation of Agriculture requests that the Canadian government negotiate the elimination of the special tariff agreements with Australia and New Zealand and further that it negotiate a British preferential tariff on milk powder of 4 cents per pound, the same as the present most favoured nation rate.
In the case of cheese we request that the special Australia and New Zealand rates be similarly eliminated and the tariff raised to 6 cents per pound. In the absence of such a tariff increase cheddar cheese should be priced on the export-import control act list of products which may enter this country only under special permit.
We would further request that a floor price of 14 cents per pound on roller powder and 16 cents per pound on spray process powder be established, with at the same time a listing of this product under the export-import control act. An adequate level of returns for milk powder is necessary if the combined return to the producer for butter fat and skim milk is to reach levels which are at all adequate.
I hope that the recommendations and various points I have brought before the ministers will be given consideration. I have quoted from both the Canadian Federation of Agriculture brief and also that of the interprovincial farm union council. Both these organizations represent thousands of farmers in the Dominion of Canada. I am sure their reason for presenting these briefs is to improve their standard of living as farmers or dairymen, whatever the case may be. As I have already said, farming 10 or 15 years ago was quite different from the farming of today, and new rules and regulations will have to be made to meet these conditions.


Mr. D. F. Brown (Essex West):: Mr. Speaker, may I add my congratulations to those tendered already to the Minister of Finance upon the most excellent budget which he has presented. We in this house who have known the minister for years feel that this budget is typical, because we know he is always conscious and careful of the money of other people, especially the money of the little people. On behalf of the little

people in my constituency I want to extend to him their congratulations and thanks.
The purpose of social legislation is not to take care of all the desires or needs of the constituents of Canada, it is to relieve them of the oppression of fear brought about by old age and other factors. This fear has been further relieved by the actions of the Minister of Finance and the government through this budget.
It is interesting to note that the number of old age security recipients in Ontario last year was about 283,171. These payments were not subject to any means test and were paid by the federal government. In addition there were those persons between the ages of 65 and 70 years who were in receipt of old age assistance, and these totalled 21,731. Then there is another class of persons who receive supplementary old age assistance. This supplementary old age assistance cannot exceed $10 per month, and must be initiated by the municipality.
I was most interested in reading what Hon. Dana Porter, the provincial treasurer, had to say on February 21, 1957, as reported on page 531 of the provincial Hansard. He said that more than 5,000 persons throughout Ontario are now benefiting from supplementary old age assistance payments, of which the province pays 60 per cent and the municipality the remainder. It is not correct to assume that Ontario is paying the supplementary payment of $10, because as this works out in Ontario the basic old age assistance would be $40 per month, of which $20 is contributed by the federal government and $20 by the provincial government. If it is necessary to grant a supplementary old age assistance payment of $10, $6 of that would be paid by the province and $4 by the municipality. I know that my own municipality is hard pressed to meet these payments of $4 per month to the recipients of supplementary old age assistance.
I do not suppose there is any other constituency in Canada which has more reason to be grateful for the social legislation which has been brought in by the Liberal government, in particular the Unemployment Insurance Act. This act has been of incalculable benefit to my constituency, especially during the past few months when the rate of unemployment has been exceedingly high. We are not crying about this, we are not complaining about our lot, we are going ahead to take steps to help ourselves. We are pursuing whatever action is possible along these lines.
As a matter of fact the mayor of Windsor, the heads of the unions and other civic representatives have been to Ottawa to discuss 82715-175J
27, 1957
The Budget-Mr. D. F. Brown this matter with government officials. Departments here in Ottawa have been busy assembling information which we trust will be of help to the municipality. As of yesterday, officials of the Department of Trade and Commerce have been in my city to see what could be ascertained to be of assistance to the community as a whole. Following along prearranged lines the mayor of the city has arranged a conference for next Tuesday, to which I received a telegram of invitation this morning. This conference will explore the possibilities of self-help, and will be attended by government representatives from Ottawa. I am not sure whether Ontario will be represented, but I assume it will. They will join with other civic representatives in an attack on this problem.
This debate affords me an opportunity to discuss another matter which is of national and international importance. We in Canada are spending many millions of dollars each year on national defence.
No one can deny the necessity for such expenditure under present conditions, yet it is not bringing us any nearer the goal of international peace. We in Canada, too, are contributing other millions to the total amount donated by a few countries of the western democracies to those countries which are poverty stricken and, of course, such generosity is commendable. But bestowing material gain on those countries has certainly not lessened international tension.
One of the greatest obstacles to world harmony is the problem of illiteracy. This must be overcome through the understanding of common justice and integrity. If the United Nations organization is to succeed it is essential that its efforts must be directed more and more to this most vital problem. The aim of the United Nations is, of course, to maintain international peace and security. It is not a world government but a forum for the discussion of problems of international importance. It is in large measure an apparatus whose function it is to focus world opinion on any current problem. I therefore submit to you, Mr. Speaker, that if it can keep its member countries in discussion, eventually reason will prevail and bloodshed be averted. So long as they talk they will not fight.
But the United Nations must also, in the words of the preamble to its charter, "establish conditions under which justice and respect for the obligations arising from treaties and other sources of international law can be maintained". Hence the impact of the work of this great body is greatest on those countries where there is an informed and educated public opinion, countries

The Budget-Mr. D. F. Brown where the individual is free to think and to act. It is not sufficient that we have abundant book learning and broad technical skill. We must be free to demonstrate our knowledge and to criticize our superiors. We must be able to vote freely.
You will agree Mr. Speaker, that respect for the principle of the United Nations charter and the achievement of its purposes calls for the application of high ethical standards, standards as high and as noble as those which are an integral part of the great religious movements of the world. We all must face the challenge of making persistent and determined efforts to examine international problems with all the honesty we possess; soberly, in a spirit of good will, always endeavouring to understand the other fellow's point of view, free from malice and preconceived prejudices. Let us he honest, tolerant and restrained.
I said a moment ago that we must have an informed public opinion. What has been the situation? When the United Kingdom and France intervened in the trouble between Israel and Egypt we were shocked. Severe criticism arose not only in other countries but in France, and particularly in the United Kingdom. Some government members resigned in the United Kingdom, and resentment was very high. When the general assembly of the United Nations called upon these two countries to withdraw, both countries complied with the terms of the resolution. Public opinion demanded it.
But what did we find in the case of Hungary? There it was different. The Hungarian people arose against the communist tyranny but were brutally suppressed by the Soviet army. The United Nations stood by helplessly. The assembly passed four resolutions. One called for the withdrawal of Soviet forces. The second called for free elections. The third asked for the admission of U. N. observers, and the fourth called for contributions of food, medical supplies and aid to refugees.
The condemnation of Soviet action and the attempt to send in observers were brushed aside by the communists, confident in their belief that they had the strength to disregard public opinion abroad and to keep it in control in their own land. They were ready, however, to accept immediate shipments of medical supplies and food. It is astounding to see how many condemn the United Kingdom and France for what happened in Egypt, yet are quite indifferent to the tragedy of Hungary.
To be effective it would appear that the United Nations need an informed public opinion in the various countries of the world.

There is a serious need also for an educated public opinion. If the democratic countries find that in matters of vital national interest they must bow to the pressure of world opinion, and must follow a course of action which is ignored by countries less sensitive to such pressure, there is grave danger that the rule of law will be impeded. Thus the aim of maintaining international peace and security will be jeopardized. All countries must honour the principles, not merely the words, of the charter which they have accepted, and the same standard of conduct must be expected of all if we are to have the reign of international justice. There can be no double standard.
It is essential, I suggest, to have an informed and educated public opinion. But how can this be arrived at in countries which are governed by a feudal system wherein the rulers amass huge wealth and the common people have little? What can we do in countries where most of the natives are tenants of absentee landlords? What is the hope in a country where the life expectancy of the individual is less than 30 years, and where his annual income is about $41? We should seriously consider what our approach to the problem, which is of vital importance, should be if we are to establish conditions under which justice and the respect for treaty obligations in international affairs is to gain strength. Should we not appeal rather to the masses of people in underdeveloped countries rather than to governments?
One billion one hundred million people- that is about two-thirds of the population of the world-can neither read nor write. They are voiceless. They cannot vote. They are virtual slaves in one way or another. Almost all are in debt all their lives, yet they know not how much the debt is and they have no idea how to compute the interest.
Such conditions breed suspicion when there should be confidence in their leaders. They breed treachery without an understanding of events. They breed dishonesty without aiming to be so. They breed a trust in material things as all-important.
A few years ago I was on a mission in South America, 1,500 miles the other side of the equator, to Bolivia where over 90 per cent of the population are native Indians. In that country most of the land is owned by absentee landlords, persons living in faraway countries but certainly not at an altitude of 12,000 feet above sea level. There I observed that the peasants lived in houses built with adobe brick, which is sun-dried mud. The houses had thatched roofs made of material taken off the farms. Each house consisted of one room with one window at the end of the room, and the doorway was

covered with a homemade blanket. Plowing was done with the crotch of a tree. Cows were used to pull the tree crotches. The cows produced milk, but because of the condition of the cattle the milk could not be consumed except in the form of cheese.
There were 11 countries represented at the conference, most of them countries where similar conditions prevailed to one degree or another. I had many discussions about these matters with various high government officials and also the president of the country, but in order to get grass-roots information I was particularly interested in the views and opinions of the missionaries. I talked with Roman Catholic, Baptist, Methodist and Friends-they are the Quakers -missionaries.	I found they were doing
much to improve conditions, but there is certainly very much more to be done.
The missionaries had established a hospital which was in operation taking care of the sick, and they were maintaining clinics for education and giving training to student nurses. Generally they were setting a very good example to the residents, doing much to raise the standards of cleanliness, order and health and at the same time instilling in the mentality of the patients a strength of mind and character. Schools were set up to teach the youngsters, most of them operated by missionaries. Never was there need of an attendance officer for the students, because they were eager to learn to read and write in their native language. By practice and by precept they were given the letter and the spirit of a better way of life. The more enlightened students were encouraged to go on to higher courses which equipped them in turn to teach their brothers, and so there were many Indians trained to teach Indians. Instruction and assistance were provided in establishing better homes and gardens. The result was better crops and habitations.
Such plans as the Colombo plan do much to help the people of these eastern countries to help themselves. We give money and technical advice to build dams, to erect
The Budget-Mr. D. F. Brown power plants and to construct railroads. Yet the people are illiterate. They are still in slavery. The native has been told not only by the communists but by the democrats that he has the right to drive a Cadillac some day. Technical training is certainly essential and scholastic training is indispensable, but there must be something more than book knowledge. The communists have overcome illiteracy with reading, writing and a knowledge of subversive atheistic materialism. We must overcome illiteracy with reading and writing, but also with a knowledge of the spiritual dignity of man which raises the moral atmosphere, giving strength of character to the individual.
We in Canada need all our strength and determination, our intelligence and integrity. Our response to the challenge must be wholehearted and wholeminded. May we keep in mind what the United Nations organization is and what its agencies cover. If we are to play our part effectively and constructively we must realize the relationship between the whole and its parts, and keep in mind the various aspects of its activities.
We have made notable contributions in the field of technical assistance by providing experts to advise less developed countries. We are helping them to improve their methods of administration, production and home living. But beyond all this lies the fundamental responsibility to provide leadership for an informed and thoughtful public opinion in support of the United Nations organization's effort to eradicate illiteracy with principles of common decency and for the protection of mankind.
On motion of Mr. Tustin the debate was adjourned.



BUSINESS OF THE HOUSE

Mr. Lapointe:: Tomorrow we shall continue with the budget debate.


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

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

Mr. Kickham: At the rates allowed under the new fiscal arrangements effective in the 1957 tax year (i.e. 9 per cent of corporate profits, 10 per cent of federal individual income tax, and 50 per cent of federal succession duties) the amount would be for the year 1951-52: Corporation and corporation income taxes	 $350,000
Individual income	taxes	 146,000
Succession duties	 15,000
This compares with a payment under the agreement, exclusive of subsidies, of $2,474,286.00.
2.	Prince Edward Island received the following payments under the 1947 tax rental agreement, in addition to statutory subsidies which totalled $2,284,660:
For 1947-48	 $1,664,958
1948-	49	
1,762,6811949-	50	
1,983,7761950-	51	
2,234,1451951-	52	
2,474,286

3.	In the 1952 tax rental agreement, as in 1947, there was no direct relationship between the taxes surrendered and the payments made. Prince Edward Island received a basic minimum payment of $2,977,015, including statutory subsidies, which was subject to increase in accordance with changes in population and per capita gross national product from the base year 1948.
An estimate of the return that would have been received by Prince Edward Island in the last year of the present agreement 1956-57 from the taxes surrendered at the rates of credits in effect for 1956 (i.e. a 7 per cent rate on corporate profits in the province plus an allowance of 1J per cent for special corporation taxes, 10 per cent of the federal individual income tax, and 50 per cent of the federal succession duties) is:
Corporation income tax	 $395,000
Individual income tax	 206,000
Succession duties	 154,000

At the rates allowed under the new fiscal arrangements effective in the 1957 tax year (i.e., 9 per cent of corporate profits, 10 per cent of federal individual income tax, and 50 per cent of federal succession duties) the amount would be for the year 1956-57: Corporation and corporation income taxes	 $418,000
Individual income taxes	 206,000
Succession duties	 154,000


$778,000 $511,000 MARCH
[Stage Direction]
This compares with a payment under the agreement, exclusive of subsidies of $4,163,918.
4.	Prince Edward Island received the following payments under the 1952 tax rental agreement, in addition to statutory subsidies totalling $3,285,000:
For 1952-53	$ 3,285,113
1953-	54	
3,655,7761954-	55	
3,910,6471955-	56	
3,708,7421956-	57	
4,163,918	(1)
[Stage Direction]
(1) Subject to recalculation. All payments subject to final adjustment at conclusion of agreement.
27. 1957	2763
Questions

Mr. Stuart (Charlotte): 1.	For how many houses has the federal government awarded contracts to date at Camp Gagetown, New Brunswick?
2.	How many of these houses are: (a) completed: (b) under construction: (c) contract awarded but not yet started?
Answer by:	Mr. Bourget, Parliamentary
Assistant, for the Minister of Public Works:
(1)	As of March 15, 1957, Central Mortgage and Housing Corporation has awarded contracts for the construction of 1,059 housing units at Camp Gagetown, New Brunswick.
(2)	Of the 1,059 housing units,
(a)	143 have been completed,
(b)	592 are under construction,
(c)	324 are yet to be started.

Thursday, March 28, 1957