1957-03-28

THE ROYAL ASSENT

Mr. Speaker:: I have the honour to inform the house that I have received the following communication:
Ottawa, March 27, 1957.
Sir:
I have the honour to inform you that the Honourable Patrick Kerwin, Chief Justice of Canada, acting as Deputy of His Excellency the Governor General, will proceed to the Senate chamber on Thursday, the 28th March, at 5.45 p.m., for the purpose of giving royal assent to certain bills.
I have the honour to be, sir,
Your obedient servant, Lionel Massey,
Secretary to the Governor General.



COMMITTEES OF THE HOUSE

[Stage Direction]
Tenth and eleventh reports of standing committee on miscellaneous private bills.- Mr. Henderson.


[Stage Direction]
Mr. W. A. Tucker (Rosthern) presented the second and third reports of the special committee on estimates, and moved that the second report be concurred in.
Motion agreed to.


Hon. Robert H. Winters (Minister of Public Works):: Mr. Speaker, in accordance with an undertaking given to the minister of public works of New Brunswick I beg leave to table a copy of a letter he wrote me on March 5 on the subject of the proposed international bridge between Campobello island, New Brunswick, and Lubec, Maine. I would also beg leave to table a copy of my reply dated March 20.



WATER RESOURCES


Hon. Jean Lesage (Minister of Northern Affairs and National Resources):: Mr. Speaker, as I announced in the house on March 8,
1957, the Canadian and United States officials had preliminary talks on March 19, 1957, on the subject of waters which cross the boundary between our two countries.
The purpose of the meeting was to consider the steps required to organize effectively the main talks. There was a full and, I may add, a very satisfactory exchange of views. The terms of reference for the discussions were drawn up. These are being submitted to each government for their consideration.
As a result of the March 19 meeting and of subsequent consideration it is hoped that the first meeting for these talks will be held in Washington in May of this year. I expect personally to head the Canadian delegation. At this meeting we will begin to get into the substance of the discussions.


Mr. Howard C. Green (Vancouver-Quadra):: May I ask the minister if a representative of the province of British Columbia will be included in these talks?


Jean Lesage: Mr. Speaker, at the preliminary meeting held in Ottawa on March 19 there were representatives only of the United States and Canadian governments. However, there was one representative, or possibly two, of the government of British Columbia in Ottawa at the time for consultation with our own officials. Consultation was held with them and it was found very useful. If the government of British Columbia wishes to send representatives with the Canadian delegation to Washington in May in order that we may consult them as the talks proceed, they will be most welcome.

On the orders of the day:


Mr. E. D. Fulton (Kamloops):: May I ask
the Minister of Northern Affairs and National Resources a further question in connection with the negotiations between the Canadian government and the United States government on the question of downstream benefits from water storage on the Columbia river. To what extent has the Canadian position been weakened by the publicly announced position of the Minister of Fisheries, repeated recently in Vancouver, indicating that he is opposed to the diversion of Columbia river waters into the Fraser river system?


Jean Lesage: I think the hon. member should read in Hansard what I said three days ago on that very subject.

Inquiries of the Ministry


Edmund Davie Fulton: I have read it, and on that basis I would like to ask the minister a supplementary question. Is it not a fact that in these negotiations one of the most powerful levers in Canada's favour in obtaining the best return for downstream benefits is the possibility of the Columbia river diversion to the Fraser, and that any suggestion that any government minister is opposed to this will weaken Canada's position?


Jean Lesage: I have said time and again that these were diplomatic negotiations, and I do not intend at any time to discuss the substance of the subject matter in the house or in public.


Edmund Davie Fulton: Then may I ask the Prime Minister what is the position of the right hon. gentleman with respect to the principle of cabinet solidarity, when we have one minister saying that the Columbia diversion is definitely still a possibility and another stating, in what we are told is a pronouncement of government policy, in Vancouver, that he is opposed to such a diversion?


Right Hon. L. S. St. Laurent (Prime Minister):: There is cabinet solidarity as to all decisions that are taken. There need not be cabinet solidarity about each individual minister's opinions on for example some of the questions that are asked.


Edmund Davie Fulton: I was asking the Prime Minister not about an expression of opinion but about a press release which we were told in this house represented government policy, and which was made in the form of an announcement, not in answer to a question.


Louis Stephen St-Laurent: I think this debate has gone far enough at this point.


Howard Charles Green: Mr. Speaker, may I ask the Minister of Northern Affairs and National Resources a question arising out of his statement earlier this afternoon about the negotiations concerning the international rivers.
Is the federal aid policy which was announced on March 26 subject to the prior completion of an agreement between Canada and the United States? It would appear from the wording of the announcement that this is to be the case, but if so, I am wondering why there should be that restriction on the policy.


Jean Lesage: Mr. Speaker, I have nothing to add to what I already said in the house when I read the statement made by the Minister of Fisheries.


Howard Charles Green: Are we to take it then that the policy announced by the Minister of Fisheries
[Mr. Lesage.)

is subject to the completion of an agreement between Canada and the United States?


Jean Lesage: Mr. Speaker, I have nothing to add and I will not be brought into a discussion of what exactly is meant by a sentence or two sentences. The document speaks for itself..


Mr. Fleming:: That is a very poor answer. You can surely do better than that.



BROADCASTING


[Stage Direction]
On the orders of the day:
Mr. Alistair Stewart (Winnipeg North):: Mr. Speaker, I should like to direct a question to the Minister of National Revenue. Is he not delighted with the Fowler report which has been published today?


Hon. J. J. McCann (Minister of National Revenue):: Mr. Speaker, I have not had an opportunity to read it, but from what I hear it is very good.


Donald Methuen Fleming: May I
ask the minister if the report will be tabled in the house before it is made public?


James Joseph McCann: I think the Prime Minister has already made mention of that fact.


Louis Stephen St-Laurent: I understand the report was
tabled at noon today, with a copy being placed in the post office box of every hon. member at the same time.



ALLEGED CONFLICT IN GOVERNMENT POLICY FOR DEVELOPMENT

[Stage Direction]
On the orders of the day:
Edmund Davie Fulton: Mr. Speaker, I should like to ask the Minister of Northern Affairs and National Resources a question arising out of his statement this afternoon and the statement on the Columbia river development made in Vancouver on Monday by the Minister of Fisheries. Would the minister tell the house what event has happened or is about to happen which caused the government to change its position and policy since February 21, 1956-


Some hon. Members:: Order.


Edmund Davie Fulton: -when every Liberal member from British Columbia, including the Minister of Fisheries-


Some hon. Members:: Order.


Edmund Davie Fulton: -voted in this house against a motion calling for dominion-provincial cooperation in the development of power projects such as that on the Columbia river?


Mr. Speaker:: How could the hon. member believe he would get away with that type of question?


Edmund Davie Fulton: This question is of the greatest interest to the people of British Columbia and of other parts of Canada, in view of the fundamental change in government policy. I am asking the Minister of Northern Affairs and National Resources if he will answer the question. What has caused the change in government policy?


Jean Lesage: There has not been any change in government policy. The policy of this government has been to further the economic development of this country to the utmost.


Edmund Davie Fulton: Would the minister then inform the house why he and his colleague the Minister of Fisheries voted against this policy on February 21, 1956?


Jean Lesage: I am sure if the hon. member for Kamloops reads again the amendment presented at that time he will see why we had to vote against it.



IRRIGATION


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, this brings up the question of the South Saskatchewan dam. In view of what is being done now and the complete change of face on the part of the government in respect to assistance for the production of power, thus removing their major objection to proceeding with the South Saskatchewan project, is the Prime Minister in a position to say that this will now be proceeded with?


Louis Stephen St-Laurent: No, I am not going to say it is
going to be proceeded with, because it is not regarded as a self-supporting or self-liquidating scheme. What has been done is to suggest to the authorities of the Atlantic provinces that something could be done similar to the creation and ownership of the northern Ontario pipe line, provided it was agreeable to them that the Canadian government should proceed in that fashion.


John George Diefenbaker: The Prime Minister uses as an excuse the fact that if this dam were proceeded with it would mean that the federal
Inquiries of the Ministry government was participating in a power development. The fact is that one of the reasons this could not be proceeded with was that it would mean that the federal government was participating in the production of power. That is now something that has been changed first by the Minister of Fisheries in a British Columbia announcement and also by a budget announcement. Is there going to be reconsideration now of the South Saskatchewan dam?


Louis Stephen St-Laurent: There is reconsideration of all these projects, and I have declared time and again that I would not take the responsibility of recommending to parliament that this scheme be proceeded with until I was convinced it was something that would put back into the whole national economy more than it would take out annually in the form of interest and amortization charges; and I have not yet been able to become convinced that such would be the case.


Mr. H. R. Argue (Assiniboia):: I would like to ask the Prime Minister a question supplementary to those put to him about the South Saskatchewan river project. Would the Prime Minister not consider proceeding with the project even though he may feel it is not entirely self-liquidating, in view of the fact that the government was prepared to proceed with the northern Ontario gas pipe line even though it was not clear at the time that it would be self-liquidating?


Louis Stephen St-Laurent: Mr. Speaker, the government was of the opinion that that would be self-liquidating. There may have been some uncertainty with regard to the time by which it was felt it would become so, but there was no doubt that it would ultimately be self-liquidating.
With respect to the South Saskatchewan river scheme, I am personally impressed by the fact that there are apt to be indirect benefits which it is very difficult to appraise at this moment, but these, in my judgment, will be taken into account in any further reconsideration that is given to this project.


Hazen Robert Argue: Is the Prime Minister prepared to give reconsideration to the project during the current session?


Louis Stephen St-Laurent: The Prime Minister cannot extend any hope to any hon. member, no matter how many questions are asked, that an affirmative decision will be reached in the course of this session, nor in the course of the next few weeks.


Donald Methuen Fleming: Up to June 12?

Inquiries of the Ministry
CIVIL DEFENCE	EXTERNAL AFFAIRS



SUGGESTED SUBSIDIZATION OF DISPERSAL OF INDUSTRY

[Stage Direction]
On the orders of the day:
Mr. A. M. Nicholson (Mackenzie):: I should like to direct a question to the Minister of National Health and Welfare as the minister in charge of civil defence. Has the minister's attention been drawn to a statement in an article in yesterday's Ottawa Citizen to the effect that Ottawa should subsidize the dispersal of industry to render it less vulnerable to attack in an age of nuclear warfare? Would the minister indicate whether or not this is a change in government policy, and also whether plans are being made to establish industries in the prairie region?


Hon. Paul Martin (Minister of National Health and Welfare):: My hon. friend asks me if my attention has been directed to the article in question. The answer, of course, is yes. The hon. gentleman directed it to my attention yesterday afternoon. The study in question is the product, I believe, of a group of professors of McGill University. They made a report to the defence research board. That report is being studied. I was at a loss to understand how it appeared in last night's paper, but I understand that this product of the McGill University professors has been before the committee of the other place on land uses.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. J. M. Forgie (Renfrew North):: I should like to direct a question to the Minister of National Defence. Will the minister say whether the five-day 40-hour maximum work week will be granted to the cleaners, helpers, caretakers, cooks, nursing staff and security guards at Petawawa military camp and other similar Department of National Defence establishments?


Hon. R. O. Campney (Minister of National Defence):: Mr. Speaker, the question of hours of work and length of the work week at Petawawa, as I mentioned in the house some time ago in respect of other camps, is at present under investigation by officials of my department, the Department of Labour, treasury board and the civil service commission. As long as those discussions and investigations are going on I cannot give a positive answer.



REPORTED STATEMENT IN FRENCH


[Stage Direction]
On the orders of the day:
Mr. Solon E. Low (Peace River):: I have a question for the Secretary of State for External Affairs but in his absence perhaps the acting minister or the Prime Minister might care to reply. A statement was made in the French parliament yesterday, as reported in this morning's papers, by a prominent member of that parliament to the effect that the United States had reneged on its agreement with Israel concerning the future of the Gaza strip following the recall of the Israeli occupation forces. Has the minister any comment to offer on that statement?


Louis Stephen St-Laurent: Mr. Speaker, I do not know that there has been any information that would enable us to say that there had been any such agreement between the government of France or the foreign minister of France and the secretary of state of the United States, and I was quite as surprised as the hon. gentleman was to hear that there was any suggestion that the United States was reneging on any agreement that had been made.


Mr. Fraser (Peterborough):: It was on the
radio this morning.



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. Is he prepared now to give me an answer to the question I asked yesterday regarding the construction or possible construction of a civic centre at Banff?


Jean Lesage: I am sorry but I just did not have the time to look up the file. I will do that this afternoon or tonight.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Howard Charles Green: Mr. Speaker, on March 25 a question was directed to the Minister of National Health and Welfare by the hon. member for Winnipeg North Centre concerning a serious charge made by Arthur Blakely in that morning's

Montreal Gazette to the effect that the government is interfering in C.B.C. public affairs programs. Subsequently I asked the minister whether there had been any correspondence between the Prime Minister or any other minister and Mr. A. Davidson Dunton, chairman of the board of directors of the Canadian Broadcasting Corporation.
The Minister of National Revenue then interjected that he personally had not had any such correspondence. Then I asked the Minister of National Health and Welfare if he would ascertain whether the Prime Minister or any minister of the government had such correspondence, to which I received this reply:
I shall take notice of my hon. friend's question and direct it to the attention of the Prime Minister when he returns.
Perhaps the Prime Minister could answer that question today.


Louis Stephen St-Laurent: After I had been in the house yesterday afternoon my attention was called to an article which appeared in the Montreal Gazette, I think it was on Monday, March 25, and so far as it concerns me it is absolutely inaccurate. I have not attempted to interfere in any of the manners suggested.
I do not think I should ask my colleagues if they have had any correspondence with Mr. Dunton. There certainly has been no correspondence with Mr. Dunton authorized by the government.
I did have some correspondence with Mr. Dunton in October about something which has nothing at all to do with partisan politics, in which I wrote him, not as Prime Minister but as a Canadian citizen, about the tone of a broadcast I had heard. I suggested I thought it was not a proper use of funds appropriated by parliament to provide fees for broadcasts of that character.


Howard Charles Green: Would the Prime Minister be willing to table that letter?


Louis Stephen St-Laurent: No, I would not, sir.	I would have no objection to
showing my hon. friend the correspondence but I would not like to set a precedent that correspondence between a member of the government and someone who happens to be in any one of these crown agencies should be tabled.


John George Diefenbaker: In view of the fact that it is very difficult for the Prime Minister to bifurcate himself into being Prime Minister at one moment and private citizen at the other, would he reveal the nature of his complaint? What was said or done that offended his sensibilities?
Inquiries of the Ministry


Louis Stephen St-Laurent: I think at the time there had been two broadcasts by a young gentleman from abroad who was presented as a Canadian university professor, and who expressed very profound views upon international affairs in a tone of persiflage that I thought it was not fitting to have used in that way. The answer I got was, well, the C.B.C. tries to provide an opportunity for every view to be expressed. To that I rejoined that this might be all right if the young gentleman in question had been introduced in a manner that made his identity appreciated, but that being a Canadian university professor retained to expound views on the C.B.C., the public may very well arrive at the conclusion that these were views sponsored by this agency of the Canadian public, and I did not think that was a proper attitude to which an agency should apply funds appropriated at the expense of the Canadian taxpayer.


John George Diefenbaker: Does the Prime Minister believe that he should be directing any selective decisions as to who should speak?


Louis Stephen St-Laurent: No, but the
Prime Minister believes that any Canadian citizen is entitled to write to the C.B.C. and express his views as he conceives them to be, about the propriety of some of the broadcasts that are made at the cost of the Canadian taxpayer.


John George Diefenbaker: Did the Prime Minister write this private letter on the Prime Minister's stationery, and did he say he was writing as a private citizen? This is a very serious interference with the C.B.C.


Some hon. Members:: Oh, oh.


Louis Stephen St-Laurent: I have not the sheet of paper on which my letter was written, and the carbon copy I have does not show whether or not it was written on official stationery.


Mr. Ferguson:: You do not even know if you wrote it on government paper.


Mr. George H. Hees (Broadview):: I should like to ask a supplementary question. Did the young professor referred to happen to be pointing out to the Canadian public the many shortcomings of this government?


Julian Harcourt Ferguson: Yes.


George Harris Hees: Was the young professor referred to in this case pointing out to the Canadian public the many shortcomings of his own government?


Louis Stephen St-Laurent: No; he was
referring to the timidity of the Canadian nation and its fear of getting its little toes burned.

Inquiries of the Ministry


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I ask the Prime Minister what specific steps he took, if any, to make it clear to Mr. Dunton that this protest came from him personally and that it did not have behind it his weight as Prime Minister of Canada?


Louis Stephen St-Laurent: I took no special steps in that regard.


Stanley Howard Knowles: May I put a supplementary question to the Prime Minister. Since he has now made known the fact that he wrote this letter, and in view of the fact that he is Prime Minister and probably wrote it as Prime Minister, does he not feel that the correspondence should be tabled?


Louis Stephen St-Laurent: No. I do
not think that kind of precedent should be established, but if the hon. gentleman wishes to see the letter I would be glad to show it to him, and I will not ask him to refrain from taking any responsibility he feels he should take after he has seen it. I extend the same offer to the hon. member for Vancouver-Quadra.


Howard Charles Green: Does the Prime Minister-


Mr. Speaker:: Order; the hon. member for Winnipeg North Centre.


Stanley Howard Knowles: With respect to the Prime Minister's reference to a precedent, what does he think of the precedent he has established in writing this letter at all?


Louis Stephen St-Laurent: I do not
think that was any new precedent. I would imagine that hundreds of letters are written to the C.B.C. in respect of matters such as the one I wrote him about.


Stanley Howard Knowles: Hundreds by prime ministers?


Louis Stephen St-Laurent: Well, no; there happens to be only one prime minister at this time, and I have written, well, two letters. There was one letter, an answer from Mr. Dunton, and a reply to Mr. Dun-ton's letter.


Howard Charles Green: Does the Prime Minister not think the only fair way to handle this letter now would be to have it tabled, rather than to place the onus on the hon. member for Winnipeg North Centre and myself with respect to the disclosure of the contents of the letter?


Louis Stephen St-Laurent: No. I have disclosed no other names but my name and that of Mr. Dunton.


John George Diefenbaker: You disclosed the young professor.


Louis Stephen St-Laurent: If the hon. gentleman wishes to see the correspondence and wishes to take the responsibility of-


Howard Charles Green: It should not be my responsibility.


Louis Stephen St-Laurent: It is not
going to be mine.


Stanley Howard Knowles: May I ask a further supplementary question. Does what the Prime Minister has now admitted not confirm in part Mr. Blakely's charge?


Louis Stephen St-Laurent: No, it does not, sir.


Stanley Howard Knowles: It does in the view of some of us.


Louis Stephen St-Laurent: I cannot be responsible for that kind of opinion.


Mr. Speaker:: Before the orders of the day are called, I take it that all questions that have to be asked this day have been asked. While some questions were being asked I found in Beauchesne's Parliamentary Rules and Forms, third edition, citation 295, part of which reads:
A question oral or written must not-
There are several paragraphs which indicate what type of question should not be asked. I found some of these paragraphs very interesting. For instance, paragraph (c) reads:
A question oral or written must not:
(c)	multiply, with slight variations, a similar question on the same point.
(d)	repeat in substance a question already answered, or to which an answer has been refused.
(e)	inquire whether statements made in a newspaper are true.
(f)	contain an expression of opinion.
(j)	be framed so as to suggest its own answer.
(k)	be a speech, however short; nor be of unreasonable length.
(s) embody a series of questions which should be moved for by an address or order.
(w) raise a matter of policy too large to be dealt with in the limits of an answer to a question.
(bb) ask the government's opinion on matters of policy.
It is almost unbelievable that these things could be found in Beauchesne's third edition.


Edmund Davie Fulton: May I ask whether you found anywhere in Beauchesne a precedent which says the Prime Minister has the right to say whether he thinks a debate has gone far enough, and close it off?


Mr. Speaker:: May I ask in what connection the hon. gentleman makes this intervention?


Edmund Davie Fulton: In connection with the course adopted by the Prime Minister, sir, in order not to refuse to answer a question or to evade a question but simply to get out from

under it by saying he thinks the debate has gone far enough, thus giving the impression that he is invoking a rule of the house, which I submit can only be done by Your Honour.


Mr. Speaker:: If the hon. gentleman himself had said something of the kind what would it matter, provided the Chair did not intervene? When the Prime Minister gave as his opinion that the debate had gone far enough did the hon. gentleman see the Speaker intervene in any shape or form?


Edmund Davie Fulton: No.


Mr. Speaker:: Was a question not asked on the very same subject immediately after the Prime Minister made the remark? Yes, there was.


Edmund Davie Fulton: Not on that one.


Mr. Speaker:: Oh, yes, on that very same subject, immediately after the Prime Minister had said that. I do not know what is the purpose of the hon. gentleman's question. If it was to indicate that I was in any way influenced by the remarks made by the Prime Minister I want to tell him that the record will show it was quite different.


Stanley Howard Knowles: 
Mr. Marler:: He did not cite a letter.


Stanley Howard Knowles: When the Prime Minister refers to a letter-


George Carlyle Marler: It is not the same.


Stanley Howard Knowles: It certainly is. When the Prime Minister tells the house on his own initiative about a letter that he as Prime Minister has written-
Inquiries of the Ministry


Louis Stephen St-Laurent: I must intervene. This was not on my own initiative. I was asked a question, if I had written a letter, and I was not going to lie about it. I did write a letter.


Stanley Howard Knowles: Mr. Speaker, surely there is a difference between the Prime Minister writing a letter, say to a relative of his or to a friend, and writing a letter to the chairman of a crown corporation. I submit that when the Prime Minister of Canada writes a letter to the chairman of the Canadian Broadcasting Corporation-undoubtedly written on the letterhead of the Prime Minister of Canada-that is a public document and should be tabled.


Mr. Pickersgill:: A privileged document.


Mr. Speaker:: May I submit that the citation to which the hon. gentleman refers is in the chapter having to do with debate. If a member cites or quotes a letter on which he founds an argument in debate it has been decided that the same document must be available to other members for the purpose of presenting counter-arguments to those introduced by the member who quotes from the letter, but this case does not obtain at the moment.


John George Diefenbaker: Mr. Speaker, with further reference to this young professor on the C.B.C.-


Some hon. Members:: Oh, oh.


Howard Charles Green: You don't like it, do you?


John George Diefenbaker: -could the Prime Minister reveal the identity of this wrongdoer, and would he also say to the house whether or not-


Mr. Harris:: Oh, oh.


John George Diefenbaker: Yes; that attitude on the part of my hon. friend the Minister of Finance is in keeping with his usual unctuousness.


Mr. Lapointe:: That is a flve-dollar word.


John George Diefenbaker: Apparently some of the other ministers are afraid that this question might be asked. The question I want to ask is this. Will the Prime Minister poll the other members of his cabinet to find out how many more of them have interfered with the C.B.C.?


Louis Stephen St-Laurent: Well, Mr. Speaker, the hon. gentleman puts his question in a manner that might bear the implication that by answering it at all I was admitting that there were more of my colleagues who had interfered with the C.B.C. and that I had interfered with the C.B.C.-

Inquiries of the Ministry


An hon. Member:: That is obvious now.


Louis Stephen St-Laurent: -and
neither of those implications do I admit. I did not treat this young man as a wrongdoer-


John George Diefenbaker: Well, then, as a malefactor.


Louis Stephen St-Laurent: -and I
even expressed the view that if we were willing to pay to have that kind of broadcast made one could hardly blame a young man from another part of the world for thinking it was the right thing to do to try to educate those who were so infantile as to provide public funds for being spoken to in that tone.


Donald Methuen Fleming: Mr. Speaker, in view of the example the Prime Minister has set to his colleagues in this respect, might we now be told who was the particular minister or group of ministers within the cabinet who were responsible for the censoring of the proposed broadcast by Professor B. Ostry in connection with the life and works of the late prime minister, Mr. Mackenzie King, a year ago?


Walter Edward Harris: That was answered over a year ago.


An hon. Member:: All that is dead.


George Carlyle Marler: So is the question.


Donald Methuen Fleming: Could we have an answer to that question instead of the eloquent silence that prevails?


Louis Stephen St-Laurent: I think that matter was gone into.


Donald Methuen Fleming: But we never got the story.


Louis Stephen St-Laurent: I had
nothing whatever to do with it and I think there were numerous questions that were asked and answered at the last session in this regard. Surely the hon. gentleman cannot expect me to carry in my memory all the details of these little things that some hon. gentlemen feel important enough to make the subject of questions on orders of the day.


Donald Methuen Fleming: Does the Prime Minister
not consider that censorship by the government of C.B.C. broadcasts is an important matter?


Louis Stephen St-Laurent: Is it any
wonder that sometimes in connection with some of these questions I use the word "debate" as qualifying what is attempted rather than considering that what is being done is merely an attempt to secure information?


George Harris Hees: I should like to direct a question to the Prime Minister in view of the

answer he gave to the Leader of the Opposition. Does he not consider that writing a letter as Prime Minister, which he did, to the chairman of the C.B.C. was an interference with the operations of the C.B.C.?


Louis Stephen St-Laurent: I do not
consider it was my fault that I was Prime Minister at that time. That is something which the hon. gentleman will soon have an opportunity to try to do his best to undo.
(Translation):



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. Paul E. Gagnon (Chicoutimi):: Mr. Speaker, I have a question to put to the Prime Minister. Could he tell us if he has taken steps so that the new hotel which is being built by the Canadian National in Montreal will be called Chateau Maisonneuve instead of Queen Elizabeth?
Right Hon.	L.	S.	St.	Laurent	(Prime
Minister): No, Mr. Speaker, he has taken no recent steps in this regard.
(Text):



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Right Hon.	L.	S.	St.	Laurent	(Prime
Minister): Mr. Speaker, I promised yesterday to be more precise about what further legislation it was intended to have dealt with. I went over the list of the matters I had mentioned to the house on February 21, and I find there are three that are not yet on the order paper. One is the legislation to confirm the Northwest Territories boundary survey. We will not be able to proceed with that unless the legislature of Alberta adopts its own legislation early enough to allow it to be proceeded with at this session.
The other two were, first, legislation to set up a peace bridge authority. That is being put on the order paper in the other place today. The remaining matter is the Canadian National Railways annual financing bill, and notice of the resolution in that respect is being put in Votes and Proceedings so it may come on our order paper immediately.
There is one other matter that had been mentioned, and in the absence of the Minister of Justice I was not able to ascertain what the position is with respect to it. I had suggested on February 21 that there might be a small amendment to the Canada Evidence

Act or another appropriate statute to facilitate the use of photostatic copies of documents to make it unnecessary to impound originals in prosecutions under federal legislation. The Minister of Justice was to ascertain whether there was not already sufficient authority in the statutes, and I have not been able to ascertain whether or not that would be necessary.
There is another matter that I omitted by inadvertence to mention on February 21. There was then the possibility that legislation might be asked for to assist in implementing the provincial legislation establishing agricultural products marketing boards. We have now reached the position where it does seem to be advisable to prepare legislation to enable the marketing boards for agricultural products set up under provincial authority to operate more effectively and without some of the legal objections that have been suggested heretofore.
John George Diefenbaker: Are we to take it that before the house is dissolved legislation will be introduced relative to the Agricultural Products Marketing Act?


Louis Stephen St-Laurent: Oh, yes. That is intended to be introduced just as soon as the form can be adopted after prompt dispatch to the provincial authorities interested in the legislation.


John George Diefenbaker: We will do everything to assist.


Donald Methuen Fleming: I take it, then, it follows that the government does not intend at this session to implement any of the recommendations of the Fowler royal commission report?


Louis Stephen St-Laurent: I have read half the Fowler royal commission report, and there certainly will be no attempt to introduce legislation to implement any of the recommendations of the Fowler report before prorogation of this session of parliament.


Donald Methuen Fleming: Mr. Speaker, may I ask if the
government will be prepared to make a statement before prorogation of parliament as to the implementation of any recommendations in that report that are capable of implementation without legislation, such as the end of the policy of monopoly in local television broadcasting?


Louis Stephen St-Laurent: Well, I have not seen the discussion of the provision to which the hon. gentleman refers as a monopoly in that regard, and I do not really think it would be fair to the royal commission for
The Budget-Mr. Diefenbaker us to attempt to come to definite conclusions in a short time about this very interesting study that has been made.
Perhaps I may add just one further comment with respect to the federal district commission. I think probably it would be desirable if the draft bill could be read a first time so it could be available and allow hon. members to see what our thinking has been after giving careful consideration to the report of the joint committee at the last session; but there would be no intention of trying to have the legislation adopted before the end of the present session.


John George Diefenbaker: That is agreeable to the official opposition.



PIPE LINES


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Prime Minister. Has the Prime Minister's attention been drawn to the boast made in Montreal a couple of days ago by Mr. C. S. Coates to the effect that Trans-Canada Pipe Lines is not subject to the regulation of its rates and earnings by governmental agencies, as are gas transmission systems in the United States?
Will the government now consider bringing the rates and earnings of gas transmission systems under the control of the board of transport commissioners?


Louis Stephen St-Laurent: My attention, Mr. Speaker, has not been called to the article that is referred to, and all I can say in answer to the second part of the question is that this government, so long as it is this government, will consider all matters that can be of interest to the Canadian public; and I hope whatever government succeeds this government will do the same.


Stanley Howard Knowles: It will.



THE BUDGET


[Stage Direction]
The house resumed, from Wednesday, March 27, 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).
John George Diefenbaker: Mr. Speaker, the views of the opposition in regard to the budget have been

The Budget-Mr. Diefenbaker set forth by the hon. member for Greenwood and the hon. member for Eglinton in particular, and by other hon. members who have spoken. I do not intend today to repeat the matters they dealt with, but rather to examine in general the circumstances under which the governor of the Bank of Canada made his recent announcement, and also to place before the house the stand which the official opposition intends to take on the C.C.F. subamendment.
As far as old age pensions are concerned, we believe the increase is totally inadequate for the needy; it is niggardly and paltry. Twenty cents a day will do nothing to help the needy among the old age pensioners of this nation. The increase of $6 per month simply will not meet their desperate need; and with the government spending so extravagantly and so profligately in other directions there are no words with which one could describe its disregard of the needs of our senior citizens.
With regard to the removal of the taxes on candy and soft drinks, may I say that the tax on soft drinks has needed to be removed for several years because the increasing cost of production has made it necessary that this action be taken. However, it must not be forgotten that this is an election year and that some of these changes have been made before. If the unhappy occurrence takes place and this government is re-elected, the experience of the past would indicate that while this type of reduction generally takes place in an election year by pure coincidence, after the election the taxes have been reimposed with the return of the government.
It is well to remember that the 25 per cent tax on soft drinks was repealed in March 1949, with an election in June of that year. It is also well to remember that it was restored and increased in September, 1950, and reduced to 15 per cent in April, 1952. The 30 per cent ad valorem tax on candy and confectionery was removed in March,
1949,	placed back as a tax at 30 per cent in
1950,	and then later on reduced to 15 per cent. The same situation prevailed with respect to the tax on electric refrigerators. It was off in 1945, an election year, and on again in 1947; it was off in 1948, and back at 15 per cent in 1951. In any of these cases I am not dealing with changes that have take place since. In the case of automobiles, the tax was reduced from 25 per cent to 10 per cent on May 14, 1945, with an election in June of that year. It was increased to 25 per cent on November 17, 1947, and so on during the years that followed.
In other words these changes are in keeping with certain other changes which were

made on previous occasions. I know the excuse will be made that the extra taxation in 1950 was because of the Korean crisis which faced this nation, but that does not explain the other examples to which I have made reference, nor is it an adequate answer to what happened in 1950.
As I read this budget and the observations thereon on the part of the minister and of Mr. Coyne in his annual report, they present to me a most bewildering exposition of government policy. In his budget speech on March 14 the Minister of Finance is reported on page 2216 of Hansard as saying:
Meanwhile, the economy has kept on a fairly even keel, despite the speed of its advance, and prices and living costs have advanced only moderately. To have achieved such expansion with so little disorganization is, I think, a source of satisfaction.
I underline the words "and prices and living costs have advanced only moderately". The minister continued:
I come now to consider the economic prospects for the coming fiscal year. On the present evidence I think we can expect a continuation of the current high level of economic activity throughout the coming year. There may, as always, he some unevenness between industries and regions, but by and large I expect the momentum of expansion to continue, at a somewhat more moderate pace but strongly enough to ensure further increases in production and employment, and a continuation of rising standards of living.
I find support for this in the information released a few weeks ago by my colleague the Minister of Trade and Commerce with respect to investment intentions for the coming year.
This poses immediately another question, and that question is this. Whose opinion will you accept? Here is what Mr. Coyne had to say in his annual report:
I believe that total spending of all kinds in 1956-the combination of capital expenditures, personal consumption expenditures and government expenditures, domestic expenditures as well as expenditures for imports-was at least $1 billion greater than would have been desirable from the point of view of general stability and sound economic growth.
The stand taken by the government has been this. Some of the ministers have denied that there is inflation, while others have pointed out the dangers of inflation. Telling the people not to spend would be more convincing, Mr. Speaker, if the government practised what it preaches. In other words, in 1956 and 1957 this government will establish an all-time high in expenditures apart altogether from the old age security fund operations, which are financed by separate taxes. The Minister of Finance would make a greater appeal to this nation if he would say, "Do as I do" rather than as is the case today, "Do as I say, don't do as I do."
After all, the governor of the Bank of Canada has pointed out again and again

the extraordinarily large expenditure which is being undertaken on the part of the government, but there has been no serious attempt by the government to reduce unnecessary and wasteful expenditure. They have continued their policy of spending and high taxation. When we, on the part of the opposition, endeavoured to secure the setting up of a committee similar to the Hoover commission in the United States to investigate and recommend reductions, such a committee, though successful in the United States, was not permitted here.
This could not have been because this government is opposed to royal commissions, for it has set up more commissions in recent years than any government in living memory. This government refused the suggestion of the opposition that the committee on estimates should have the power to call witnesses and have documents produced, though that committee could operate successfully only with its members having the right to have witnesses brought before them, rather than selected witnesses chosen by the government for its own purposes.
I ask, too, what is the general policy of this government regarding taxation. In 1949 Mr. Abbott said in his budget speech:
We must recognize that most Canadians, like other people in recent years, have shown they prefer to pay taxes in a form other than high income taxes.
Mr. Abbott cut the income tax that year. He repealed certain indirect taxes, and reduced corporation taxes. That was an election year. In 1953 he cut income tax rates, reduced some corporation taxes, removed the radio tax, the stamp tax and taxes on certain other commodities. He expressed the view at that time that the way to secure greater production was to reduce income tax, and that such a course would combat inflation.
I ask the Minister of Finance when this change came about on the part of this government. After all, many of the ministers of the present government belonged to that government when Mr. Abbott enunciated that policy as a means of meeting inflation. My hori. friend from Eglinton points out that the Minister of Finance was a member of that government and naturally, with cabinet solidarity being what it is, he must have accepted that general principle which was enunciated.


Walter Edward Harris: As usual the hon. gentleman
is wrong. I did not join the government until January, 1950.


John George Diefenbaker: I am subject to correction in that regard. But whatever the date upon which the present Minister of Finance came into the government, that same
The Budget-Mr. Diefenbaker policy was followed until he became minister. Whatever the case may be-and I accept the hori. gentleman's statement, naturally-the fact remains that following his achievement of cabinet rank that same policy was followed, and I quote this particularly from Mr. Abbott's remarks at the time:
Income tax rates, if too high, can do harm in many directions. Tax laws should avoid placing too great a penalty on successful effort. Every reasonable incentive should be given to people to work hard, take risks and expand their businesses without keeping one eye on the tax gatherer. This is particularly important in a country such as ours which is growing and expanding.
Indeed, the Minister of Finance himself, when he did become minister, made a speech in the city of Montreal as reported on December 17, 1954, in which he said that the situation regarding taxation'-the height of taxation-and the degree to which it interfered with effort and initiative was, to use his own words, "amazing". "I am amazed", he said. Those were his words at that time. However, each of these ministers cannot be right.
Taxes are too high today. Taxes are interfering with production. Taxes are preventing the production without which inflation cannot be met. Yet when we take the view that a reduction in income tax is necessary, supporters of the government ridicule the idea and say it is not in keeping with responsibility, having regard to present inflationary trends. I call as witness in that regard one of our greatest tax gatherers since Matthew, and I refer to B. W. Scully, a former deputy minister in charge of income tax who, now in business, reveals his views regarding Canadian income tax and its effects on the Canadian people. He says:
Money desperately needed for planned expansion is being siphoned away from corporations and individuals. This has become a vicious and chronic habit with our government. It is one that could some day bring about the end of this system of free enterprise which has enabled all of us to prosper as we have.
Again, Mr. Speaker, we find ourselves in a position where Canadian corporations are denied an equal opportunity with United States corporations in Canada with regard to the investment of risk capital. Why has this legislation not been changed? Why has the deterrent to Canadian investment in risk enterprises not been removed from the income tax laws? Why should we in Canada find ourselves in a position where United States corporations can engage in risk enterprises in expanding and developing our resources, and do so on better terms than can Canadians? These are questions that Canadians are asking.

The Budget-Mr. Diejenbaker
Maybe, however, that comes of the indirect way in which taxation is imposed. Due to the fact that the major portion is deducted at the source, Canadians have not realized how heavily they are taxed. In the United States today there is a tremendous public movement on the part of people outraged at the levels of taxation, demanding reductions and securing reductions. Yet in the United States we fin'd that the income of the average American, after taxes are paid, is nearly 30 per cent higher than that of the average Canadian after taxation. The Hamilton Spectator summarizes the situation regarding our taxation in this land iri these words:
The politicians know that payroll deductions and other apparently painless taxes have transformed taxation from a historic annoyance into a hazy narcotic.
A sinister illusion is growing that climbing income and corporation taxes somehow are coming out of a great and limitless pocket divorced from the man on the street and the housewife-a serious, even tragic, misconception.
I know that in certain quarters it is popular to advocate increasing taxation as against corporations, to say that further taxation as against corporations is needed. I say to those who hold that view that our present rates of taxation are denying reinvestment and expansion and are in part responsible for the degree to which United States investment is taking over control of many of the major industries in this nation.
In order to show that his surplus was not as large as it actually was the minister engaged in the juggling referred to at length by the hon. member for Eglinton (Mr. Fleming). By the allocation of over $150 million the minister was able to reduce the amount of the surplus and thereby endeavour to show the Canadian people that they were overtaxed less than they actually were. Having successfully done that this year, we find that he intends to follow the same course next year, in other words, to juggle his accounts so that the actual surplus will not be shown. As found at page 2221 of Hansard of March 14, the minister said:
... I propose for the coming year that a further $50 million be credited to the reserve against assets, bringing it up to about $600 million against total assets of about $8 billion. I am also proposing to appropriate another $50 million to reduce the unamortized deficit in our superannuation account to $89 million. In addition, early in the new fiscal year we shall be paying over to the Canada council if royal assent is given to the bill the amount of $100 million.
It is the same old play, concealment of the actual facts, concealment of the fact that overtaxation today is placing Canadians in a position detrimental to the future of the country and is defeating the very purpose that is put forward for the existence of this
[Mr. Diefenbaker.l
overtaxation, namely, that it is designed to meet inflation. Apparently the basis upon, which the budget is founded is that Canadians cannot be trusted to spend their own money. If they spend their own money that makes inflation, but when the government takes it from them and engages in the greatest spending in all history, with the exception of one year during the days of the war, such spending does no harm.
I say to the government, "If you would meet inflation, physician, heal yourself." Let us have some action on the part of the government to bring about the reduction of unnecessary expenditure. As a matter of fact, the high rates of personal and corporate taxation mean that the incentive to produce is sacrificed, that as a consequence manufacturing costs are on the rise and that we find ourselves challenged in our markets in every part of the world.
The Winnipeg Tribune discussed the matter at some length and pointed out that what was actually done in the present budget was to pretend to fight inflation and at the same time to give some indication by a general spread of benefits that the voters might be disposed to support the government. You ask Canadians to check inflation. When did you find out it existed? When did it begin? In 1955 you were encouraging inflation by your policies, and then in 1956 you began to realize that by gradual steps inflation was taking place. What of 1957? We find expenditures amounting to $5,018 million and revenues estimated to be $5,170 million. The Regina Leader-Post, which has not been a severe critic of the government in the past, has summarized the anomalous situation of the government in these words:
The major quarrel with the budget arises from Mr. Harris' admonition that the people should spend less and save more, a device which Mr. Harris and the federal government are failing to put into practice . . .
The Bank of Canada warns that a 3 per cent rise in consumer prices in seven months is disturbing and would certainly be dangerous if it were to continue at the same rate. The governor of the bank has warned the government. The government saw his report before it was produced here. He warned them about government expenditures and the need to take action to reduce them. Yet instead of taking action the government fans the fires of inflation by failing to restrict its own expenditures. Indeed, the major creator of the existing inflation is the actions of this government.
I intend to deal generally for a moment with the problem of inflation. The Bank of Canada cannot preserve the cake if the government spending departments insist on eating

it. That was an editorial comment in one of the papers of this country and it summarizes the situation. Physician, heal thyself. The government asks Canadians to draw in their belts while it continues its orgy of expenditure and takes from Canadians $24 to $35 more per person in taxation than is needed for the costs of government.
Inflation will not be met by forcing the provinces and municipalities to increase their costs. According to the figures given by the minister, last year they had to borrow $772 million in new bond issues. Cities across the nation find themselves actually in a position where the costs of borrowing are making it impossible for them to carry on the ordinary and requisite expenditures to meet an ever-increasing population.
What is the government going to do about it? What action does the government intend to take? It superintended the imposition of higher interest rates. It refuses to reduce its wasteful expenditure. It refuses, as I said a moment ago, to permit the setting up of either a commission or committees to recommend action. All of us agree with the objective, namely, that this situation must be met. The only difference between us is that we do not believe it can be met with a government that persists in spending and increasing its expenditures without regard to the effects of these increases.
Credit restrictions? Did they prevent inflation? According to the governor of the Bank of Canada they did not and if the increase in consumer costs in the last few months persists the situation will be dangerous. We find that housing has practically been undermined in this nation or was until the 7th of March, with major projects being shelved by municipalities and with the economy of various parts of the nation frozen at a lower level than the economy of other parts.
Those are things which the people of this nation realize. Those are things which this government does not realize because it places the responsibility for action everywhere but on its own doorstep. I believe that all of us must take a responsible attitude towards meeting this grave danger and, unless action is taken, it will threaten the stability of our economy. All of us recognize that in addition to government spending, consumer and investment spending contributes to the total spending and thus adds to the pressure of demand upon productive capacity. I repeat this, and it cannot be too often repeated, the government refuses to accept for itself the medicine that it prescribes for others. While refusing to cut its own spending, while exhorting banking institutions to exercise restraint in extending consumer
The Budget-Mr. Diefenbaker credit, it has adopted a monetary policy which has placed almost the whole burden of restraint on the investment sector. This restraint has been felt by all small businesses in this nation, for it is the small and medium-size businesses which have been forced to the wall as a result of this policy, ineffective as it has been.
What have been the weaknesses of government policy? First, it has attacked inflation by attacking the volume of investment and by reducing the rate of economic growth. This, to me, is unsound, since inflation by description is not due to too much production but to too little. It has enhanced the competitive power of large business as against the small business man, with agriculture and particularly prairie agriculture being a special sufferer. It exercised no noticeable restraint on many types of less essential spending, while severely restricting investment in social capital, as I mentioned a moment ago for example, in needed municipal development and in the crucial field of housing. It has also clearly resulted in regional discrimination. The maritimes have been particularly discriminated against in this regard. It has attempted to solve a dangerous situation almost solely by monetary policy, despite the technical limitations which have been shown in the experiences of the last few months. These limitations have been repeatedly pointed out by the presidents of the various chartered banks and are now admitted by the governor of the Bank of Canada.
No one denies that there is no painless cure for inflation. We have to cut down total spending when total spending exceeds our productive capacity. Cuts are imperative. Again, I say it is the government itself that must act. If it makes a determined and effectual effort to reduce its own spending and inflationary forces still persist it would be the task of government to consider whether less essential consumer spending should be given consideration. Up to the present, in all too many cases, exactly the reverse has been happening. Capital investment maintains our economic growth, supports our welfare expenditures and makes possible the contribution that we make to social security measures as well as providing for full employment. Yet, because of political expediency and technically using and implementing a policy of general monetary restraint, it is precisely this sector of investment which this government has attacked. However, the attack on the investment sector has been directed or at least been effective only against the small business, and as a result has been grossly and unwisely discriminatory. I believe we should stimulate enterprise, encourage initiative and expand the rate of economic

The Budget-Mr. Diefenbaker growth. I believe with Mr. Abbott, in his declaration of several years ago, that the means of encouraging production is through a proper regard to the reduction of taxation which denies initiative.
We are confronted today by big government spending. We are confronted by the fact that small business, the farmer and the economical progress of the poorer provinces is being affected by this policy. Indeed, the centralization of economic power invites the undermining of the foundation of the economy. In support of that I again quote Mr. Scully, who had experience for years as the trusted confident of government departments and today has experience in business and finds that the action that ought to be taken is not being taken. Yes, the policy so far attempted, if you can call it that, condemns itself by the experiences that have followed its adoption. We condemn it, and I think the nation as a whole will condemn it. Sir, this policy is impractical in so far as effectiveness is concerned and I think unless the government itself acts to reduce its own unnecessary expenditures, it will continue to be ineffective.
I come now to the recent recommendations made by Mr. Coyne. I think that the house and the country deserve fuller information than they have been given on this matter. Apparently Mr. Coyne, with the blessing of the minister, met with the press and pointed out the need for action in connection with the banks in this country. In his report he states that in order to meet the situation created in the housing industry, as I see it, and the detrimental effects that have followed on the lumber industry of British Columbia and other parts of Canada; in order to bail out the government from the impossible position in which it found itself, he suggested the segregation of savings for mortgage purposes. Yes, it appeared when the government announced that, that indeed here was a governor with a strange device. We in the opposition think a great deal of the Bank of Canada. We know how the banking system in the late 20's and 30's weathered the storm. We know it was Mr. Bennett who decided, when he was prime minister, that there should be a banker's bank and the Bank of Canada was set up. We know that it was to direct policy and that credit should be regulated to keep the economy on an even keel. We know, too, the experience of 1929 and 1930, when the United States banks operated on the basis of advancing money on real estate and when the call came on the part of the depositors they were unable to meet it and went into bankruptcy, so the depositors lost in every part of the nation.

Our banks were traditionally not allowed to enter the mortgage money-lending field. They were pushed into that field. The tight-money situation, which the Minister of Finance now talks about, pushed the banks out of that field for a moment, or for a short period of time during the early months of this year, and then came this novel suggestion, as I have said, that the savings of Canadians are to be pushed into the real estate long-term field, if those recommendations are accepted.
Canada has always been proud of its banking system; it is the envy of people everywhere. I want to view Mr. Coyne's recommendations with objectivity. On the other hand, I do not want to see the public institutions of credit of this nation used as an instrument by the government. I believe that if those plans were carried into effect in the form in which they have been enunciated they would reduce the bankers of this country to a group of sycophants answerable to the government. That to me is a step that should not be taken without grave consideration and decision on the part of the Canadian people as a whole.
The government found itself embarrassed by its tight-money policy, because that policy resulted in a practical cessation of housebuilding and the assigning of housing loans. Then it was that Mr. Coyne made his announcement; then it was that questions were asked in the house; then it was that there was criticism on the part of the president of the Bank of Montreal. The major support the government got for these suggestions was the promised support of the C.C.F. party, which fully endorsed the recommendations which were made.
We endeavoured to get information. The answers given by the minister in no way clarify the situation whatsoever. All they do is postpone any decision until after the election, because the government did not want to take any stand on this matter before the election, hoping against the improbable event of being returned to power and then to act. The Canadian people have the right to have information in this regard, not the uncertain information that the minister gave on March 26. When questions were asked by the hon. member for Greenwood (Mr. Macdonnell) the minister read a prepared statement, and he finally ended up by saying this:
In any case no "radical", "fundamental" or "precipitate" actions relating to the structure of Canadian banking have been suggested, nor are they contemplated by the government.
That is a long way from saying that the government does not intend, if it is returned to power, to do this very thing.


Walter Edward Harris: Mr. Speaker, I give that assurance at once, because what I said there was a quotation from the statement of the president of the Bank of Montreal, and I used his words in order to answer the request that he made in public.


John George Diefenbaker: The minister now dilutes his later statement.


Walter Edward Harris: No, he does not.


John George Diefenbaker: I continue:
Should any recommendations of that kind be made on future occasions,-
He was referring to these changes. The statement goes on:
-they would be subject to full discussion both in the house and in the banking and commerce committee, and would have to be taken by way of amendments to the Bank Act.


Walter Edward Harris: I was asked the question how it would be done.


John George Diefenbaker: Mr. Speaker, this was one of these written statements that the minister read from. The question was asked and the minister had his written answer prepared.


Walter Edward Harris: On a point of order; I do
not want to debate it, but my hon. friend is wrong. What I read is in the smaller print, and my hon. friend is now quoting from my extemporaneous remarks. They were not in the written statement at all.


John George Diefenbaker: I must accept what the
minister says. I read what he said:
I think that is sufficient comment,-
He read the statement that he had made the day before in the House of Commons. 1 continue:
I think that is sufficient comment on the statement issued by the president of the Bank of Montreal. In answer to the other question asked as to the approach that the president made to me, I may say that approach consisted of a statement by Mr. Ball that he felt the question that the hon. member for Greenwood asked of me earlier this month, and my answer in which I said that any discussion of this kind and any changes would be recommended by the government, if by anyone, in the normal way of amendments to the Bank Act, had not sufficiently emphasized the fact that none of these things could occur without government recommendation to the House of Commons, followed by action of the house in either accepting or rejecting these proposed amendments.
I ask the minister now, does he give assurance that the plan announced by Mr. Coyne does not receive approval, is not acceptable and will not in any way be used in the future? Is that what the minister says?


Walter Edward Harris: Well, if my hon. friend wants a short answer I can give it; if he wants a longer answer I will speak in this debate and give it.
The Budget-Mr. Diefenbaker


John George Diefenbaker: I do not want any of
these evasive answers. A moment ago the minister was saying-


Walter Edward Harris: All right.


John George Diefenbaker: He tried to leave the
impression-


Walter Edward Harris: My hon. friend asks if at
any time in the future any government might make this recommendation-


John George Diefenbaker: No, this present government, in the unhappy event of its return to power.


Walter Edward Harris: This government. So far as
I am concerned, sir, and I have not consulted my colleagues because I do not believe that this is a matter on which any decision could be reached in a great many months, if not several years, but so far as the Minister of Finance is concerned, I have no intention of recommending to my colleagues action such as that which is set out in the report.


John George Diefenbaker: Well, that is clear now,
and it is clear I presume, that the cabinet solidarity binds the other ministers of the crown to that declaration, because in the past we have had-we had the experience today- announcements made outside of the house which were not in keeping with declarations made in the house by ministers. I ask the minister also to give the assurance that that statement on his part is binding on his colleagues; otherwise it is meaningless.


Walter Edward Harris: I just made it clear that I
could not do that. I may not be Minister of Finance tomorrow even, and anything that I might say is binding only on myself; it is not binding on the government; but I must say, and I repeat, Mr. Speaker, the government has not considered this and so far as I am concerned I am not going to bring it before the government for consideration.


John George Diefenbaker: I am very glad to have
that admission because it just indicates how this government fears an aroused public opinion; that is all, because two weeks ago the government was straddling this matter-


Walter Edward Harris: Nonsense.


John George Diefenbaker: -and today, in the light of an aroused public opinion, at last we are able to see evidence of the fact that public opinion does on occasion control the actions of this government.
There is another matter to which I want to refer and that is in connection with development policy. I am pleased to see that some action is contemplated in the maritimes although the action is very belated. Over and over again hon. members on this side of the

The Budget-Mr. Diefenbaker house have been asking for action in that regard and have pointed out the position of affairs in the maritimes with the coal industry-in a difficult position, with discriminatory freight rates operating to the detriment of those provinces rendering them unable to market their products in the central provinces and to the need for the development of power because while the resources were there the power was unavailable. The stand of the government as far as power is concerned was that under no circumstances would they co-operate by assisting the provinces in the development of power plants or projects which would have as their effect the development of power.
We asked time and time again for action in connection with the South Saskatchewan river dam and irrigation project. One of the excuses for not taking action that was continually advanced by this government was that to assist in connection with the development of that power would involve interfering in the development of resources that were under the jurisdiction of the provinces and therefore no assistance could be given.
The same stand was taken with regard to the maritimes. Over and over again the hon. member for Saint John-Albert (Mr. Bell) and the hon. member for Royal (Mr. Brooks) have asked for action in this regard and particularly for assistance in the Beech wood project, but that assistance has been denied. Now that the government has changed its attitude in this regard I want to see the government proceed with the South Saskatchewan river dam and irrigation project. There is no reason whatever why action should not be taken in this regard.
Someone may suggest to me that in asking for expenditures on behalf of development I am not realizing the inflationary trend which exists today. The Regina Leader-Post summed up that situation the other day in these words:
Development programs which will increase the supply of consumer goods are the useful prelude to meeting the inflationary trend and threat.
We in Her Majesty's loyal opposition have long pointed out the need of a national development program in co-operation with the provinces to the end that by the construction of those works which in themselves will be self-liquidating and contribute to additional production the future welfare of this nation will be secured, but we have been met by ridicule.
The government, as far as the meagre outline in the budget is concerned, is now at last departing from its previous policy of refusing to co-operate with the provinces in a development plan. This is what we in the opposition have advocated for many years. We have

pointed out the need for opening the north by assistance on the part of the federal government for the building of highways to resources. I could outline any number of possibilities in that connection. In northern Saskatchewan-and I mention this merely as an example-there are available tremendous power resources and mineral resources and the fabulous developments at Uranium city.


Mr. Howe (Pori Arthur):: Who started those?


John George Diefenbaker: Pardon?


Clarence Decatur Howe: Who started the developments at Uranium city?


John George Diefenbaker: The people started them and then the government stepped in and took over the paying proposition themselves.


Clarence Decatur Howe: The government started everything in Uranium city. The people were never there.


John George Diefenbaker: Oh no.


Clarence Decatur Howe: The people were never there.


John George Diefenbaker: We want to see highways constructed to those resources in order to make more readily accessible the development of those things which are necessary in the establishment of a firm and solid economy in other parts of this country. We have advocated this for many years and we still advocate it. We wonder why it is, however, that the government waited until the eve of an election to make any announcement in this regard. We also wonder if it was a matter of coincidence that the Minister of Fisheries made an announcement in British Columbia the other day which in every particular denies the declared policy of this government throughout the years.
We know the reason for the change of attitude with respect to the maritimes. The voices of the hon. member for Royal and the hon. member for Saint John-Albert and of other members in the opposition from the maritimes were simply voices crying in the wilderness until Hugh John Flemming was reelected a second time and the government of Premier Stanfield was formed in the province of Nova Scotia.
The only reason the government intends to act even to the meagre extent revealed in uncertain outline in the budget is the fact that on the eve of an election the results of affairs in those two provinces caused the government to stop, look and listen and to finally act even though it is to a meagre extent. For too long the attitude of this government has been that provincial governments of the wrong political faith do not receive consideration nor their provinces the assistance to which they should be entitled.


Mr. Marlin:: Oh, oh.


John George Diefenbaker: I wish now to refer to the amendment moved by the C.C.F. regarding old age pensions. That amendment reads as follows:
That the amendment be amended by changing the semicolon at the end of the subparagraph (a) thereof to a coma, and by adding immediately thereafter the following words:
"by increasing the old age pension to an amount commensurate with the increase in the gross national product since 1949, which would call for a pension of approximately $75 a month."
I mentioned at the beginning of my remarks that the increase of $6 in old age pensions and the increases in blindness, disability and other pensions was simply a sop to political expediency-


Murdo William Martin: $132 million!


John George Diefenbaker: -a paltry contribution to these people who are in need.
I have read in the press of this nation the interviews that have taken place with those who because of age or other incapacity are unable to take their place in the economic life of this country. They are not asking for more than a fair increase. As I read the statements made by these people from one end of Canada to the other, I find that most of them have said if the government had increased their pension by$10or$12a month they would not have considered it unreasonable. Those statements were made immediately after the announcement of the increase. In only one case that I can recall did anyone suggest it should be increased to more than $60 a month.
I give place to no one in my desire to assist by social security measures in assuring and maintaining freedom from fear on the part of the afflicted and aged. I would be remiss if I were to hold out promises which could not and will not be met. It is quite easy to make promises in the form of amendments when there is no possibility of having to face the responsibility of being in office. I say to my friends of the C.C.F. that I do not doubt their honesty of purpose or their desire to help, but in their subamendment, as I read it, they go far beyond anything that has ever been advocated by their party.
After all they are in power in Saskatchewan and there is nothing to prevent them from giving an additional amount over what would have been a fair increase by the federal government.


Walter Edward Harris: The same in Ontario.


John George Diefenbaker: I am glad you qualify that. I can see my hon. friend is a little disturbed about Ontario and the attitude of its government. He has personal reason to be, I can tell him that.
The Budget-Mr. Diefenbaker
The subamendment must be realized by those who moved it as being impossible of attainment, but what stand did they take in their own province? I have here a report of a statement made by the premier of Saskatchewan the day after the budget. In so far as old age assistance is concerned, the government of Saskatchewan and other provincial governments contribute one-half. This is paid to people in need who are between the ages of 65 and 70 years. The federal government makes its 50 per cent contribution and the provincial government makes its 50 per cent contribution.
You would have thought that the premier of Saskatchewan would have wanted to raise the old age assistance payment to $75. All it meant was that the government of Saskatchewan would pay one-half of that amount to the needy along with what would be contributed by the federal government. After speaking in properly critical terms of the budget, the premier mentioned the $6 increase. I am going to read everything he said so there will be no misunderstanding. I quote from this report:
The provincial government will "certainly match" the federal increase in old age pensions for people 65 to 69, the premier stated, but he didn't believe the boost would even compensate pensioners for the increased cost of living.
"However, we are pleased the $6 increase has been granted. It is small, but I am sure it will be welcome."
The provincial government is ready to raise its share from $20 to $23, he said. "We have indicated to the federal government on a number of occasions that we are willing to pay our share of the increase to the group up to a maximum of $60."
When there was such a willingness to accept responsibility to pay up to $60 and when $75 is the requisite for those in need, why was there no offer on the part of that government to express its willingness to pay half of the additional amount? I think that answers itself. People between the ages of 65 and 70 are in need. As I recall the figures given on one occasion by the hon. member for Winnipeg North Centre (Mr. Knowles), in 1950 some 45 per cent of those over 70 years of age were in need. Make it 60 per cent in need of those over 70 years. Certainly the amount given by this government is inadequate and unjust, it is simply a sop, but on the other hand-


Stanley Howard Knowles: Does the hon. member feel satisfied to leave the responsibility for those between the ages of 65 and 70 years shared between Ottawa and the provinces? Does he not agree with us that it should be a federal responsibility?


John George Diefenbaker: I have argued that before and have agreed with the stand implied in the question asked.

The Budget-Mr. A. W. Stuart


Stanley Howard Knowles: That is the answer to my hon. friend's question.


John George Diefenbaker: It is not at all because $60 is provided for those in need. That is as far as Saskatchewan was prepared to go.


Stanley Howard Knowles: Because we believe it should all be paid from here.


John George Diefenbaker: With that objective I
agree, but it is so easy to spend other people's money. I simply point out that the amount is inadequate; the $6 additional is inadequate. It cannot be justified and this government must be held accountable. An additional amount is necessarily required in order to permit our old age pensioners a reasonable opportunity. I submit that the fixation of $75 at this time is something that I cannot support, having an adequate sense of my responsibility. I am reinforced in that stand by what the premier of Saskatchewan has stated, that he is prepared to make a 50 per cent contribution up to $60.


Mr. A. W. Stuart (Charlotte):: Mr. Speaker, first of all I should like to congratulate the Minister of Finance on bringing down one of the most sound, honest and courageous budgets we have had in this country for many years. Before continuing with my remarks I should like to refer to a statement made just a few moments ago by the Leader of the Opposition (Mr. Diefenbaker). Referring to the Minister of Finance he said that the minister intends to follow the same course next year that he followed this year. I wonder if the Leader of the Opposition has already thrown in the sponge. That statement would indicate to me that he has certainly given up any thought of ever forming a government after the election.


George Harris Hees: Mr. Speaker, on a question of privilege, the Leader of the Opposition said, in the unlikely event that the government should be returned.


The Acting Speaker (Mr. Applewhaite):: Had
the Leader of the Opposition seen fit to raise that question of privilege I might have been called on to hear him, but I do not think that that remark can be made the subject of debate.


Andrew Wesley Stuart: The Leader of the Opposition paid a great tribute to the Tory members sitting in this house who come from New Brunswick. He was indicating to the house and to the general public that the only members from the maritime provinces who are trying to do anything for the citizens of the maritime provinces are those Conservative members who come from that area. It is most pleasing for me to note that in his budget the minister has introduced the very

suggestions that we Liberal members from the maritime provinces have made. Every matter in the budget which is beneficial to our part of the country was brought to the attention of the minister by Liberal members from the maritimes.
These improvements, I realize, are most harmful to the Tory party at this time. The Leader of the Opposition (Mr. Diefenbaker) has just come back irom the maritime provinces, and I believe he came back most disillusioned after he had found out about the way in which this budget had been received in that area. I do not believe it gave him very much encouragement, because, if ever there was a budget which was designed to assist the citizens of the maritime provinces it was the budget brought down by the Minister of Finance a few days ago.
There are many other benefits contained in that budget which will be most helpful not only to the citizens of the maritime provinces but to all Canadians. The hon. member for Greenwood (Mr. Macdonnell) when he spoke immediately after the budget had been brought down the other evening, had this to say at page 2250 of Hansard.
A great deal of what has been done is for the benefit of the people who are able to help themselves.
I wonder if when the hon. member for Greenwood made that statement he was referring to the people of the maritime provinces. Was he referring to the old age pensioners, to those receiving old age assistance, to those receiving blind disability pensions, or to war disabled pensioners in receipt of federal aid? Was he referring to family allowances, to the deduction in respect of medical costs, charitable gifts and so on; or was he referring to the removal of the 10 per cent tax on tea, coffee and other foods which every housewife has to buy?
My thought is that the hon. member for Greenwood was very much disturbed to find that there had been no change in income tax rates which, of course, if reduced, usually provide much greater benefits to those in the higher income brackets. The Leader of the Opposition, when he was speaking this afternoon, made some comparisons between taxation in the United States and taxation in Canada. The hon. member for Greenwood did exactly the same thing when he spoke, and he was most critical of the fact that there had been no tax reductions in the budget just brought down, although they both seemed to think that it was an election budget.
That is why I call this a courageous budget on the part of the Minister of Finance. I believe it might be well at this particular

period to put some figures on the record which will authenticate this comparison between the tax rate in this country and that of other democratic countries, all expressed in terms of Canadian dollars. A single man in Canada gets an exemption of $1,000. His counterpart in Australia gets an exemption of $224, and he must pay tax on any income in excess of that. In the United Kingdom a single man would pay tax on any amount above $385, while in the great and rich country to the south of us, the United States, he would pay tax on everything over $600.
Thus, we allow under our tax law a difference of 40 per cent before we begin to calculate income tax at all-$1,000 in Canada as compared with $600 in the United States. It is in a situation like this that the Leader of the Opposition today swung his arms in great anger about the tax structure in this country being so unfair as compared with that of other countries in the world. Now I would like to put on the record Mr. Speaker, a few more comparisons with regard to married men. In this country a married man gets an exemption of $2,000, while in the United States, which has the highest exemption figure of comparable countries, it is $1,200. In the United Kingdom it is $660, and in Australia $447. These figures, I believe, clearly indicate that no country in the world has a better tax system than this country of ours, or one that is more fair to the people.
I come now to a matter that I am called upon to deal with quite frequently-I refer to the provincial government in New Brunswick, and the Progressive Conservative members in Ottawa who are determined to convince the citizens of our province and of other parts of the country that all the troubles in New Brunswick, and all their tribulations, can be placed on the doorstep of the federal government. The legislature opened in New Brunswick a few weeks ago. Our premier opened the debate on the speech from the throne, and half the time taken up in that debate was spent in criticism of the actions of the federal government toward the province of New Brunswick. A few days later, the debate was ended, and the premier closed the debate, using exactly the same terms, exactly the same criticism, and aiming at the same target-the federal government.
When the budget in New Brunswick was brought down a few days ago, the secretary treasurer started off like this:
New Brunswick needs more federal aid if it is to improve its relative economic position.
We have heard a lot this afternoon about the expenditures of this federal government.
The Budget-Mr. A. W. Stuart The headlines in the same paper which reported those words read: "New Brunswick Budgets for a Record $64 million".
The approach of the Progressive Conservative party just prior to an election is exactly the same as the approach in every province where they are trying to defeat the government in power. They have a greater policy of economy, but the minute they are in the driver's seat they spend more money than was ever known before in the history of that province. When the government of New Brunswick took over in 1952, our total revenue was $52 million. This has been increased to $64 million through the generosity of this government. And still they are begging for more. Yet every bit of their trouble is placed on the doorstep of the federal government. I believe this is most unfair and I believe it is something we must face and deal with as federal members.
The premier of our province also said in his remarks that the rehabilitation and growth of the Atlantic provinces could not be achieved through small federal expenditures. I have yet to hear the premier of our province or any tory member ever make any mention of Camp Gagetown which is one of the biggest projects under construction in this country today. I have yet to hear one of them make a complimentary remark about it and may I say for the sake of comparison, that the cost of Camp Gagetown will be five times greater than the cost of the causeway in Nova Scotia. There will be 2,000 employees the year round at Gagetown, and an annual payroll of about $15 million. The project will lead to the creation of a town of between 12,000 and 15,000 population. I wonder if the tory members from New Brunswick could indicate any industries there which are employing so many employees with so large a payroll.
I might add that this project is taking place right on the premier's doorstep, and that he must know all about it. But he has not said one word about the fact that this is one of the greatest projects that ever came to our province; and I would like any hon. member here to tell me if he has heard anyone pay it a single compliment. To give the house some idea of the magnitude of this undertaking, may I point out that some time ago I asked how many houses had been subject to a federal government contract, how many had been completed, and so on. I found that 143 houses have been completed, 597 were under construction, and that 324 are to be started in the near future, giving a total of 1,059.

The Budget-Mr. A. W. Stuart
Well, Mr. Speaker, no mention has been made of this important project, to be completed at a cost five times greater than that of the causeway-a cost about one-third as large as the whole of the Canadian expenditure in connection with the St. Lawrence seaway. However, not a Conservative in my province has a good word to say for it, though it is one of the greatest benefits that has ever come to the province. Nevertheless, we, as Liberal members, welcome it.
I also realize that when I stand up as a Liberal and contradict anything that has been said by a tory member from our province, I am accused of being a saboteur, of being disloyal, and of many other things which are not too complimentary. It would seem that the tory members from that province feel that they are here to do nothing but criticize, and that no one who defends the government should come here as a Liberal member. I feel, however, that I have that part to play, and when I believe that the government is right I support it and, of course, that is at all times. I do not intend to sit here and listen to abuse and condemnation of a government which has done so much for my province.
Another matter I would like to mention briefly is the fact that Conservatives try to make the people in my province believe that if they did ever form a government here in Ottawa they would make things much easier for us in the maritime provinces. Hon. members know, without my telling them, what benefits we have received from the federal government in my province. Because the hon. member for Royal (Mr. Brooks) has questioned these figures on other occasions, I think it might be well for me to put them on the record at this time. A few moments ago the Leader of the Opposition (Mr. Dief-enbaker) said that provincial governments of a different political faith do not receive consideration by the federal government. The figures I have are authentic and they are for the year 1955-56. In that year the federal government took $45,227,000 in tax revenues from the province of New Brunswick. That was the total amount of taxation taken by the federal government. I am going to give the break-down of the total, but I want to put the total on the record now. In that same year the federal government paid into the province of New Brunswick $126,937,000. I cannot see how any fair-minded person could say that is a niggardly way to treat my province and I cannot agree with anyone who says that.
Let me give the figures for that period for the expenditures by the federal government represented by payments to or expenditures

in the province during the fiscal year 1955-56. Payments for subsidies and taxes are as follows:
Compensation under the Tax Rental
Agreements Act, 1952	
Compensation under the Tax Rental Agreements Act, 1952, section 6, share of net taxes collected from certain
public utility companies	
Statutory subsidies

Payments for contributions, grants and subventions are as follows:
General health grants	
Old age assistance, blind persons and
disabled persons allowances	
Trans-Canada highway	
Vocational training	
To combat spruce budworm infestation Miscellaneous

Direct payments to individual residents of the province are as follows:
Family allowances	 $15,451,000
Old age security pensions	 13,246,000
Pensions (world wars I and II)	 5,044,000
Veterans war service gratuities and reestablishment credits	 136,000
Veterans rehabilitation benefits	 41,000
War veterans allowances	 1,770,000
Expenditures by government departments or agencies within the province are as follows:
Agriculture	 $ 4,253,000
Office of chief electoral officer	 20,000
Citizenship and immigration	 673,000
Finance	 1,072,000
Fisheries	 987,000
Justice	 1,393,000
Labour	 1,489,000
Mines and technical surveys	 71,000
National defence	 30,819,000
National health and welfare	 691,000
National revenue	 1,986,000
Northern affairs and national resources ..	651,000
Public works	 4,596,000
Royal Canadian Mounted Police	 1,325,000
Trade and commerce	 64,000
Transport (including Canadian maritime commission and national harbours
board)	 3,574,000
Veterans affairs	 2,783,000
Then there is the proportional share of the federal government's contribution to the unemployment insurance fund amounting to $1,160,000, loans to veterans under the authority of the Veterans Land Act amounting to $429,000 and interest paid on government of Canada bonds amounting to $9,672,000. These figures make a total of $126,937,000.
That is the amount paid into the province of New Brunswick by the federal government over that 12 month period and in that same 12 month period they took out a little over $45 million. Some members may try to convince me that the government is unfair and is not treating the citizens of my province as fairly as they should be treated but in my opinion those figures are the answer. I think they also apply to the assertion made by the Leader of the Opposition when he said that

governments that are not in line with the federal government are not treated fairly.
Another statement that is often made is that if we had a Tory government at Ottawa conditions in the maritimes would be improved. I often wonder whether those from the maritimes who make such statements really believe them themselves. We all know exactly where the premiers of Quebec and Ontario have stood for years so far as the tax rental agreements are concerned. We all know, if we want to be fair, what a benefit they are to our province. I do not believe there is a Conservative member in the chamber who believes that if we had a Conservative government at Ottawa today the premiers of Quebec and Ontario would be any more willing to share any more of their wealth with us than we are receiving at the present time. I fear greatly that the situation would be just the other way around. I believe that the people of New Brunswick realize that these agreements are their only hope of survival.
As I stated a few minutes ago, federal payments to the province of New Brunswick have increased by about $8 million since 1952. The sum of $8 million means much to the government of New Brunswick and much to our people. I believe that the increases have been much more than anyone visualized five or six years ago. I know that if the premier of New Brunswick at the time when the provincial sales tax was imposed had known that these subsidy payments would be increased to such an extent we would never have had a sales tax in that province. That is why I say that the government we have there today had every reason to remove the sales tax because revenues were increased to the extent that it could have been removed with little difficulty.
When the hon. member for Royal and the hon. member for Victoria-Carleton (Mr. Montgomery) spoke in this debate they referred to broken election promises. I should like to remind the hon. members of broken election promises in my province. We were told in 1952 that the sales tax would be eliminated, that there would be a great reduction in government spending, that the department of public works would call for public tenders for all work under that department, that there would be a reduction in employees in government garages and other government services. Then, a year ago they passed a bill very hurriedly to take care of hospital insurance. At that time the premier announced that they had to get the bill through the legislature immediately in order that they might take part in the plan with the federal government.
The Budget-Mr. A. W. Stuart Of course, that was just before the provincial election. The bill was passed unanimously. There was not a dissenting voice. But the election took place in the meantime and the bill has not been heard of at all since. I believe that the people of New Brunswick are expecting that our premier will see fit to play his part and enter into the hospital agreement which means so much to the people of New Brunswick.
I also remember that at that particular period previous to the election there was discussion about a bridge to be built between Campobello island and Lubec, Maine. Our premier was very anxious to get the engineers of the federal Department of Public Works down there to look over the situation. He was in great haste. He wanted to get the bridge under construction as soon as possible. The provincial government got the data they felt was necessary in order to arrive at the estimated cost, but from that time on it has been a dead issue. Every effort is being made today by the federal government and the state of Maine to try to get some action but it is just impossible, and the premier of our province has refused to pay any part of the cost of the proposed bridge.
After the Minister of Finance (Mr. Harris) replied to a question asked by the hon. member for Royal the other day, the hon. member for Royal said that he wished to know if the figures used with respect to New Brunswick compared with Nova Scotia and Prince Edward Island. Apparently the hon. member has failed to understand that liberalism means exactly the same treatment for all Canadians. There is nothing done for one province that is not done for another, and I do not understand why he would ask such a question. The tax rental agreements, for example, are open to each and every province and if they do not accept them that is up to them. In so far as health insurance is concerned, we are getting a better break than Ontario and Quebec in that a greater proportion of the cost is to be paid by the federal government.


Mr. Brooks:: And less than in some other provinces.


Andrew Wesley Stuart: Since the hon. member has mentioned that, I should like to go back to his speech the other night. This is what he said, as found at page 2614 of Hansard of March 22:
... I think it will take more than the eloquence of the Minister of National Health and Welfare to persuade the old age pensioners who are condemned to live on their old age pensions that they should be satisfied with an increase of $6 a month.

The Budget-Mr. A. W. Stuart
I want to say this, that it will take more than the eloquence of the hon. member for Royal (Mr. Brooks) to persuade the people of New Brunswick he has done so much for them. He failed them completely at a time when he was in a position to give them assistance, and at a time when they needed it. Old age assistance is one matter that should never be mentioned by a Tory member in the House of Commons. No one from New Brunswick should ever mention old age assistance. The record of the Conservative party in this regard is so black it covers the blackest period of history in our province, yet they have nerve enough to get up in the house here and speak about it. When they do that, it is only natural for one to sit back and say, I wonder what they would do if they were in a position to do something? That is what I want to explain.
In 1926, the hon. member for Royal and many others of his party spoke from the platform-very often when I am speaking the hon. member mentions the little red school house, and I can say he made many speeches in the little red school house. They promised the citizens of my province old age pensions and they won an election. Then, they sat back for four years, folded their arms and nothing was done.


Alfred Johnson Brooks: Old age pensions were not in force in 1926.


Andrew Wesley Stuart: In 1927-my memory is better than yours in that regard. In 1930 there was the grand betrayal of all time. It is the only time within my memory when the Tory party used the churches for their own benefit. I will defy the hon. member for Royal to deny this. Application forms for old age pensions were placed in the hands of the clergymen in our province by the members of their party. The clergymen were told to get them into the hands of the old people immediately, because when the election was over they were going to put old age pensions into effect.


Alfred Johnson Brooks: That is not so.


Andrew Wesley Stuart: I could take my oath to this because I was there. When the election was over, the hon. member for Royal was elected again. Then, he folded his arms again and did nothing. This is the gentleman who gets up here today and tries to make the people of this house believe that he is a champion of all pensioners in the Dominion of Canada. When he had the chance himself, and when he could have done something for the people of his own province, and as I have said many times at a time when it was needed, he folded his arms and refused to do anything for them. Now, I do not believe the people down there when they read this

statement of his that it will take more than the eloquence of the Minister of National Health and Welfare (Mr. Martin) to persuade old age pensioners who are condemned to live on the old age pension that they would be satisfied with an increase of $6 per month, will pay much attention to that statement. Let me add to that that in this same period of the thirties, not just old age pensioners but whole families were getting $3 per week from a Tory government and those who did not have families got 20 cents a day and were hidden back in some work camp. These are the people who stand up and say you are not going far enough. My first thought is, what would they do if they were in the driver's seat. I have given you an example of what they would do. They did nothing.
There was also a reference by the hon. member for Victoria-Carleton (Mr. Montgomery) to family allowances. This is another one which does not go too hot with the Tory party. The hon. member mentioned ten cents a day for pensions, and then he mentioned the family allowance cheque. Again, one would think, what would the Tories do if they were in the driver's seat. Well, let us go back to a conference held in Ottawa a few months ago. This is part of the record of the Progressive Conservative national convention of December 13, 1956. This is Grace Hartman of Sudbury speaking, and she said:
I notice in our social welfare section that we made no mention whatever of the family allowances and you'll remember that those were introduced by the Liberal government some years ago and they have taken the credit for them ever since. It seems to me that we. of the Conservative party, should take the initiative at this convention and offer some proposition that will increase them or improve this ruling. Sometimes we women are told that our place is in the home, we're interested in the home as well as in public life. And I would like to know just what it is we're going to be doing about these family allowances. We've covered everything else but that.


The Chairman:: May I ask the Hon. T. L. Smith, of Nova Scotia, who is the chairman of this committee to reply.


The Hon. T. L. Smith:: Mr. Chairman, ladies and gentlemen, I am very happy to say what the view of the subcommittee on this point was. We certainly did consider the question of family allowances and we felt as strongly as one can feel, or a committee can feel, that of course we are in favour of the principle of family allowances and of the continuance thereof. We felt, however, that we were not in a position to recommend now to this convention, an increase in the amount or rate at which these allowances are presently being paid. Therefore, acting on the principle that unless we were recommending something new, it would not be appropriate to suggest a recommendation or resolution to the convention, we did not include a paragraph on that particular point.
Now, that is all the interest they had in family allowances. It was not even discussed. I could read on farther, but I think my time

is rapidly disappearing and that is not necessary. In any event, they did not think the allowance could be increased.
I should like to deal with one more point that was brought up by the hon. member for Royal the other day. He mentioned the fact that today the federal government was taking practically all the tax dollar and leaving nothing for the'provinces or the municipality. I want to put a few figures on the record that I know are correct and the source from which they come is one of the most reliable.


Mr. Charlton:: What is the source?


Andrew Wesley Stuart: The Minister of
Finance (Mr. Harris) and I do not believe there is a better authority in the House of Commons. On the basis of 1953-54 the percentage amount taken actually by each level of government was: federal, 71 per cent; provincial, 16 per cent; municipal, 13 per cent. This ignores the net transfers from the federal to provincial governments of $420 million in the year and the transfer by provincial governments to municipalities of $230 million. Using these corrected figures we get the following result: federal, 64 per cent, provincial 19 per cent, municipal 17 per cent.
Now, in 1939-40 the distribution was this way; federal 44 per cent, provincial 24 per cent, municipal 32 per cent. Since that time we have taken over the full payment of old age pensions, are paying family allowances -we pay all these other social services which were considered to be a provincial obligation previous to that date. Now today if we adjust those same figures taking into consideration our defence costs, we will find-I put the figures on the record: adjustments for defence, $1,250 million; veterans pensions, $250 million; debt charges, $300 million; social welfare, $800 million; federal adjusted net revenue, $1,500 million; provincial adjusted net revenue, $1,183 million; municipal adjusted net revenue, $1,041 million. When that is broken down and we take out the defence expenditures and all the services which we pay now and which were provincial obligations previous to 1939, you get these figures: federal, 40 per cent; provincial, 32 per cent and municipal 28 per cent. We are actually taking today from the taxpayer 4 per cent less than we were in 1940. However, every provincial government in this country will cry to high heaven that they are not getting their share of the taxpayer's dollar. That is what is happening in New Brunswick. All we hear down there anyway is bellyaching; that is all they know. All they can do is complain. The thing that hurts, and it hurts the people there, is the fact that in 1952 we had too much revenue and the payment was increased from $52 million to $64
The Budget-Mr. A. W. Stuart million. They still have not enough. If you gave them $15 million more they would still have not enough. There is a reason for it. They have got too many friends to take care of.


John Alpheus Charlton: You are the last one to talk about that.


Andrew Wesley Stuart: What was that?


John Alpheus Charlton: I said you are the last one to talk about that.


Andrew Wesley Stuart: What do you mean by that?


Mr. Gauthier (Portneuf):: Explain.


John Alpheus Charlton: What do you mean by that?


Andrew Wesley Stuart: I meant they had too many political friends.


John Alpheus Charlton: That is what I meant, too.


Andrew Wesley Stuart: That is exactly what I meant and I will just add, since my hon. friend interjected, that there is not a provincial project in my province on which a Liberal can get a job even if he were starving today.


Alfred Johnson Brooks: It is a falsehood.


Andrew Wesley Stuart: That is correct. I know, and I can take you down there. There is no such thing around Camp Gagetown, which is a federal project. A man is not asked how he voted when he asks for work there. I would not belong to a government that did a thing like that because I am not that narrow minded. I can tell my hon. friend about a job in my own county which was a part-time job because they could only work when the tide was out. A gentleman I know well applied for work and the gentleman building the bridge said he could only give him part-time labour. He said, "Well, I will have to take it until something better comes along." Then, the man said, "You will have to drive back to St. Stephen and get a slip from Mr. Buchanan before I can put you to work." That was part-time work for four or five hours a day on a provincial government project. I can tell you that not only on that project but on the trans-Canada highway project it was a terrific problem for a Liberal to get a job.


Alfred Johnson Brooks: When my hon. friend's party was in power for 17 years Conservatives could never get a job. That was the situation.


Andrew Wesley Stuart: The hon. gentleman cannot tell me what happened for 17 years; I know what happened for 17 years. I am one who never believed that because a man voted against me he had to be starved to death, but that has been the attitude of the

The Budget-Mr. A. W. Stuart Conservative party as far back as I can remember, and my memory is good. That is the way they have been carrying on in our province. Take the Beech wood project that has been mentioned so often in this house. Who looks after the hiring and firing on the Beech wood project?


Alfred Johnson Brooks: The hon. member for Charlotte is the only member in the house who brings cheap, untrue politics into this house, and he does it every time he speaks.


Andrew Wesley Stuart: In reply to that I say to the hon. member for Royal that he thinks he can use everything he likes in this house and I should not reply to him, but I can tell him that as long as I am here- I do not know how long that will be-I am going to reply to him. I have replied to remarks in connection with old age pensions. I ask the hon. member whether he can rise in his place and deny what I said about old age pensions?


Alfred Johnson Brooks: I can, and I deny it.


Andrew Wesley Stuart: I have lived in that province and I know that we went through a period when old age pensions were paid and we did not get a single dollar. There is a little more to it than that. During the seven or eight years that I have spoken of we of New Brunswick paid our proportionate part of federal taxation to take care of the other provinces. The excuse given by the leader of the Tory party in the 1935 election, and he was defeated as a result of this, was that we did not have the money to pay old age pensions. But I can tell the hon. member this. After the Liberals came into power they found the money to pay the old age pensions and they put it into circulation. They took the bill the Tories had hidden away in some pigeonhole; they dusted it off and put it into execution, and they got pensions within 10 months of the time the Liberal government took over. I will tell the hon. member for Royal that the day will come-and it is not too far distant,-when they will take over again, because it will take the people only a short time to realize that some housecleaning ought to be done. When you have one-third of the population on the payroll of the provincial government it is time to do something about it.


Alfred Johnson Brooks: There will be a housecleaning in my hon. friend's constituency the next time.


Andrew Wesley Stuart: That might happen.


Alfred Johnson Brooks: It will happen.


Andrew Wesley Stuart: I am very doubtful that it will happen. I still have faith in the people of Charlotte. I do not believe they


want a Tory to represent them. I am going back to Charlotte with every expectation of being elected again.


Alfred Johnson Brooks: You will be terribly
disappointed.


Andrew Wesley Stuart: I referred a few minutes ago to the project at Beech wood. The gentleman who does the hiring and firing at Beechwood was the provincial Tory member for about 25 or 28 years. Well, there was a time a few years back when those who were in the potato-growing industry were in a very bad way. It was decided that there would be several carloads of potatoes shipped away. They were to be subsidized, given away, or something, and the potato growers were to get a few dollars. The gentleman who has charge of the hiring and firing at Beechwood today let it be known publicly that no Liberal growing potatoes could receive a single nickel. The only policy he had was to give to his Conservative friends. That is the gentleman who is doing the hiring and firing at Beechwood today. If my hon. friend from Royal would like to see them, I can show him letters from Liberals living within a stone's throw of Beechwood who have never been able to get on the payroll and who will never be able to get on the payroll as long as we have a Tory government in New Brunswick, because they will look after their friends. If you do not vote as they vote you can starve as far as they are concerned.
I am going to resume my seat, but I wish to repeat: if the hon. member from New Brunswick, the Conservative hon. member, thinks he can rise in his place in this house and condemn the government with which I am associated without my making some reply, then he has the wrong fellow to deal with. I do not intend this government to be abused when I believe it is right. I have felt it was right from the day I first came here and I shall continue thinking that way until something happens that will change my views. But I intend to support the government; I intend to stand on my feet and condemn any of the propaganda that they bring into the House of Commons.


Stanley Howard Knowles: Will the hon. member permit a question?


Andrew Wesley Stuart: Yes.


Stanley Howard Knowles: In view of his concern about patronage in his own province, will he tell us who recommends the hiring of the persons who do cleaning work in the buildings operated by the Department of Public Works in the city of Ottawa?


Andrew Wesley Stuart: I cannot tell the hon. gentleman that because I am not the Minister of Public Works, but I will tell him this. I know of many who are working in the House of Commons who do not support the Liberal government; that is as far as I am concerned.


Pierre Gauthier: You got your answer.


Stanley Howard Knowles: The cleaners are recommended by the Ottawa Liberal members.


Mr. O. L. Jones (Okanagan Boundary):: Mr. Speaker, the last two speakers have used their time in this debate to cover practically any subject they wished. Under those conditions I am going to deal with a subject that I am very interested in, since my constituents are worried about it at the present time. I refer to the fruit industry. I feel the federal government has a direct responsibility to the industry because in the 1930's, when the industry started to build up in Canada, the fruit-growers received government protection and encouragement. I would draw to the attention of the government the fact that this was included in the horticultural council's presentation made to the government within the last month or so. I would like to quote it:
The protection extended to the fruit and vegetable producers in the early thirties provided the incentive for expansion of production in Canada; an abundance of supply resulted in very reasonable price levels for Canadian consumers. The extent to which that protection against "dumping" has been whittled away, and the Canadian producer left exposed is the cause of the alarm today among Canadian producers, and prompts this "request for action".
It is this question of unfair competition, or so-called dumping, that still plays havoc with our industry that I should like to deal with, particularly in connection with soft fruits and vegetables. The government's present policy, and its definition of dumping, have proved useless in stopping the practice. Actually, it continues to increase, much to the detriment of our producers each year. Early this year the British Columbia fruit growers association passed the following resolution covering the same point, and with your permission, sir, I should like to quote from it:
Whereas heavy crop years in soft fruits occur simultaneously in the western United States and British Columbia, and
Whereas experience has shown that in such years American soft fruit surpluses are dumped indiscriminately on the Canadian market, thus completely disrupting and demoralizing the orderly marketing of the British Columbia crop, and
Whereas provision to prevent such dumping is made in the general agreement on tariffs and trade yet, because of the inadequately defined antidumping clause, enforcement is practically impossible :
The Budget-Mr. Jones
Therefore be it resolved by this 1957 B.C.F.G.A. convention that the executive be requested to petition immediately the federal government to have the anti-dumping clause of the general agreement on trade and tariffs rewritten and clarified so that the "prevailing price" in the country of origin may not be the price prevailing in any isolated local market but must be the average price prevailing in at least six principal markets in the country of origin.
Last year I suggested that dumping could be defined by accepting the Canadian cost of production as a yardstick and any importation at a price below that should be regarded as dumping.
In view of the unanimity shown by the whole organized fruit industry as displayed through their briefs and resolutions which have already been presented to the federal government, I trust the minister will take steps immediately to carry out their very reasonable requests.
I would like now to quote from the brief of the horticultural council. They say:
The nature or form of the competition to which our producers object most strenuously is imports at "distress" prices at the peak or clean-up of American harvesting which frequently collides with the commencement of Canadian harvesting. Under these conditions the American producer may have received a premium price, or at least a good average price on a large proportion of his crop, but his "clean-up" sales can set the market price for a very large proportion of the Canada crop of the same commodity, and prevent any possibility of the Canadian producer selling any portion of his crop at premium prices, or even benefiting to a normal extent from a short-crop condition that might exist in Canada.
No one can convince the farmer of the fairness or equity of a trade agreement which makes no realistic provision to protect a primary producer against this type of imports.
I am not going to take a great deal of time in dealing with this problem because I have already mentioned it and I think the minister is aware of the serious plight of farmers not only in British Columbia but in other parts of Canada through this unfair and unjust competition which is growing by leaps and bounds.
I would ask the minister to remember that at one time this industry flourished under the protection of the government and if they have the same interest now as they did then they should grant the industry the same protection which they accorded it in the past.
In line with my personal thoughts I would also suggest to the minister that a great deal could be done to protect the industry by setting up a board to provide for the orderly importing of fruit and vegetables, for instance through export-import boards, and the setting of appropriate quotas which will first enable the Canadian fruit and vegetable industry to plan for the future which they cannot do today; second, guarantee Canadian

The Budget-Mr. Jones consumers an economical supply of good quality fruit and vegetables at fair prices; and third, provide security for the fruit and vegetable farmers and workers in the industry. This will also ensure fair trades practices and prohibit the unfair dumping of fruit and vegetables into Canada at distressed prices.
I will conclude my remarks concerning dumping by asking the minister to read again the briefs presented by the two main bodies representing fruit farmers in Canada so that he can appreciate the extent of the damage that is being done to that industry.
The convention recently held in Penticton to which I referred earlier also asked for a price support for the fruit industry such as is already given to some sections of our agricultural industry including meat and poultry. I also mentioned their request for minimum support for the current year of at least 25 cents a box on fruit. I trust the government will give consideration to this request for immediate assistance. This industry is ailing but is not beyond recovery if the federal government will apply the necessary remedies. A floor price would be one valuable remedy which the government could apply to give a measure of stability and security to the growers.
Another resolution passed at the convention called for the extension of unemployment insurance benefits to farm workers and particularly orchard workers. I understand that this matter has been given consideration by the Minister of Labour (Mr. Gregg) during the last year or two. Surely the department has found some solution to what appears to be a minor problem of administration. The benefits of this act at the present time are being denied to approximately 100,000 of our primary producers in Canada. I would ask the Minister of Labour to hasten the bringing in of necessary changes in the act in order to extend unemployment insurance benefits to a very essential group in our economy.
I would like now to request the Minister of Agriculture to extend the research work that is presently being carried out in our industry. I appreciate the splendid work that is being done at the present time but I feel that a great deal more could be done with by-products if adequate funds and suitable buildings and equipment were provided. In addition to research into byproducts research could be conducted in relation to marketing, packing and shipping.
I am pleased that at the present time there is a team composed of officers of the Department of Agriculture and members of

our industry who are carrying out research into packing, marketing and shipping in New Zealand and Australia. I hope that when they return with useful recommendations the government will adopt them.
Agriculture in general and those I represent seek just one thing, economic equality with labour and industry or, in other words, a fair share of our national wealth. While Canada as a whole is enjoying general prosperity I would point out that the benefits of this prosperity have not descended equally on all sections of Canada and especially those areas depending entirely on agriculture with the result that many of our smaller communities find it difficult to carry on with the necessary improvements.
I have in mind one such community that is faced with the urgent need to replace its entire irrigation system. For that purpose it has to borrow approximately $270,000 and must find this money on the open market probably at a very high rate of interest because it is a depressed area owing to loss through frost and other conditions that brought depression into the immediate neighbourhood. Failing this the community will have to abandon the whole plan which in this case would mean the ruination of the entire fruit industry in that particular area.
I contend that the Municipal Improvements Assistance Act should be reopened to take care of such areas as the one to which I have just referred. It is true, we might be told, that this act which made money available at 2 per cent for self-liquidating projects was designed to assist municipalities by making capital available at cheap interest during a period of crisis, but may I point out to the minister that a crisis exists today in some of our agricultural communities such as the one I mentioned.
I feel this act was a good one and if it was ever needed in Canada it is needed today to assist municipalities to cope with the increasing need for the building of necessary self-liquidating projects to take care of the natural growth of population and the influx of immigrants.
If the government is willing to reactivate this act to cover the whole of Canada much good could result. Failing that would it not be possible to reopen it as far as the distressed areas are concerned or, if it is the wish of the government, on a regional basis?
I know that after it was generally closed some years ago it was reopened in favour of Quebec when it had ceased to operate in other parts of Canada, and if an exception could be made in favour of Quebec at that time the same principle could apply to these distressed areas now.

I feel that the tight money policy which is now in effect has placed many municipalities in an impossible situation. The growing need for public works and the current cost of borrowing money has caused them to abandon many urgently necessary projects and this situation obtains right across Canada. The reopening of this act would be their salvation and would allow them to play their full role in supplying utilities in the fast growing urban areas.
I would now like to say a word or two on behalf of three groups who I am satisfied did not receive fair treatment in the budget. I refer to blind pensioners, widows of veterans and single veterans in receipt of war veterans allowance. I urge the minister to reconsider these three groups to see if something cannot be done to raise their standards of living to compare with those standards that have been raised slightly. I know from experience that it is almost impossible for a single veteran to maintain decent surroundings or a decent home and provide the necessary food, clothing and shelter on $60 a month. I urge the minister to reconsider the decision he came to with regard to these three groups because what I say about the veterans applies also to the blind pensioners and the widows of war veterans.


Mr. Romuald Bourque (Outremonl-St. Jean):: Mr. Speaker, I rise to compliment the Minister of Finance upon his presentation of a budget which is a great tribute to the wisdom and farsightedness of this administration in that the principal problem of the minister has been to plan his fiscal year on the basis of another financial surplus.
Members of the official opposition may criticize the government and the Minister of Finance as they wish, but they must admit that in their own party record they have never found themselves in such an enviable position. Under the Liberal administration and under the leadership of the present Prime Minister (Mr. St. Laurent) Canada has enjoyed a period of unparalleled prosperity and has at the same time been able to offer more to the citizens of Canada than at any other time in history.
Under the budget we have just received, more than a hundred and fifty thousand Canadians receive additional benefits. Those who decry the prosperity budget certainly do not include those who will be receiving increased old age pensions or increased family allowances. Neither will they include those who are now relieved by a further tax exemption from paying any income taxes, even though they receive the benefits referred to.
The Budget-Mr. Bourque
The disappointed ones are those who are already receiving record incomes and are enjoying to the utmost the second highest living standard in the world. As they drive their cars, own their own homes, look at television and enjoy all the other fine products of modern life, they complain that there is little in the budget for them. They do not need any help. They are doing very well as it is. The minister has instead shown concern for those in need and his budget is designed to help them. For those who think in terms of all the people there is little fault to be found with this budget.
And now may I ask the indulgence of this house for a short while so that I may bring to the attention of hon. members something which I believe is of concern to all Canadians. Several months ago a magazine published in the United States printed an article which seriously slandered the French-Canadian people. Widely distributed in Canada, this article is one which could cause disunity in this country. It is, of course, the right of an editor to exercise his own judgment in what he publishes. But it is not the right of an editor to create dissension and then refuse to permit the other side of the story to be told. Immediately upon reading the offensive article in Esquire magazine I wrote the publisher. I received from him a non-committal answer. I wrote the publisher again and in reply to this letter received the same reply that I had received to my first communication.
We in Canada believe in freedom of the press. But we believe that along with this freedom there must be a sense of responsibility. I believe that the editors of Esquire delight in causing trouble and dissension in this country. They show no sense of responsibility and are not entitled to any consideration on our part.
I wish this statement to go on the record and I wish to read my correspondence with Esquire to go along with it. If these irresponsible editors can distribute in our country their disreputable attacks on one group of our citizens, they can as well attack another group tomorrow. We have iri Canada a serious struggling group of honest magazines. They are swamped by the overruns of a lot of cheap trash published below the border. We go a long way when we allow this trash to circulate here at all; surely we do not have to admit trash which also consists of slanderous attacks on our own people. The letter which I addressed to

The Budget-Mr. Bourque the editors of Esquire under date of December 24, 1956 was as follows:
Gentlemen.
Since your publication came into existence I have been one of your constant readers and for many years have very much enjoyed reading it.
I was somewhat shocked by the statements made in an article published in your January 1957 issue entitled "The Shooting of Alanna Boole" by Gerald Kersh.
I would appreciate if you would publish the attached letter in your next issue of Esquire.
Thank you in anticipation of this favour, I remain.
Sincerely yours,
Romuald Bourque, M.P. Mayor, City of Outremont, Province of Quebec, Canada.
The attached letter, also dated December 24, 1956, reads as follows:
To the Editors of Esquire.
Dear Sirs:
Your many good friends in Canada were shocked and, I am afraid, angered by some of the statements made in the article "The Shooting of Alanna Boole" by Gerald Kersh. They were shocked because they have never found Esquire to be unfair or deliberately inaccurate: and they were angered because there were so many indications of personal prejudice in the author's biased portrait of French Canadians.
Editors can be misled and when they are, I believe it the duty of those who are aggrieved to seek to inform them. As a member of the Canadian parliament, representing a constituency which is both French and English speaking, and as mayor of the city of Outremont which is also a bilingual community, I wish not to protest against an article which was undoubtedly published in good faith, but rather to correct some of the glaring errors in fact and interpretation. I think that you as editors and publishers would wish to be correctly informed, and I think that your readers, particularly those in the United States, have a right to be given a truer picture of their northern neighbours.
It is always difficult for an individual brought up in one language and one culture to judge fairly people who speak a different tongue and have a different cultural background. People of French extraction are prone to look down upon those whose ancestry is Anglo Saxon and to find their manners and customs just as peculiar as their own manners and customs appear to the English. However, when any such individual takes the time and makes the effort to study the culture of others, he soon finds that in every national group there are virtues and qualities that command admiration and respect. This is as true of French-Canadians as it is of any other people anywhere.
To say that the French-Canadian is without culture or good manners is to slander a people who are recognized by their English-speaking compatriots as the main contributors to the culture of Canada. This young country which is notably lacking in many of the old world's cultural attributes has a recognized French-Canadian literature which commands respect in France as well as among educated people in many foreign countries. The leading English critics consistently point to French Canada's group of contemporary novelists and playwrights as the freshest, most invigorating writers in North America today.
Esquire itself, might do worse than commission some articles from Roger Lemelin, Gabrielle Roy or any one of a number of modern French creative

writers. They, and others, have much to say, and they say it in a manner which is both cultured and exciting.
In the field of fine art. French Canada's talented and lively school of expressionists has a wide audience in France as. well as here at home. Its traditionalists are represented in many foreign galleries. The French Canadian is daring in expression and highly skilled in the use of colour.
French Canada has also established an unique record in television drama, a new art form with which even the greatest United States producers and actors are not always entirely successful.
Participation of French Canadian actors in the Stratford Shakespearean Festival opened the eyes of many United States visitors and English speaking Canadians to the French Canadian stage which is a vital, living force in Quebec province.
To say that French Canadians have made no contributions to music is, of course, a statement that can only be founded upon ignorance. Many French Canadians have won world reputations in music; a Pelletier was for many years conductor at the Metropolitan Opera; Calixa Lavallee, the composer of "O Canada", was known as the Father of American Music; L'Heure de Concert, produced in Montreal, is one of the great music programs of North American television today.
No number of words can, of course, portray a people's culture to another. Such a culture is a discovery each one must make for himself. Every year, friendly people from the United States come to visit French Canada by the thousands. They, I am sure, take back an entirely different picture of their hosts than the one that has been presented to them in Esquire. They find here a friendly, hospitable people, rich in tradition, gay in manner, fond of good music, good and stimulating conversation. They will not find here an Old France or a European province, but a North American France, speaking and honouring the same French language but adapting to it, as do all people of all languages, the idioms and the nuances of their region and their surroundings.
The culture of French Canada is here for all time. It is traditional, it is true but above all it is a living culture and not one to be despised or belittled by those who do not share it.
As a French Canadian, proud of my heritage. I have learned to appreciate and understand the traditions and culture of the United States. I can distinguish between, but do not discriminate against, the culture of New England and that of the Middle West. With my fellow Canadians, whether English or French, I seek not uncritical praise but rather understanding. And that, I am sure, would be the wish also of the editors of Esquire.
Yours very truly,
Romuald Bourque, M.P.
Mayor of the City of Outremont,
Province of Quebec, Canada.
I received the following letter dated January 8, 1957. It was a circular letter, to which had been added my name:
Dear Mr. Bourque:
Thank you for your comments on "The Shooting of Alanna Boole," by Gerald Kersh, which appeared in the January issue of Esquire. We always appreciate a word from readers, even if it is a chiding one.
In reply, but not necessarily in retort, permit me to say that since Esquire is not a magazine of opinion-that is, it contains the comments of contributors but does not guide or direct their points of view-this often leaves quite a bit of latitude on the part of the author. We judge an article on its

merits, for style or interest or other content: but in this case of a distinguished writer such as Gerald Kersh, who is certainly qualified to speak for himself, we would not alter his point of view within certain limits of taste even if we were to disagree with it. We are, therefore, pleased to pass along your reactions to author Kersh, who will also be obliged to you for your courtesies.
Meanwhile, with only a passing glance at the many complimentary articles we have published about Quebec over the years, I hope that your pleasure in the Quebec report by Richard Joseph, to appear in our forthcoming May issue, will more than compensate for your disappointment in the present opus.
Sincerely,
Frederic A. Birmingham.
And to this I replied on January 22, 1957:
Dear Sir,
Your letter of January 8, 1957, intimates that you are not willing to permit those who do not agree with Gerald Kersh's estimate of French Canadians to answer his insulting and unreasonable charges. Your attitude surprises me since I have always believed that you, as all other responsible editors, believed that freedom of expression extended to those who are attacked as well as those who are the attackers.
The views expressed by Mr. Kersh are obviously his own and not those of Esciuire. However, since you made space available to him to air those views, and presumably paid him well for doing so, it seems only fair that those whom he attacks should be allowed to respond, particularly when they do not ask to be paid for so doing.
No writer, however talented, should expect to have all his statements go unchallenged. In the case of Mr. Kersh, who seems to be unknown in this country, the right to reply is even greater because he obviously writes from prejudice rather than experience and appears to me to be a completely irresponsible individual.
In Canada, there are approximately four million Canadians who are French speaking. In the United States, I believe, there are more than two million people who still look upon French Canada as home. It is surely not a policy of Esquire to deliberately insult these people and deny them the right of rebuttal.
Your rights as an editor are not disputed. You obviously have control over everything that appears in your publication. But your readers have some rights, too. These include the right to hear both sides of the story. The fact that you are publishing an article on Quebec in a later issue does not constitute an answer to the charges made by Mr. Kersh.
The policy of the Canadian government is one which favours the exchange of ideas between nations. No tariffs are imposed upon United States or any other foreign magazines entering this country. We favour the free exchange of views. But when the free exchange, which means proper representation for both sides, is denied by a publisher himself, then the time has come when the desirability of unhindered distribution of that publisher's magazine in this country may be seriously questioned.
Your respect for your French Canadian readers is obviously very slight; your refusal to permit these readers to defend themselves against unprovoked insult is indefensible.
Sincerely yours,
Romuald Bourque, M.P.
Mayor of the City of Outremont.
I received a reply to that on January 24,
1957-the same letter that they had already
The Budget-Mr. Bourque sent me-the circular letter they had sent me on January 8. To this I wrote my final letter dated February 12, 1957.
Dear Mr. Birmingham:
Surely, the courtesy of an intelligent reply is not too much to expect from an editor or publisher. The same form letter received in response to two personally written letters of protest cannot be considered either as good manners or good public relations for a publishing company such as yours.
In good faith and with goodwill, I took the time to write you last December regarding what I considered to be unfair and unjustified comments on one-third of the Canadian people published in Esquire last fall. I believed that as responsible editors, you would wish to provide space in your letters column to a reasonable presentation of the other side of the story. Apparently, I was mistaken. On January 8, 1957, I received a curt reply indicating that my views were of no interest.
Because I still believed that no editor would willingly be placed in a position of refusing a rebuttal to a prejudiced article, I wrote to you again, and on January 24 I received a copy of the same form letter I had previously received. This may simply indicate that you do not read your mail, or it may be that you do not have any interest in reader reaction to what you publish. '
Strangely, I along with many other Canadians, am just this week in receipt of another form letter from your company, this time urging us to become subscribers to Esquire. Surely, you insult our intelligence.
In Canada, as in the United States, we have long enjoyed a tradition of freedom of the press. This privilege however, is one which should be deserved and which should not be abused. Any publication which seeks to divide one section of the Canadian public against another or which seeks to hold up to scorn and ridicule a third of our population, no longer deserves the right of unhindered distribution through the Canadian mails.
Many foreign publications circulate freely in Canada, entering this country without duty and free of any Canadian taxation. They are admitted because they add to the exchange of information between countries and contribute to our knowledge and culture. A few publications are banned from entry either because they are politically subversive or because they are immoral and indecent in character. Publications which deliberately seek to create dissension in Canada could come within either of these classifications.
To the troubled world which exists today, the United States is seeking to provide enlightened leadership. Millions of your dollars are being spent to promote understanding and friendship in Asia and other parts of the world. Next door, the United States has a neighbour whose friendship does not need to be bought but whose friendship can be imperilled by reckless and irresponsible treatment by editors of magazines which circulate in this country. We cherish our good relations with the United States too greatly to permit them to be endangered by such irresponsible editors
The growing antagonism to the United States resulting from attitudes and opinions expressed in some United States magazines is a matter which is already causing concern here and which has reached the attention of your president.
I would ask the courtesy of a reply and the assurance that you will publish my first letter and that you do not intend to continue publication of unfair and thoroughly prejudiced attacks upon mv countrymen.	'
Sincerely,
Romuald Bourque, M.P.
Mayor, City of Outremont,
Province of Quebec, Canada,

The Budget-Mr. Hees
And to this I received a final answer from Esquire on February 8, 1957.
It reads as follows:
Dear Mr. Bourque:
Thank you for your recent letter and for your interest in Esquire magazine. We found your comments most interesting and appreciate your taking time to express your reaction to the magazine's content.
Unfortunately, we are able to print only a very few of the many letters received; however, time and space restrictions permitting, we will publish your letter in a future issue of Esquire.
Please feel free to write again, telling us your views of Esquire.
Cordially,
Esquire, Inc.
A. T. McIntyre Sound and Fury


George Harris Hees: 

THE ROYAL ASSENT

[Stage Direction]
A message was delivered by Major C. R. Lamoureux, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the Honourable the Deputy Governor General desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the house went up to the Senate chamber.
And being returned;
Mr. Speaker informed the house that the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bills;
An act for the relief of Leonard Bloom.
An act for the relief of Helen Mary McEachran Cole.
An act for the relief of Dorothy Frances Auger Delacobis.
An act for the relief of Patricia Jean Jones Robinson.
An act for the relief of Gwendoline Stedman Adrain.
An act for the relief of Joyce Bernice Good Taylor.
An act for the relief of Jessie Pearce Meti.
An act for the relief of Maud Lenore Wheeler Lanctot.
An act for the relief of Patricia Anne Wylie Houstoun Patience.
An act for the relief of Anita Marinier Shaver.
An act for the relief of Mary Matilda Chatfield Eldridge.
An act for the relief of Phyllis Minnie Reid Foster.
An act for the relief of Harry Leo Metham.
An act for the relief of Dorothy Cumming Ryan.
An act for the relief of Robert Allan Taylor.
An act for the relief of Eta Krupnick Caron.
An act for the relief of Camille Emile Bunlet.
An act for the relief of Catherina Lassahn Schwartje.
An act for the relief of Lewis George Joy.
An act for the relief of Harvey Clifford Yetman.
Ah act for the relief of Marie Rose Lina Patricia Guertin Theberge.
The Royal Assent
An act for the relief of Jean Prefontaine.
An act for the relief of Emma Rosetta Rule Fuglewicz.
An act for the relief of Joan Monica Evans Schwarz.
An act for the relief of Diana Mary Beatrice Glassco Cumming.
An act for the relief of Edith Chatfield Gossage.
An act for the relief of Mary Frances Crosbie Kirkham.
An act for the relief of Elizabeth Trefry Cahusac.
An act for the relief of Dudlay Nurse.
An act for the relief of Aldo Ermacora.
An act for the relief of Anastazia Suchodolaska Matiosaitis.
An act for the relief of Joan Simonne Ghent Brooks.
An act for the relief of Philip Tamborino.
An act for the relief of Muriel Martha Margaret Wilkins St. James.
An act for the relief of Boris Varvariuk.
An act for the relief of Stefania Stella Rosiu Nahorniak.
An act for the relief of Douglas Pinkney.
An act for the relief of Doris Amelia Carter Nicolle.
An act for the relief of Aldona Dodon Kulczycki.
An	act	for	the	relief	of	Elizabeth Catherine
Baggott Allarie.
An	act	for	the	relief	of	Edward Alfred Le
Comey.
An act for the relief of Margaret Mary Ellen Morninge Hartwell.
An act for the relief of Charlotte Ellis Elkin
An act for the relief of Shirley Anne Julian Boyd.
An	act	for	the	relief	of	Georgette Paquette
Senecal.
An act for the relief of Pierrette Beaudry Dennis.
An act for the relief of Catherine Phyllis Reid MacDonald.
An act for the relief of Grace Alice Williams Jones.
EckfordCt f°r thS reUef °f °lga Hel6n Descyca
An act for the relief of Patricia Mary Shewan Chalmers.
An	act	for	the	relief	of	Edith Beryl Jewett
Gagnon.
An act for the relief of Gwyneth Owen Young Douglas.
An act for the relief of Beverley Carol Wilson J3arnes.
An act for the relief of Katharine Kimball Little Blake.
Rose 3Ct f°r the relief of Frances Elizabeth Lyon fenowaRief°r ^ relief of Sylvia Elizabeth Good-
An act for the relief of Anne Griffith Brown. Ritchie^ ^ ^ relief of Dorothy Ellen McCulloch
An act for the relief of Marie Rose Elizabeth Giroux Lefrancois, otherwise known as Colette Giroux Lefrancois.
An act for the relief of Dorothy Amelia Ashmore MacDonald.
An act for the relief of Frances May Cousins Stone.
An act for the relief of Loma Clare Bianchi Shields.
An act for the relief of Edna Hall Powell Tannahill.
An act for the relief of Marion Ruth Bronfman Hoffer.
An act for the relief of John Fraser McLean.
An act for the relief of Rene Dauray.
An act for the relief of Clarence Ronald John Emberg.
An act for the relief of Elizabeth Joyce Cole
Fraser.
[Stage Direction]
The Royal Assent
An act for the relief of Joseph Rolland Forest.
An act for the relief of Bessie Holmes Saunders.
An act for the relief of Sarah Spiegel Wigdor.
An act for the relief of Joyce Western Dolan.
An act for the relief of Christina Muriel Jean Leard Kowal.
An act for the relief of Pauline Marguerite Dastous Bourgon.
An act for the relief of Marie France Jose Therese Fasbender Rousseau.
An act for the relief of Mary Klodin Freeze.
An act for the relief of Zigurds Berzins.
An act for the relief of Tobia Betze van Lier Franken.
An act for the relief of Marthe Brais Laurence.
An act for the relief of Miriam Fridman Herszlikowicz.
An act for the relief of Cleo Joseph Ladouceur.
An act for the relief of Elizabeth Mabel Freestone Lachance.
An act for the relief of Marion Campbell Stewart.
An act for the relief of Jean MacRae Barnett.
An act for the relief of Anita Roberge Fournier.
An act for the relief of Louise Yvette Ruth Dumais Jacobson.
An act for the relief of Noella Jacques Primeau.
An act for the relief of Joan Perl Finfer Weber.
An act for the relief of Jacques Alfred LeGault.
An act for the relief of Rina Cirl Reich Nutovic.
An act for the relief of Harold Ernest Woodrow.
An act for the relief of Winnifred Matthews Forrester.
An act for the relief of Clara Price Kimmel.
An act for the relief of Margaret Nelson Sime Jackson.
An act for the relief of John Howard Burland Webb.
An act for the relief of Katharine Puobis Dynes.
An act for the relief of Edward Kotapski.
An act for the relief of Julija Rinkeviciute Strelis.
An act for the relief of Samuel Weniger.
An act for the relief of Marie-Yvette Laurette Petit Levesque.
An act for the relief of Lennard Gordon Spurrell.
An act for the relief of Marjorie Edwina Elizabeth Eke Stanley.
An act for the relief of Joseph Jacques Robert Mackay.
An act for the relief of Sylvia Slutsky Steinhart.
An act for the relief of Margaret Frances Dear-mond Bonner.
An act for the relief of Alice Katherine Sorensen Engel.
An act for the relief of Deirdre Joan Lang Srb.
An act for the relief of Lily Brigham Hall Fallon.
An act for the relief of Margaret Cameron Brown Gravenor.
An act for the relief of Naim Shaul Goorji.
An act for the relief of Roxcina Viola McPherson Lippiatt.
An act for the relief of Lillian Annie Wagner Fahy.
An act for the relief of Pauline Jean Stoakley Ramsay Porter.
An act for the relief of Allan Graham Bennett.
An act for the relief of Chana Paya Trifskin Cupchik.
An act for the relief of Victor Edward Drembo.
An act for the relief of Doris Silversides Harper.
An act for the relief of Lily Claiman Neiss.
An act for the relief of Abraham Sztajnhart, otherwise known as Abraham Steinhart.
An act for the relief of Elizabeth Hill Silver.
An act for the relief of Gaston Bedard.
An act for the relief of Mary Tuskewich Gashler.
An act for the relief of Muriel Gamache McCrea.
An act for the relief of Maitabel Horwitz Johnson.
An act for the relief of Laurette Lacombe Paradis.

An act for the relief of Claude Christopher Richard Luard.
An act for the relief of Joseph Elie Claude Lacelle.
An act for the relief of Muriel Audrey Connor McLeod.
An act for the relief of Margaret Ragna Erickson Hunt.
An act for the relief of Francois Richer LaFleche, otherwise known as Francois Pierre Patrice Joseph Richer LaFleche.
An act for the relief of Florence Helen Leslie Redston.
An act for the relief of Jeannine Thauvoye Pastuszko.
An act for the relief of Ellen Catherine Norma Hogan Liddell.
An act	for	the	relief	of Abrasha Brainin.An act	for	the	relief	of George Henry Eaton.An act	for	the	relief	of John Bernard Finucane.An act	for	the	relief	of Anne Marie Marguerite
Victoria Melchers Harwood.
An act for the relief of Estelle Frances Demaio Parr.
An act for the relief of Helmut Josef Wagner.
An act for the relief of Therese Filion Robert.
An act for the relief of Elizabeth Mary Gnaedinger Johnson.
An act for the relief of Peggy Mary Trim Bodaly.
An act for the relief of Arthur John Chatham.
An act for the relief of Margaret Louise Martin Bowden.
An act for the relief of Margaret Joan Carol McCurley Decaire.
An act for the relief of Jean-Paul Audette.
An act for the relief of Donald Edmund O'Neill.
An act for the relief of Joseph Robert Gilbert Croteau.
An act for the relief of Eve Giasson, otherwise known as Lucien Giasson.
An act for the relief of Ingrid Malten Prokopp.
An act for the relief of Edward Douglas Taylor.
An act for the relief of Jacqueline Waite Chew Keen.
An act for the relief of Stanley Smith Wilson.
An act for the relief of Marjorie Alice Holdron Thorbergson.
An act for the relief of Irene Kluehnyk Shvshko.
An act for the relief of Beatrice Lillian Sldaway Mudry.
An act for the relief of Bernard George.
An act for the relief of Helen Rose Bickerdike Ovenden.
An act for the relief of Catherine Violet Mooney Leger.
An act for the relief of Laurice Michel Malouf.
An act for the relief of Helene Victorine Monseur Sharpe.
An act for the relief of Kenneth Franklin Hallas.
An act for the relief of Joan Betty Mae Barnard Laframboise.
An act for the relief of Lemuel Alvin Henry Ward.
An act for the relief of Joseph Raoul Guy Felix Labelle.
An act for the relief of Gene Koklyte Gedvila.
An act for the relief of Lillian Martin Cyr.
An act for the relief of Ange-Aimee Jacqueline Lacoste Paquette.
An act for the relief of Francois Yip Lim Lesage.
An act for the relief of Lorna Charlotte Brooks McConnery.
An act for the relief of Thomas Jeremie Foulds.
An act for the relief of Evelyn Gladys Douglas Fox.
An act for the relief of George Johnstone Gray.
An act for the relief of William Ross Macdonald.
An act for the relief of Marie Therese Ibbotson Collins.
An act for the relief of Donna Ruby Stallworthy Black.

An act for the relief of Mildred Edith Shaw Boulard.
An act for the relief of Shirley Edythe Fairlie Scarff.
An act for the relief of Lily Stall Dixon.
An act for the relief of Hazel Gladys Rees Webb.
An act for the relief of Violet Kert Hausman.
An act for the relief of Angelina Szpilakowska Rzasa, otherwise known as Angela Szpilakowska Rzasa.
An act for the relief of Ludmila Eremeeff Mazaraky.
An act for the relief of Mary Elizabeth Williamson Miller.
An act for the relief of Phyllis Shirley Moore Lariviere.
An act to amend the Canadian Wheat Board Act.
An act respecting The Life Underwriters Association of Canada.
An act to incorporate Oblate Fathers of Assumption Province.
An act respecting Canadian Pacific Railway Company and certain wholly owned subsidiaries.
An act to amend the Quebec Savings Banks Act. ^An act to amend the Export and Import Permits
An act to incorporate Alaska-Yukon Pipelines Ltd.
An act respecting Alliance Nationale.
An act to incorporate The Kings Mutual Insurance Company.
An act respecting Canadian Co-operative Credit Society Limited.
An act respecting The Governing Council of The Salvation Army, Canada East, and The Governing Council of The Salvation Army, Canada West.
An act for the Establishment of a Canada Council for the encouragement of the Arts, Humanities and Social Sciences.
An act to amend the Canada Shipping Act.
An act to amend the Canadian Farm Loan Act.
An act to amend the Export Credits Insurance Act.
An act to Implement a Convention Between Canada and the United States of America for the protection, preservation and extension of the sock-eye salmon fisheries in the Fraser river system, signed at Washington on the 26th day of May, 1930, and a protocal thereto signed at Ottawa on the 28th day of December, 1956.
An act to amend the Merchant Seamen Compensation Act.
An act to amend the Municipal Grants Act.
An act for granting to Her Majesty certain sums of money for the public service of the financial year ending the 31st March, 1957.
At six o'clock the house took recess.

AFTER RECESS

The house resumed at eight o'clock.


[Stage Direction]
The house resumed consideration of the motion of Hon. W. E. Harris (Minister of Finance) that Mr. Speaker do now leave 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).
The Budget-Mr. Hees
George Harris Hees: Mr. Speaker, when the call from the other place came a few minutes before six o'clock I was saying that in the five years between 1948 and 1953 foreign investors contributed two-thirds of the additional capital supplied to our oil and gas industry, more than two-thirds of the additional capital supplied to our mining and smelting industry, and just over half of the additional capital supplied to our manufacturing industries. The indications are that this process has increased during the past three years.
Government spokesmen try to explain this situation away by claiming that Canada is merely going through the same process which the United States passed through at the height of its development period. Figures prove this contention to be completely untrue.
The year 1914 was the peak year for foreign investments in the United States compared to its national income.


Walter Edward Harris: What year?


George Harris Hees: 1914. At that time the United States had a population of 94 millions, a national income of $45 billion and foreign-owned assets in the country totalled $7.5 billion, or 15 per cent of the national income.
Today in Canada we have a population of 16 millions, a national income of approximately $23 billion and foreign-owned assets in this country amount to $15 billion or 65 per cent of our national income. On a per capita basis, foreign owned assets in the United States in 1941 amounted to about $75 per person. In Canada the per capita figure for 1953 was $790, for 1954 it was $822, for 1955 it was $860 and it is $940 today. And so we see, Mr. Speaker, there is no similarity between the situation which existed in the United States at the time when its foreign investment compared to its national income was at its height and the situation in Canada today.
The United States retained control of its development and we are losing more and more of ours as each year goes by. I believe that to be losing control of our industry and natural resources is a very serious situation to be faced by a young and growing country such as ours. The question is, of course, what are we going to do about it?
I believe that what we must do is to work out a program by which we will do a great deal more of our own developing than we have done in recent years and thereby retain a far greater control of our industries and resources than we do today.
The next question, of course, is how is this going to be done? I believe it can be done by taking five constructive steps. The first is to revise our taxation system so that

The Budget-Mr. Hees
the incentives which are made available to Canadian development companies will be at least as favourable as those provided by the United States government to American companies investing in Canada.
One example of how the government is making it difficult for Canadians to compete for ownership and control of their natural resources is in the oil and gas industry. The United States government allows an American company to write off the entire bonus price paid for the drilling rights on an oil reservation. The Canadian government permits no write-off whatever. This enables United States companies to outbid Canadian firms because they know they will be allowed to write off the entire bonus price which they have paid if the area proves to be non-productive.
Another example of how the Canadian government is discriminating against Canadian oil and gas companies is in the matter of depletion allowances. The United States government allows depletion allowances of 274 per cent of gross income to the limit of 50 per cent of the net income. The Canadian government merely allows a depletion allowance of 33J per cent of the net. The more generous depletion allowances which the United States companies receive puts them in a far better position to carry on exploration and development than Canadian companies and that is the main reason why they have done so much more of this work than we have.
Another example of how the Canadian government places Canadian industry in a less favourable position is in the matter of research. In Great Britain and the United States all expenditures for research are allowed as tax write-offs whether they be capital expenditures or current expenditures. In Canada the government merely allows a write-off of 5 per cent of the taxable income of the previous year unless the minister makes some special concession and even then of course the company must wait anywhere from six to nine months before they know what the minister's decision will be.
Research is needed most after a bad year or when a company is just starting to operate and that of course is the time when taxable income is at its very lowest. This simply points up the unreality of the government's approach to this whole problem.
The second step which I suggest the government should take is to create by budgetary measures an economic atmosphere in this country which will induce new industries to start up and present industries to expand.
One such measure would be the introduction of a graduated corporation tax which

would apply to new industries and would be spread over the period it is estimated that a new industry would require to get on its feet.
Another suggestion would be a graduated corporation tax on protfis between, let us say, $20,000 a year and $50,000. At the present time a company pays 20 per cent tax on profits up to $20,000 a year and then on the next $1,000 of profit it pays the full tax of 47 per cent. This provides very little if any incentive to a small company to branch out into the sphere where it could be considered a medium sized or big business with all the additional requirements and headaches this implies.
Still another suggestion would be the granting of accelerated depreciation on plants and equipment to a new company so that it would be enabled to write off its investment more quickly and induce those who might be thinking of going into such an enterprise to more readily embark upon it.
The third constructive step which I suggest is that we should create a national industrial development board which would work with the provinces, municipalities and transportation companies to obtain maximum concessions for potential industries, and by advertising these concessions make Canadian businessmen aware of the opportunities that are awaiting development.
The fourth step I suggest would be to provide an incentive to United States companies who are developing Canada to increase the proportion of their stock which would be owned by Canadians by offering tax concessions in proportions to the percentage of stock held by Canadians.
The fifth step I suggest is that we create in the mind of the average investor a preference for sound development enterprises over investment in bonds. I believe this could be done through films, by speeches by leading statesmen, by editorials in our leading newspapers, and by literature put out by our financial houses to advise businessmen and Canadians of the great opportunities which exist for investment in the development of this country.
In conclusion, I believe that if we will take these steps we can finance the great industrial development of which this country is capable and at the same time retain control of that development here in Canada. United States and foreign capital is of course most welcome but it is one thing to invite investment in our country and another to allow outsiders to take over the economic control of it. I believe it is up to us to see to it that by our vision, initiative and courage we retain control of the future development of our own country.


Mr. J. A. Byrne (Koolenay East):: Mr. Speaker, there are some disappointments in this budget for some of us, but in the main I am sure it will be accepted by a large majority of the house and, it follows, by a large majority of the people of Canada. I intend of course to support the budget when the vote is taken and to vote against the amendment which will be before us later this day. There are some things in the budget which are of great interest to British Columbia, and also in the estimates which have been before the house for some time, but I think one of the most important announcements of government policy that has been made in many years in so far as British Columbia is concerned is the announcement of new policy in connection with the development of power in British Columbia, more specifically in the Columbia basin.
The announcement made in Vancouver the other day by the Minister of Fisheries (Mr. Sinclair) will I am sure be met with enthusiasm and great joy in all parts of British Columbia, and particularly in the southern mainland which faces a power shortage within the next few years, and in both Kootenay East and Kootenay West which comprise an area which in all probability will become the industrial empire of America as a result of this development. There is no reason why our industrial expansion should not match that of the north of the United States Northwest Pacific area where because of the power made available by the construction of the Grand Coulee and other dams, the production is worth something like $10 billion annually. We should be able to match that production when the vast power potentials of the Canadian Columbia have been developed.
Another important aspect of this announcement is that it will put an end forever to the offers and rumours of offers from power interests in the United States to come to Canada to build dams and weirs for the purpose of controlling the water flow for their own use. Certainly the Kaiser deal will be as dead as a mackerel. As you know, that deal was effectively stunned by the International River Improvements Act which was passed in 1955.
The announcement of this policy should advance the completion of the Mica creek project by at least six years. We realize that no single administration or no single enterprise could raise the money necessary to build this huge dam which in all probability will cost close to half a billion dollars when all the installations and equipment are considered. An offer has been made to the province of British Columbia under which
The Budget-Mr. Byrne the government of Canada is prepared to sit down with them to discuss this matter at their pleasure. It is certainly something for which we are truly thankful and I am sure the province generally shares my enthusiasm.
This offer should also expedite the negotiations which are to take place in May between the Canadian government and the United States authorities with respect to the downstream benefits on the Columbia and Kootenay rivers. For that reason the building of the Libby dam should be brought nearer to reality. The building of the Libby dam will bring about great improvements in my riding as it will have the effect of controlling the floods on the Kootenay flats and thus enhancing the value of much of that property to a great extent. It would open up the flats to use by smaller farms and the growing of wheat, which is not profitable on that type of land, could be discontinued and other types of produce grown which would bring in higher returns per acre.
There are other matters in which the federal government will participate to a large extent in British Columbia, more particularly in Kootenay East, and I refer to the activities of the national parks branch which is also under the energetic direction of the Minister of Northern Affairs and National Resources (Mr. Lesage).
This is in the Kootenay, Yoho Park and, of course, the adjacent parks of Banff and Jasper which are just across the border in Alberta and he will have spent $10 million on roads and other construction. I believe that on trunk roads alone they will have spent about $7 million by the end of 1957. The trans-Canada highway passes through two of these national parks, the Banff national park and the Yoho national park, and in the construction of the trans-Canada highway, which is entirely a federal responsibility in the national parks, a further $11 million will be expended. This means, I understand, that by next year the highway from Banff through to Kamloops will have been virtually completed up to trans-Canada standards, with hard surface.
The federal government has offered within the past year to incur considerable expenditure on the Golden to Revelstoke section of the trans-Canada highway. I understand that an agreement has been reached with the provincial government to apply the 90 per cent formula to the cost of the trans-Canada in this section. It is, indeed, a very costly section of the highway; snow sheds, tunnels and so forth will be required, and we are very grateful that in the not too distant future we shall have a highway on

The Budget-Mr. Byrne which we can travel directly to Vancouver from the riding of East Kootenay.
Now I am going to make a suggestion for further expenditure by the Department of Northern Affairs and National Resources and this expenditure will, of course, be requested specifically for the riding of East Kootenay. Not because it is the riding of East Kootenay but because a section of the highway leading to the four national parks that I have just mentioned is a highway upon which there is converging traffic from all the midwestern states of the United States and the western United States.
One of these highways is known as highway 93. It stretches from the heart of Mexico to Alaska, and when the provincial government has completed a short section of the highway that is known as Elco cutoff between Elco and Roosevelt there will be sufficient highway leading to these parks, and as I have said, a highway going directly from Mexico to Alaska. A lot of traffic will go through there.
The other converging highway leads from Kingsgate, the second largest port of entry in British Columbia and joins the northbound highway at Cranbrook, and the traffic during the summer is almost unbelievable. The section I have in mind reaches from 13 miles north of Kimberley to Radium. I would suggest that inasmuch as this is an access highway road to these four national parks and since it is certainly not in such a condition that it is capable of handling the traffic that it is bearing, and will have to bear, the federal government should take into consideration building this highway on a 50-50 basis with the province of British Columbia.
We were indeed grateful for an announcement that was made some weeks ago that the federal government is prepared to assist in the building of a highway parallel to the Alaska panhandle, and open up the rich mineral and forest resources of northern British Columbia.
The premier of British Columbia, when advised of the announcement by the Minister of Fisheries (Mr. Sinclair) recently, was sceptical of the offer regarding the power project, and said he would prefer to speak to the Prime Minister. He obviously does not realize that the cabinet in Ottawa does not operate as a "one man show" as they do in British Columbia, but that each and every minister, when he makes an announcement is speaking for the Prime Minister (Mr. St. Laurent) and for the entire cabinet. The premier made the observation that he was not concerned about speaking with the travelling Minister of Fisheries. Undoubtedly


the Minister of Fisheries does get around, and gets things done. He is a very capable minister doing a good job for British Columbia as is the Minister of National Defence.


An hon. Member:: Where is he now?


James Allen (Jim) Byrne: We are indeed thankful for their efforts.
I had not intended, Mr. Speaker, to mention any of the speeches which have been made in this house during this debate, but I have just read through one that was made by the hon. member for MacLeod (Mr. Han-sell) in which he denied that the Social Credit government ever made an offer of $25 a month. Well I happened to be in Alberta when that election campaign was on, and I can assure you that there was no misunderstanding; everyone was under the impression that they were going to get $25 a month if the Social Credit government was elected.


Mr. Hansell:: The hon. gentleman must have been wearing his knee trousers, because it was 25 years ago. But I was not so gullible as most people were.


James Allen (Jim) Byrne: Mr. Speaker, I would like now to say a few words about the old age security program.


An hon. Member:: A poor program.


James Allen (Jim) Byrne: I hear someone say it is a poor program, but in my opinion it is the best program in existence in the world today. It is not a welfare program, as many would have us believe. The welfare aspect of old age pensions was left to the provincial governments at their own requests when the British North America Act was revised for the purpose of bringing in old age security, and this is the section dealing with these representations.
94 (a) It is hereby declared that the parliament of Canada may from time to time make laws in relation to old age pensions in Canada, but any law made by the parliament of Canada in relation to old age pensions will not affect the operation of any law, present or future, of a provincial legislature in relation to old age pensions.
I have taken the trouble, Mr. Speaker, to go to the library and get some of the reports of the various provinces on their welfare programs and 1 have done some study of the Dominion Bureau of Statistics figures which appear in the Canada Year Book. Old age security provisions have resulted in a much lower welfare cost to the provinces, and that is the statement which I intend to prove here this evening.
Before dealing with the province of British Columbia, I will give the national picture. As far as old age pensions are concerned in 1951 there were 300,000 persons receiving

old age pensions at a cost to the federal government of about $100 million and a related cost to the provinces which, as you know, were on a cost sharing basis. The number receiving federal old age security in 1956 was nearly 900,000, at a cost to the federal treasury of almost $400 million.


Edmund Davie Fulton: All in British Columbia?


James Allen (Jim) Byrne: So that the cost to the federal government has increased from $100 million to $400 million so far as old age pension payments are concerned. In 1951 the British Columbia welfare department paid $11,420,000 to the recipients of old age pensions. In 1956 the provincial government paid $5,425,714 to recipients of old age security and old age assistance. I believe that was prior to the $5 increase in the supplement but nevertheless that was in 1956. Therefore in 1956 the welfare department of British Columbia paid less than half as much towards old age pensions as it did in 1951.


Mr. Hahn:: Does that not prove how prosperous they are under the British Columbia government?


James Allen (Jim) Byrne: The hon. member should wait to hear the end of the story. Last year federal payments to recipients of old age security in British Columbia amounted to $44,657,286, so it is quite obvious that the province of British Columbia, as well as other provinces, because of the savings it is making through the introduction of old age security, is well able to accept its share of the welfare payments necessary to those who are in special need.


Mr. Patterson:: How much are they paying now in supplementaries?


James Allen (Jim) Byrne: The $6 increase announced by the federal government in payments to recipients of old age security amounts to almost as much as the total of all payments for old age security in British Columbia.


Charles Edward Johnston: It is still just a subsistence allowance.


James Allen (Jim) Byrne: Now I come to the province of Saskatchewan and we will see how much they saved.


Edmund Davie Fulton: Would the hon. member mention the cost to the taxpayers of the increase?


James Allen (Jim) Byrne: I did not get the hon. member's question but I assure him I am under no illusions. I realize that all these payments are a cost to the taxpayer.


Edmund Davie Fulton: Then do not talk about handouts from the federal government.
The Budget-Mr. Byrne


James Allen (Jim) Byrne: I am making no excuses.


George Carlyle Marler: Make your speech later, Davey.


James Allen (Jim) Byrne: I have never said anything to indicate that there is not a responsibility to raise that money. My hon. friend will probably never have that responsibility but he will probably sit there for a number of years yet and keep on asking for more payments and more grants but always vote against a tax increase.


Edmund Davie Fulton: You are the one who is talking about hand-outs from the federal treasury.


James Allen (Jim) Byrne: The hon. member will probably sit in that seat for many years to come and keep on asking for these things, as he knows he will never be in a responsible position. In 1951 Saskatchewan paid $6 million in round figures, toward old age pensions. These are dominion bureau of statistics figures. In 1956 that province paid $1,182,096 for old age assistance and as a supplement to those over 70 years of age, they paid the stupendous amount of $869,871, making a total of $2,051,967, in 1956 compared with $6 million in 1951. A saving of $4,000,000.


Mr. Ellis:: Are you going to include the value of the medical services?


James Allen (Jim) Byrne: That province too is in the happy position that it has savings brought about by the institution of old age security with which to make a very substantial contribution to those receiving old age assistance and those over 70 years who qualify under the means test.


Alexander Malcolm Nicholson: How about hospital and
medical care?


An hon. Member:: Other provinces provide that for the aged.


Stanley Howard Knowles: Which ones?


James Allen (Jim) Byrne: I can understand the irritation.


Alexander Malcolm Nicholson: What about hospital care?


Mr. Speaker:: May I remind hon. members that the house is now in session.


Edmund Davie Fulton: The hon. gentleman should
have regard to the facts.


James Allen (Jim) Byrne: We hear so much from the
C.C.F. member about payments for old age assistance and old age security but the strange thing about it is that-of the three far western provinces-British Columbia, Alberta and Saskatchewan-


Alexander Malcolm Nicholson: Include Manitoba.


James Allen (Jim) Byrne: Wait a moment and I will
come to Manitoba.


Alfred Claude Ellis: That is a touchy spot.

The Budget-Mr. Byrne


James Allen (Jim) Byrne: Only Saskatchewan does not pay a supplement to those receiving old age assistance, and the house must remember that old age assistance is only paid to those who are in dire need. They have to show extreme need but that province does not pay one cent in old age assistance supplement.


Alexander Malcolm Nicholson: What about Manitoba?


James Allen (Jim) Byrne: The province of Saskatchewan, however, make a contribution to those receiving old age security payments who can qualify under the means test and have reached the age of 70. As I have said, the figure is $869,871 and represents an average of $8 per person.


Alexander Malcolm Nicholson: What about their medical
care?


Alfred Claude Ellis: What about the cost of medical services?


James Allen (Jim) Byrne: If the hon. member will give
me time to go through the welfare services of the other provinces he will find they are no better in Saskatchewan than in the other provinces which have gone ahead and done their duty to their citizens.


Alexander Malcolm Nicholson: What about Manitoba?


James Allen (Jim) Byrne: The hon. member has asked
about Manitoba. I want to explain to the hon. gentleman that I spent half an hour in the library this morning-


Mr. Knight:: Doing what?


James Allen (Jim) Byrne: -trying to find a report on
Manitoba. I understand they have one there but I think one of the C.C.F. members may have it in his office now.


Alexander Malcolm Nicholson: The Minister of Justice (Mr. Garson).


James Allen (Jim) Byrne: In considering the record of
the Liberal administration in Ottawa arid elsewhere there is one thing of which I am quite confident; the people in need of welfare assistance in Manitoba under a Liberal government are far better off than those in Saskatchewan.


Alfred Claude Ellis: Oh, oh!


Stanley Howard Knowles: The Liberal government of
Manitoba does nothing for old age pensioners.


James Allen (Jim) Byrne: They may be entitled to different payments but I am sure the payments measure up.


Alfred Claude Ellis: No wonder Manitoba does not
put out a report.


James Allen (Jim) Byrne: I come now to the province of Ontario. I am, of course, making comparison's to show why I feel that the provinces that have insisted on maintaining


their right to render welfare assistance-it is a right and I think a worthy one-should look after the welfare of their citizens. In 1951 the Ontario government paid $30,065,394 to recipients of old age pensions under the 1927 act. In 1956 the total cost to the province of Ontario was $4,919,000, a saving of $25 million. Now, I am sure, if they feel so determined about assisting the needy as the hon. Leader of the Opposition (Mr. Diefenbaker) sounded this afternoon the Ontario government could come forward with a supplementary payment.
Old age security payments by the federal government in that same year amounted to $130,296,095. When we take out the approximate $5 million that the provincial government paid in the way of old age assistance, that leaves a difference of $125 million. The federal government paid $125 million more to the recipients of old age pensions in Ontario than did the province of Ontario.
Now, there was a little matter brought to my attention this morning, an article in the Globe and Mail-I do not read it often-in which welfare minister Cecile of the province of Ontario had this to say:
Welfare Minister Cecile yesterday expressed doubt that all the funds collected by the federal government for old age security pensions is actually used for that purpose.
Well, I think that is reflection on the intelligence of all the members of this house. We know that for three years there had to be payments of between $40 million and $50 million from the treasury to make up the difference between the taxes which were set aside for that purpose and the actual payments themselves.


Stanley Howard Knowles: Be fair, even to a Tory, and read the rest of it.


James Allen (Jim) Byrne: Then, the minister went on to say that our old age security program appeared to be inferior to that of the United States. I have told you something of our old age security program, and I am going to outline in a few words the old age and survivors insurance of the United States. I find that 85 per cent to 90 per cent of all the wage and salary earners and self-employed persons are covered under this insurance. The most of the state and municipal employees are not covered, and there is a large percentage of farm labour that is not eligible. The average benefits are a little higher for single persons. The average benefit for a single person under that scheme is $62 per month. Of course, if he is still employed or has any earnings of any appreciable amount, he cannot receive it. There is a means test, whereas under the old age security program one receives the $46 when he reaches 70

without qualification. If the man is married, his wife also receives $46, making a total of $92. The married recipient in the United States receives $65 and his wife, upon reaching the age of 65 receives half of his payment. If he has any income or is still employed, he does not receive the pension. I have pointed out that a Canadian, under the same circumstances, may receive $92 at the age of 70, and his income is not questioned. Old age security is on a universal basis and no one is barred. This fact must be taken into account when the government considers increases in old age security payments.
It should be recalled, as I pointed out, that in British Columbia the supplement is $20 per month so that a man and his wife may receive up to $120 in that province. Now, that is as good as anything that the United States has. I make no apology for that. The state of California may have something better, I do not know.


Edmund Davie Fulton: And the state of Oregon and the state of Washington.


James Allen (Jim) Byrne: In the United States a participant pays into this fund at the rate of 2J per cent of his wages up to $4,200 so that that would mean a maximum of $90.50 whereas under our old age security program the maximum is $60. An employer pays the equivalent amount, a maximum up to $90.50. If a person is self-employed, such as doctors, lawyers and so on, he pays up to $135. There is another feature about the United States plan and that is for the first five years no one received anything after the plan was instituted. After 15 years of operation the maximum being received was $23. I think it is generally understood in this house that when the principle of old age security came under discussion, we could not possibly make it on a contributory basis, otherwise there would have been this long waiting period before anyone would have been covered. We took care of all those who had made some savings for old age, and the $40 made up for the depreciation of the dollar. In this way, their old age was in a measure secured.
In the United States there was a waiting period so, all in all, when we are considering the statement made by Mr. Cecile, I think we can say that it was made without proper study of our system. Of course, I understand that he is new in the job and he does not have the same understanding of the situation as his predecessor had. His predecessor came to Ottawa and agreed in every respect with what was being done in the way of old age security. That is all I have to say.
28, 1957
The Budget-Mr. Patterson


Murdo William Martin: And it was contrary to his own premier's view and contrary to the view of the hon. member for Eglinton (Mr. Fleming).


Stanley Howard Knowles: Obviously this speech could stand a little help.


James Allen (Jim) Byrne: I do recall reading in Hansard today that the premier of Ontario was very much in favour of the system of pay-as-you-go, which is the system followed for the old age security program. I do not like to waste my time, but I did read some of the remarks by the hon. member for Eglinton. It was quite obvious that he went right down the line with Premier Frost. We have no reason whatever to be ashamed of our old age security program. It is the best in existence today.


Alfred Claude Ellis: I wonder if I might ask the hon. gentleman a question? Does he feel the $6 increase in old age security to be adequate?


James Allen (Jim) Byrne: If the hon. gentleman had not been doing so much yacking while I was speaking, he would have understood the import of my remarks.


Alexander Bell Patterson: Mr. Speaker, we have listened to a very interesting speech from the hon. member who has just resumed his seat. We did appreciate very much the splendid tribute he paid to the provincial government in British Columbia.


James Allen (Jim) Byrne: I forgot to tell you that it was a Liberal government that brought in the supplementary payment.


Stanley Howard Knowles: You had better make this speech all over again.


Alexander Bell Patterson: We all realize that since the Social Credit administration took office there, legislation has been introduced which has had a tremendous effect and influence upon the development of that province. We are very happy that the member for Kootenay East recognizes and acknowledges that fact.
He has made reference to the announcement made by the Minister of Fisheries just recently and, of course, everything that was said the next day in the house as a consequence of that announcement; but I know the hon. member for Kootenay East will pardon us if, in view of the history of Liberal election promises in the past, we accept this one with the usual proverbial grain of salt.


Stanley Howard Knowles: Bag of salt.


Alexander Bell Patterson: The hon. member for
Kootenay East said that there are some disappointments in this budget. Well, Mr. Speaker, I think that is one of the understatements of this budget. The overstatement was that he is sure that the people

The Budget-Mr. Patterson across Canada are going to accept it with enthusiasm and great joy. It would seem that there is a slight contradiction in those two statements, rather a paradox, but possibly he will be able to explain it at some other time.
I believe, Mr. Speaker, the minister should be aware by this time-


James Allen (Jim) Byrne: The disappointment is over
there; the budget is pretty good.


Alexander Bell Patterson: I thought, by the look of your face and by your words, you were very disappointed. That is how it was interpreted on this side, anyway.


James Allen (Jim) Byrne: Sometimes I do not make myself clear.


Stanley Howard Knowles: You had better go back to the library.


Alexander Bell Patterson: I am sure the minister should be aware by this time that the budget which he brought down on March 14 has failed to receive the endorsation of the people across the country. Following what has become recognized as Liberal policy, the minister bluntly states that we can expect no concessions so far as income tax reductions are concerned. Then he goes on to exhort the people of Canada to spend less and save more, in other words, lest the little bit that is left after they pay their taxes should plunge our whole economy into the dark seas of inflation. I think the minister should realize that all that the great majority have left after they pay their taxes would not have too much effect so far as inflationary tendencies are concerned. I would think his exhortation sounds a little out of order and a little ridiculous when we consider all the factors which are involved.
We are all aware, of course, of the high rates of taxation and the burden of taxation that are resting upon the people of this country. I believe that one man who recognizes this most clearly is the Minister of Finance himself, because I remember his first year as Minister of Finance when he was quoted in the press as having said that the people of Canada were labouring under a very heavy load of taxation. I believe he stated at that time that he was amazed at the patience with which they bore this burden and still carried on with their responsibilities from day to day. Therefore, I say I am sure the minister is aware of that fact, as are all the other people who live in this great country of ours. We think of the high rate of taxation; we think of the constantly rising cost of living.
I received from one of my constituents just the other day a letter in which she referred
[ Mr. Patterson.]

to the efforts to increase old age pensions. This constituent referred to the fact that she was in full accord with it; she wanted it but, after all, there were many others who were facing severe difficulties because of the continual rising cost of living, and that those who are on what might be called moderate incomes were faced with very great difficulties in trying to make ends meet. This particular constituent expressed the hope that the government would come to the realization that something would have to be done to take care of this very unsatisfactory state of affairs.
Then, we think of the production of consumer goods. The other day my colleague, the hon. member for Macleod (Mr. Hansell), spoke along this line and referred to the fact that we are constantly hearing the statement that there is a shortage of goods. I read in a periodical the other day a reference to the $11 million that the province of Alberta is distributing as dividends to the people of that province. It said it just means that there will be $11 million more to spend on goods that we have not got. Why, bless my soul, who said that, anyway? How can they prove it? I think we all realize that our merchants are carrying on an allout campaign to sell goods. The hon. member for Macleod mentioned some of them. He did not mention some of the others, though. Nevertheless, he indicated that everywhere we look we find a tremendous sales program being carried on to dispose of goods. Yet they tell us that there is a severe shortage of goods and therefore we have to save more. I was just looking at the paper today and I saw great full-page advertisements advertising foodstuffs. May I say that foodstuffs are one of the greatest needs of our people across the country. Oh, they are buying a certain amount of foodstuffs, but if they had the money they could buy goods and food that would be better for them; it would give them a balanced diet and help them to enjoy health to a greater extent than they are enjoying it at the present time.
There are all these facts that I have mentioned. There is the demand for markets. Then, when we consider government expenditures we ask ourselves, what is the government itself doing and what is the minister doing to try to implement his own policies of saving more? I do not think there is any indication whatsoever in the budget that that is being accomplished or being attempted. Therefore, I suggest that the policy recommended by the minister of saving more will have the result, if followed, of increasing the inventories which are now on the shelves, in

the stores and in the factories. Unemployment would result; depression would come, and I know that none of us wants to see that happen.
I think the whole picture indicates that this government acts only when it is pushed hard enough; it waits not only until public opinion points out the direction, but until public sentiment becomes so insistent that to oppose it is political suicide.
In his budget speech the minister tried to leave the impression, for election purposes no doubt, that millions of Canadians are going to benefit from the provisions enunciated in the budget; but I trust that we shall all realize the benefits are so meagre that they will hardly be noticeable at all in relation to the whole economic picture across our country.
Nevertheless, we do welcome the crumbs that fall from this government's table. With an estimated production of $31J billion, and a surplus of close to $500 million, the best that this government can do is dole out a few more pence to each of our senior citizens, our disabled, our blind and our war veterans.
No wonder there is a general feeling of resentment across this country over the inadequacy of these proposals submitted and over the inability of this government to come up with a better answer to the problems that are facing us at the present time.
A great deal has been said about the tight money policy of this government and I am not going to say very much about it. We all know that our whole economy received a severe jolt when that policy was announced some time ago. We saw its effects immediately upon developments across our land. We saw its effects and we still see them in the sharp decline in house construction; it is not too much to say its effects are evident in the complete stoppage of house construction. Its effects backed up into our lumber and allied industries.
I was speaking to a lumberman just the other day and I asked him how the lumber business was. He replied that the lumber business is dead and the result is that the men engaged in lumber and sawmills and allied industries throughout the country have been thrown out of work.
We see the effects of the tight money policy in that particular relationship and we see its adverse effects on the small businesses in our country. I had the opportunity of visiting a certain area some time ago and someone told me that in a small town in that immediate vicinity there were six small businessmen who were going out of business within a week's time because
The Budget-Mr. Patterson of the effect of this government's policy or, as they might express it, the policy of the bank. Nevertheless because of the tight money policy many-yes, even hundreds- of our small businessmen are being forced to the wall and placed on the unemployment list. The policy adopted and supported by this government has had an adverse effect upon our whole national development program and our entire economy.
I would now like to speak with reference to old age pensions. We all know that concerted efforts have been made throughout the years to get the government to recognize in more adequate measure the debt we owe to our senior citizens. I do not know exactly what the hon. member for Kootenay East (Mr. Byrne) was trying to imply in his remarks but I think he was trying to say that after all this is a provincial responsibility.
I was very glad to hear the hon. member say that old age pensioners in the province of British Columbia receive a supplemental payment of $20 a month which is the highest supplemental payment in Canada and, as was pointed out by the hon. member for Kootenay East, it is perhaps one of the highest paid in North America. If this federal government would come to the point where it would recognize the fact that the provincial governments and municipal authorities have obligations to fulfil and leave them a large share of the tax dollar then there would not be such a demand on the federal government. The federal government takes the lion's share of the tax dollar and when the provinces and municipalities try to discharge their responsibility they find they do not have sufficient income and are forced to come to the federal government which looks upon them with a rather paternal and patronizing attitude and says, "We will do this. We will give you this and we will give you that".
I know that we all realize the hardships confronting our senior citizens. I do not need to emphasize them nor take the time to depict the plight in which many of our senior citizens find themselves. I am sure that each hon. member of this house including the Minister of Finance is aware of their problems.
The proposal was made in the budget that old age pensions would be increased by $6 a month. I recently read a statement which appeared in the Chilliwack Progress on February 27. This was a statement made by the Chilliwack Senior Citizens' Association prior to the definite announcement that the increase would amount to $6 a month. At

The Budget-Mr. Patterson that time the rumour was that the increase would be between $5 and $10. The statement is as follows:
This branch contends that these amounts as quoted are an insult and disgrace, particularly as a large number of old age pensioners are people who years ago contributed to the present prosperity of this country.
I also have an editorial which appeared in The West Ender on February 20, 1957, a community newspaper published in the city of Vancouver. The editorial was entitled, "Will you Sell Your Vote for $5?" and although I do not intend to read the whole article I shall read the first sentence:
No doubt we should be used to Ottawa's continued and callous refusal to recognize the disastrous effect the ever-increasing cost of living is having on our old-age and veteran pensioners, but it still came as a shock to hear of the miserable five or ten dollar a month increase which has been proposed.


Mr. Habel:: They must feel the 5 per cent for provincial tax.


Alexander Bell Patterson: What is that used for?


Joseph-Alphonse-Anaclet Habel: The same as the money we are collecting.


Alexander Bell Patterson: A little further down the editorial states:
To anyone who knows the amount of pressure that has been put on the government during the past three years or more, to recognize the dire need of our pensioners, it is equally sickening to see a miserly five dollar pension increase being used as vote bait for the coming election.
No thank you, Mr. St. Laurent, we are not selling our vote for five bucks.
Now, what do we find? I have read newspaper articles and received communications to the effect that at least in British Columbia and perhaps elsewhere the rents of many people in receipt of pensions of various kinds are being raised to a degree which more than offsets the increase in their pensions. It may be that the householders involved have been kind to pensioners and provided them low rental accommodation through the years. I do not know if that is the case but perhaps the situation is that now the pensioners have received an increase the landlords feel they should have an increase in the rent. In any event what is taking place results in our senior citizens and those in receipt of war veterans and disability pensions being no better off now than they were prior to the announcement being made concerning the increase in their pensions.
We have before us, Mr. Speaker, a subamendment proposed by the C.C.F. party and in a very few minutes we will be voting on that sub-amendment. As I have said we are all aware of the difficult circumstances in which many of our aged citizens find themselves. We believe that everything possible

must be done to help those who have passed their time of productive labour and because of circumstances have been unable to provide security for themselves in their later years. We in this group have always maintained that in arriving at a decision as to what these pensions should be we must take into consideration several main factors; the needs of the people, the cost of living and the productive capacity of our nation. We believe that in proposing an increase of $6 a month this government has indicated its unwillingness to consider these basic and important factors.
We are convinced that the proposed increase is not only inadequate and niggardly, it is not a true expression of the wishes of the Canadian people with respect to our senior citizens and those in the other categories named. So for these reasons we will vote for the subamendment, not because we necessarily agree that $75 is the proper rate but as a vote of protest against the inadequacy of the government proposal now before us.
As we go along in the budget speech we find that our blind citizens are going to receive consideration. There is another matter to which I should like to refer and I believe this has been referred to in other debates and in other years. I know I have mentioned it and I know many other hon. members have also. We have had requests from across the constituencies and across the country for an allowance free from a means test to take care of guiding services for our blind citizens. I have received a number of communications from Legion branches in my constituency. I have received letters from city and municipal councils asking that I support this proposal. We have had as well communications from many labour unions and individual citizens who are interested in the plight of our blind friends.
Therefore we are asking for an allowance free from a means test to take care of those special expenses which are peculiar to blindness. I do not know just why the Minister of Finance (Mr. Harris) has refused to heed this request and bring in something along this line. I suppose he has a reason; he may think it is included in or covered by the other increase proposed; but I feel that this request should have been acceded to and an allowance granted in this connection.
We have as well an announcement relative to the veterans legislation. Of course we welcome the changes that have been forecast in the budget address, but we all recognize that they are still inadequate. These changes in the veterans legislation seem to provide an outstanding example of something I have said before, that the government seems to wait until it is forced into the position where

it has to make some concession and act on the requests. We find that some of the gaps are gradually being closed, that some of the needs are being met, but all we get is a little bit at a time when the pressure seems to be so strong and so insistent that they hardly dare resist it.
We appreciate that the request has been acceded to and that the rate for married recipients of war veterans allowances is to be raised from $108 to $120. But I say again that there is still a group of veterans who are in a difficult situation. I refer to those recipients of the war veterans allowance who because of health or economic conditions in their locality are not able to supplement their incomes by casual earnings. These people are still in dire straits and they must have help. They need help and I trust that something will be brought in to improve the lot of this particular group.
We note that the permissive ceilings on earnings have been raised. In the case of a single person the request was that this ceiling should be $1,200 but the government has decided to raise it only to $950. There was a request for a $2,000 ceiling for married veterans but this now stands at $1,620. I suppose it means that the veterans will have to keep on putting on the pressure, making their requests and plugging away so that eventually the government may get around to acceding to their request in this connection.
Pensions have been raised slightly but still they are not up to what has been required and requested by the Legion in the various briefs they have presented.
There is another matter in connection with succession duties I should like to mention briefly. This is the third time there has been reference to succession duties in budget addresses of the Minister of Finance. I seem to remember that there was an indication back in 1955 that amendments to the act were being considered and would be brought in. There was a reference made to it last year and I have here a note of a question which was asked by the hon. member for Eglinton (Mr. Fleming) and the reply given by the Minister of Finance was as follows:
The bill is almost ready for consultation with my colleagues. I would expect that we could have that done within the next couple of weeks. I would doubt very much if we could pass the bill at this session.
This year the minister comes along and says that he is sorry, nothing can be done; the bill is not ready and therefore nothing is going to be done in this connection. I should like to remind the minister again of the requests that have been made by many throughout the country. Two recommendations have been made, first that instead
The Budget-Mr. Patterson of exempting an estate up to $50,000 this amount be made a true exemption deductible from the value of the estate before the calculation of duties. The second is that one-half of a deceased husband's estate be considered for tax purposes as having been earned by his widow and therefor not subject to succession duties when it passed to her on his death.
Here again I suppose all we can do is to plead with the minister to give this matter consideration. If it should happen, and we certainly hope not, that he is Minister of Finance next year under a Liberal government, then we hope that consideration will be given to these matters.
There is a matter which I have brought to the attention of the minister, I think for three successive years. This has to do with deductions of donations to charitable institutions.


Walter Edward Harris: The hon. member is in favour of what we have done in the budget, is he?


Alexander Bell Patterson: No.


Walter Edward Harris: Vote against it and you will lose votes in your riding.


Alexander Bell Patterson: Is a hungry man going to vote against receiving half a loaf of bread because he cannot have a whole loaf?


George Carlyle Marler: I am well accustomed to that technique.


Alexander Bell Patterson: I did not hear what the minister said; he is mumbling in his beard. We regret that the minister has not yet found it possible to grant the request I made that the rate for donations be raised to at least 20 per cent. When I mentioned this the first time the minister showed little interest. Last time he did not show very much interest. This year I do not think he is showing any interest because he thinks he has brought in a measure which takes care of the matter. I assure him that he has not.
The hon. member for Hamilton West (Mrs. Fairclough) referred to this particular matter, but there is one thing in the hon. member's speech to which I take exception. She said :
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.
I want to assure the hon. lady that there are still a great many who believe in that type of financing and who practice it. Last year I placed on the record details of the systems used in Great Britain and the United States. I shall not take time to put the details

The Budget-Mr. Patterson on record again, but I do hope the minister will look over the record and check the figures.
In the United States, up to 20 per cent of an individual's gross income paid to charitable and religious organizations may be exempted from income tax, and I think that is a reasonable basis upon which to work. The minister asked me if I did not agree with what is being done now. I think there are, possibly, two objections. One is that a great many people are going to be able to claim deductions when they do not actually turn the money over to these organizations. The other is that those persons who go beyond the 10 per cent permitted are not receiving any assistance whatsover. I think the minister should take another look at this question, and work it out. I am not saying it should be 20 per cent without vouchers; I think if we want to get credit we ought to be able to supply the vouchers from our charitable organizations. All these organizations give them, so there should be no difficulty about it.
This government professes concern for the finer things of life, and I am not saying they do not believe in those things. But I say: why not confirm that by providing this incentive to those who support these worthy causes?
Mr. Speaker, I have just one other matter to deal with. I am advised I have about five minutes left. I want to refer to the minister's statement regarding the tariff on potatoes. I am not going to read it-it is to be found at page 2224 of Hansard. We all realize the inequity of the present tariff arrangement between the United States and Canada whereby for those shipping potatoes to the United States the tariff is $7.50 a ton up to a certain amount and then is doubled at $15.00 a ton, though potatoes imported from the United States enter duty free with the exception of six weeks during the year, and that is in midsummer.
I do not know who was responsible for that. I would hate to think that even a Liberal government would accede to a proposition of that sort. But it seems this arrangement was made at some time, and it has never been changed. Concerted efforts have been made to alter it and the minister agrees that some change is desirable. In this connection I think a statement made by the acting minister of agriculture of the province of British Columbia, Mr. Kenneth Kiernan, is relevant. Referring to this situation he states that the potato tariff as it stands can bring a state of bankruptcy to the British Columbia growers.
I received in the mail today a copy of The Grower, and on page 12 we find an article headed: "Potato Growers May Stage

March on Government". These are obviously not British Columbia growers-it is too far to march, I guess. But this article states:
The potato growers of New Brunswick are up in arms. In a wire to Mr. L. F. Burrows, secretary of Canadian Horticultural Council on March 16, they said: "Our potato growers not happy since tariff on potatoes not included in budget. Talking strongly chartering train for Ottawa next week to protest. Think if U.S.A. not agreeable our government should have used escape clause. What agricultural items did U.S.A. apply tariff on under this clause? Preliminary meeting tomorrow afternoon."
With Maine potatoes flooding eastern Canada markets, and Quebec markets demoralized, the anger of the New Brunswick growers is readily understood. It is nearly two years since the Canadian potato industry asked for adjustment of the tariff on potatoes and it now looks as if the boiling point has been reached.
I sincerely hope that in the very near future negotiations which are apparently now under way will be concluded and we shall find a more favourable situation as far as tariffs are concerned, not only with respect to potatoes but also with respect to other agricultural products.
(Translation):


Mr. Raoul Poulin (Beauce):: The Budget-Mr. Poulin that prices vary quite considerably from one year to the next, and even during a given production season. Under such circumstances, the producers do not know when to sell their product. They have to toss a coin-if I may use this expression-with the result that a number of them are losing vast amounts of money, because they failed to sell at the right moment. For instance, last year some producers marketed their product in the early summer for a price that was far from satisfactory to them, while probably as many others did not sell at all, and are still likely carrying their stock.
I can understand that a company, co-operative or otherwise, may be in a position to do that, but the individual producer generally cannot afford it. What complicates the situation even more is that the drums or other containers which the producer would require immediately to gather the product of the new crop are held up, thus leaving the producer in a most difficult situation.
That request for a support price has been made to me by hundreds of producers of my constituency. I will admit to the house that the granting of such a wish appeared difficult to me, and that I so stated to the Beauce constituents with the same frankness as I am stating it this evening. I explained to them the objections which, to my mind, could make the proposal impractical. I wondered for instance whether the fact of subsidizing the sale of a product, when that product is mainly sold outside of Canada, would not constitute some sort of dumping contrary to international trade regulations.
Besides,-I mean to point it out here,- my objections never were concerned with the necessity of such a measure but rather with the difficulties of carrying it out. However, I may be wrong,-I do hope I am,-and it may be that I see difficulties where there are none at all, because I am far from being an expert. I am, however, sufficiently familiar with the problem to be able at least to have doubts, and that is precisely what makes me urge the Minister of Agriculture to have this problem studied by the experts of his department. Moreover, according to a letter I received from the minister in reply to a request I made to him, I understand that the officials of his department are studying-
(Text):


Mr. Deputy Speaker:: Order. I am extremely sorry to interrupt the hon. member but this being the fifth appointed day of the budget debate, and having just been advised by the Clerk that it is fifteen minutes before ten o'clock, it is my duty to put the question on the amendment to the amendment to the main motion.


Mr. Speaker:: I declare the amendment to the amendment to the main motion lost.


Mr. J. W. Murphy (Lambton West):: Mr. Speaker, may I move the adjournment of the debate?


Raoul Poulin: Mr. Speaker, I move the adjournment of the debate.


Mr. Speaker:: A motion to adjourn the debate has already been placed before the Chair by the hon. member for Lambton West and therefore I cannot accept the motion of the hon. member for Beauce.
(Translation):
I cannot accept the motion of the hon. member for Beauce (Mr. Poulin) since the hon. member for Lambton West (Mr. Murphy)
The Budget-Division has already moved the adjournment of the debate. Since the new regulations restricting the budget debate are in effect, it has always been recognized that the member who speaks just before the vote, though it be for a mere few minutes, cannot speak immediately on the other motion which remains to be discussed. The hon. member will no doubt have the opportunity to speak later if he wishes to do so but, since he has spoken immediately before the vote on the sub-amendment, he cannot be the first to speak on the amendment.
(Text):
On motion of Mr. Murphy (Lambton West) the debate was adjourned.



BUSINESS OF THE HOUSE

Walter Edward Harris: Mr. Speaker, tomorrow I shall ask that the house go into committee of ways and means in order to vote one month's supply, if the house feels so inclined.


Stanley Howard Knowles: You will ask that we go into committee of supply first, will you not?


Walter Edward Harris: No. Then we shall take the committee of supply for the estimates of the post office, and then legislation in the following order: first, the resolution concerning the conservation of north Pacific fur seals, the Eastern Rocky Mountain Forest Conservation Act, the Territorial Lands Act, the Department of Northern Affairs and National Resources Act, the Currency, Mint and Exchange Fund Act and the Canadian Vessel Construction Assistance Act.


[Stage Direction]
It being eight minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.
Robichaud
Robinson (Simcoe East)
Rouleau
Rowe
St. Laurent (Quebec East)
Schneider Shipley, Mrs.
Simmons
Small
Stanton
Stick
Stuart (Charlotte)
Thatcher
Tucker
Tustin
Van Home
Vincent
Weir
White (Hastings-Frontenac)
White (Middlesex East)
White (Waterloo South) Winters-145.
[Stage Direction]

Wi
[Stage Direction]

Friday, March 29, 1957