1958-06-27

BRITISH COLUMBIA-TABLING OF DOCUMENTS CONCERNING SUPPORT PRICE FOR RASPBERRIES

Hon. D. S. Harkness (Minister of Agricul-lure):: Mr. Speaker, I should like to table the telegrams and the order in council which were requested yesterday in connection with the stabilization price of raspberries in British Columbia.



SUGGESTED PROHIBITION OF OPEN SALE

[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the -I presume-acting minister of national health and welfare. My question concerns the health and welfare of this generation and generations yet unborn. Has the minister's attention been drawn to a news item in the Gazette of June 17 entitled "Doctors Claim Poison Sold Across Counter", and the report of the committee on maternal welfare, presented to the annual meeting of the Canadian Medical Association, which comments on the irregular sale of drugs and consequent poisoning by preparations containing oils of apiol? Can the minister inform the house why the sale of this drug across the counter has not been prohibited under the Food and Drugs Act?


Hon. Paul Comtois (Minister of Mines and Technical Surveys):: Mr. Speaker, in the absence of the minister may I take this question as notice. I will inform him as soon as I see him.



NOVA SCOTIA


[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Leader of the Opposition):: Mr. Speaker, can the Prime Minister advise the house what results, if any, have followed from conversations held yesterday among members of the government, the premier of Nova Scotia, union and company officials, concerning the cut-backs in the Nova Scotia coal industry?
Right Hon. J. G. Diefenbaker (Prime
Minister): Mr. Speaker, as the Leader of the Opposition stated yesterday, we had a meeting with the premier of Nova Scotia, the representatives of the Dominion Coal Company and the labour union, the hon. member for Cape Breton South (Mr. Mac-Innis), as well as various ministers, the Minister of Mines and Technical Surveys (Mr. Comtois), the Minister of National Revenue (Mr. Nowlan), the Minister of Veterans Affairs (Mr. Brooks) and the Minister without Portfolio, the hon. member for Greenwood (Mr. Macdonnell). We discussed in general the situation created in Nova Scotia in consequence of the fact that 1,400,000 tons of coal are piled up and are at the moment unsaleable, although there are orders on hand for the disposal of some 4 million tons in the foreseeable future.
I want to say first that the manner in which the representations were made, both on the part of the company and on the part of the representatives of the unions, was deserving of the highest compliment. There was obviously a desire on the part of both to present a picture, and one of deep concern, not only to those directly affected, namely the miners in Nova Scotia and their families, but also to the economy in general of Nova Scotia and indirectly of the maritimes.
The representations that were made are now receiving the consideration of the government. It is a complex problem; it is one that deserves the fullest consideration. What the decision will be I cannot at the moment say. The cabinet met this morning and discussed the question in all its ramifications, and will also give it further consideration later today.
Having regard to the size of the problem and its great importance, I will say no more than that every sympathetic consideration will be given to assure the bringing about of a state of affairs which will ameliorate to the maximum degree possible this very trying and serious problem. My feelings in that regard and those of my colleagues in the cabinet have certainly been intensified as a result of the co-operative attitude displayed by the representatives of the company and the union. I cannot go further at the present time, except to assure the Leader of the Opposition that this matter is one of preeminent importance.

Inquiries of the Ministry Mr. H. W. Herridge (Kootenay West): I
should like to ask the Prime Minister a supplementary question. Does a situation such as this concern the Borden commission, and have they made any interim reports or recommendations to meet such a situation?


Mr. Diefenbaker:: Mr. Speaker, at the
moment I can see no connection superficially between the situation in the mines of Nova Scotia and the problems that are faced by the Borden commission. It may be that on closer examination there might be some direct connection, but certainly any decision that will be made will not in any way derogate from the problems faced by the Borden commission or the recommendations the commission will make.



ST. LAWRENCE SEAWAY INQUIRY AS TO LAY-OFFS FOLLOWING FLOODING OF CANALS

[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: Mr. Speaker, I should like to direct a question to the Minister of Transport. Because of the inundation of the Ontario-St. Lawrence canals which will take place on and after July 1, can the minister tell the house, now or at a later date, since I was not able to give him notice of this question, how many employees will be laid off because of the inundation of these canals and what his department or the government are doing to find employment for those who will be affected?


Hon. George H. Hees (Minister of Transport):: I will get that information for the hon. member and give a reply on Monday.



GATT-STATEMENT AS TO RENEWAL OF AGREEMENT

[Stage Direction]
On the orders of the day:
Hon. Gordon Churchill (Minister of Trade and Commerce):: Mr. Speaker, yesterday the hon. member for Springfield asked me several questions which I should like to answer now. The first question was:
When will the general agreement on tariffs and trade ... be up for renewal?
The answer is that GATT continues automatically in effect among the countries wishing to participate, and the question of its termination or renewal therefore does not arise. The next meeting of GATT countries is scheduled for October of this year. As far as the schedules of tariff rates that have been negotiated under GATT are concerned, these are at the present time bound against increase 
for a firm period until January 1, 1961. This, of course, is subject to the renegotiation of particular tariff rates under established GATT procedures.
The second question was:
Will representations be made at that time to the effect that Canada's position be recognized in a special category?
I am not sure what is meant by this question. Should the government at any time consider that special arrangements within GATT should be made with regard to Canada's position, this could, of course, be taken up with our other GATT partners. However, as I stated at the twelfth session of GATT last year in Geneva, the government's position at the present time is that we shall continue to operate our policies in accordance with the rules and procedures of GATT.
The third question referred to the likelihood of the agreement not being renewed by the congress of the United States. I have no comment to make on possible action by another country.



TELEVISION


[Stage Direction]
On the orders of the day:
Mr. H. J. Robichaud (Gloucester):: I should like to direct a question to the Minister of National Revenue. Is the minister prepared to advise the house what action is contemplated by the Canadian Broadcasting Corporation to provide national network service to the proposed television station to open in New Carlisle, Quebec, this coming fall? Will such service, if provided, include both French and English networks?


Hon. George C. Nowlan (Minister of National Revenue):: Mr. Speaker, the hon. member gave me notice about this the day before yesterday. It is proposed to have a bilingual station at New Carlisle of whose programs approximately 65 per cent-I am not being specific within a point or two- will be French language broadcasts and approximately 35 per cent in the English language. It is proposed to connect this station in the immediate future with the microwave outlet in so far as the French language is concerned because, as the hon. member knows, it is easier geographically to connect with the French microwave service. In so far as the English programs are concerned I should not like to say at the moment whether we will be able to connect with that microwave outlet in the immediate future, but ultimately, I am advised by the C.B.C., that is their intention.



DOMINION-PROVINCIAL CONFERENCE INQUIRY AS TO REPRESENTATIONS BY MUNICIPALITIES

[Stage Direction]
On the orders of the day:
Hon. J. W. Pickersgill (Bonavisla-Twil-lingate):: Mr. Speaker, I should like to ask the Prime Minister if his attention has been drawn to an item in the Globe and Mail to the effect that he had assured himself a place in Canadian history by agreeing to a municipal-provincial-federal conference. This statement was apparently made by the mayor of Toronto, and what I specifically wish to ask the Prime Minister is whether he has given any assurance to the mayor of Toronto or anyone else that such a conference will be held, and if so when.


John George Diefenbaker: I am glad to see the interest taken by the hon. gentleman in this assurance of a place in history for the Prime Minister. I appreciate his interest in this regard. With respect to the question itself, I wish to say that the only suggestion that has been made in any way in connection with the matter to which he has alluded is that there will be an opportunity for representatives of the municipalities to come to Ottawa to present their views some time, I hope, late in September, following the commonwealth trade and economic conference.


John Whitney Pickersgill: May I ask a supplementary question. Was the premier of Ontario then in error in the statement he made that the provincial governments were also to be represented at this conference?


John George Diefenbaker: The entire program at the moment is as was promised to the mayors' association and as requested by them, namely that they have an opportunity to informally present their views. An undertaking was given at the time these representations were made-I think it was in February last- that an opportunity for such an informal conference would be provided, and in pursuance of that undertaking an informal conference with the municipalities will take place, as I said a moment ago, some time late in the fall following the commonwealth conference.


Lester Bowles Pearson: A supplementary question, Mr. Speaker. I wonder if the Prime Minister would consider bringing to the attention of the premier of Ontario the undesirability of making statements of this kind reflecting on the Prime Minister.
Inquiries of the Ministry


Mr. Speaker:: I am sure the Leader of the Opposition does not expect the Prime Minister to move out of his own field in that way.


Lester Bowles Pearson: I was just thinking of the Prime Minister's place in history.


John George Diefenbaker: Such solicitude on the part of the Leader of the Opposition is most touching.


Hon. Paul Martin (Essex East):: With great respect, Mr. Speaker, I wonder if I may just observe, with regard to the question put by the Leader of the Opposition-


Some hon. Members:: Question.


Paul Joseph James Martin: -on a question of privilege and order, that the question put by the Leader of the Opposition was not a frivolous question. It was based on an observation made and a question put a few moments ago by the hon. member for Bonavista-Twillingate, who asked about a statement made by the premier of Ontario with regard to the holding of a dominion-provincial conference. Surely the Leader of the Opposition is permitted under the rules of this house to ask a question which would elicit from the Prime Minister an amplification of the reply he made to the question previously put to him, as to whether or not statements made outside this house by the premier of Ontario with regard to a dominion-provincial conference are to be ignored by the government.


Mr. Speaker:: I assure the hon. member for Essex East that my comment on the question of the Leader of the Opposition was not a frivolous one. The question related to a statement made by the premier of Ontario. If he will consult the rules and precedents with respect to the asking of questions he will find that it is not in order to ask of the ministry questions about matters not within their control and jurisdiction. I suggest to him that statements made by the premier of Ontario are not within the jurisdiction or control of the Prime Minister of Canada. That was the question as I understood it, and that was the view I took of it. The other things the hon. member for Essex East said may be quite proper and correct, but on that particular point that is the view I hold.


Lester Bowles Pearson: On a point of order, Mr. Speaker, may I ask you this question with great respect. Would your ruling mean that members of this parliament could not ask any questions relating to a statement made by the premier of a province, if that statement was on a matter entirely within federal jurisdiction?


Mr. Speaker:: Certainly not.

Inquiries of the Ministry


John Whitney Pickersgill: If I may, I should like to ask the Prime Minister a further question. Can the Prime Minister tell us whether the government of Canada has any plans to hold a federal-provincial conference in 1958?


John George Diefenbaker: The full answer has been given to that question in the past. Whenever there is any change or alteration of viewpoint, it will be communicated to the house.



CENTRAL MORTGAGE AND HOUSING


[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Pori Arlhur):: Mr. Speaker, I should like to direct a question to the Prime Minister. It is corollary to the question I asked the Secretary of State the other day about the relationship of the civil service and Central Mortgage and Housing Corporation. Has the Prime Minister seen or studied or considered any action on the charge made at a civil service meeting in the railway committee room Wednesday night that the C.M.H.C. staff was reduced not through dollar-saving dismissals in the interests of efficiency but through people quitting because working conditions at C.M.H.C. were so bad?


John George Diefenbaker: Mr. Speaker, I have not seen the item in question. I have seen references to it. After the statements made before that committee have been brought to the attention of the government, consideration can then be given as to the answer to the allegations in question.



BRIDGES

[Stage Direction]
NUNS* ISLAND-INQUIRY AS TO REPRESENTATIONS RESPECTING NAME
On the orders of the day:
['Mr. Speaker, I have no comment to make.']
Lionel Chevrier: May I
direct a question to the Minister of Transport. Has the minister received representations from a Montreal committee recommending a name for the new bridge at Nuns' island, and will the bridge be called after Champlain in commemoration of the 350th anniversary of the founding of Quebec?


George Harris Hees: Mr. Speaker, the chairman of the national harbours board has had meetings with representative bodies in Montreal to try to decide what would be an appropriate name. That matter is under consideration now. I expect to be able to make an announcement about it in the near future.



[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: I should like to ask the Secretary of State for External Affairs whether he is in a position to comment on a statement made yesterday by the minister of economic affairs in Yugoslavia that in view of the suspension of credits by the Soviet union to Yugoslavia, the government of the latter country was going to seek credits to bolster its economy from other countries including Canada.


Hon. Sidney E. Smilh (Secretary of Slate for External Affairs):: Mr. Speaker, I have no comment to make.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Hon. Ellen L. Fairclough (Minister of Citizenship and Immigration):: In answer to a question by the hon. member for Bonavista-Twillingate yesterday I informed him that I had not then been able to ascertain the relationship of the agreement with Ontario on the Hungarian question to the agreement with Saskatchewan. Since that time I have found they are both the same; in fact the Ontario agreement was modelled after the agreement already in effect with Saskatchewan.


John Whitney Pickersgill: Is the hon. lady aware that that was the original proposal we made to the government of Ontario, which was previously turned down as inadequate?


An hon. Member:: Question.


John Whitney Pickersgill: That was a question.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Lionel Chevrier: I would like to ask the house leader the following question. In view of the fact that in the past it has been the custom to refer certain Department of Transport items such as maritime freight rates, the Prince Edward Island car ferry deficit, the Hudson Bay railway, the Yarmouth-Bar Harbor ferry and the Newfoundland car ferry to the committee on railways and shipping, could the minister inform

the house if it is the intention of the government to withdraw these items from the committee of supply and to refer them to the committee on railways and shipping owned, operated and controlled by the government?


Hon. Howard C. Green (Minister of Public Works):: If the hon. member for Laurier will refer to today's order paper he will notice that under item No. 15 there is a motion for the setting up of this committee to which he refers.


Lionel Chevrier: That does not answer my question, Mr. Speaker. As I said, in the past it has been the practice to refer these five or six items of the Department of Transport to the committee on railways and shipping for consideration, where the officers of the Canadian National Railways can be examined upon them, and my question was as to whether these items, which have already been referred to the committee on railways, canals and telegraph lines, would now be withdrawn from that committee and referred to the committee on railways and shipping.


Howard Charles Green: The hon. member is not as bright as he should be this morning. If he will look at the motion by which certain items of the Department of Transport were referred to the standing committee on railways, canals and telegraph lines, he will find that items 431, 432, 442, 443 and 635 were not included. I believe those are the items to which he refers. The intention is to refer them to the special committee, notice of the setting up of which has been given.


Lionel Chevrier: That was the point about which I was seeking information from the house leader, whether it was the intention to refer those items to the committee on railways and shipping. There has been no such indication so far.


Howard Charles Green: If the hon. member had done his homework-and he is obviously missing the tremendous staff he used to have behind him when he was on this side of the house- he would have found that those particular items were not referred to the standing committee on railways, canals and telegraph lines, and that reservation was made for the very purpose of having those items referred to this special committee on government-owned railways and shipping.


Lionel Chevrier: Why did you not tell us in two words that that is what you are going to do?


Howard Charles Green: I could not make the hon. member understand with a few words.
27, 1958	1693
Inquiries of the Ministry THE MINISTRY



INQUIRY AS TO APPOINTMENT OF PARLIAMENTARY ASSISTANTS

[Stage Direction]
On the orders of the day:
Douglas Mason Fisher: I would like to address a question to the Prime Minister in a spirit of friendliness rather than of impertinence. Could the minister inform us as to what date the anxiety and speculation among our Conservative fellow members will end and proper ambition receive its due reward with the appointment of parliamentary assistants?



FISHERIES


[Stage Direction]
On the orders of the day:
Hon. J. A. MacLean (Minister of Fisheries):: Yesterday the hon. member for Northumber-land-Miramichi asked me a question which I took as notice, and which was as follows:
Have any representations been received with regard to the extension of the gaspereau fishing season in the Miramichi area?
The answer is that no such representations have been received.



ROYAL CANADIAN MOUNTED POLICE


[Stage Direction]
On the orders of the day:
Lionel Chevrier: I would like to direct a question to the Minister of Transport. In view of the findings of a coroner's jury with respect to the death of one of the R.C.M.P. officers drowned in lake Simcoe, and the fact that it appears that the small boat regulations of the Department of Transport were not adhered to by those charged with the responsibility of enforcing them, what action will the department take in connection with this matter?


George Harris Hees: Mr. Speaker, I wish to thank the hon. member for advising me of his intention to ask this question. The department has not yet received a complete copy of the findings of the coroner's jury, but the information we have obtained unofficially is under careful study. When we receive a copy of the findings as a whole they will be thoroughly considered, and if action appears necessary it will be taken.

The Budget-Mr. Mitchell



DOMINION-PROVINCIAL RELATIONS NEWFOUNDLAND    INQUIRY AS TO REPORT OF ROYAL COMMISSION ON REVISION OF TERMS OF UNION

[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Mr. Speaker, I wonder if I could ask the Minister of Finance if it will be possible for him to ascertain from the officials of the royal commission on the revision of the terms of union with Newfoundland when the report might be expected?


Hon. Donald M. Fleming (Minister of Finance):: I have no precise information on the point, Mr. Speaker, but my understanding is that there is ground for hoping that the report may be available before too long.



THE BUDGET


[Stage Direction]
The house resumed, from Thursday, June 26, consideration of the motion of Hon. Donald M. Fleming (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. Beni-dickson.
Mr. D. R. Mitchell (Sudbury):: Mr. Speaker, in rising to take part in this debate I hasten to make a few observations concerning the recent budget brought down by the Minister of Finance. As one of the members from northern Ontario I assure you that it is still a stronghold of Liberalism, and I am sure it will remain that way for some time to come.
Following this recent election, when not one Conservative was elected in northern Ontario, it is easy to understand why the Conservatives would be concerned with this situation. In a newspaper article which appeared not long after the election I noticed a statement to the effect that the Conservative national organizer was considering taking a trip to northern Ontario to study just why this catastrophe had happened to the Tory party. I do not believe it will do him much good should he take this trip, as I firmly believe that the best informed and most intellectual electors live in the various parts of northern Ontario.


John Whitney Pickersgill: And in Newfoundland.


David Rodger Mitchell: This, I am sure, shows a firm belief in Liberalism, and I see no reason why any of the electors in the north should ever depart from it.
In the minister's budget there are certain irregularities that I feel I should bring to the government's attention. The Conservative government's budget forecasts a deficit of
[Mr. Hees.l
$648 million. This figure must be viewed with some reserve and suspicion, and certainly should be subjected to further analysis. As recorded at page 1240 of Hansard the Minister of Finance stated in his budget speech: After studying all the available data most carefully and taking account of possible lapsings and our continued search for economies, I have come to the conclusion that our budgetary expenditures for the fiscal year ending March 31, 1959, will he approximately $5,300 million.
Is this figure realistic? Let us begin with the expenditure proposals that are already known and which we find in the tabled main estimates and the first of the supplementary estimates, totalling the sum of $5,237 million. To this must be added payments to the provinces under the Hospital Insurance and Diagnostic Services Act of $70 million, the deficit in the old age security fund of $190 million and the deficit for the Canadian National Railways of $55 million. We then arrive at a total of $5,552 million.
In addition we must add rough estimates for additional statutory requirements and the usual final supplementary estimates totalling $50 million, and payments under the Agricultural Stabilization Act of $3 million, which give a total of $5,605 million. We must also take into consideration unknown expenditure factors including salary increases for civil servants and armed forces personnel, which could amount to $100 million, and further revisions in the dominion-provincial tax rental agreement which could amount to $150 million should Ontario be granted its demand for $78 million.
Assuming that no action is taken by the government with respect to salary increases and upward revision of payments to the provinces, our budgetary expenditures for the year ending March 31, 1959, appear to be approximately $300 million more than the $5,300 million estimates of the minister. Accepting his estimate of revenue of $4,652 million, we find that the budgetary deficit amounts to $5,605 million minus $4,652 million or a total of $953 million.
We now must take into consideration a bookkeeping transfer to budgetary revenue, I suppose, from a non-budgetary national defence equipment account which amounts to $165 million. This bookkeeping shift was evidently taken into consideration by the minister in arriving at his budgetary deficit. If we do the same our estimated $953 million deficit is cut down to $788 million, or $140 million more than the figure that is being quoted so widely. This $788 million deficit presupposes no governmental action on salary increases or increased transfer payments to the provinces. It is difficult to assume that nothing will in fact be done in these two

problem areas. Hence the concern regarding the presently forecast budgetary deficit of only $648 million, and the suspicion that future events will probably bring this deficit figure up to $1 billion.
In times of stress no one argues with the necessity for a deficit budget. However, the full and proper figures should be given and no attempt made to pull the wool over the eyes of the Canadian people when a budget such as this is presented. True figures should be shown, and I believe this has not been done.
It should also be borne in mind that the purpose of this deficit budgeting was to correct unemployment. I will admit that employment figures have increased in the last month, but the over-all number of unemployed is still higher than it should be, and certainly higher than it has been in many years; and now the Canadian taxpayer is faced with both a deficit budget and unemployment. It has not cured the ills it was intended to cure, and this money has to be recovered in one way or another from the taxpayers of Canada at a future date.
Some time ago, Mr. Speaker, I had occasion to say a few words concerning the plight of the small businessman, and I was hoping that some relief for him might have been indicated in this budget. Unfortunately this does not seem to be the case and he is no better off; in fact he is worse off as each day goes by. I am sure it would not have cost the government a great deal of money should the small businessman have been allowed accelerated depreciation on any alterations or renovations he might want to make in his place of business. This would have been of assistance, but it was not contained in the budget.
I feel that the small businessman is being overlooked due to the scarcity of such men in this house; therefore he has not been able to shout loud enough to reach the ears of the mighty. I place myself in the category of a small businessman, and it is for this reason I am attempting to bring the situation to the attention of the government.
At the time I spoke I mentioned that I felt the attention of the combines investigation commission should be drawn to some of the practices which are prevalent and are very harmful at this time. I know that representations have been made to this commission and to various ministers by various retail organizations regarding the use of loss leaders by many of the larger businesses. These loss leaders are used as an attraction to customers to visit their premises where they may pick up other merchandise which shows a respectable profit.
Just recently I received in the mail an advertisement of one of the large business
The Budget-Mr. Mitchell firms in the city of Toronto dealing in furniture, and I should like to mention two articles which I think the house will agree with me are certainly "come-on" merchandise. I hold the advertisement in my hand, and I draw the attention of the house to a very well-known product, namely Kleenex, which in this advertisement reads, "Regular 19 cents a box, on sale two for 19 cents." I assure hon. members that this merchandise cannot be purchased wholesale at nearly this price. Therefore it is in the category of a loss leader.
However, this is not bad enough. This is a business firm which sells furniture, but in the other corner of the advertisement we find this: "Fresh today, Sunbeam bread, 5 cents a loaf". I reiterate, this is a furniture store which has no connection with the sale of bread, but as a come-on is advertising it at 5 cents a loaf. Any hon. member who has been sent out to buy a loaf of bread knows what the approximate regular price should be.
This is a practice which I feel should be stopped. I am sure it is not the intention of any government to allow this to continue, as it, along with many other loss leaders, is detrimental to the small businessman who is trying to make a living and provide a home for his family. I would urge the government to take steps as soon as possible to organize the committee, which they have suggested, to look into this practice which is being followed every day and prevent many small businesses from being forced to the wall and closing up shop.
In the budget, Mr. Speaker, legislation was brought down indicating that prescribed medicines are to be allowed as deductions for income tax purposes. I feel that this legislation is quite in order. As a pharmacist I believe this will be a great relief to persons who have lingering illnesses which cost considerable money, and relief in this way will be welcomed by many families. However, as a pharmacist I must draw attention to the extra work it will entail in each drug store in the recording, filing and giving of receipts for such medication. It will place the pharmacist in a rather embarrassing position if some of his customers should mislay their receipts and at income tax time hurry to him in the hope that he can give them copies. We are pleased to do this, but the amount of work entailed in hunting back over records is going to be tremendous and a tax on the staff who are already overloaded with regulations, the keeping of records and so forth, far in excess of any other type of retail business.
I also wish to draw the minister's attention to the wording he has used in his budget

The Budget-Mr. Thomas speech, which I feel does not fit the circumstances and I hope will be altered when the resolution is brought down. I refer to the wording in the budget speech as follows:
Accounts paid after June 17, 1958, for drugs and medicines which have been prescribed in writing by a medical practioner to be included in the medical expenses in computing taxable income.
The words "in writing" do not seem to be appropriate. Under present regulations of the Department of National Health and Welfare and through pharmacy acts in various provinces we are allowed to take certain types of prescriptions over the telephone and reduce these to writing over the doctor's signature in the form of a prescription, with the pharmacist's signature as well. Therefore I believe this resolution, as far as the wording is concerned, should be changed to read "Legal prescription" or "prescribed medication" instead of the words "in writing". This could be worded in another way which would provide that drugs, medications and so forth which have been prescribed by a medical practitioner, a dentist, a veterinarian surgeon and so on, and recorded by a licensed pharmacist, can be included as expenses that are deductible for income tax purposes. Any of these three wordings would be quite acceptable and should be used in preference to the words "in writing".
I hope the resolution, therefore, will be appropriately reworded, and that supervision will be given by the department's inspectors so that only drugs and pharmaceutical preparations are allowed as prescribed items. If this is not done many other articles could be included in the form of a prescribed order, which is not intended in the legislation and would add considerably to the amount of money this legislation would cost the government. I assure the house that we pharmacists are quite willing to assist in this relief for our customers, but certain pitfalls could be encountered which I hope will be thoroughly investigated to prevent any unfair advantage being taken of this legislation. Representations have already been made by our Canadian pharmaceutical association to the deputy minister of finance, and I believe certain questions have been ironed to everyone's satisfaction, with a view to having this legislation run smoothly and achieve the purpose for which it is intended.


Mr. Speaker:: Is the house ready for the question?


Mr. W. H. A. Thomas (Middlesex West):: Mr. Speaker, I am very pleased indeed to have a part in this debate. I have listened with interest to the speeches which have been made by opposition members as well as by members of our own party. I should like to

contribute to the congratulations which have already been offered from all parts of the house to the Minister of Finance (Mr. Fleming) on this excellent budget.
This is a moderate budget, well balanced, designed to maintain a balance between the forces of depression and the forces of inflation. I think even the members of the opposition will agree that the Minister of Finance has done an acceptable job in this regard. I have noted some of the comments from members of the opposition. The Liberal financial critic, the hon. member for Kenora-Rainy River (Mr. Benidickson), made these statements at page 1279 of Hansard for June 17:
The budget contains very little for the Canadian people except cheaper rat poison, violins, cut flowers and tree guards not more than 36 inches in height.
Again, at page 1279 the hon. member said:
We have a deficit not by design but a deficit by default.
My analysis of what is lacking in this budget is that the government is simply sitting out the situation and sitting it out on its hands.
Then he takes a slightly different line on page 1463, after he has had several days to think it over. On June 20, he said:
One can certainly argue for spending and deficits if they are not aimless but rather are planned, comprehensive and vigorous enough proposals to provide incentive, to provide lift, to perk up the economy. But I suggest, Mr. Speaker, that an analysis of this budget will show that the deficit is more attributable to political commitments than to economic theory or for the relief of unemployment.
Farther along on the opposition side we have the leader of the C.C.F. group, the hon. member for Assiniboia (Mr. Argue), who had this to say on June 20 as found at page 1470 of Hansard:
This is an ice water budget which I think will awaken the people of Canada to the fact that on March 31 they were cheated, as has been proven by the government's lack of action since that date.
Again, on page 1471 the same speaker went on to say:
This government, with its double talk, with its progressive face of last year and its Tory face of this year is just as inconsistent in all its actions.
On page 1472 he went on to say:
-Conservatives all over this country, whether they be high-placed Conservatives in Ontario or high-placed Conservatives with another name in the province of Quebec, have all got their elbows or their arms into this very lucrative deal, or as somebody says, their nose in the trough. They are still exempt. There is no capital gains tax.
As found on the same page the hon. member went on to say:
The agricultural producers of this country expected fair treatment by this government. They put great stock in the Agricultural Stabilization Act passed in this house last year, . . . The legislation says the farmer is to have the cost

of production, but the government are not trying to find out what the cost of production is.
I think those are good and typical examples of the line of criticism put forward by both parties on the opposition side. We are dealing now with the Liberal amendment to the motion to go into committee of ways and means. That amendment is in these words:
That all the words after the word "that" be struck out and the following substituted therefor:
' This house regrets that the government, in its budget proposals, has failed to cope satisfactorily with the problems of the recession in spite of the largest peacetime deficit in Canadian history and that it is moving towards greater trade restrictions at a time when other countries in the western world are moving in the opposite direction."
I think possibly we should congratulate the official opposition for the efforts they have put forth in criticism of the budget. I think we can congratulate them for the reason that they had so little to work with that their efforts indicate great industry in their search for arguments with which to do their job. The budget has little in it to criticize, and in view of that fact the efforts of the opposition are to be commended.
With respect to the criticism that the government is following an aimless course and that its actions are unplanned, surely the opposition will remember those items which have been enumerated again and again, and which disprove that criticism. The actions of the government have been well planned, and ever since the government took office a little over a year ago they have been aimed at accomplishing certain purposes. The country was slipping into a depressed economic state. The aim of the new Conservative government was to stop that trend, to bring about a measure of greater prosperity, and to create a more buoyant economy.
The actions they took are well known. They began immediately by making more money available for housing, and during the last year over half a billion dollars has been made available for that purpose. Social security allowances of all kinds, old age security, old age assistance and disability allowances, were all increased with the object of placing more purchasing power in the hands of the people so that our markets and business generally could be stimulated and our manufacturing industries could get back to work and relieve unemployment, which was increasing to proportions very undesirable in this country.
Income taxes were eased; a total of $178 million a year was lopped off such taxes. The results of these actions have been to reduce interest rates so that money is more readily available. The recession has been slowed
The Budget-Mr. Thomas down, and there is reason to believe that the bottom has been reached and we are again on the upgrade.
For the same purpose, to create a more buoyant economy and also to assist agriculture, which was bearing a greater share of the burden of recession than other parts of the economy, the Agricultural Stabilization Act was passed. The government has taken action under this legislation to improve the position of agriculture and again to get more money into the hands of the people with which to buy manufactured commodities.
The government is also encouraging all segments of our economy to hold the price line in an effort to prevent further spirals of inflation. I would think these actions are neither aimless nor unplanned. They have produced results and will continue to produce results. Therefore the criticism of the opposition cannot be taken too seriously.
Now I should say a word about our Middlesex West constituency. Our riding is located just west of the city of London in southwestern Ontario. Due to the moderate climate and the nature of the soil we have probably as great a diversity of industry in this riding as will be found in any riding in Canada. We have good soil of all types, with the result that crops which will flourish and grow anywhere in Canada can be grown in Middlesex West, and they are grown there in great abundance-cannery crops, tobacco, fruits of all kinds, potatoes, grain, hay-and we have also large areas of some of the finest grazing land to be found anywhere in the world.
Our livestock production is varied and important. We have a large dairying industry, and some of the finest herds of dairy cattle that are to be found anywhere in Canada are located in our area of Middlesex West. Some sheep are raised there, but not in large numbers. Also there is an important production of hogs. Our poultry production is important. We have some of the largest turkey farms to be found anywhere in the land. Another item of major importance is the production of seed. We grow a great deal of registered grain for seed. Again, being close to large centres of population, we have a large and important greenhouse industry for the production of vegetables and flowers.
Based on this agricultural production we have a number of processing industries. We have one of the largest canning factories in the country located in the town of Strathroy, one of a chain of factories which once belonged to Canadian Canners and which still operates under that name, although control has passed to a United States interest. Another very

The Budget-Mr. Thomas important industry in that area is the teed mixing industry. Every town and village has one plant or more which grinds grain and mixes it with supplements for stock feed. As western towns have their strings of elevators along the railway tracks, the towns and villages of Middlesex West have these feed mills which distribute feed mixes to the farmers.
We have a large flour mill in the town of Strathroy. We also have a very large cold storage warehouse where fruit and potatoes are stored and later packed for the trade. We have, in the riding of Middlesex West, what is reputed to be the largest egg breaking plant in the British empire, where eggs are broken and frozen and shipped all over the world. We used to dry them there and make egg powder during the war. I do not know whether that process is still being carried on; I think not. These eggs are transported in a frozen state. We have quite a number of egg and poultry processing plants where fowls are dressed and prepared for sale to the distributing trade. We also have a very large milk gathering station in Middlesex West. Milk is transported 25 to 30 miles to the station. It is cooled there and taken in large trucks to the processing plant at Aylmer. Also we have in our riding a very large seed-cleaning establishment, where carloads of seed of all kinds are prepared not only for local sale but for shipment to the United States.
Not only do we have these processing plants connected with agriculture, but in the towns in our riding we have a number of medium-sized plants which manufacture products not connected with agriculture. We have a large aluminum plant which manufactures window sashes and other building fixtures; we have a plant for the manufacture of mobile homes, otherwise called trailers, and we have a large furniture factory. We have a number of lumber mills which saw hardwood lumber for export to all parts of the country.
Our area produces fine oak timber in addition to cherry, walnut, maple, elm and all other kinds of hardwood. It is rather strange, when you ride through the towns in this area, to see on one side of the track large piles of lumber which have been sawn ready for shipment to furniture plants in other parts of the country, and on the other side of the track large piles of lumber which have been unloaded from British Columbia or northwest Alberta for use in the building trade in our own area. Hardwood is of no use for outside purposes; its use is for furniture and inside fittings. Therefore, though we produce large quantities of hardwood, it cannot be used locally except in our local furniture industry.


We have woollen mills for the making of blankets, knitting mills for socks, and we have one of the largest nursery enterprises in the country, the head office of which is in Middlesex West in the town of Strathroy with branches in Bowmanville and Abbotsford, Quebec. Then we have a large handle factory operated by the Welland Vale Manufacturing Company. There is also a large distribution plant for heating equipment-


Mr. Speaker:: Order. I have allowed the hon. member to go a very considerable distance in describing his riding, but unless he relates his description to the matter under debate I think he should be content with what he has said up to this point. I do not allow him the same latitude that I allow a member making his maiden speech, because he has had earlier opportunities to do this.


William Howell Arthur Thomas: Mr. Speaker, I was just about to relate these things to the budget debate.
I was pointing out the variety in agriculture and manufacturing industries, and raising the point that the budget introduced by our government aims to improve our position and to assist these industries which are being carried on in Middlesex West. What is required there in general is a certain amount of protection for our industries. The budget in its supplementary papers has mentioned certain tariff changes which are designed to assist industries through our part of Ontario. Because the protection is needed the minister and the government are to be commended because of these protective measures. Because of our position in a northern latitude it is possible to grow agricultural products farther south more cheaply than we can produce them, and to get them on the market earlier than ours can be placed on the market. A certain amount of protection is therefore required for our agricultural products. Because our industries are not large in nature, a certain amount of protection is required to keep them going.
The budget deals with the stabilization of agricultural products. It expressed the hope that large payments under the agricultural prices stabilization act will not be required. I have already complimented the government on their efforts to stabilize agriculture through the action taken under this agricultural prices stabilization act. I have read some criticism that has been offered by members of the opposition to the effect that this stabilization act is not altogether serving the purpose for which it was intended. I contend that the stabilization act has done a good job. Agricultural prices can never be set so that everyone will be satisfied. In trying

to arrive at satisfactory levels for prices I think the government has made a worthwhile effort to satisfy the farmer as well as to protect the interests of all concerned.
A large number of products are now stabilized or supported, and these support prices range from 80 per cent to 112 per cent of the base price. People in Middlesex West are generally satisfied, I understand, with the action that has been taken with regard to eggs, and for the most part with regard to dairy products. There has been some disappointment over the level of the price for soybeans, but the differences of opinion which have arisen concerning the prices of soybeans, I submit, are mostly due to the lack of any acceptable figures covering the cost of production and the lack of cost of production figures generally in the industry of agriculture.
The best figures available-and they were produced under the auspices of the economics branch of the Ontario department of agriculture-indicate that soybeans can be produced for about $1.41 per bushel, that corn can be produced for about 88 cents per bushel, and that the cost of producing sugar beets is about $9.90 per ton. There might be some agreement among the farmers as to the cost of producing a ton of sugar beets; a great deal of research has been done in that regard. However, I do not think anyone has succeeded yet in persuading the farmer that soybeans can be produced for $1.41 per bushel. However, those are the best figures available, and until the farmers or our agricultural research experts can bring forward proof that these figures are not sound, we must accept them.
With soybeans supported at $2.10 per bushel, on the basis of these figures, which are the best available, there cannot be too much complaint. The soybean producers themselves feel that they should have $3 per bushel in order to put them in a sound position in the production of soybeans. They asked for a support price of $2.57 per bushel. The government, after taking all things into consideration, set the support price at $2.10 per bushel. I know our soybean growers are not happy about this situation. Personally I am not happy but we must commend the government for using their best judgment and doing the best they could under the circumstances.
I should like to say a word about the Canada Water Conservation Act of 1953. In the riding of Middlesex West we have two conservation authorities. The one of particular interest to us is the Ausable valley
The Budget-Mr. Thomas authority, which takes in most of the northern part of the constituency. There is another authority in Middlesex county, namely the upper Thames valley conservation authority, which is of more interest to Middlesex East than it is to Middlesex West. I cannot see anything in the budget which will give any measure of assistance to those authorities over and above the provisions of the water conservation assistance legislation. These river valley conservation authorities include all the municipalities which have land draining into any of the tributaries of the entire river system, and each municipality appoints representatives to serve on those authorities. The conservation authorities are something like a municipal government or school board, having wide and important powers and responsibilities; and once set up they have full control over conservation in the various watersheds.
I would like to make the proposal that the federal government, when considering assistance to these conservation authorities, should include the whole conservation scheme planned by such authorities rather than limit consideration to individual items in an over-all plan. That is to say, rather than taking the attitude that one particular dam, for instance, was not of sufficient importance to justify federal assistance, several dams and other works should be all taken together when such consideration is being given to water conservation schemes.
The present water conservation legislation was criticized in the June 23, 1958 report of the standing committee on mines, forests and waters. The minister himself pointed out that this act is not giving the service which he feels it might give in providing assistance to these conservation authorities, and he made the suggestion that the legislation be reviewed with the object of making it more useful.
Time does not permit me to go into much further detail, but I would like to mention that in Middlesex West we have an Indian reserve, and that I feel it is desirable to help the Indians on that reservation to develop their agricultural resources more intensively than has been done in past years. A great deal of agricultural activity was carried on at that particular reservation prior to the first world war, but owing to its proximity to several large industrial centres the Indians since that time have tended to accept positions in industry rather than engage in agriculture. Some of the older Indians have now, however, reached the conclusion that they would be better advised to develop more agriculture on their reservation and a committee has been set up

The Budget-Mr. Bourque among them to promote this idea. We have been promised the co-operation of the Indian affairs branch in connection with this project. The Indian affairs officials feel, however, that the promotion of greater agricultural activity on the reserve should come from the Indians themselves rather than from the officers of the Indian affairs branch.
In conclusion, I would again like to commend the minister and the government upon the budget, and to urge its adoption without amendment.


Mr. Romuald Bourque (Outremont-St. Jean):: 
Mr. Martineau:: Well said!


Romuald Bourque: Now, Mr. Speaker, for the fiscal year 1957-58, the Minister of Finance of the day had forecast a surplus of $152 million. The present Minister of Finance, who claimed he could offer surpluses too, and achieve all sorts of good things, has unfortunately offered the people of Canada nothing but a $39 million deficit.
During the fiscal year 1956-1957, the Liberals reduced the federal debt by $522 million through a budgetary surplus of $258 million, a non-budgetary surplus of $166 million and a reduction on cash account of $98 million, totalling $522 million.
But that is not all Mr. Speaker. The Liberals reduced the debt by $2,500 million since the end of the war. For this year the
1702	HOUSE OF
The Budget-Mr. Bourque Minister of Finance forecasts a deficit of $648 million and, at the same time, he says that he will require close to $3,400 million. He estimates his revenue at $4,660 million. Expenditures, that is to say the main and supplementary estimates, will amount to $5,237 million. If to this figure we add $70 million for the hospital insurance plan, another $55 million for the expected C.N.R. deficit, $190 million for a deficit in the old age security fund, another $100 million for civil service salary increases because a raise of 8 per cent was definitely promised, and the other supplementary estimates which will certainly amount to no less than $100 million, we reach a total of $5,752 million.
Considering an estimated revenue of $4,660 million, the actual budget deficit is $1,092 million.
That is not all, Mr. Speaker. The Minister of Finance has further claimed that public debt will increase by $1,400 million, that is $775 million against the exchange fund, plus a $648 million deficit, which gives a total of $1,423 million. I claim however that the debt will increase by $1,092 million, to which must be added $775 million from the exchange fund, which gives a total of $1,867 million.
If you consider that Mr. Frost, the premier of Ontario, has asked for $100 million, an amount of $300 million must be added to that figure-taking the equalization principle into account-which will give for this year an actual increase of $2,167 million in our debt.
From 1947 to 1957, the Liberals have reduced the debt by some $2,500 million. Well, Mr. Speaker, in spite of all the promises made by the Conservatives, in spite of all they said during the election campaign, if my figures are correct, and I have every reason to believe they are, the Minister of Finance will have increased our debt by $2,167 million in a single year.
Mr. Speaker, I read in the Petit Journal of last Sunday an article entitled: "Thank you just the same, Mr. Fleming!" in which the author said:
How shall we spend those 49 cents?
Sixteen million Canadians will save S8 million in taxes between now and the end of the year. That is about 50 cents each.
Mr. Speaker, that saving represents less than one cent a week. What a farce! Especially after we had been promised prosperity and many great things. And what are Canadians getting now? Unemployment. In fact, this very week automobile workers gathered at


the door of the parliament buildings, carrying signs which read: "We do not want charity, we want work".
If we had a deficit of two or even three billion dollars but provided jobs, with prospects of returning prosperity in a not too distant future, it would not be too bad. We would just say: "We went through a depression, and we are back on our feet". But what is the Conservative party offering us today? Nothing! Just misery! That is what we will have to face next winter.
Mr. Speaker, I contend that if the Liberals were able to reduce the national debt by $2,500 million in a ten year period, it is outrageous that the Conservatives should have increased it by $2,167 million in a single year.
(Text):


Herbert Wilfred Herridge: In order that we may correctly interpret the hon. member's use of words, would he mind answering a question? When he used the word "menial" did he use it in the old Anglo-Saxon sense, meaning a very vulgar fellow, or did he use it in the modern sense, meaning one of lesser status?


Romuald Bourque: One of lesser status, a fourth or fifth grade employee.


Mr. R. M. T. McDonald (Hamilton South):: Mr. Speaker, last year when I rose to take part in the debate on the address in reply to the speech from the throne I was very nervous. I thought the nervousness would disappear, but apparently it is the same today. We have heard from the hon. member for Hull (Mr. Caron) in this debate, and the hon. member for Gloucester (Mr. Robichaud) gave us a booming oration, telling us that we were all mixed up. It was far different from the sincere criticism and sincere tributes which the hon. member for Carleton (Mr. Bell) paid to the Minister of Finance in his summation of the budget.
It is very difficult for a minister of finance to pump out a sinking ship after the Liberals have run it on the rocks, but I maintain that the Minister of Finance is doing a very good job; he is working very diligently-


John Whitney Pickersgill: It is still sinking.


Robert Matthew Turnbull McDonald: Well, if the hon. member for Bonavista-Twillingate had done a little thinking on March 1, when he received the trade and commerce economic report, which I hope he read, and had taken some action during the time the budget was

being prepared in March, 1957, perhaps the situation in Canada would not be as bad as it is today.


John Whitney Pickersgill: If we had been allowed to read the one for this year we would probably know what the situation is today.


Robert Matthew Turnbull McDonald: You were there too long. This is a time for spending. The Liberal party in their thinking and in their talk made reference to building up surpluses and paying off the national debt. We are a young country. Like any young businessman we must look to the future. I think the Liberal party had completely lost touch with the thinking of the people of Canada, and that is why they were turned out.
One thing that worries me very much today is the anti-Americanism we find creeping across Canada. I think the government, if given the necessary time-and I am sure we will be here for a long time-will iron out all the inconsistencies that arose between the former Liberal government and the government of the United States. Our policy is to put forward boldly that we are a completely independent country and that we must be respected in every way. I am sure that with the Minister of Finance leading delegations we will have this respect.
In reviewing the budget it is very interesting to note that this government is trying to help the municipal governments. By eliminating the sales tax on such things as culverts, goods for use in sewage systems, fire truck chassis and so on, the government has increased the revenue of the city of Hamilton to the tune of about half a million dollars. I can assure the Minister of Finance that this will help the city in the construction of many sidewalks and other services.
In the budget there are many references to tariffs. I sometimes wonder whether, when the Liberal party set up the tariff board, they wanted to have the real facts. The tariff board was asked to conduct hearings on the textile industry and I wonder whether, if a Liberal government had been in power today and had received the recommendations the present government received, the Liberals would have acted; or would they have just wasted the taxpayers' money in having these tariff matters investigated by the board. I think our proposals are within the bounds of GATT. I believe the textile industry was sorely pressed and was seeking not so much increased tariffs, but a revision of the dumping laws. In 1953, I believe, the former minister of national revenue, Mr. McCann, stated that it was a sorry affair that the Americans were allowed to dump their excess merchandise into Canada. He said that measures
27, 1958	1703
The Budget-Mr. R. M. T. McDonald should be taken to correct the situation, but apparently nothing was done.
The amendment moved by the Liberals is in these words:
This house regrets that the government, in its budget proposals, has failed to cope satisfactorily with the problems of the recession in spite of the largest peacetime deficit in Canadian history and that it is moving towards greater trade restrictions at a time when other countries in the western world are moving in the opposite direction.
Let us look at the unemployment picture for a moment. In his reply to the budget speech the hon. member for Kenora-Rainy River (Mr. Benidickson) suggested that in the early part of June, 1957, there were some
167,000	people out of work. I can assure the hon. member that if he will take the latter part of June he will find that there were a quarter of a million people out of work. This was much higher than in January, 1957, and it is very gratifying to see that in the last report-


John Whitney Pickersgill: Would the hon. member permit a question?


Mr. McDonald (Hamilfon South):: Yes.


John Whitney Pickersgill: He quoted some statistics about unemployment in June of last year. Could he give the source of those figures?


Robert Matthew Turnbull McDonald: I am sorry I have not the source here but I recall reading a newspaper article-


Mr. Benidickson:: Read the budget papers. My figures came from the budget papers.


Robert Matthew Turnbull McDonald: Perhaps I am mistaken about that, but in the early part of July, 1957 there was an article in the Windsor Star or Winnipeg Free Press indicating that there were a quarter of a million people out of work at that time, and the blame was being put on the Conservative government which had only been in office for a very few weeks. I do not think it was fair comment to say that the Conservative government was responsible for this unemployment when actually in the early part of June the figure was much higher than in January, 1956.


William Moore Benidickson: That is not so. Read your budget papers and you will see that June was the low of the year.


Robert Matthew Turnbull McDonald: In the
early part of March, 1957, the Liberal cabinet received an economic report which said that we were coming to the end of cyclical expansion.


John Whitney Pickersgill: Would the hon. gentleman mind quoting the passage in the report which says that?
1704	HOUSE OF COMMONS
The Budget-Mr. R. M. T. McDonald


Robert Matthew Turnbull McDonald: I do not
have the report here but I have several extracts taken from it. I am sure the hon. member has read it. I have also read it. There were some favourable comments in it, but the comments I have taken from the text with respect to this situation-


John Whitney Pickersgill: A highly selective approach.


Robert Matthew Turnbull McDonald: I read the whole thing and I will give hon. members their due to a certain extent. There were some favourable things, but I believe that when there are bad statements in a report it is up to the government to take action to correct them. I maintain that the Liberal government hid the facts from the Canadian people. I do not blame them for not telling them, but if they had acted at the time and taken steps to correct the situation it probably would not be as bad today.


John Whitney Pickersgill: Would the hon. gentleman permit another question?


Some hon. Members:: Order.


John Whitney Pickersgill: Will the hon. member say whether he thinks it is right for the present government to hide the corresponding report for this year?


Robert Matthew Turnbull McDonald: I am not
referring to that report.


John Whitney Pickersgill: Obviously not.


Robert Matthew Turnbull McDonald: I have just stated to the hon. member that I do not blame the former government for not making the report public at that time, but I do blame them very much for not acting on the report of their own civil servants in the Department of Trade and Commerce. I blame them because they were told that more conflicting tendencies in construction and manufacturing had begun to emerge, and increases in unemployment in Canada since October, 1956, had been more than seasonal. They were told that some secondary manufacturing industries might encounter a period of renewed difficulty this year. They were also told that if a weakening in United States activity were to develop, and such a possibility could not be ruled out, could such a development be avoided by Canada? They were told that housing construction was expected to drop fairly markedly below the high level of the two previous years.
Did the Liberals provide any money for housing? They said that everything was fine. They said they could not afford to lower taxes and that everything was going to go along just fine. They were the boys of the boom period, and they brought about the recession and slump. They did not act after they had complete information supplied by

officials of the Department of Trade and Commerce. They were told that a higher average level of those without jobs and seeking work was likely in 1957 but they did not tell us anything about that. They did not even inform the opposition of what was happening. What did they do? They put the tight money policy into effect.
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.
Robert Matthew Turnbull McDonald: Mr. Speaker, at one o'clock when the house rose for lunch I was discussing the inadequate policy of the Liberal party with regard to the trade and economic report which was tabled in the house last January. In this report the Liberal party were told certain things and 1 believe they did not act upon them. Their tight money policy was not the proper thing. I believe their immigration policy was poor and, most of all, they could have put money into housing in the early part of last year but they did not do so.
It is most gratifying to see that the unemployment situation in Canada is not quite as serious as it was, with 150,000 fewer people on the unemployment rolls and 212,000 more people at work.
With regard to the trade policies of the late government, the imbalance of trade between Canada and the United States grew to astronomical proportions after 1950 until in the early part of 1957 it was $1,300 million. I believe the Conservative party is on the right track with regard to commonwealth relations. We are not ignoring the United States. We want the United States to know the facts with regard to the economic conditions of this country, and we want to secure an understanding of our problems. With the commonwealth conference in the fall I am sure we can expand our trade throughout the commonwealth and the world.
Talking about deficit spending, we have heard pro and con on this question, but it seems funny to me to hear criticism of deficit spending, when during the election campaign the Leader of the Opposition talked about tax holidays, $400 million tax cuts and so on, thus increasing our present deficit. I am not too clear on the thinking of the Liberal party with regard to this, but most of all I am not too clear on the thinking of the C.C.F. party. They would have us spend billions of dollars. The hon. member for Assiniboia (Mr. Argue), who is not in his seat at the present time, talked to the Minister of Finance (Mr. Fleming) about contradictions.

If the house will bear with me for one moment I should like to talk about the C.C.F. party and their policy with regard to financing. During the election campaign, the C.C.F. spokesman in my riding stated that if they came to power they would raise taxes. In a public debate I asked my opponent if this were so, and he said: Oh, yes, we would raise the taxes from the big corporations and the millionaires. I proceeded to ask: Is it not also the policy of the C.C.F. party to nationalize the steel mills that is: the Steel Co. of Canada, Dofasco, the Firestone Company and several other companies prominent in Hamilton? He said: That is the policy; we are going to take everything for the workingman. I fail to see how the C.C.F. party could raise the taxes of the big corporations and take them over at the same time. I think it is very inconsistent.
I went further, and asked my opponent how they were going to take over these big corporations, and he said they were going to purchase their stock. I think the hon. member for Skeena (Mr. Howard) in his alphabetical speech talked about robbing the people. In taking over this stock I think the C.C.F. would be robbing all the people of Canada, not only the millionaires but the little people who hold stock in these corporations. I asked, referring to a certain type of stock, whether they would pay $30 the market value. They said: No, we would pay the market value when the stock first came into force. So I believe their policies of nationalization and increasing taxation are very unsound and ridiculous.
In this budget I believe the Minister of Finance has done the best job possible considering what he had to put up with and what was left by the Liberal party after 22 years in power. They had the facts, and they did not act upon them. How different was the amendment which the hon. Minister without Portfolio, the hon. member for Greenwood (Mr. Macdonnell), proposed during the last 1957 budget debate when the Hon. Walter Harris was minister of finance. He moved:
That this house regrets that the economic policy of the government fails, despite a very large surplus, to meet the needs of the Canadian people and in particular (a) does not provide adequately for old age and other pensioners; (b) does not propose a reduction in the personal income tax; (c) does not assure to the provinces a larger share of the revenues from federal-provincial fields of taxation; and (d) ignores the problems and needs of agriculture.
Mr. Speaker, this was true Conservative policy. We were putting forth views at that time which we thought were right. In the last session of Conservative administration every one of those amendments was put into 57071-3-108
The Budget-Mr. Peters effect by the Conservative party, and the people of Canada are getting benefits from them today.
In summarizing my short speech I should like to say that the Conservative party is a very progressive party. Some of the Liberals feel we are conservatives with a small "c". On the other hand they think we are the old Tories of the depression years. But we are a party of young men and we are going to try to show Canada that we have good policies; that we have bound the French and the English together without disunity, without taking the east coast from Upper Canada or Quebec from Ontario, and with this kind of thinking I believe we will have one Canada for Canadians.


Mr. Arnold Peters (Timiskaming):: In rising to speak on this budget I find many things in it about which I am not too happy, and very little to give the Canadian people encouragement in the years to come.
One of the things that struck me particularly was the great play that has been made on what the situation is going to be in the coming year. We were told in the budget that our gross national product was going to rise by approximately two per cent. That, I would say, appears to be a very liberal estimate of what the situation is likely to be. At the same time, very little was made of the fact that our national population is continuing to grow by a similar amount each year by natural increase. So it would look as if our situation is going to be worse this year in the light of the gross national product in terms of the population we are going to have, and therefore the situation does not look too bright or too hopeful for the forthcoming year.
I, personally, am not in agreement with having a deficit budget unless that deficit budget is going to satisfy some particular purpose, and it would appear to me that the budget we have before us is no different from the last budget that the Liberal government introduced in March, 1957. There have been very few changes, but I think those few changes are things that the Canadian people should look at very closely. It reminds me of the fact that governments, irrespective of their political colour, are faced with certain housekeeping expenses, and with regard to these the Conservatives are going to find it very difficult to depart from the policy followed by the Liberals in the past. And, I may say, the C.C.F. party also would have to make this type of payment, and that this part of the budget-this housekeeping budget-would be the same no matter what the government was. The small percentage with regard to which the government can make a difference

The Budget-Mr. Peters because of its political views seems to be getting less and less. Certainly this budget would seem to indicate that.
I think an emphasis has been put on certain phases in that budget which would indicate some minor trends of a difference in thinking between the Conservatives and the Liberals. We notice this in the tariff proposals. I think it is surprising that a party which comes to power and which brings in its first budget after so many years should not have done some thinking about the protectionist views it held 20, 30 or 40 years ago and come up with something a little better than a patched up tariff program of this sort. The tariff structure should have been examined in the light of the new thinking that is taking place throughout the world and certainly in the light of the offer of free trade extended by the United Kingdom government, and it should have taken into consideration the fact that in Europe free trade on a united basis is the policy of many of those countries.
I think that this budget failed to take into consideration what must be the experience of many years and has reverted, in relation to this tariff structure, back to the thinking of the Conservatives many years ago. There are many things that we wished to have done, and I am quite happy that the hon. member for Hamilton South (Mr. McDonald), should have mentioned some of them. Some of the things which I think it necessary to raise and to give consideration to for the welfare of the bulk of our population were not mentioned. I refer, for instance, to family allowances. In 1945 the Conservatives were quite opposed to family allowances. But this is something to which we have become accustomed. It is something that I am quite sure the Conservative government would not wish to take away from the Canadian people. If they do not wish to take it away from the Canadian people, then they also have an obligation to bring it back to its original purchasing power, a procedure which would give us now family allowances of approximately twice what we are receiving. This would not be any increase, I might suggest, but it would be rather in keeping with the cost of living.
I think that raises another problem that we should face up to. We are now enjoying the highest costs-and most of us are not liking it-that we have ever had in the consumer field. Everything we buy is double, triple and sometimes much higher than that. At the same time we in Canada are faced with a recession. Although the government may not feel that this recession is important or should be given any particular consideration in this first budget of this parliament,

I think it certainly deserves some consideration, and that a great deal must be done to eliminate that problem. It is true that those who are employed are finding that their wages are up as compared to what they were ten years ago but they are also finding at the same time that those wages do not buy in produce as much as they bought ten years ago. Hence we must face this inflationary problem if we are going to look after the people in Canada. In order to do that I suggest that raising family allowances is a way of getting into the people's pockets money that they would not otherwise normally have.
This also is true with respect to old age security. It is quite true-and I do not think there is a member of this house who will disagree-that the main reason the Conservative government was elected in June, 1957 was the fact that they offered the old age pensioners of this country an increase in the old age pension. But I do not think that they were even honest with themselves when they raised that pension by $9. They had promised more than this and they had not made it pie in the sky. I note that the hon. member shakes his head. It is quite true that they may not have been definite because they seldom if ever are definite about anything; but you must tie it to something. You cannot go to the voters and say, "We will give you an increase" without being able to justify it in some way. The only logical justification for the increase, when our revenues are not as high as we should like to see them, is on the basis of maintaining purchasing power which we wish to maintain. I think this matter must be given some consideration in the near future.
We were pleased that an investigation should be set up to examine the whole structure of old age security. I think we all realize that while we can make promises at election time, we are finally going to have to implement them; and that procedure costs money. I am told that we are now going in the red quite rapidly on our old age security program. But why the investigation in the United States? I do not credit Canadian governments over the years with having been so unaware of the situation and so unaware of the lack of a formula on which to base their old age pension system that they did not look at other pension schemes throughout the world, not only that in the United States but those in other countries. I am quite sure that the officials in the minister's department could tell the minister exactly what the program is in the United States and how it could be applied in Canada, and that we did not need to stall for a year or so while we made a phony investigation into something we already knew.

The C.C.F. believes in and would implement the $75 old age pension. We also agree that it cannot be raised in the manner in which we have raised pensions in the past. We propose to the Canadian people to provide two types of old age security, one that is a basic old age security similar to the one that we enjoy but at a reasonable rate in line with the cost of living; and second, we propose that there be a contributary old age pension or national pension or superannuation plan or whatever you might wish to call it, and that this plan be of a nature that the employee be compelled to contribute out of his wages, that the employer also be compelled to pay a like amount out of his fund and that the federal government maintain and operate this plan in a manner similar to that in which the unemployment insurance system that we enjoy today is handled. That would mean that when an employee quits one job he could go to another job and carry his pension fund with him, that he would establish this pension plan from the day he began to work, that he would have an equity in the plan and that he would be able to carry it from job to job, industry to industry or province to province and that at the end of his lifetime of work he would be able to retire on a plan to which he had helped to contribute.
The first step I would suggest in this proposed plan would be to eliminate this $60 limit that we have put on people that are well able to afford a higher payment. We say that all people, even those who have not been employed like your wife and mine-we do not consider them to have actually been employed-should be able to enjoy the basic pension of $75, and we hope they will be able to do so; and we think that one of the steps that must be taken into consideration and should have been taken into consideration in this budget is that of allowing the tax to rise as the income of the people rises. If there is any truth in the statement that the wealth of this country is rising and that the people themselves are sharing in it, then even the $60 a month that was put on a number of years ago would not be realistic if we used the same formula from which the original amount of money was raised.
We have heard what was said by the hon. member for Hamilton South, and I am quite pleased that he raised this matter. He stated that the C.C.F. had said that they would increase taxation. That is quite true. We would increase certain forms of taxation. What he said with regard to corporation stock or corporations is not true. The C.C.F. at no time have had any desire to nationalize industries just for the sake of nationalization.
57071-3-108i
The Budget-Mr. Peters


Some hon. Members:: Oh, oh.


Robert Matthew Turnbull McDonald: I rise on a point of order, Mr. Speaker. As a matter of fact, I am not sure whether it is a point of order or a question of privilege. I was referring to C.C.F. policy in my riding. I was pointing out the direct views of the C.C.F. candidate who opposed me and what he said on a public platform as reported in the press.


Mr. Speaker:: Perhaps what the hon. member wants to do is correct a statement that is being made by the hon. member who has the floor.


Robert Matthew Turnbull McDonald: Yes.


Mr. Speaker:: If that is so, I suggest that he leave the matter until the hon. member who has the floor is finished. Then he will have an opportunity to make any necessary corrections.


William Arnold Peters: I am pleased to have received that correction, Mr. Speaker. I was under the impression that this was supposed to be the policy of the C.C.F. If it has not been stated in this particular case, it has been stated in other places in a manner similar to that employed by the hon. member who preceded me. I should like to use one example. In recent months we have seen a particular case in which the federal government is involved namely the matter of Trans-Canada Pipe Lines.
We have seen very large profits made and we do not want to say whether or not those are right although legally we have allowed them to make these huge profits on very low investments. Some companies make an investment of a few hundred dollars and realize a capital gain of $1 million. Certainly we should tax that capital gain. Can any hon. member name any country in the world that does not have a capital gains tax? If the same companies who are spending money in Canada were to spend it in investing in pipe lines in the United States they would have to pay a capital gains tax of 25 per cent. There is no point in giving these people unrestricted profits without requiring something in return. We should remember that they are exploiting the natural resources of Canada. Is there any better way of imposing a tax that will provide the people of Canada with some protection through the means of old age security and other social welfare measures? This could be done by imposing a capital gains tax on those companies that risk very little and make a great profit through exploiting our natural resources.
We were unhappy to observe that the budget did not indicate that there would be a personal income tax exemption of $1,500 for

The Budget-Mr. Peters single persons and $3,000 for married persons. It would appear to me that if the minister-


Mr. Speaker:: Order. I call to the hon. member's attention the fact that the house voted on that issue last night and negatived it, and it would be out of order to raise the matter again.


William Arnold Peters: Thank you, Mr. Speaker. I
wish now to approach the subject of pipe lines in a different way. As hon. members appreciate, the government made money available for part of the pipe line in the budget. We have received many complaints over the months concerning the Northern Ontario portion of the pipe line. I hold in my hand a letter which I received just the other day which points out better than I could some of the problems the people in that area are facing, and I should like to read a brief excerpt from the letter. Its author states:
Furthermore, the company-
That is, a contractor of the Northern Ontario Pipe Line Crown Corporation-
-has developed a sort of disdain and hatred against our men because they are French-speaking. "The least of them, the better!" is the motto of the said company; this is why our men keep on going every morning to the office and there is no work for them, but the company hires strangers, even from Texas, ignoring the local starving families.
I might point out that the lumber and pulp and paper industry in this area west of Hearst has almost disappeared. Where there were 7,000 or 8,000 workers in the bush last year there are now less than 2,000. These people wish to work on the pipe line in order to support themselves and their families although it is not necessarily the type of work for which they have been trained. Nevertheless they are willing to accept labourers' rates of $1.25 an hour, but they are being refused the opportunity of working on the line. The letter goes on to describe some of the other events that are taking place:
-since the TCP-
The Trans-Canada Pipeline Company-
-compels the men to work Sundays, in spite of all civil and divine laws, claiming that it must make up for time lost during January and February.
While one can appreciate the company's desire to compensate for lost time, I frankly do not think it is a justifiable excuse for having the employees work overtime. I cannot believe that the line will continue to be constructed in northern Ontario during the winter months because there can be anywhere from four to six feet of frost in the ground. There can be no justification for compelling the employees to work on Sunday

when it is not a continuous operation. If it were an around the clock operation there would perhaps be some slight justification for this and the employees could be given their day of rest on another day during the week. There is no reason for having the employees work between 70 and 80 hours a week. Two people could work a 40-hour week on the job and it would be accomplished just as quickly.
With respect to the pipe line, the government has failed to take any action in line with the statements it made prior to the election, on which it was returned to this house. Previous to the election members of that party spoke about nationalization of pipe lines. Not only hon. members of the C.C.F. but the leader of the Conservative party agreed that nationalization would probably be a good thing. I believe the government should seriously take into consideration nationalizing our pipe lines.
I noticed an article in the Globe and Mail of yesterday which reported that the question of nationalization of the trans-Canada pipe line was discussed at a convention of municipalities meeting in Toronto. They agreed that the federal government should be approached and asked to take some action in the nationalization of the pipe line and only two dissenting votes were cast. There are many abuses prevalent on the pipe line which I do not think the Canadian people can afford to tolerate.
At this point I wish to thank the minister for the assistance he provided to the gold miners in my area and on behalf of all gold mining communities in Canada I tender him my appreciation. Having sat in during the presentation of several briefs by the gold mining industry to the federal government I can safely state that those in the industry will appreciate this increased assistance. However, they know and I am sure the minister knows that assistance of this kind is not the solution to the problem. Emergency gold mining assistance is being paid to only a small part of the industry and other parts of the industry struggle along without any aid because their costs of production are not as high as some of the other more marginal mines. The government has not offered a permanent solution to the problem confronting the industry and therefore it has an obligation to the industry. I would suggest that the government remove the word "emergency" from the Emergency Gold Mining Assistance Act when it is next brought into the house for renewal or revision. There is no longer a need for the word "emergency"

to be there because this appears to be a continuous problem which requires a permanent solution.
I believe the government should investigate the matter of storing gold, which could very well be referred to the banking and commerce committee. Let us put a Fort Knox in Canada. Let us buy the gold and back the currency of our own money. If the United States can afford it at $35 it should be worth $35 and more to us. We could set our price for gold. Other countries have had to do that. I am sure we will find some satisfactory method of utilizing gold other than selling it to the United States, which pays only $35 for our gold. If we feel that the gold mining industry should be saved let us find a permanent solution to the problems it faces instead of dealing with the industry on a day to day, year to year basis.
I want to advise the minister that we in the mining communities of Canada are going to be watching very carefully to make sure that a fair proportion of the 25 per cent or $2J million is returned to the pockets of the workers and through them to the communities that are entirely dependent on that industry. I do not believe the Canadian people have any interest whatever in financing the dividends that are being paid to shareholders in these corporations.
If some of the members on the Conservative benches feel that statement is unfair because they are thinking of some of the dividends from some of these corporations about which they have been speaking, they should take a look at some of these mining companies who are paying out sums as large as $16 million in voluntary dividends when there was an original capital investment of only a quarter of a million dollars. I do not think we have to waste too much sympathy on the gold mines or their operators but we should have a great deal of sympathy and we must be very concerned about those miners who are working for very low wages and who are completely dependent on that industry for their very existence. This is a serious situation throughout northern Ontario and many other parts of Canada. This part of the country must be developed and I therefore hope that every consideration will be given to the people who live in those communities I have mentioned and who, as I say, depend on the mines for their livelihood.
There are a number of other problems in northern Ontario which have not been met by this budget, in fact I can think of very few which have been met by it. However, I am hopeful that some of them will eventually be taken care of. One such problem
The Budget-Mr. Peters is with respect to agriculture. Every day people leave the farms of this nation and I particularly have in mind northern Ontario where you can drive through the country and see signs on the corner posts along the side roads "auction sale, such and such a date" and then there is a list of the farm equipment for sale at the various farms. Agriculture is one of our greatest assets in Canada. The agricultural industry is both staple and basic, an economy which we can improve and expand with very little effort and which can be made more equitable with the economies in other parts of our country and, indeed, with the agricultural economy of other countries. I say this because, as is well known, there are hungry people throughout the world and there is a common need for food. We have the means and the ability to bring about great production in that field. I think some consideration should be given to increasing our ability to sell our products and to increasing the value of those products.
This appears to be the day to talk about Conservative candidates during election time and so I will make reference to the Conservative candidate in my own area who made speeches before and since the last election asking for assistance in respect of beef production in my area. He is quite right. Beef cattle can be raised in northern Ontario better than it can be raised in any other part of Canada. Our climate is very similar to that of western Ontario and with our clay land our produce can equal if not improve upon the produce of any other sections of the country. Mention was made recently by one hon. member of the grain in his area which he said was the top quality. We in northern Ontario have done better than he has to the extent of 30 bushels per day. We need assistance, however, and we would recommend the setting up of government gradings, particularly with respect to cattle so that we may stamp our beef No. 1 quality. Assistance should be given to our farmers in connection with improved breeding of our livestock generally so that our beef production may be increased and made more readily available to Canadian markets.
One suggestion I would like to make is that the government could render assistance in this respect by making provision for a slaughter house in my area and I understand that there are in existence certain acts which would make such assistance possible. We would then be able to eliminate some of this dependence upon gold mines and would be able to branch out into secondary industries. This would serve a double purpose in that the federal government would be relieved of some of its responsibilities in

The Budget-Mr. Peters respect of subsidies now being paid to the mines. These subsidies have constituted a very difficult problem and it has been very difficult to dispose of them.
We will be watching the situation with respect to how this budget is going to be applied for the assistance of those people who came to Ottawa the other day stating that all they asked for was the right to work. It is true that all these people want is a job. It cannot be said that they are lazy or do not want to work. They live in towns such as Windsor where jobs have not been available for a long time, where unemployment benefits have for many months been exhausted and where seasonal benefits no longer apply. We will watch this situation very closely.
This brings us to another matter. The Prime Minister (Mr. Diefenbaker) stood up in the house the other day and very graciously suggested that parliament should sit at 4.30 on July 1 instead of at 2.30. I have been concerned with labour problems for quite a few years and July 1 is one of those holidays which we have had very little difficulty in getting employers to endorse as a national holiday. It is true that with respect to some of the other holidays management has argued that they are not of a national character but this national holiday has been the only one universally observed. This day commemorates the creation of the Dominion of Canada and yet we are asking the representatives of the people of Canada to sit in this house on that day rather than enjoy the holiday celebrations.


Mr. Speaker:: I hope the hon. member does not intend to pursue that matter because he will have a chance to do so when the motion is called. It is on the order paper. I do not wish to unduly restrict him but that is the situation.


William Arnold Peters: I do hope something can be done but I was not aware this matter was to be debated. I will have something further to say when the motion is called. We in the C.C.F. are very perplexed-


Some hon. Members:: Hear, hear.


William Arnold Peters: Yes we are because we think and some other people do not. We are perplexed because we have waited for this budget to be introduced and we know that it is a budget which many many people have also been anxiously awaiting. Many Canadians have been saying how wonderful it was going to be when the people of this country would receive the first Conservative budget which would eliminate many of their problems. They have now received it but I fail to see any difference between this


budget and one the former minister of finance would have introduced had he still been in office. I think these sentiments might be echoed by many of his predecessors. As one of the hon. members of this house has said this was a truly blue budget introduced by a minister of finance wearing a blue carnation and a blue suit. I notice that he has worn that blue suit since budget day but I think from now on the people of Canada, by the time he has finished with them, will be the ones who are wearing the blue suits.
(Translation):


Mr. Emilien Morisseiie (Rimouski):: Mr. Speaker, in speaking here for the first time as member for Rimouski, I should like to recall the memory of some of the most prominent figures of Canadian political history who have attached their names to my constituency.
After the principle of responsible government had been accepted, Robert Baldwin became attorney general of Upper Canada and, in accordance with the practices of the time, had to be re-elected but, unfortunately, went down to defeat in his Ontario riding of Hastings. Lafontaine, then member for York, asked the member for Rimouski, one Borne, to resign and, in early 1843, Baldwin was elected by acclamation as member for Rimouski and remained so until the general election of 1844. A few years later, in 1847, Joseph-Charles Tache, was elected member for Rimouski. He represented that riding until 1857.
Mr. Speaker, may I remind hon. members that Joseph-Charles Tache was the founder of the Courrier du Canada and was at one time deputy minister of agriculture, in Ottawa. By articles in his paper and by means of a pamphlet entitled Provinces de VUnion Federate (Provinces of the Federal Union) published in 1858, Tache was one of the main promoters and propagandists of the confederation idea.
Finally, in 1878, Sir Hector Langevin, one of the fathers of confederation-who, after the death of Sir Georges Etienne Cartier, was the principal collaborator of Sir John A. Macdonald, and who was also the brother of the first bishop of Rimouski-tried to get elected in my riding, but unfortunately failed.
Such illustrious precedents, Mr. Speaker, may well fill a young member of parliament with noble ideals, but also with a great deal of humility. I want to say, without boasting, that I have no other ambition than to modestly follow in the steps of these great men.

I congratulate the Minister of Finance (Mr. Fleming) for presenting us with a very lucid and detailed study of the problem of Canadian finance and of the general economic situation of our country. I congratulate him specially, as I do the government, for developing and deciding to apply an economic and financial policy which, in the present situation, appears to me to be very appropriate.
I congratulate the official financial critic of the opposition,, the hon. member for Kenora-Rainy River (Mr. Benidickson). For all the incoherence of his theories and the built in contradictions of his system, which were very forcibly denounced by the hon. member for Carleton (Mr. Bell), I was deeply interested in his speech.
I was surprised to find that our Liberal colleagues base all their disparagement of the budget on the fact that this year the government will have a deficit of about $650 million, when the very A B C of economics say that, in periods of recession, government expenditures should be maintained at a very high level. And while lashing into the announced deficit, Liberal members found it possible to lecture the government for its failure to cut down taxes even more. They inveigled against the budget deficit but asked the government to introduce all sorts of measures that would mean a further drain on government funds. This lack of logic in criticism on the part of our opponents bespeaks either bad faith or incompetence.
By expounding contradictory, self-demolishing theories, Liberal members are showing to the whole country that they have been unable to conceive a genuine and realistic economic policy.
Already, on previous occasions, the Prime Minister has described to the house the fiscal policy devised by the government to ensure economic recovery, and he has clearly defined the three ways in which the Conservative government plans to fight unemployment.
On Friday June 6 the Prime Minister made a statement in this house which can be found on page 899 of Hansard for that day:
According to economists there are several means that should be adopted. One is to provide additional consumer monetary assistance in order that the consumer may be able, by the expansion of his income, to make purchases, thereby improving the general situation. The second is by a public works program. The third is by action in the reduction of taxes. All three courses of action have been followed. In no case has any one of these three legs of the tripod, as it were, for recovery been followed in its entirety. Each
The Budget-Mr. Morissette complements the other. None of the three by itself is recognized by economists as sufficient to meet the situation.
That is what the Conservative government has done. Its first move was to reduce taxes.
Since the election of June 10, 1957, the government has reduced taxation by a total sum of about $200 million. It has helped keep purchasing power at a high level by improving all forms of social security legislation. It raised the old age pension and allowances to the disabled and the blind. Its new fiscal concessions to provincial governments have allowed the Quebec legislative assembly, for instance, to increase in turn its allowances to needy mothers. It enacted repeated and numerous extensions to unemployment insurance legislation, in respect of seasonal benefits. Finally, to complete these two first steps, the government has set into motion a vast public works program.
Within the present day economic context, this federal government policy has proved both appropriate and timely. The economic situation is already improving, and we can infer from a number of factors that Canada's economic activity is again on the upgrade.
Consumer demand is growing at a satisfactory and steady rate. The employment index is rising.
According to the national employment service, in May 1958 the national labour force was 6,031,000, as against 5,881,000 in May 1957. That is an increase of 150,000 over last year. Prospects for the home building industry were never so good. This is a direct consequence of the government's generous and bold policy in this matter.
As the Minister of Finance pointed out in his budget speech, in the first four months of the present year the number of building starts were 80 per cent greater than for the same period in 1957. Many facts point to the growing stability and buoyancy of Canadian economy. Home building activity recently went up 15 per cent over last January. I have already noted that with regard to the corresponding period of last year, that increase is of the order of 80 per cent.
The price of the industrial securities registered in the stock market, I mean common shares, are two to three per cent higher than at the beginning of the year. Commercial and industrial construction was more active in March and April. The weekly averages of hours of work in manufactures show new
1712	HOUSE OF
The Budget-Mr. Morissette firmness as do wholesale prices in the field of industrial production. Finally, our exports, one of the decisive factors of our national prosperity, have risen in March and April.
According to the Federal Bureau of Statistics, the total volume of our exports represented, in March 1957, the sum of $361 million; in March 1958, the corresponding figure was $369 million. In April 1957, the figure was $365 million and, in April 1958, it had reached $371 million.
It is easy to forecast that, as the economic activity improves in other countries, especially in the United States, Canada's export position should improve further.
It is reassuring to think that the recession itself has been much less serious in Canada than in the United States. It is fair and reasonable to believe that the sole reason why the economic situation deteriorated much less in Canada than in the United States has been the wisdom of the financial and economic policy of the Conservative government.
In March 1958, the retail trade in the United States was 5.6 per cent below its level of July 1957. In Canada, the volume of retail sales has increased by 12 per cent from July 1957 to March 1958 and this trend seems to continue.
Industrial production went down 10 per cent in the United States from July 1957 to March 1958. In Canada, the difference is but 3.3 per cent.
New construction projects in the United States are just about beginning to reach the level of last year, while in Canada a very strong rising tendency has contributed to strengthen our economy substantially.
Instead of protesting vehemently, and of describing as outrageous the deficit forecast by the Minister of Finance, Liberals should remember that, before the June 1957 election, they failed to take the energetic measures which could have then warded off the recession. When the first symptom of an economic slowdown became apparent, the Liberals kept finding delight in a stupid inflationary intoxication. Not until a Conservative government took power were adequate and appropriate measures taken to deal efficiently with a disturbing slackening of economic activity.
Mr. Speaker, it is indeed strange to hear Liberals rejecting today, as a matter of political expediency, the economic creed they had professed at one time.


Even since John Maynard Keynes wrote his very famous "General theory of employment, interest and money", in 1935, the Liberals have claimed to be die-hard "Keynesians". It can be said, Mr. Speaker, that certain economists, great advisers of the Liberal party, have never been ashamed to confess candidly that they had been fana-ticized and bewitched by the great English economist. They have always claimed to be the champions of a cyclical tax policy. But when, in 1958, a Conservative government introduces a budget which, precisely, has due regard for all that is best in contemporary economic thinking, the Liberals heap abuse upon it. I say, Mr. Speaker that this attitude enlightens us on the score of their inconsistency or lack of sincerity.
If the Liberals were sincere and if they wanted to be consistent, they would congratulate the Minister of Finance and the Conservative government for having the courage to accept all the liabilities of a deficit budget at a time when everyone knows that it is the best and perhaps the only way to cope efficiently with the recession and to establish in Canada a full employment economy.
In concluding, Mr. Speaker, I wish to deal briefly with a few matters concerning my constituency.
First of all, I take pleasure in thanking the government, since the hon. Minister of Public Works (Mr. Green) announced on June 6, when we were discussing the estimates of his department, that he intends to spend a sum of approximately three million dollars for the construction of a winter harbour at Father's Point. I am happy at the thought that work will start this very year. This year-round boat service linking the area with the north shore will alleviate the present isolation on that shore and help reduce the great cost due to seasonal ups and downs in our economy. When we think, Mr. Speaker, that, all along the 700 miles from the mouth of the Saguenay to the Atlantic, the people and industry on the north shore rely only on navigation for their supplies and the shipping of all kinds of products, we can easily grasp how much this project will help develop the area and promote the welfare of local residents.
Following the example of my friend, the hon. member for Gaspe (Mr. English) I also would emphasize the necessity of extending the railway from Matane to Ste. Anne des

Monts. The Gaspe peninsula needs this link between its raw materials and the markets. An extension such as this would do much to increase prosperity along the lower St. Lawrence and in Gaspe peninsula.
Finally, Mr. Speaker, I should like to draw the government's attention, and especially that of the Minister of Transport (Mr. Hees) to a problem of acute import to my constituency at the moment: that of air navigation. My constituency has two airports: one at Rimouski and the other at Mont Joli. The one at Mont Joli was built during World War II and involved the investment of about $20 million, but, unfortunately, is practically out of use today. In the last few years, under the Liberal administration, no active step was taken to bring it back to its former status. By their geographical location, facing the north shore-now in full-geared activity, as a result of the development and operation of the iron ore deposits in the Quebec-Labrador area-the airports of Rimouski and Mont Joli occupy a strategical position.
I ask the government to consider whether it would be possible, by improving and modernizing those airports, to stimulate air transportation in my area. At any rate, it is absolutely necessary from the economic point of view in the area of the lower St. Lawrence and of the constituency of Rimouski that strong steps be taken in order that our airports may obtain part of the air traffic which the development of the Ungava and new Quebec has created and will continue to create.
In closing, Mr. Speaker, I would also like to say to the voters of the constituency of Rimouski how grateful I am to them for the eloquent tribute of confidence they gave me on March 31 by electing me to represent them in the parliament of our nation, with the greatest majority-barring a single exception-ever granted a member for Rimouski. My only ambition is to serve humbly in the defence and promotion of the rightful interests of my electors. I believe that by working for the prosperity of our own particular home constituency, we are all working here for the prosperity of this great homeland of ours, our beloved country, Canada.
The hon. member for Laurier (Mr. Che-vrier) had words of regret, the other day, for the position of Quebec Conservatives. My hon. friend is at present a victim of a frustration complex. I am pleased to say to him that we, Conservative members from 57071-3-109
The Budget-Mr. Houck the province of Quebec, feel quite at home in the party of Macdonald and Cartier, in the party of the right hon. Prime Minister of this country. We know that, within it, we can work freely and usefully for the greater good of Canada.
(Text):


Mr. W. L. Houck (Niagara Falls):: Mr. Speaker, I would be very remiss indeed if I did not offer my congratulations to my old and good friend from Hamilton South (Mr. McDonald) for the speech he delivered a while ago. I am not so politically bigoted that I cannot praise at times a man with whom I find myself in opposition. I have always felt that the hon. member for Hamilton South, and I say this without any fear of contradiction whatsoever, was one of the greatest footballers Canada ever developed. He not only brought a great deal of honour to himself, his family and the city of Hamilton but also to the big four football organization. I must confess that many times I sat with the other fans in Hamilton and cheered him lustily for his good playing, little realizing at that time that I was cheering a Tory.


John Whitney Pickersgill: He probably was not a Tory then.


William Limburg Houck: I must say that he brought
honour to himself and was a perfect gentleman on the football field as he is in the House of Commons.
For a few minutes I should like to deal with something not particularly connected with the budget but first of all may I congratulate the previous speakers who over the course of the last five or six days have argued the pros and cons of the budget. At this time I should like to discuss some of the problems with regard to what I consider is a very troublesome, perplexing and not well understood tax, the income tax. I was quite impressed on reading a statement of Mr. W. M. F. Petry, a noted archaeologist who made a study of the rise and fall of nations and civilizations which gave him unusual insight into the outcome of man's experiments with government. He made the statement that democracies consume themselves through excessive and unjust taxation until they collapse and are succeeded by men on horseback or the rank growth of the jungle.
Representative William Cockran of New York years ago warned that democratic institutions must perish from the face of the earth if they cannot protect the fruits of

The Budget-Mr. Houck human industry wherever they are or in whatever proportion they may be held by the citizens.
I think we have failed fully to realize that through our tax system we have been playing right into the hands of the Marxists who gleefully hail the income tax as the one sure instrument that will bring capitalism to its knees. We also have failed utterly to see that communism is not a political philosophy or plan but rather is a state of impotence to which those marked for subjugation by would-be dictators must be, and are, reduced in order to assure absence of effective resistance. But there are other reasons for taking a dim view of our tax system, particularly the income tax, that are no less urgent than the fact that the system has become an ideological bombshell.
I could mention people in many categories whose skill and talents have placed them in the higher brackets, yet the taxes that they have to pay are certainly brutal. I think the professional athlete fares about as badly as anyone. If one is fortunate enough to break through to the top he usually does well income-wise, but the way up is pitifully unrewarding, so much so that those who make the grade more often than not mount the throne of glory head over heels in debt and their reign usually is short. These are the people with whom the tax collecter forms a real heads I win tails you lose partnership. Even the people with a regular earning power are by no means the only sufferers from our income tax laws. Almost everybody now has been gathered under the tent and the percentage of those taxed leaves few immune to plucking who have enough feathers to notice.
It is my belief that one of the strongest and most serious counts in the indictment against the income tax is its complexity. It certainly started out simple enough, but I do not think it is an exaggeration to say that it has become as frustrating, confusing and bewildering a fiscal problem as the Canadian people ever had to cope with. I certainly give the department credit for trying everything they could think of to make this tax understandable, and it is my belief they have made some progress. Relatively few people can handle even the short form or T1 general tax return without assistance. Naturally, the forms have to follow the law. They cannot be made any simpler than the law, and anyone who cannot understand the law cannot very well be expected to understand the form. It certainly is an unhappy truth that it seems to be impossible to have simplicity and fairness at the same time.

Most of the complexity in the present law came from efforts to plug the so-called loopholes and remove discrimination. Let no one assume that the income tax law is any better understood in official circles than it is by its lay victims. This honourable house is not made up of supermen or superwomen. It is simply a collection of human beings like everybody else and I hope no one will think that I wish to make any attack on these people, but to be perfectly frank I must suggest that just as no one has to understand what dynamite is made up of to know that it can blow a person to kingdom come, so no member or parliament or senator has to know how to determine the tax consequence of intricate corporate reorganizations to have found out by now that the income tax is hopelessly complicated and a Trojan horse.
May I ask this question? Who, if anybody, does really understand this tax? How about the people who write it? The answer is not greatly different. By the time the tax branch and their staffs get through with the grist that is delivered to their mills, many undecipherable changes have been wrought. The problem then presented is well illustrated by the struggle the experts in the treasury department have been having with the job of getting out regulations to cover the code. It isn't that the people in the treasury department and the national revenue service have not been trying to get these regulations to be clearly understood; quite the contrary, I think they have been knocking themselves out at it. But it has been extremely difficult for them to reach agreement as to just what the government means at many points and equally difficult to agree on how to express the intentions of the government after they have agreed upon what the intentions were.
Honest and efficient administration of public affairs cannot be achieved by invasion of the prerogatives and assumption of the responsibilities of executive officials by legislative bodies, committees, individuals or committee staffs. I have never believed that enduring honesty or efficiency can be achieved by legislation. Honest and official public administration can be achieved only by honest and efficient administrators, honestly appointed and free to act only in the interest of the people.
Another count in the indictment against the income tax, and a very serious one, is the cost of it. There are two categories of this cost: (1) what the government spends to administer the law; and (2) what the taxpayer pays to comply with it. In identifying the first category, the cost, I did not speak of it as a cost which the government pays. The government does not pay any part of

this cost. The taxpayers pay every cent of it, the cost of administration as well as the cost of compliance. The government never pays anything. It spends, and the taxpayer pays. I am not suggesting that the revenue service is wasteful or inefficient, because I know better. What I am suggesting is that the complexity of the income tax law necessitates the use of a lot more people in our nation's revenue department than would be necessary under a simple and better understood revenue system, and that therefore the cost of administration is a great deal more than it ought to be. We continually hear complaints from the revenue department, and I think it is the irony of the present situation, that they do not have enough on the staff to assure adequate enforcement. Sometimes I think we have more fear that the taxpayer would react adversely to close enforcement of the law than concern about the revenue that would be lost by inadequate enforcement. I have never felt that people resent full enforcement of tax laws. They do resent inadequate enforcement because they well know that a lot of people do not pay what they should when enforcement is inadequate.
Many taxpayers have complained bitterly to me about this situation, and sometimes I think the gentlemen who are acting in the tax department assume the role, and improperly, so, that because of the fact they are like an officer whose coat is filled with brass buttons, they assume too much authority and demand too much of the taxpayer. I have a case in point in my own riding where the tax men went to a doctor's home and demanded to see not only his will but his wife's will, and they broke the seal upon both of these wills, and kept this doctor's books for a year-and-a-half without returning them. This sort of action breeds a feeling of ill-will against any government.
Many taxpayers have complained bitterly to me, and I am sure to many members of this honourable house about this sort of situation and I must admit I cannot honestly disagree with them. All I could do, like any other member, was to try to explain the problem in my meagre way and beg their indulgence. No one ever refused to listen to me, but none of them were happy about it and I do not blame them.
If a satisfactory substitute for the income tax cannot be found, the only answer to the first complaint is more revenue agents of top grade, but I must be frank in saying that I doubt if this government or any other government would permit the service to have all the agents it needs. I think some of the members of this house must fear what many knowing outsiders firmly believe, namely that 57071-3-109i
The Budget-Mr. Houck if this House of Commons allowed the revenue service to have enough money for all-out enforcement of the income tax the demand for repeal would become so great within a year that it would be irresistable.
Another count in the indictment is that the income tax is unstable, being based upon income. It is a low producer in slack times and the high producer when times are good. Thus, theoretically, rates must be raised when people are least able to pay, and may be lowered when everybody is most able to pay.
The man-made deficiencies of the income tax laws are to a large extent the consequences of submission to the demands of pressure groups. For instance tremendous accumulations of income producing wealth have been removed from the jurisdiction of the income tax law by the exemptions granted to foundations and certain other nonprofit organizations about which I am not complaining. I think these exemptions are perfectly justified, are right and should be continued. What I object to is the fact that billions of dollars of potential income also are kept out of reach of the tax collector by government's engagement in business activities that compete with private enterprise.
Too much has been done deliberately to keep taxable income from keeping pace with economical development and growth, thus precluding realization of the full potentialities of the income tax as a revenue producer and making it more and more unequal to its job.
With the income tax having proven to be an unstable source of revenue I think the government has availed itself of a variety of other taxes. Some, if not many, of these taxes could be dispensed with if the primary tax were a stable one and could be permitted to produce fully and freely.
Naturally hon. members are going to ask themselves the question: What can be done about all this? I suggest to hon. members of this house that the time has come to take a new and critical look at our whole tax system. After all, some elements of the present tax system seem to be as old as our dominion itself.
Naturally age alone is not a sufficient reason to condemn any particular tax or any part of our tax system, but to me there is a lot more wrong with the income tax besides its age. Naturally, you are going to ask me-and rightly, what I would suggest to remedy this serious situation. My proposal would be a simple one. It is that this house appoint a commission-type group to make a really critical analysis of the income tax in particular and other tax systems in general and to study such reasonable proposals as

The Budget-Mr. Houck may be made with regard to both. I think such a study is long overdue. We have failed in the past but there does not seem to be much of a search for anything better and this search could be conducted on a continuing basis. Research pays off handsomely for business as to matters far less important to it than the government's tax system. It is time the government got some research started in this important field. Such a commission as I have in mind should be a non-partisan one and all the responsibility for it and its findings should be assumed by this House of Commons. Moreover, it should not be put under the handicap of a deadline. It should have time to do a thorough job and not be restricted in any way in its enquiry.
Then again I know that hon. members will ask me the question, "Well, what if we get rid of the income tax what would you put in its place?" That is a fair question but to me that is not the immediate problem. The necessity for a commission to go into the whole problem of taxation thoroughly would be lost in an argument whether or not mine or your suggestions would be feasible. Those who have vested interest in maintaining the status quo would see to that. There are many such people and I must admit some of them have tremendous political power. For the time being I must content myself by saying that I believe that a law or system can be contrived that would be simple enough for the average taxpayer to understand. Such a system might be relatively inexpensive for the government to administer and the taxpayer to comply with and at the same time be a stable source of revenue. Certainly such results have been worked out in many cases in very important categories of business enterprise. I believe that the same can be worked out for business generally and for individuals as well.
I say to the hon. members of this house that there is not any time to lose. Whether you believe it or not, everybody is being overtaxed, the middle class is being taxed out of existence and the nation thereby is being robbed of its surest guarantee of continued sound economical development and growth and its staunchest bulwark against the rise of socialism. The marvels of television brought the truth home to us with indelible clarity. Certainly the big surprise to me and others as well has been how little we have left after the "gimme" man has taken his cut.
Too many people today do not have enough money left in their business after taxes are paid to keep them abreast of the demands of their customers and since even more is extracted from us as individuals we just do

not seem to accumulate anything and are not able to increase our investment in our businesses, or in our country's growth. I repeat and with emphasis indeed that things are mighty serious largely because of the tax system and the income tax. Big business gets bigger and little business and substantial middle class folks are beginning to disappear. We were concerned about the future because we did not believe we could stand another serious recession. High rates of tax certainly could not mean anything when we have not anything to tax.
May I say again that time's a-wasting and the enemies of the way of life that we cherish so greatly rejoice as we are led closer and closer to national suicide. So I leave this question to hon. members of the house: What are we going to do about it? Let us do something about it before it is too late.
Mr. C. W. Hodgson (Victoria, Onl.k Mr. Speaker, in taking part in this debate I first want to congratulate the Speaker, yourself and the chairman of committees. This is my first opportunity to do so since you three have taken office. I want to say that in the discharge of your duties you are doing a wonderful job, to the honour of this chamber and yourselves, in maintaining the traditions and the dignity of parliament.
Next I want to congratulate the Prime Minister (Mr. Diefenbaker)-and this also is my first opportunity to do that-on the wonderful majority he has brought into this house for the benefit of Canada through the Conservative party. He has carried on and won two campaigns within a year. Some hon. members say: "Oh, he had good candidates". It is true that he had good candidates; but I want to say that it is much easier to get good candidates under the leadership of John Diefenbaker. He talked the same talk and the same politics in Vancouver and Newfoundland and Ontario as he did in Quebec.


John Whitney Pickersgill: Is that not rather a reflection on your previous leader?


Mr. Hodgson:: It is quite a change from the tactics of the former government because they have talked of "divide and rule" for the last twenty years in every election.


John Whitney Pickersgill: That is rather a reflection on your previous leader.


Clayton Wesley Hodgson: I am making a reflection on you fellows, I hope.


An hon. Member:: Keep it clean.


Clayton Wesley Hodgson: Anyway, the former government talked of "divide and rule" from one end of this country to the other. They did not talk the same talk in Quebec as they did in western Canada and they did not talk the same

talk in western Canada as they did in Quebec. But that procedure has become outmoded with the advent of the radio and television. However, they did not know that it had become outmoded or they forgot. The former government were so arrogant and domineering and were in power so long that they could not see the forest for the trees. When they woke up they found themselves on the humble side of the opposition.
I would like next to congratulate the Minister of Finance (Mr. Fleming) on the splendid budget he has brought down. He was frank; he was honest; he was bold.


John Whitney Pickersgill: He was courageous.


Clayton Wesley Hodgson: Yes, he was courageous.


John Whitney Pickersgill: That is the theme song.


Clayton Wesley Hodgson: This is the first honest attempt of any government or any minister of finance in my time, and I say this because he has lived up to all the election promises.


John Whitney Pickersgill: Half a billion reduction in taxes? He promised that.


Clayton Wesley Hodgson: Oh, the hon. member's leader was talking in the election about cutting everything and giving the people $500 million.


John Whitney Pickersgill: Your leader promised half a billion in tax reduction; where is it?


Clayton Wesley Hodgson: Where are all the things your leader promised?


John Whitney Pickersgill: He promised many things but he is not in office.


Clayton Wesley Hodgson: He promised everything from soup to nuts.


John Whitney Pickersgill: You have your chance but you do not deliver.


Clayton Wesley Hodgson: The people did not believe him.


Mr. Deputy Speaker:: Will the hon. members kindly allow the hon. member for Victoria (Ont.) to continue with his speech? If they wish to ask the hon. member's permission to ask questions they may do so, but otherwise they must let him carry on with his speech.


Clayton Wesley Hodgson: I do not mind, Mr. Speaker. Sometimes it is the spice of life if someone finds fault. As I have told hon. members, if I am making a speech with which they are in opposition, it is quite all right, they can go ahead, because Sir John A. Macdonald once said that all the sticks and stones generally lay under the best trees of fruit.
This was a double-barrelled budget. It takes care of the farmers and also of such problems as old age pensions, amendments
The Budget-Mr. Hodgson to the Unemployment Insurance Act of 1957 for the benefit of labour and measures to improve veterans affairs and so on. In fact the budget not only lives up to every election promise but it has assistance for the little man, the farmer, the butcher, the baker, the labourer and the artisan.


An hon. Member:: Nothing for the lumberman.


Clayton Wesley Hodgson: I think it is going to help the lumberman before the end of the year. I did not intend to make a speech today at all but my name has been brought into the house so many times on different occasions that I thought I had better say something to try to put right some of those who are at times so wrong. I refer firstly to the hon. member for Levis (Mr. Bourget), who said as recorded at page 912 of Hansard of June 0, 1958:
Hon. members will also recall that when the amendment was discussed in the house our friends now sitting opposite were very critical of the progress that had been made. They were also blaming the government of the day for not paying at least 90 per cent of the total cost of the road. I could read from Hansard many statements that have been made, particularly by the hon. member for Victoria and also supported by many other members of the Conservative party of that time.
That is quite all right, but I did not know I was so effective when I was on the opposition side. I did not realize that I probably asked too many embarrassing questions.


John Whitney Pickersgill: The hon. member is always effective.


Clayton Wesley Hodgson: Never mind, John, you are doing all right. The hon. member for Port Arthur (Mr. Fisher) said, as recorded at page 916 of the Hansard for the same date:
One of the points that I believe was dear to the heart of the hon. member for Victoria, Ont., when he was a critic in this particular field was that the trans-Canada highway was not wide enough, that the 22 foot strip led to a concentration and a wearing out of the highway so that by the time the project is completed the highway is going to be in a state of needing rebuilding. He made the point very well, I thought, that a broader highway-even a 24 foot highway-would be to the best advantage. I should like to have some word on how he has gotten along in his work within the department in seeing that this is coming to pass.
One of the other things in connection with the trans-Canada highway was this. I noticed there seems to be a popular clamour from new Conservative members in Alberta and Saskatchewan to have a second trans-Canada highway instituted under the general overlordship of the federal government.
I would suggest to the minister that in certain parts of Canada we are still waiting for the trans-Canada highway itself to be completed, and that before he follows this rush of enthusiasm from the west he should begin taking steps to get the provincial governments working much faster on completing the highway as it is. I wonder whether
1718	HOUSE OF
The Budget-Mr. Hodgson if in this regard he would consider offering Premier Frost of Ontario some sort of bonus in order to get his department of highways working a little harder up in northwestern Ontario.


John Whitney Pickersgill: I wonder if the hon. member would permit a question. Would he tell us whether, when he becomes minister of public works, he will pay 90 per cent of the cost of the trans-Canada highway?


Clayton Wesley Hodgson: I think I will be perfectly safe in promising that, because I have to become a minister first. However, I would like to say to the hon. member that if there was any special concession given to Ontario his group would foe the first to holler to high heaven.


John Whitney Pickersgill: We would like it for Newfoundland.


Clayton Wesley Hodgson: After all, this government has a mutual understanding with all the provinces and they must all be treated in the same way. As far as the 22-foot strip is concerned, in some places where the highway is taken over from the provincial highway it is only 20 feet wide and in some places 22 feet. But as soon as we became the government there were negotations from an engineering standpoint between the provincial and federal governments. We have been in favour of building a 24-foot highway but, after all, the wishes of the provinces must be considered and in connection with the procedure in the province of Ontario we have put a 22-foot hard top on the trans-Canada highway and where a piece of provincial highway was taken over where the road was only 20 feet wide, all the grading and work done since is prepared for a 24-foot top. I might say that all the pavement in connection with the trans-Canada highway being laid this year in the province of Ontario will have a 24-foot top.
The hon. member for Port-Arthur made reference to the width of the trans-Canada highway and suggested a bonus for the province of Ontario for the early completion of the highway and I think he has been answered.	The provisions of the trans-
Canada highway agreement permit a minimum of 22 feet and a maximum of 24 feet pavement. This government would prefer all of the highway to be 24 feet. In Ontario, however, they had in some sections elected to complete to the 22-foot width. There have been discussions with provincial officials at the engineering level and it is our understanding that they are prepared to build the new construction to the 24-foot width. This point is being pushed by the department.


With reference to progress in Ontario, the work is being pushed. We have received from the province a very tight construction schedule which they have prepared to complete the paved highway on the route by 1960.
A particular effort is being made in the gap section from Agawa to Marathon, a distance of 165 miles. All grading contracts will be awarded by July of this year and it is proposed to award paving contracts for 45 miles before the end of the year. To date, $10,537,000 has been spent on the gap and another $12 million is estimated to be spent this year.
Mr. Speaker, I have some figures covering commitments on the estimated cost of construction of the trans-Canada highway for the fiscal years 1956-57 and 1957-58 and then the payments to the provinces in connection with the additional 40 per cent contribution to the cost of construction as provided for under section 6 (1) b and section 6 (1) c of the trans-Canada highway agreement. Then there are figures concerning the paving mileage approved and completed under the agreement. I have recently received these figures and would like to have them appended to my speech as part of Hansard.


Mr. Deputy Speaker:: Has the hon. member the permission of the house to put this table on Hansard.


Some hon. Members:: Agreed.


Clayton Wesley Hodgson: There has been some talk about our not spending as much money on the highway this year as in previous years. This table gives the facts and the figures and it will be found that more money was spent on the trans-Canada highway during the last 12 months than in any previous year.
Commitments Covering The Estimated Cost of Construction of The Trans-Canada Highway
Fiscal Year 1956-57 Total Canada's Share
Newfoundland $ 3,226,920.00
Prince Edward Island
Nova Scotia
New Brunswick
Ontario
Manitoba
Saskatchewan
Alberta
1.355.900.00
2.753.155.00 6,617,236.35
22,930,460.29
4,938,788.64
7.563.909.00 6,909,263.75
British Columbia 25,709,100.00

Total:	$82,004,733.03	$52,044,143.90

The Budget-Mr. Hodgson
Fiscal Year 1957-58	December 10, 1949 to May 31, 1958
Newfoundland $ 4,689,892.25	$ 5,792,184.70 Newfoundland	
$ 9,777,397.16Prince Edward	Prince Edward Island	
3,272,532.20Island	793,103.75	779,711.88	Nova Scotia	
4,792,713.50Nova Scotia	3,318,825.20	2,806,212.60	New Brunswick	
12,385,775.21New Brunswick	9,315,232.36	7,923,896.18	Ontario	
41,240,308.94Ontario	21,887,793.13	13,561,706.56	Manitoba	
12,890,076,46Manitoba	5,369,206.00	3,385,475.40	Saskatchewan	
15,051,388.49^Saskatchewan	-1,107,841.58	-533,795.78	Alberta	
17,264,295.06Alberta	4,009,971.06	2,780,545.53	British Columbia	
40,820,162.99British Columbia 24,995,878.00	15,607,880.20	
Total:	$73,272,060.17	$52,103,817.27	Total:		$157,494,650.01
December 10, 1949 to May 31, 1958
$27,438,223.30	$17,166,350.22
Newfoundland Prince Edward Island Nova Scotia New Brunswick Ontario Manitoba Saskatchewan
7,336,758.99
11,245,837.20
33.479.012.85 117,832,008.33
28,877,966.55
27,759,207.27
34,179,330.14
94.356.081.85
4,385,739.50
6,807,398.60
23,271,942.83
66,551,524.15
15,181,295.68
15,864,748.65
19,686,515.47
51,660,139.12
Alberta British Columbia
Total:	$382,504,426.48 $220,575,654.21
* The reduction shown for Saskatchewan in the Fiscal Year 1957-58 represents the cancellation of commitments due to overestimating during the early stages of construction that is now completed.
Payments to the Provinces by Canada on Account of Trans-Canada Highway Construction
These payments include Canada's additional 40 per cent contribution to the cost of construction as provided for under Section 6(l)b and Section 6(l)c of the Trans-Canada Highway Agreement.
Payments to the Provinces by Canada on Account of Additional 40 per cent Payments as Provided for Under Section 6(1 )b and section 6(l)c of the Trans-Canada Highway Agreement
Fiscal Year 1956-57
Newfoundland	 $	-
Prince Edward Island	 -
Nova Scotia	 -
New Brunswick	 723,267.85
Ontario	 36,670.56
Manitoba	 -
Saskatchewan	 -
Alberta	 295,978.99
British Columbia	 59,400.56
Fiscal Year 1956-57
Newfoundland	 $ 1,126,469.58
Prince Edward Island	 414,104.91
Nova Scotia	 951,212.88
New Brunswick	 3,281,869.84
Ontario	 4,855,053.08
Manitoba	 3,124,305.23
Saskatchewan	 2,652,471.90
Alberta	 1,945,462.47
British Columbia	 6,455,013.07
Total:	 $24,805,962.96
Fiscal Year 1957-58
Newfoundland	 $	861,313.26
Prince Edward Island	 1,232,516.42
Nova Scotia	 3,531,597.02
New Brunswick	 3,557,974.73
Ontario	 12,381,361.51
Manitoba	 2,729,336.02
Saskatchewan	 3,346,041.71
Alberta	 5,289,623.17
British Columbia	 16,418,285.58
Total:		 $49,348,049.42
Total:	 $ 1,115,317.96
Fiscal Year 1957-58
Newfoundland	 $	343,851.61
Prince Edward Island	 210,161.30
Nova Scotia	 504,154.73
New Brunswick	 908,366.38
Ontario	 2,111,097.93
Manitoba	 356,132.02
Saskatchewan	 1,770,058.36
Alberta	 1,418,534.53
British Columbia	 1,503,952.94
Total:	 $ 9,126,309.80
April 1, 1956 to May 31, 1958
Newfoundland	 $	366,934.00
Prince Edward Island	 210,161.30
Nova Scotia	 504,154.73
New Brunswick	 2,189,881.35
Ontario	 2,147,768.49
Manitoba	 356,132.02
Saskatchewan	 1,770,058.36
Alberta	 1,714,513.52
British Columbia	 1,563,353.50
Total:	 $10,822,957.27

The Budget-Mr. Hodgson Paving Mileage Approved and Completed under the Trans-Canada Highway Agreement
Fiscal Year 1956-57 Approved Completed		
Newfoundland 	-	-Prince Edward Island ..	10	14Nova Scotia 	2	-New Brunswick	7	15Ontario 	103	73Manitoba 	43	68Saskatchewan 	84	63Alberta 	-	18British Columbia 	97	60Terra Nova Park 	-	-Banff and Yoho Parks ..	-	-Glacier and Revelstoke Parks 	-Total 	346	311Fiscal Year 1957-58 Newfoundland 	Prince Edward Island ..	3	1Nova Scotia 	-	-New Brunswick 	14	4Ontario 	34	44Manitoba 	48	33Saskatchewan 	5	50Alberta 	-	-British Columbia 	2	33Terra Nova Park 	-	-Banff and Yoho Parks ..	-	-Glacier and Revelstoke Parks 	-	-Total 	106	165December 10, 1949 to April 30, 1958	Newfoundland 	-	-Prince Edward Island ..	70	67Nova Scotia	26	-New Brunswick	88	78Ontario 	452	434Manitoba 	270	246Saskatchewan 	406	406Alberta	214	214British Columbia 	262	262Terra Nova Park	-	-Banff and Yoho Parks ..	-	-Glacier and Revelstoke Parks 	Total 	1788	1707
Grading Mileage Approved and Completed under the Trans-Canada Highway Agreement
Fiscal Year 1956-57
Newfoundland 	22	25Prince Edward Island ..	9	12Nova Scotia 	23	32New Brunswick	25	19Ontario 	91	48Manitoba 	30	34Saskatchewan 	35	33Alberta 	57	26British Columbia	91	110Terra Nova Park 	-	-Banff and Yoho Parks ..	19	25Glacier and Revelstoke Parks 	-	-Total 	402	364Fiscal Year 1957-58 Newfoundland 	35	7Prince Edward Island ..	3	3Nova Scotia 	22	29New Brunswick	27	33Ontario 	108	109Manitoba 	35	48Saskatchewan 	-	1Alberta 	4	35British Columbia 	63	70Terra Nova Park 	26	8Banff and Yoho Parks ..	-	29Glacier and Revelstoke Parks 	-	-Total 	323	372December 10, 1949 to April 30,	1958Newfoundland 	366	249Prince Edward Island ..	71	70Nova Scotia 	99	94New Brunswick	120	118Ontario 	674	576Manitoba 	240	234Saskatchewan 	406	406Alberta 	275	275British Columbia 	428	385Terra Nova Park 	26	8Banff and Yoho Parks ..	80	79Glacier and Revelstoke Parks 	-	-Total 	2785	2494

There is one other matter I would like to bring to the attention of the house and that is the occasion when my name was again brought into the discussion, this time by the hon. member for Levis as reported at page 912 of Hansard of June 6, 1958 when he said:
At this point I should also like to ask-the hon. member for Victoria (Ont.) also inquired about this some years ago-if the minister has made any approach to the government of the province of Quebec so as to convince them to share in this program if it is not too late.
All I could say about that is that there has been a certain amount of ill will between the government of the province of Quebec and the federal government for a number of years. I believe the election of June 10, 1957, and the election of March 31, 1958, ended a lot of that disagreement and misunderstanding and I think there is now a better feeling between the federal government and all the provinces than there has been for a number of years. I hope the provinces and the federal government will strengthen their good will and understanding because the provinces and the federal government must be united if we are to have a united Canada and there must be a maximum of understanding and co-operation between them.
The hon. member for Port Arthur was heard from again on June 6 and we find his remarks recorded at page 913 of Hansard of that date. He had this to say:
One of the points I wanted to bring up was that two years ago the hon. member for Victoria (Ont.) made an interesting comment during the consideration of these estimates. He said something like this:
Last year, I made some reference to patronage. So long as you do something for my riding, I do not care how much patronage you use. So long as we get a little project, a building here and there, we shall be satisfied. The little bit of patronage that is used by the department at times does gripe a little, but never mind we shall stand the gripes if the minister will get busy.
I said that two years ago and I said it a year ago and I still say it now, as far as that is concerned.


Herbert Wilfred Herridge: What did the hon. member say about patronage?


Clayton Wesley Hodgson: As far as I was concerned I meant it for my own riding. I did not say it about any other riding. If the Liberals wanted to use a little patronage in my riding it did not affect me very much nor did it affect the C.C.F. because neither the Liberal or C.C.F. party got any more votes. All the votes the C.C.F. got could be put in your hip pocket. That is how the few pieces of paper were involved. Whatever patronage the Liberals might have used in my riding it did not affect the Liberal vote either because I kept getting more Liberal votes all the time. I had to have 5,000 Liberal votes to get the
The Budget-Mr. Hodgson majority I did. Why should I object to a Liberal receiving a job through Liberal patronage? The chances are he was voting for me in any event. I can understand that the C.C.F. would be worried about it because they did not get enough votes to amount to anything. But I will say this about the C.C.F., they are courageous people. They run a candidate every election.


John Whitney Pickersgill: Why don't you give him a job?


Clayton Wesley Hodgson: He is a good fellow and he does not need one. He is not as poor as some of the members of the C.C.F. would have us believe they are when they are howling about it all the time. This chap can look after himself financially and otherwise but it does not assist him in getting votes.
The hon. member for Port Arthur went on to say:
This, of course, raises a nasty suspicion in my mind that perhaps patronage did exist in the Department of Public Works under this nefarious regime which ended last June. We righteous people are worried, because of the approach of the member who has been parliamentary assistant to that department, as to whether or not patronage still exists. This suspicion was increased last session when the minister, in answer to a question from a gentleman on the Liberal benches who has since moved to a more exalted realm in Quebec, suggested that the building of certain river improvements was more likely to have been placed in certain areas if the people in the area happened to be good Liberals. As I say, these suspicions are going around in our minds. We are prepared to accept that the new minister is a very forthright and very honest individual. He has made a number of public statements that no such thing as patronage is going to exist. I feel, therefore, he should be prepared now to make a statement about the patronage he found in the department and the steps he has taken to stamp it out. Certainly, he should say what steps he has taken to watch his erstwhile parliamentary assistant who said he did not care how much patronage there was as long as his riding got a little bit. Now that may be in keeping with the free enterprise ethics we heard stated so well yesterday. However, it seems at odds with the minister's own position, and we would like to hear more about that.
There is one more aspect of patronage I should like to mention, and this has come to the notice of those on the opposition benches. There are not many defeated Conservative candidates across Canada, and I know that makes a number of people around this chamber very happy. Those few defeated Conservative candidates that do exist have, in a few instances since the last election, come out with statements in their local papers. These statements seem to have been triggered by letters they received from the Department of Public Works or officials of that department to the effect the government, in its graciousness, is going to do something here or there. In other words, we have defeated Conservative candidates announcing government projects as a result of what seems to be a pipe line into the Department of Public Works.
From my knowledge of the Department of Public Works there is no pipe line into the
1722	HOUSE OF
The Budget-Mr. Hodgson department that is not open to all members of parliament. If any hon. member wants to establish a pipe line into the Department of Public Works all he has to do is write a letter to the department setting out what he wants to know and he will receive the information without any trouble.


Herbert Wilfred Herridge: Would the hon. member who is presently waiting in the outer courts to be called as a parliamentary assistant to the Minister of Public Works permit a question? When he or other persons notify the defeated Conservative candidate of a proposed public works in the riding is the sitting member for the riding, if he happens to be in opposition, also notified?


Clayton Wesley Hodgson: Turning now to another subject-


Herbert Wilfred Herridge: What is the answer?


Clayton Wesley Hodgson: I did not catch the hon. member's question. I thought he was making a speech.


John Whitney Pickersgill: Make it simple.


Herbert Wilfred Herridge: When a Conservative candidate for any constituency is notified by some person in the Department of Public Works that any certain public works project is going to be undertaken in his riding is the sitting member for the riding, if he happens to be an opposition member, also notified at the same time?


Clayton Wesley Hodgson: I cannot tell you that. I only know that if any hon. member wishes to receive information from the Department of Public Works he has only to write in to obtain it. The department consists of a fine group of civil servants who are very cooperative. I do not think they have any politics. My personal experience with the department indicates that they are always open and above board in all their dealings.
I could continue to quote passages from the remarks made by the hon. member for Levis but I do not think it is necessary. He is a nice little fellow and I will say this to you about him. The hon. member for Levis had a lot more authority with the Department of Public Works than I do to either hire or fire.
The hon. member for Laurier (Mr. Che-vrier) also expressed an interest in the business of patronage and his remarks can be found at page 1137 of Hansard of June 13. I might note that at one point he made reference to the hon. member for Burnaby-Coquitlam (Mr. Regier) although I believe he intended to refer to the hon. member for Port Arthur. Apparently the Liberals are interested in patronage too and I think the hon. member for Laurier was more or


less setting traps. I must point out that he was not a very good trapper because he did not catch the Minister of Public Works (Mr. Green) in any of the traps he set; at least he did not succeed in having the minister make whatever statements he might have been interested in having him make.
I wish to deal briefly with one of the statements made by the hon. member for Port Arthur as found at page 914 of Hansard which I have already placed on the record when he said:
Certainly, he should say what steps he has taken to watch his erstwhile parliamentary assistant who said he did not care how much patronage there was as long as his riding got a little bit.
I must confess that I was not aware that the parliamentary assistant had any authority that would warrant his being watched very carefully but I was interested in the remarks of the erudite hon. gentleman from the Lake-head and so I looked up in the dictionary the meaning of the word "erstwhile" to ascertain exactly what it means. According to Webster's dictionary it means "before" or "before long".


John Whitney Pickersgill: Are the last two words a prayer?


Mr. Dinsdale:: You are becoming a good scholar.


Clayton Wesley Hodgson: Take that for what it is worth. So far as patronage is concerned, this government does not know anything about it, at least I do not think they do. They are babes in the woods compared with the former Liberal government.


John Whitney Pickersgill: What about Mr. Carson Stroud?


Clayton Wesley Hodgson: So far as patronage is concerned, they are babes in the woods. I know this from what happened in my riding. I do not have to go across Canada. The hon. member for Laurier was minister of transport for a number of years. In the letting out of jobs or in the hiring of people his party and his department were rife with patronage right in my own riding. There was nothing I could do about it. I can well remember when I got a little money from the government to build a dock in a place called Bobcaygeon. What happened? Talk about pipe lines. In the Department of Public Works and in the Department of Transport, and you can also add in the department of the post office, there is such a thing as appointing foremen and inspectors. The present government puts these jobs out for competition. Under the old government there was no competition. Who was the inspector on the first job that was done in my riding after I became elected in 1945? Was it a Liberal,

a Conservative or a C.C.F.'er. No, it was the humble defeated Liberal candidate, the man whom I defeated and who was a member of this house for 10 years. He was the inspector. On the next job on Cameron lake the next year, who was the inspector? It was the same individual and that sort of thing went on. There never was a competition run for the job of inspector at any time under their regime in my riding. So far as the Department of Public Works and the post office are concerned, the same thing took place there.
There was a competition once for a postmastership in Bobcaygeon. This is the way the competition was run. The district postmaster at Toronto came up to Bobcaygeon and he talked to the heads of the Liberal association there. They went over to a garage and got a little fellow out of the garage, a nice little boy, and he turned out to be a good postmaster, too. He was installed and the old gentleman was retired. That is how the competition worked. I happened to be the member and some people did not like what happened and they were bothering me about another fellow who wanted the job. So I took it upon the floor of the house with the postmaster general and they had a competition. The competition was held in June. Although the other fellow had some months experience in the post office, the second man had five years overseas experience and six years experience in the army. He won the competition on both the written and oral examination. He had four years of high school and one year in college. What happened? Did he get the job? He got a large form from the civil service commission. We have the form framed if anybody wants to see it. The form stated that he had won the written and oral examination by so many marks, and so on, and that his appointment would be made early in September.
July went by, August went by and September came. September went by and there was no appointment. The people began bothering their member of parliament again. I got on my horse and I drove down to Ottawa and low and behold the postmaster general would not see me. I could not get on to his plush carpets; I could not see him. Of course, the girl asked me what I was there about. I said I wanted to talk about the postmastership at Bobcaygeon. I could not get in to see him. I started calling him on the telephone and after six or eight calls he talked to me about it. He said that the other fellow had three, four or five months experience and he did not think it right to turn him out. So the minister overruled the decision of the
27, 1958
The Budget-Mr. Boulanger civil service commission. That is the way patronage was played in my riding from that day until June 10, 1957.
Patronage permeated other departments besides the Post Office Department. It was as bad in the Department of Public Works and in the Department of Transport while the hon. member for Laurier was minister of transport. In my riding I have from 165 miles to 240 miles of the Trent canal and waters and lakes. There are 25 or 30 men hired temporarily every spring and two or three permanent men retired every year and new ones hired. Never once did a Conservative get a job on the Trent canal; in fact, a Conservative can hardly look into the canal. After I was elected for a year I thought it was about time that the houses occupied by the workers on the canal were wired. I was down near the canal one day and I thought I would drive down and see what was going on. I drove over to the canal and got out. Instead of walking all around as I should have done I walked across the locks. I got half way across the locks when a man came out screaming, "Get off there, get off there". He came over to the locks. I thought every man in my riding knew me, but I found out that one fellow did not because I said, "I am the Conservative candidate". He said, "You get the hell out of here; you can't put that bull over me". He said, "There is no room for a Conservative around here, anyway". He is still on the job. I think he is a good lockmaster.
Then we have the Department of Trade and Commerce. They have a little patronage in there, too. They appointed some six or eight statisticians up in our country and again not one Conservative, not even a C.C.F.'er, got a chance at those jobs. The appointments were made by the Liberal association and they were hand-picked. They were not only Liberals, they were good Liberal workers both before and after they got the job and even up to the last election. They died awfully hard, but they still have their jobs. I do not believe in firing everybody high wide and handsome. I do not believe in firing people who are doing a good job just because some political mistakes were made by somebody higher up who should know better.


Walter Gilbert Dinsdale: They have seen the light now.


Clayton Wesley Hodgson: You can lead a horse to water but you cannot make him drink. They will be just the same if they ever get back into power but they will not be back in power for a long, long time.
(Translation):


Mr. Samuel Boulanger (Drummond-Arlhabaska):: Mr. Speaker, I am happy to take part in the discussion of the budget and to

The Budget-Mr. Boulanger express my personal position and the views of the voting population of that grand riding of Drummond-Arthabaska.
The first words of the Minister of Finance (Mr. Fleming) in his budget speech, were the following:
I approach this task tonight in a spirit of deep humility and dedication in recalling, as did some of those who have preceded me in delivering their first budget speech, that this honour has fallen in times past to the lot of some very great Canadians.
It was indeed with humility that such a budget had to be submitted and no Canadian has ever presented such a pitiful one since confederation. As someone said before, no government has ever submitted a budget with as large a deficit in peacetime.
In submitting an explanation for his $648 million deficit budget, the hon. Minister of Finance has broken with a long Liberal tradition. As a matter of fact, since 1946, i.e. the year after the war, we have seen the public debt gradually decrease, except in the fiscal years 1954-1955, when our deficit was $147 million, and 1955-1956, when it reached $17 million. However, these slight deficits were compensated by a surplus of $272 million in the years 1955, 1956 and 1957.
On April 1, 1958, the national debt was estimated at 11 billion 48 million dollars, i.e. $649 per capita. However, this debt had been of 13 billion and 400 million dollars in 1946, or $1,100 for each man, woman and child in this country. Under the able guidance of the Hon. Mr. Abbott, who was minister of finance until 1952, the debt gradually decreased and continued to be paid off under the equally capable leadership of the Hon. Mr. Harris.
At the time several members of the Conservative party were loud in their criticism of these administrators. But the latter deserved the gratitude of every Canadian citizen. Whatever the area in which they may, at this time, exercise their activity, they deserve our gratitude and our sympathy.
Since the Conservatives came into power, what has happened? Whereas Mr. Harris' budget forecast a $152 million surplus for the fiscal year ending March 31, 1958, we have seen the present Minister of Finance, not only absorb this surplus in its entirety, but end the year with a deficit of $40 million, not even considering the $250 million which, according to the hon. gentleman, had been camouflaged by the Liberal party. This means that the government has added $542 million to administrative expenditures since it has come into power, though we are still as far as ever from the earthly paradise which it had promised us. You will remember the promises made during
[Mr. Boulanger.l
the election campaigns of 1957 and 1958. There was not one Conservative candidate who did not express shock at Liberal government surpluses. It was said that each family should be reimbursed the $120 it had paid over the year in surplus taxation. It was also stated that the excise tax on automobiles should be repealed, that our natural resources should be developed, that employment should be kept at a high level, etc.
If we look at the forecast made by the Minister of Finance last year, to the effect that there would be an $80 million surplus on March 31, 1958, and if we look at the evidence of a $39 million deficit which was confirmed last week, we can easily deduce that, projecting this error in like proportion, next year's deficit will be one billion dollars. The most striking feature of the budget under discussion is the flagrant contradiction between the figures provided by the Minister of Finance and the promises recently made by the Prime Minister (Mr. Diefenbaker).
He was not sparing of words when telling us that, without regard to cost, we should see to it that the economic life of this country be activated in order to create employment. Last year in his stillborn budget, he reduced taxation by $178 million, bringing about, in so doing, no improvement in the situation. It was during the few months that followed this reduction in taxation that we have seen the unemployment figure reach 860,000.
This year, this reduction in taxes is only of the order of $8 million. At that it will only benefit those who wish to make a gift of $10,000 to their wife and children, those too who will leave, at their death, an estate of $60,000 and less. Even Don Juans will not have to pay taxes on the flowers which they distribute right and left, thanks to the generosity of the Minister of Finance.
True, there have been some slight deductions in taxes on certain construction materials, agricultural and horticultural products, without forgetting eyeglasses and rat poison. But what real relief will all this bring to the working class and to the heads of large households?
With the exception of medicine bought on prescription, and of other treatments for chronic ailments, there is very little that the Minister of Finance can show in the way of real relief for the ordinary citizen of this country.
We have reason to say that Tory times are hard times.


Mr. Chown:: Shame!


Samuel Boulanger: Since Confederation, not
one Conservative government ever presented a sensible budget. Under the Liberal administration, a budget deficit of $648 million would have meant, if that amount had been applied to relieve the taxpayer, a reduction of $38 for each citizen of our country. If the same amount had been applied to increasing family allowances, Canadian families would be receiving $15 to $20 per child.
Yet, it was none other than the Prime Minister who said that Liberals were picking out of the pockets of every Canadian family $120 which the government did not need to administer the affairs of this country. When saying this, he was taking advantage of people's honesty in order to draw votes. The Canadian people were taken in and must now suffer the consequences, though with regret.
Mr. Speaker, I did not want to let the consideration of this budget go by without dealing with some aspects of family allowances. In fact, I received a great number of requests from citizens of my constituency asking me to urge an increase in family allowances. There is no doubt that all members in this house have received such requests.
These requests are fully justified by the increase in the cost of living and by the ever-pressing needs of education.
In January 1957, on the basis of the rise in the cost of living, the Liberal government understood and raised family allowances at the same time it raised old age pensions, pensions to the needy and all other social welfare benefits. A few months later, it was the Conservative government which, immediately after taking power, increased the old age pension by $9 a month, for the same reasons, while forgetting about family allowances. It is strange to find that the Conservatives who gave themselves as champions of social justice did not apply the same principles to the protection of the family.
One would have to look into the hearts of the Tories to find the real reasons of their indifference towards large families.
Since the Hon. George Drew, former leader of the opposition, opposed family allowances in 1945, the Conservatives have consistently grumbled that the Liberals had gone beyond the limit to meet the demands of the people. Still recently, in 1956, at the Conservative convention, the party defined its stand when the Hon. G. I. Smith, to a lady who asked him what was the attitude of his party in that field, answered that the committee instituted to study that question did not feel able to recommend now an increase of family
The Budget-Mr. Boulanger allowances. On the other hand, the Liberal party, at its convention in January, did not hesitate to make its stand known and to add to its program the payment of family allowances to students up to the age of 18.
Today, the disproportion between old age pensions and family allowances is obvious and the Conservatives have substantially aggravated this lack of balance. At one time, we felt that the government would have decided on a certain increase in family allowances to meet the repeated demands of the population. Many members from the government side have therefore made statements in which they undertook to recommend such an increase. In fact, the Conservative members from the province of Quebec went all out, to their hearts' content, in their statements published in a certain paper of that province. Not one of them, however, had the courage to state squarely in this house what he desired. They have merely been using nice words, making no sense whatever. Yet, they are aware of the growing needs of large families with regard to maintenance and education.
The consumers' price index based on 100 for 1949-that is four years after the family allowances act was sanctioned-reached 125.2 in January last. The least the government could do at this session would be to continue to pay these allowances for children still pursuing their studies and until 18 years of age, and adjust pensions to a level comparing with old age pensions.
Any legislation that the government will introduce to improve that act will be welcomed by all citizens and there is no doubt that the Liberal party will approve it without reservation.
Mr. Speaker, before ending my remarks, I would be remiss if I did not say a few words about agricultural prices support. When that legislation was considered at the last session, there was much discussion and we were right, on the Liberal side, when we asked that its adoption should be delayed so that we could consider it further.
The Minister of Agriculture (Mr. Harkness) was so anxious to have it adopted, so as to be able later to say that he had fulfilled one of his promises, that he did not care whether it would be detrimental or not to the farmers.
In the last few months, several reactions cropped up from many parts of the country. It is rightly claimed, for instance, that milk powder producers are affected directly, and the farmers indirectly. Those manufacturers are fairly numerous in the eastern part of the country, and especially in the provinces of Ontario and Quebec.

The Budget-Mr. Boulanger
Under the new price stabilization act, the Minister of Agriculture has decreed that the new prices would come into effect on May 1, 1958, and that the government was willing to pay 15 cents a pound for first quality dry skimmed milk, spray processed, and 12 cents a pound for roller processed dry skimmed milk.
Those new prices are 2 cents a pound less than those in force prior to May 1. Now, according to the figures of the Dried Milk Producers' Association, there were still in those plants, from 10 to 12 million pounds of milk powder. Those producers therefore took or will take a loss of 2 cents a pound when marketing their product. Those losses will account for $200,000. Some small manufacturers, whose financial situation is not too solid, will be in a very embarrassing situation.
If the government had at least announced its reduction policy a few months earlier, those producers would have had time to dispose of their stock.
A similar situation came about under the Liberal regime in the years 1942 and 1943. The government of the time paid a compensation to wholesalers who had quantities of butter in reserve when a price reduction was announced on this product. The butter producers, wholesalers and farmers were not then forced to sustain a loss and the change-over came about smoothly.
Since the reduction of the support price of dry milk by 2 cents per pound, the price of milk in Quebec and Ontario has been reduced by 10 cents per hundredweight. We know that approximately 8 pounds of dry milk can be obtained from approximately 100 pounds of milk plus 4.2 pounds of butter. By carrying out an extremely simple computation we will see that with the increase in the price of butter the profit is 4.2 cents per hundredweight. This shows that with regard to recent years butter has been selling for one cent more per pound, that is 64 cents. This increase, with regard to 100 pounds, is equal to a profit of 4.2 cents. If account is taken of the fact that 8 pounds of dry milk are produced from 100 pounds of whole milk, this decrease in 2 cents means a loss of 18 cents for the producer per hundredweight. By subtracting the loss incurred on dry milk production from the profit made on the sale of butter, we will note that the producer loses from 10 to 12 cents per hundredweight. What is happening at this time in the province of Quebec is that the price of butter has gone down from 10 to 12 cents per

hundredweight. And there is great praise for the agricultural prices production act which, according to some people, is the farmer's salvation!
We are still unable to see what the results of this act will be since it is far too recent; but we can state that this legislation, as far as milk products are concerned, is a complete failure from the point of view of the farmer. True, there are certain products in respect of which this legislation can be to some advantage for speculators or traders. This is true as far as wool is concerned. A compensation price of 60 cents a pound is being considered. Since this wool can be sold only to manufacturers or traders, the farmer is deprived of the advantage of bargaining and the manufacturer can offer him any price whatever. Whether the farmer sells his wool 40 cents, 50 cents, or 65 cents a pound is completely irrelevant since the government will pay the difference when the compensation price has been established on the basis of the price on the Toronto market. Therefore, if the compensation price is fixed at 60 cents and if the farmer has sold his wool at 40 cents, the government will pay the difference, that is 20 cents per pound. If that legislation has any advantage whatever, it is only as far as traders and manufacturers are concerned. Since the trader is not concerned with competition, he can offer any price he wishes. In fact, he can grade it in any way he chooses. I am convinced that there are no wool graders who really know anything about wool grading either in our Quebec manufacturing plants or among traders.
I had an opportunity to offer similar remarks last year, when we were discussing the Agricultural Prices Stabilization Act and I believe that the Minister of Agriculture (Mr. Harkness) will admit today that I was right.
We could deal with a great many other products, but I am content with noting these two, reserving the right to return to them later on.
(Text):


Mr. A. R. Websier (Sf. Anioine-Weslmount):: Mr. Speaker, rising as I do now for the first time in this house, my first words must be of congratulation to the Speaker on the high office with which he has been honoured. It must be a source of great satisfaction to know that members of parliament from every party and every corner of the country were

not only pleased but proud to have him chosen again as the first commoner. We in this far corner of the House of Commons know that he will see us equally well and as often as he will see those members who are much closer to him. I should congratulate too, the hon. member for Longueuil (Mr. Sevigny) who has already demonstrated in this session that he will live up to the many fine things said about him by earlier speakers in this parliament.
St. Antoine-Westmount is a metropolitan Montreal riding about two miles and a half square. The 41,000 voters are a cross-section of Canadian life. Every walk of life, from the lowest to the highest, is represented. There are the very poor and the immensely wealthy. About half are French and the other half predominantly English. I will strive honestly to represent them all, not just those who voted Conservative in this parliament.
I might add that my constituents will be able to make a close and, 1 trust, friendly check on my activities here through the hon. member for Longueuil, the hon. member for St. Lawrence-St. George (Mr. Chambers) and the hon. member for Iles-de-la-Madeleine (Mr. Keays), who are all residents of St. Antoine-W estmount.
I must record my approval of the budget presented to this house last Tuesday by the finance minister in a feat of endurance and easy speaking which I am sure was a marvel to all the new members like myself.
Naturally, I have been watching for and listening closely to all the comment available on the budget. I have been in my own riding of St. Antoine-Westmount this last weekend to hear the observations of my own constituents; and, notwithstanding what we have heard from certain sections of this house, I am forced to say that I believe most Canadians approve and are satisfied with this budget. Of course there is nothing in it to make anyone hysterical with joy. But there is an honest recognition of the facts of economic life in Canada as the people know them.
There was optimism, justifiable optimism, I believe for the future. The Minister of Finance (Mr. Fleming) has told us that this budget is only a first push to start the wheel turning forward. There is no reason not to believe that in subsequent budgets the wheel will gather momentum and that there will be the gradual, systematic reduction of taxes for which this party has always stood.
The Budget-Mr. Webster
Before discussing taxes at greater length, there is one feature of the budget and reaction to it which I think deserves some notice. We have heard repeated charges that this is a budget based on a protectionist philosophy. No doubt we will hear that claim made often even long after this budget has been approved here in parliament by the representatives of the people.
Some members of the opposition parties with whom we share this side of the House of Commons have found it convenient in their attack on the budget to quote the Financial Post, a paper with considerable standing in the business community. Let these critics, then, turn up page 10 of the Financial Post of June 21 where the tariff changes are discussed, and let them note these two paragraphs quoted from that article:
All of these changes-
The reference is to tariff revisions on iron and steel, pipes and tubes, zinc and zinc products and wool.
-are the result of tariff board investigations initiated under the Liberal government.
The Conservative government is following lines mapped out by its predecessor.
That ends the quotation and it should end too some of the fallacious arguments we have been hearing from other sections of the House of Commons about what these changes mean.
Before this diversion I was discussing taxes and the fact that I have found general approval of the budget in spite of the fact that there were no substantial tax reductions. The only people who seem really concerned about this are those sitting to your immediate left in the two opposition parties. They are in the minority in this house, and I am convinced they are still swimming against the stream of public opinion in the matter of this budget and other equally important questions. There was general agreement throughout the country even before the budget was presented *-and I am now not referring only to the events of March 31-that taxes should not be drastically reduced.
One of the most significant documents which came to my attention in the last few weeks was a copy of a letter from H. Roy Crabtree, chairman of the executive council of the Canadian Chamber of Commerce. This organization is a national voluntary federation of more than 750 boards of trade and chambers of commerce in all Canadian provinces and the territories of the north as well. As such it represents literally thousands of businesses, large and small, who have as great a stake as you or I in every budget.
1728	HOUSE OF
The Budget-Mr. Webster
In January of this year the national chamber of commerce, visited the Minister of Finance and the Minister of National Revenue (Mr. Nowlan) and urged upon them consideration of substantial reductions in personal and corporate income taxes. Four months later, however-in May-the executive council sought and received another interview with the Minister of Finance and his cabinet colleagues. The council felt it was important, in view of changed circumstances, to considerably amend its former position. During its first meeting the executive council had expressed the uncertainty that everyone felt at the time regarding the possible extent and duration of the adjustment which the Canadian economy was then undergoing. In May the chamber said, and I would like to quote from the letter to the ministers as follows:
There are still elements of uncertainty particularly as to the duration of the current slowdown in business. There is some recent evidence, however, of stabilizing tendencies.
The letter went on to discuss the fact that Canada's economy is directly affected by economic developments abroad, particularly those in the United States. It added that there appear to be what the chamber of commerce called feasible means of improving our economic climate through governmental and private policies designed to improve the confidence of business and consumer. Then the letter came to this significant conclusion:
During the intervening months-
That is, since the first submission made in January.
-the fiscal background has changed significantly. Having in mind the probable sizeable deficit of the government for the fiscal year ending March 31st, 1959, largely resulting from expanded spending to counteract prevailing unemployment, the executive council believes that it would not be prudent or responsible to recommend sizeable tax rate changes at this time.
I would like to repeat the last part of that important sentence.
-it would not be prudent or responsible to recommend sizeable tax rate changes at this time.
That is the considered opinion of the executive council of the Canadian Chamber of Commerce. I do not think anyone could accuse that body of the political bias which inevitably flavours every speech made on this subject in this house. By the standards of this group the budget under discussion is, therefore, both prudent and responsible. Furthermore, the Minister of Finance apparently received similar advice from the large group of trusted and efficient officials in these departments which prepare studies to aid him in budget decisions.


Within this frame of reference, that is to say, "Hold the line on major tax cuts", the Minister of Finance has introduced some improvements which I am glad to hear, even the opposition admits, makes sound sense. The question must be lingering in many minds as to why these changes were not made by former governments. We have heard arguments that the welcome changes in deductions for medical expenses will be of very little value to very few people. I think this is an exaggeration because reduction of even a few dollars in tax payments is valuable to every Canadian affected. One argument is that the 3 per cent floor which must be exceeded in respect of medical expenses before all such expenses are deductible will severely limit the value of these changes. While medical charges are not altogether standardized, I think it is fair to say that it is much easier for a relatively low income family to run up 3 per cent of income in medical bills than it is for a higher income family to do so. These changes therefore will be of the most value to the Canadians who most need the benefits.
More and more Canadians are wearing eye glasses, and yet until the night of June 17, 1958 the federal government refused to accept the fact that weak eyes or any condition requiring eye correction was, for deduction purposes, a physical ailment.
The same is true of the bulk of drugs which are playing an increasingly important part in the treatment of illnesses. I imagine every member of this house knows of at least one case where the cost of drugs has been the largest item in the recovery of some patients. Laboratory and diagnostic services are also vital to the proper treatment of many ailments and, as I said earlier, it is only good sense that they should all be included for deduction purposes.
I could not agree more than I do with the statement of the Minister of Finance on this subject last week he told us of these changes, as recorded at page 1243 of Hansard for June 17 in the following words:
-will go a long way to correct the unfairness which in the past has been the source of so much complaint about this section of the income tax law.
The same words might apply to another change announced in the budget address. As every member must know, a wife could earn $999 without damaging the exemption which her husband could claim for her. But, as conditions were before the budget, if she earned $1,001 this exemption was immediately reduced by $250. I understand the change will eliminate this small but rather vicious anomaly. The deduction will now be reduced by only the exact amount of the wife's earnings in excess of $1,000.

The third announcement I would like to mention concerns the estate tax. A new bill was introduced in January last and since then many representations have been made. These representations we are told had resulted after careful consideration in a number of revisions. This proves to all concerned the wisdom of the course adopted by the house earlier this year in facilitating the introduction of this important legislation.
We have also been told that the tax relief envisioned by the new estate tax legislation is concentrated, deliberately, in the low value estates. Estates of less than $50,000 will be completely free from tax and widows will receive particular attention by means of a scale of exemptions which, as the minister explained, are true exemptions. In other words, the tax will be paid only on the amount by which the estate exceeds the total applicable exemptions.
In closing I would like to say the Minister of Finance is a Conservative, with both a large "C" and a small "c". If he has erred in any of his estimates and predictions forming part of his budget, his error has been on the side of caution. Therefore we have reason to believe that the situation will improve and that his controlled optimism will be more than justified.
I have spoken of the general policy decisions which had to be made in regard to this budget and I have mentioned three specific changes for which I am sure the majority of Canadians are grateful. I believe the points I have discussed underline my contention that this is a budget built on good sense. It is the kind of budget the people expected and that the country should have under the circumstances. I am therefore pleased to say that my vote against both amendments and for the main motion will be a vote for good sense more than a vote for political partisanship.


Mr. Speaker:: It being five o'clock the house will now proceed to consideration of private and public bills, the former having precedence pursuant to standing order 15 (3).



PRIVATE BILLS


[Stage Direction]
Bill No. SD-28, for the relief of Therese Beaudoin Girard.-Mr. McCleave.
Bill No. SD-29, for the relief of Dorothy Elizabeth Nairn Anderson Bloodsworth.-Mr. McCleave.
Bill No. SD-30, for the relief of Anne Marie Mathilde Vautelet	Gagnier.-Mr. McCleave.
Bill No. SD-31, for the relief of William Leonard Mugford.-Mr. McCleave.
Private Bills-Divorce
Bill No. SD-32, for the relief of James Clancy.-Mr. McCleave.
Bill No. SD-33, for the relief of Marjorie June Gabrielson Trainor.-Mr. McCleave.
Bill No. SD-34, for the relief of Kathleen Mitchell Cabana.-Mr. McCleave.
Bill No. SD-35, for the relief of Fernande Leduc Clarke.-Mr. McCleave.
Bill No. SD-36, for the relief of Ann West-water Murphy.-Mr. McCleave.
Bill No. SD-37, for the relief of Gaynor Jenkins Douglas.-Mr. McCleave.
Bill No. SD-38, for the relief of Roland Paquin.-Mr. McCleave.
Bill No. SD-39, for the relief of Jone Vanda Skakauskaite Kaniewski.-Mr. McCleave.
Bill No. SD-40, for the relief of Ivy Elizabeth Shaw Labbee.-Mr. McCleave.
Bill No. SD-41, for the relief of Constance Jean Backhouse Brayton Lapierre.-Mr. McCleave.
Bill No. SD-42, for the relief of Lisbet Schlosser Wisternitz.-Mr. McCleave.
Bill No. SD-43, for the relief of Virginia Marshall Staniforth.-Mr. McCleave.
Bill No. SD-44, for the relief of Elie Kouri. -Mr. McCleave.
Bill No. SD-45, for the relief of Margaret Stirling Izett Brown.-Mr. McCleave.
Bill No. SD-46, for the relief of Norman Weisman.-Mr. McCleave.
Bill No. SD-47, for the relief of Dawn Yvonne Tonkin Kadas.-Mr. McCleave.
Bill No. SD-48, for the relief of Betty Taylor Sharpe.-Mr. McCleave.
Bill No. SD-49, for the relief of Doris Williams Timmins.-Mr. McCleave.
Bill No. SD-50, for the relief of Marjorie Mary Ellen Bowes Jupp.-Mr. McCleave.
Bill No. SD-51, for the relief of Earl Bruce Carswell.-Mr. McCleave.
Bill No. SD-52, for the relief of Beverly Joan Smithson Rook.-Mr. McCleave.
Bill No. SD-53, for the relief of Joseph Francois Gabriel Rene Denis.-Mr. McCleave.
Bill No. SD-54, for the relief of Solomon Seymour Yetman.-Mr. McCleave.
Bill No. SD-55, for the relief of Margaret St. Aubin Brennan.-Mr. McCleave.
Bill No. SD-57, for the relief of Lidija Plesums Koppel.-Mr. McCleave.
Bill No. SD-58, for the relief of Vera Hamburg Colson.-Mr. McCleave.
Bill No. SD-59, for the relief of Margaret Miller Fisch.-Mr. McCleave.
Bill No. SD-60, for the relief of Katie Miller Fisch.-Mr. McCleave.
[Stage Direction]
Interest Act
Bill No. SD-61, for the relief of Greta Clair Van Valkenburg Stenstadvold.-Mr. McCleave.
Bill No. SD-62, for the relief of Beatrice Madeleine Schmid Layton.-Mr. McCleave.
Bill No. SD-63, for the relief of Anne Gold Zidile.-Mr. McCleave.
Bill No. SD-64, for the relief of Thomas Mastropaolo.-Mr. McCleave.
Bill No. SD-65, for the relief of Charles Coorsh.-Mr. McCleave.
Bill No. SD-66, for the relief of Claire Aubin Daunais.-Mr. McCleave.
Bill No. SD-67, for the relief of Maurice Gardner Swaine.-Mr. McCleave.
Bill No. SD-68, for the relief of William Arthur Terry.-Mr. McCleave.
Bill No. SD-69, for the relief of Frances Eileen Fisher Baker.-Mr. McCleave.
Bill No. SD-70, for the relief of Marie Aurore Cecile Gauthier	Thomson.-Mr. McCleave.
Bill No. SD-71, for the relief of James Dunn Drummond.-Mr. McCleave.
Bill No. SD-72, for the relief of Marie Eva Desorcy Valiquette.-Mr. McCleave.
Bill No. SD-73, for the relief of Norman Silver.-Mr. McCleave.
Bill No. SD-74, for the relief of Herbert Everett Follette.-Mr. McCleave.
Bill No. SD-75, for the relief of Abie Cubitz.-Mr. McCleave.
Bill No. SD-76, for the relief of Eva Shtull Hager.-Mr. McCleave.
Bill No. SD-77, for the relief of Georges Etienne Brais.-Mr. McCleave.
Bill No. SD-78, for the relief of Barbara Eisenstein Packer.-Mr. McCleave.
Joseph Pierre Albert Sévigny: Shall the bills carry?


Lionel Chevrier: On division.



SECOND READING


[Stage Direction]
Bill No. SD-56, for the relief of Margaret Patricia Winckworth Thornton Sherwin.- Mr. McCleave.


[Stage Direction]
The house resumed, from Thursday, June 5, consideration of the motion of Mr. Argue for the second reading of Bill No. C-4, to amend the Interest Act, and the amendment thereto of Mr. Benidickson.
Mr. John Drysdale (Burnaby-Richmond):: Mr. Speaker, on June 5 at the adjournment of the debate I was in the middle of a

sentence when, according to the report in Hansard, I was guillotined. During the interval of time I have had drawn to my attention an editorial appearing in a newspaper called the New Toronto Advertiser headed "Of Interest To Borrowers". I feel at this time I should read it in its entirety because to a large extent I feel there has been a matter of misrepresentation as far as I am personally concerned. The editorial reads as follows:
The people of Canada can consider themselves very fortunate that there is only one John Drysdale in the House of Commons. Because you have probably never heard of him, we will tell you that John Drysdale is the member for Burnaby-Richmond. His fleeting moment of fame or rather notoriety came this week during discussion on the C.C.F. motion to amend the Interest Act and limit interest to 12 per cent.


Mr. Speaker:: Order. May I call the attention of the hon. member to the practice that editorials which comment on proceedings in the house are not properly read in the course of debate.


John Andrew W. Drysdale: May I call the attention of Mr. Speaker to page 133 in Beauchesne's Parliamentary Rules and Forms, fourth edition, 1958, paragraph 7 which reads:
(7) When a complaint is made of a newspaper, it is the practice in the House of Commons of Canada for the member to rise on a question of privilege and point out that he has been libelled or misrepresented. He may read as much of the article as is necessary to prove his case but he cannot go farther. He is bound to confine himself strictly to the question of privilege.
On that point, Mr. Speaker, I rise on a question of privilege and ask for permission to read the editorial.


Mr. Speaker:: I understood the hon. member was speaking on the debate on second reading of the bill. He had not referred to any matter of privilege.


John Andrew W. Drysdale: Well, Mr. Speaker, during the interval this editorial appeared involving myself and in connection with the Interest Act. I am rising to speak following the adjournment and I wish to rise at the same time on a question of privilege. Being a new member I was not sure whether or not it was necessary under parliamentary procedure to raise a question of privilege but I do so now if it is necessary in order to read the editorial.


Mr. Speaker:: I have never heard of an hon. member interrupting himself to raise a point of privilege. The rules say a point of privilege may be considered at any time and it may be that the hon. member is right. If I have some advice on the subject I might give a better decision. Does any hon. member wish to speak on this question?


Lionel Chevrier: Mr. Speaker, if I may address myself to the point, I think while the hon. member may be right in raising a question of privilege if he speaks now I do not think he will be able to get back to the subject which is under discussion because he cannot have it both ways. He cannot raise a question of privilege and interrupt his own speech and then go back and argue the resolution or bill which is now before the house. He must do either one or the other. He can raise the question of privilege before the orders of the day are called as any hon. member can but my submission is that he cannot have it both ways.


Mr. Nielsen:: Mr. Speaker, may I be allowed to rise and bring up the question of privilege that the hon. member for Burnaby-Richmond (Mr. Drysdale) wishes to interrupt himself on so as to transfer the liability from himself to me.


Mr. Speaker:: After I dispose of this point of order, I will consider it.


Herbert Wilfred Herridge: Mr. Speaker, if I may offer to be of some help in resolving the dilemma. 1 listened very carefully to the hon. member and his remarks so far were only an introduction to what could be a question of privilege. I suggest that he could make his question of privilege now and later take part in the debate.


Mr. Hamilton (York West):: Mr. Speaker, it seems to me that perhaps the hon. member might adopt a method which is used in court from time to time. He could incorporate some of the words from the editorial in the context of his speech and thereby refer to them without offending at all the objection raised on the question of privilege and without offending the rule about reading the editorial itself.


Mr. Speaker:: Perhaps there are various solutions to this dilemma which will commend themselves to the hon. member, but I really do not think he can speak in two capacities at the same time. Since he is addressing the house now on the motion for the second reading of the bill I suggest he confine himself to that and deal with the matter of privilege on another occasion.


John Andrew W. Drysdale: Mr. Speaker, the two matters more or less fuse together, and the reason that I disclosed at the beginning the fact that I was reading from the editorial is that I did not want to fall into the difficulty that the hon. member for Essex East (Mr. Martin) fell into in connection with the editorial from the Winnipeg Free Press. This is not from the Winnipeg Free Press. I do not know whether I should actually refer to the editorial itself,
Interest Act
but if it is necessary to adopt the garb of anonymity, shall we say, I shall be glad to go back to just reading this matter without referring to it as an editorial. Would that be permissible?


Mr. Speaker:: If the hon. member will proceed, I will interrupt him if I feel it necessary.


John Andrew W. Drysdale: Thank you, Mr. Speaker. I certainly enjoy this enlightenment of the rules as I proceed.
John Drysdale began his address-
This sounds like a paid advertisement, Mr. Speaker, but I assure you it is not.
John Drysdale began his address by claiming he agreed with the objectives of the bill and then continued on to prove he did no such thing.
He pointed out that banks do not lend money at six per cent interest.


Mr. Speaker:: I am afraid the hon. member is trespassing on the credulity of the house in using words which are obviously not his own. In accordance with the rules, I really do not think he can use the editorial, since it reflects on some action of his own in the house. If he complains about what a newspaper said he is in order to raise the matter as a question of privilege at the proper time.


Mr. Broome:: Mr. Speaker, would it be in order for the hon. member to speak in the debate, and then when he has closed off any further remarks he wishes to make in regard to the debate, to proceed on the question of privilege?


Mr. Speaker:: I will deal with that when it arises. Perhaps I might give the hon. member this assistance. If he wants to indicate to the house the substance of what has been said about his statement, without attributing it to anyone, and it is relevant to the bill, I would not object to that procedure.


John Andrew W. Drysdale: Thank you. I will not pursue the dilemma that I seem to be placing the house in at the present time. Perhaps I might paraphrase the effect of the editorial. The objection that I had to it primarily, sir, was that the length of the editorial is approximately the length of my interrupted speech and it ascribes to me certain points of view on the interest rate which I feel are inimical to the stand I took. The editorial continues by taking out certain phrases from the small speech that I made and then taking these particular phrases to back up or substantiate a preconceived conclusion that they had already reached. I felt it was extremely important, because the matter is of a great deal of interest to the people in my riding and to the people of Canada generally, and when a point of view is ascribed to me, to which I do not adhere, as stated in the

Interest Act
editorial, I feel that I should take the opportunity of clarifying the matter.
In substance the editorial adopts the attitude that the 12 per cent rate of interest is quite justifiable. At the beginning I pointed out to the hon. member for Assiniboia (Mr. Argue) that I agreed with the objective of the bill but I had great difficulty in ascertaining where he obtained the 12 per cent figure. These are some of the phrases used by the hon. member in 1957, as reported at page 1897 of Hansard, in reference to the 12 per cent rate:
Certainly loans made by the chartered banks to a great many credit unions in the country, money loaned under the Farm Improvement Loans Act, the National Housing Act or the Canadian Farm Loan Act, all carry lower rates of interest.
He meant lower rates than 12 per cent. He went on to say:
I believe the terms of the bill are moderate. I think the suggested rate of 12 per cent per year is certainly as high as any rate should be.
Another reason why I suggest that rate is that many credit unions in Canada charge a rate of approximately that amount.
That is the only positive statement he made as to how the 12 per cent rate was established. Again, speaking on the same bill on January 10, 1958, at page 3164 of Hansard, the hon. member said:
The 12 per cent interest rate provided in this bill is, I think, high. Some hon. members on previous occasions have said that the rate should be lower and I think a good argument could be made in this respect, but this rate was proposed because it seemed to me that it was so reasonable that very few hon. members could oppose it.
Again, arguing in the debate on June 5, 1958, as reported at page 858 of Hansard, the hon. member said:
I do not think it can be successfully argued that a rate of interest should be in excess of 12 per cent per annum. As a matter of fact, I think 12 per cent is itself rather high but I have placed the ceiling in that amount in order to appeal to hon. members to do something about this problem.
In other words, the analogy, or the idea, that the hon. member for Assiniboia uses to establish the basis is that he looks on the credit unions as establishing the rate of 12 per cent. However, I would like to refer to the report of the royal commission on cooperatives in 1945, and specifically appendix E, which starts at page 239 and deals with the development and operations of credit unions-caisses populaires-in Canada, and in particular at page 242:
A credit union (caisse populaire) may be defined as an incorporated group of people with some well defined tie of association, occupation or residence, who pool their savings in the form of shares and deposits and out of the fund so accumulated, make loans to members only for purposes which are considered to be provident or productive.
The affairs of a credit union are administered by three committees appointed by and from the

members, namely, a board of directors, a credit committee and a supervisory committee.
The board of directors must rule on all applications for membership, each application being endorsed by at least one director. In addition, the directors determine the maximum individual share holding and the maximum individual loan which may be made with or without security, subject to the provisions of the act, determine interest rates on loans and deposits, declare dividends: (subject to the approval of the general meeting); have charge of investments, other than loans to members; fix the form and amount of security of officers and employees handling money; and fill vacancies on the board of directors or of the credit committee until the next annual meeting.
The legislation requires the credit committee to pass on all loans and determine the rate of interest and security in each case. The directors may fix the maximum rate which may be charged from time to time.
The supervisory committee examines the books and accounts at least quarterly, makes an annual audit and reports thereon to the annual meeting. The supervisory committee may also suspend any officer and call a meeting of the credit union to report on such suspension.
There are thus three committees in each credit union, with well-defined functions. The exceptionally low loss record of credit unions is probably partly due to this three-way system of checks, balances and administration. Another factor is that the tie of residence, association or community which must form the basis of credit union membership, seems to be conducive to a careful selection of members and results in a certain similarity of credit problems.
Another factor is that of the loyalty of a credit union member to his group. When he borrows money from his credit union he tends to remember that he is borrowing the money of his friends and neighbours. Another factor responsible for the low loss rates of credit unions is undoubtedly that all credit union legislation makes provision for at least an annual inspection of each credit union by the registrar or other government official concerned with the administration of the legislation.
Further on there is the following:
Most of the loans made by credit unions are for the purpose of meeting current expenses of the members, although as the resources increase, mortgage loans may be made.
The point on which I have taken issue with the hon. member tor Assiniboia is the fact that his whole argument is based on a 12 per cent rate of interest and as far as I can gather from the arguments he has put forward in the past three years he has established that rate only from the fact that it is the rate charged by credit unions which are on a much different basis, are much more selective, examine loans made to their members much more closely than the ordinary investor or finance company can and therefore have much more stringent control over the individual member. In fact, Mr. Speaker, even within the credit unions themselves loans, in addition to being made very carefully, generally have a provision whereby the note is endorsed by at least two members of the association. The act itself provides that

if the directors make the wrong type of loan they are in fact responsible for making the necessary repayment.
By taking an extremely unusual group such as the credit unions and adopting the 12 per cent rate of interest the hon. member has in my opinion failed to look at the realities of the situation. I feel that the result, although not intended by the hon. member, would be just the opposite. In other words, there would be a tremendous increase in loan sharks and the number of people trying to circumvent the legislation because people would not be inclined to take the great risk involved in lending money at 12 per cent.
The editorial to which I referred earlier emphasizes some of the types of individuals who borrow money from loan companies. In contrast, the credit unions scrutinize prospective members thoroughly and to a large degree seek them out for their honesty and responsibility. On the other hand, the loan association estimates that at least 20 per cent of the people who borrow from such companies require special consideration.
I referred earlier in the discussion to the fact that I was a lawyer and that in my earlier days as a young lawyer I had had occasion to follow up some of these people. The thing that amazed me was the extent of irresponsibility of the people who got that far. Although there is not too great respect, shall we say, held for lawyers when they are pursuing people on such matters, personally I took the attitude that I would try to get them to come and see me so that I could talk over the matter with them, point out that they had contracted an outstanding debt and that the best thing for them to do was to try to pay it off.
Very often there were cases where service of papers was involved. I can think of some instances where I telephoned the man concerned and said, "If you come into my office on Tuesday we can save you at least the $5 costs involved in serving the papers." I can remember an instance where the person came in on Friday. He apparently had not bothered to take the trouble to come in before and had just decided that he did not want to make the saving. I had a great deal of difficulty in understanding that attitude. I should like to clear up the impression created by the newspaper editorial. There are many good, responsible Canadian families who at times have to obtain small loans from the loan companies but I do want to accentuate the matter a bit with my own personal experience that not all people who borrow from loan companies are highly virtuous and respectable.
When I started out to practice as a lawyer I also had the experience of following up
Interest Act
members of a particular credit union. Several of them would perhaps move away, forget their problems and leave the two endorsers on the note with the responsibility of paying it. I think the hon. member for Assiniboia has not disclosed in any of his speeches on this subject during the past three years a realistic approach as to what would be a sensible rate of interest. He has merely reached out, taken a figure which he assumed would be suitable because of the specialized case of credit unions and has endeavoured to hold on to that figure very rigidly. Although he talked at great length about various iniquities, he has done nothing to support a figure of 12 per cent.
There is another factor that bothers me a great deal. Because of the risk involved to the various lending agencies, I would assume that in all likelihood the 12 per cent figure he has suggested as a maximum would tend to become the figure that prevailed. We would have a rather unfortunate situation in that regardless of the size of the loan, whether it was $300 or $3,000, the 12 per cent figure would still apply. I feel that the hon. member did not take this into consideration and that this is another indication of his relatively unrealistic attitude.
In order to clear up the difficulties as far as the editorial is concerned and the misrepresentation I felt was attributed to me, I should like to emphasize that I am in favour of having interest rates reduced but I do not feel that can be done until there is some realistic evidence to justify the establishment of a lower rate.


Mr. M. W. Martin (Timmins):: Mr. Speaker, since I spoke on second reading of the bill an amendment has been moved which gives me the opportunity to rise again today to clear up a few misunderstandings that may have been inadvertently brought about by the hon. member. I should also like to refer to another case which I think should be placed on the record. When the hon. member read from the report of the investigating commission he mentioned the 12 per cent per annum rate of the credit unions. To clear up any misunderstanding, this is the maximum rate permitted to credit unions but in actual practice the rate charged is not nearly that high.
I think the easiest way to explain it is to take a unit of $100. If you borrow $100 from a credit union and keep it for one year you will pay $12 but if you pay it back in 12 equal instalments the interest charged will only be $6.66. Most credit unions pay an interest rebate at the end of the year according to the profit the credit union has made and there is a further reduction there. In

Interest Act
the credit union with which I was associated as treasurer tor four years the rate of rebate was 15 per cent which reduced the interest rate to $5.67 on $100. Therefore it can be seen that while the interest rate is based on a maximum of 12 per cent per annum in actual fact it does not come anywhere near that figure.
In his report he mentioned the various committees-the board of directors, the credit committee and the supervisory committee- and he mentioned that the credit committee has authority to set interest rates. That is true in one sense, but it only has authority to set interest rates from 12 per cent downward, not from 12 per cent up.
With regard to the suggestion that credit unions are a privileged group, I do not think that is actually so. But from my experience of these credit unions I know of many cases where members have been taken out of the hands of the finance company, sometimes after they have been there for many years, and after only two or three years in the credit union, with the advice and assistance given by credit union officials they have been able for the first time in many years to find their way out of the dilemma they were in. I rather resent the remark the hon. member made about the irresponsibility of some people. I think, in all fairness, it is not so much irresponsibility as a complete loss of hope. Many who have been in debt to finance companies for five, ten or fifteen years, year after year, find themselves reduced to despair.
The other matter I should like to mention today has to do not with finance companies, not with money borrowed to buy luxuries or anything of that kind, but with people buying groceries, the very basic staples of life. I have run across a case where a big chain store-not one of the national chain stores, but still a big chain store-is being very accommodating to its customers, permitting them to buy on a pay-to-pay basis and then, with the excuse that the store itself has to borrow money to pay for its stocks, charging what at first sight may be regarded as a very low interest on the loans, namely three per cent. But it should not be forgotten that there are 26 pay days in a year, and on this basis the rate of interest actually works out at no less than 72 per cent per annum.
In many cases people do not realize what is happening; they are lulled to sleep by fancy advertisements. They do not realize what they are stepping into. I became interested in this matter, so I went into it a little further. I found out that the situation is even worse than it at first appeared, because it is not even three per cent, it works out at one cent interest on the first 18 cents. So if I go

into the store today and buy groceries, and tomorrow is pay day and I pay my bill, one per cent on 18 cents works out to the astronomical figure of something like 2,000 per cent a year. This is a fantastic figure and it should be prohibited in this country. This is the purpose of this bill. Those who support it are trying to put a stop to these practices which are bleeding people white without their realizing what is happening. I think this bill should definitely go back to the committee so that we may find out how many times situations of this kind are being repeated across Canada, and put a stop to these practices once and for all.


Mr. McCleave:: I wonder if I might ask the hon. member a question? Was the 5.37 per cent the effective rate paid on the $100 lent by the credit union? How did the hon. member arrive at that particular figure?


Murdo William Martin: That is the actual interest paid. In a credit union, on very rare occasions does one get any term loans. It is usually worked out on the basis of what a member is capable of paying, and calculated on the basis of one per cent per month. That is what $100 would cost, paid off in 12 equal instalments with the rebate back at the end of the year.


Robert Jardine McCleave: I thank the hon. member for that information.
Mr. Speaker, when this matter was brought before us on June 5, the hon. member for Assiniboia (Mr. Argue), the sponsor of the amendment to the Interest Act, spoke about "the men in grey suits". I would go a little further this afternoon, bearing in mind the tales that have been told today and in the previous debate, and call them "the men in the grey fleece suits".
What is the modus operandi of the interest shark? I would say it was an ability to play very cleverly on the nerves of potential ulcer sufferers in Canada. The snare and delusion with which he traps his victim is the promise of soothing treatment to a man or woman harassed to death by debts and anxious to consolidate them and, instead of having 25 letters a month coming to the door demanding payment, to get only one instead. And once the prey is well and truly trapped, if he falls behind in interest payments the suggestion that may be made to him is to use the same remedy all over again-to consolidate that debt, both principal and interest together, into the new loan. And so it goes on, with the 24 per cent interest snowballing downhill and dragging the unhappy sufferer along willy-nilly.

It seems to me I might perform a useful service to the people of Canada who suffer from the too rapacious demands of some loan companies to remind them that sometimes it is much better to be sued and to suffer judgment rather than sign a new note which puts them in the 24 per cent interest category, for although submission to judgment may affect credit standing, the people who go to loan companies probably have little or no credit standing anyway. As I say, it might be better for these people to accept judgment and then pay six per cent interest on that judgment rather than continue to pay 24 per cent. I throw this advice out in a modest way, to whoever may be in the hands of loan companies.
One of the useful pieces of literature associated with the subject is prepared by the superintendent of insurance for Canada who finds himself seized with the task of reporting to parliament on the activities of small loans companies and moneylenders. We have the report of this gentleman for the year ending December 31, 1956, and I believe we may expect the report for 1957 some time around the end of this year. I notice that the last report of Mr. K. R. MacGregor was dated November 1, 1957. I have examined the figures, and though I pretend to be no accountant-no expert at going through company statements-I find this fascinating reading. Take, as an example, the case of a company which enjoins Canadians never to borrow money needlessly. As of the end of 1956, the total amount of money out on loan at 24 per cent interest-this was before the last change in the Small Loans Act

was just under $50 million; in fact, it was $49,866,095. Assuming that all that money were out at any given point during the year and collecting 24 per cent interest, the total amount of interest from it would be just under $12 million. Actually, I calculated it to be $11,967,862.
Looking elsewhere in the accounts of this company as reported to parliament I find that the actual income earned on those loans was just a trifle less, namely $11,806,865. The house may be interested in the difference between those two figures. It is $160,997. In short, that figure is approximately one per cent of the total amount of interest earned by the company. It would suggest to me- although perhaps I may be wrong and may not be reading the balance sheet correctly .-that these companies are very efficient when they lend money at 24 per cent and are able to get it all back. It also suggests to me that the potential which they have to lend out is in fact lent out, because of the $160,000 figure which indicates that they are just about
Interest Act
getting the maximum use of the money for which they have potential loan customers.
Reading elsewhere from the balance sheet, I would suggest to any committee which is charged with studying this matter that the reserve for bad loans of these companies is probably too high in the light of the figures I have just given the house. However, I think the house should also know that while the major loan companies are extremely efficient in their transactions, there are smaller companies in the business of making small loans and their fate is not always a generous one. The big companies seem to take the cake in this business. For example, at page 52 of Mr. McGregor's report for the year 1956, I find that 71 companies which were in the small loans business during 1956 had a loss of $292,204 on their operations. It is true that these companies were in other fields and on those operations they made $4,637,546. But at least the figure of the loss on small loans indicates that there is some danger in this field.
My hope would be that this matter would go before the committee as recommended in the amendment of the hon. member for Kenora-Rainy River (Mr. Benidickson) and I am going to support his amendment for that reason. It may be that we have even another remedy and that is to examine the English law on this matter. I do not know the constitutional implications, whether it is a jurisdiction of the federal parliament or of the provincial legislatures but I think the matter is worth looking into. As the house perhaps knows, under the English laws relating to usury I do not believe there is any particular ceiling on the amount of interest that can be charged but there is a good healthy provision that courts may be enabled to look into the whole transaction.
Yet another possible suggestion on this matter is that this and all other matters of credit policy be studied by a royal commission such as the one which was set up in Canada some 25 years ago and which led to the setting up of the Bank of Canada. As has been suggested by the premier of New Brunswick, Hon. Hugh John Flemming, such a royal commission could be charged with a good many tasks, among them the problems of Canadians in obtaining credit.
My final suggestion to the hon. member for Assiniboia and his supporters is that perhaps they might give serious consideration to amendments to the Bank Act. I am informed that at the present time the banks make no profit in the small loan business. Perhaps that is the reason why they have allowed these finance companies to spring up. They find it difficult to operate small loans departments on the 6 per cent interest that is

Interest Act
allowed. Even if they are successful in obtaining back all the money that they loaned out under small loans to customers, they still do not find it profitable for the time of the supervisors and the employees would have to be charged up against such operations.
(Translation):


Mr. L. J. Pigeon (Jolieiie-L'Assompiion-Monicalm):: Mr. Speaker, the hon. member for Kenora-Rainy River (Mr. Benidickson) moved an amendment to refer this bill to the banking and commerce committee.
However, I should like to say a few words on the purpose of this bill, which is to limit to 12 per cent a year the interest charged by some finance companies.
The Interest Act, as it is drafted just now, sets no limit on the interest which can be charged in Canada. In certain fields, limitations are imposed with respect to the interest rate but they are provided for by special legislation.
An analysis of loans under the Small Loans Act, the Farm Improvement Loans Act, the Bank Act, and so forth, reveals that there is no legal limit to the interest rate which finance companies may charge at the present time and anyone is free to make a loan to an individual at any rate of interest agreed by the two parties. It is also legal at the present time for a finance company to charge all costs which may be agreed upon between the purchaser of an article and the company.
No limitation is provided for in the case of the interest rate which a business undertaking can charge to finance its instalment sales. The bill now before us would set a limit with respect to the interest on all loans made for instalment buying. Like the other bill on the order paper concerning the Small Loans Act, this bill would restrict the interest rate at 12 per cent annually. If the interest rate of 24 per cent a year charged on small loans is too high, the rates of 25 per cent, 30 per cent or 40 per cent charged by some finance companies are obviously fantastic.
To have to borrow money at that rate of interest is a dreadful thing for hundreds of thousands of Canadians.
Some large commercial businesses are charging today, in Canada, for instalment purchases, a rate as high as 54 per cent a year.
The interest which government bonds yield now is in the neighbourhood of 3 per cent.
The huge sums of money now being loaned under the National Housing Act are loaned at an annual rate of interest of about 5 per cent. The rate of interest prescribed under the Farm Improvement Loans Act is 5 per

cent a year. Bank loans yield in the neighbourhood of 5 or 6 per cent per year.
If this maximum of 24 per cent charged for small loans is too high and must be lowered, an interest of 30 or even 40 per cent charged by some commercial companies is certainly exaggerated. In fact, it is four times and even eight times higher than the interest rate charged by the banks. The borrowers from those lending institutions are, in the main, the ones who can less afford such a high interest. Most of them are workers.
I am in favour of this bill to limit the interest rate of finance companies and great commercial businesses. I am supported in this by labour unions such as the CTCC which has an important branch in my constituency and whose president, at Joliette, is Mr. Marcellin Ferland.
The interest charged on loans granted to the lower income groups should be reduced to a level comparable as much as possible to the rate of interest charged borrowers who are considered to be better risks.
Say what you will of the differences that must exist between interest rates, I maintain that the disparity between an interest rate of 6 per cent asked by the banks for ordinary loans and of 24 per cent for small loans- and even 28, 30, or 40 per cent for larger loans-which is charged by some finance companies is certainly much too high.
In this country, credit unions lend money to their members at a rate of one per cent a month. In this way they can accumulate savings and pay rebates. May I also, in this house, give credit to the Caisses Populates founded in 1900 by Mr. Alphonse Desjardins, of Levis (P.Q.), and which have multiplied throughout Canada.
The slogan of these credit unions is "All for one and each for all".
There are several credit unions in my riding, and they are partly responsible for the present development of home-building.
If today a number of workers have become house-owners, it is thanks to the credit unions and the provincial law of Quebec with regard to the family home. I would strongly encourage all classes of society to go and deposit their savings in their local caisse, or union. This money helps all groups, and more especially the working class.
The number and the size of the deposits increase the confidence of the owners and the very low rates of interest attracts prospective borrowers and prevents them from falling into the nets of the lending companies.
How many workers and large families have been able to settle their housing problem thanks to credit unions?

Allow me to pay tribute to hon. Senator Cyrille Vaillancourt who has shown an exceptional devotion to the Quebec credit unions. His nobility of heart, his magnanimity and his work have allowed credit unions to spread throughout the country and to become the pride of Canada. In my constituency, in the town of Joliette, credit unions are prosperous. Their boards of directors are made up of serious and devoted men and their managers, notably Mr. Marcel Gravel and Mr. Albert Lajoie, are hard working men.
Mr. Turgeon, the manager of the Caisse Populaire de L'Assomption is a credit to his board of directors.
In Montcalm, credit unions are equally prosperous.
There are about 4,500 credit unions in our country, which lend more than $300 million to more than 1,700,000 members. The number of credit unions and the scope of their operations are ever increasing. For instance, in 1948, there were only 2,600 of them with 850,600 members. The credit union system is more flexible than that of any other finance undertaking, as far as borrowers are concerned.
They also do a fine educational and moral job by tying their financial activity with the campaign against obscene literature, for example.
There are also the rural establishment banks instituted by the clergy of Quebec and by the UCC. They make loans at a very low interest rate to sons of farmers wishing to settle on a farm and thus complete the provincial farm credit system that lends money at a record low interest rate of 2J per cent.
Credit is vital to any nation wishing to develop. Our prosperity depends upon it in large measure. A reasonable interest rate would not only permit more Canadians to satisfy their needs but would increase the purchasing power.
I hope this legislation will be adopted, as it will facilitate loans at a reasonable rate of interest. Unfortunately, low wage earners must pay high interest rates while people of means can borrow at low rates. I do not suggest that it is possible to achieve uniform rates, but I say that the discrepancy between the two is too sharp at the present time.
Loans have become more and more important in Canada through the years. A table showing the total earnings made on small loans granted by finance companies dealing with this type of business reveal that in 1941, for instance, they have earned $1,642,000. In 1946, their earnings jumped to $2,926,000, and 57071-3-110
27. 1958	1737
Coal-Shutdown of Nova Scotia Mines we could go on with further examples. Unfortunately, I do not have figures for the last few years, but I am sure the increase must be nearly twice as much. This increase shows the rapid development of the Canadian economy and the still quicker expansion of loans in our national economy.
Loans being very popular, it is only consistent to discuss a reduction of interest rates. Some people will say that if the interest rate is lowered, however worthy the aim, a lot of people who could up to now obtain funds from the loan companies, will be forced to apply to loan-sharks ...
(Text):


Mr. Deputy Speaker:: I am sorry to interrupt the hon. member, but it is now six o'clock.



NOVA SCOTIA


John George Diefenbaker: Mr. Speaker, with the leave of the house I should like to make an announcement with respect to action being taken by this government to meet a serious problem in Nova Scotia. Over the last several weeks representations have been made by the members for Cumberland (Mr. Coates), Inverness-Richmond (Mr. MacLellan), Cape Breton North and Victoria (Mr. Muir), Pictou (Mr. MacEwan) and Cape Breton South (Mr. Mac-Innis) with regard to the question of the rising unemployment situation in the coal areas of that province.
To summarize the general position I wish to say that the Dominion Coal Company has been for some time maintaining abnormally high stockpiles of coal and because of this fact has recently announced immediate layoffs of 25 days in addition to the period of regular holidays for which latter period the employees received pay.
Even in the face of those reductions in working days, the company has estimated, and that estimate has been confirmed by the dominion coal board, that by the end of the year 1958 there would be in stockpile 750,000 tons of coal in excess of the normal average carryover.
The company has advised the government that it would be necessary to extend lay-offs beyond the above mentioned periods with a view to reducing the stockpile at the end of
1738	HOUSE OF
Coal-Shutdown of Nova Scotia Mines the year to approximately the average amount of the normal carryover in previous years. As these hon. gentlemen to whom I have referred have pointed out, if this action were taken it would result in over 9,000 men being out of work in the coal fields, thereby constituting a serious hardship to them and their families and, in general, much economic loss to the province of Nova Scotia as a whole.
Discussions have taken place between the representatives of the company, of the labour union, of the Minister of National Revenue (Mr. Nowlan), who is himself a member from Nova Scotia, and of course always with the concurrence of and in the presence of the Minister of Mines and Technical Surveys (Mr. Comtois) and those discussions yesterday culminated in the meeting to which I made reference earlier today. At that meeting company officials undertook that at the end of the 25-day lay-off already announced the company would continue its normal operations providing it is compensated for the additional cost to which it would be put to maintain the excess over and above the normal stockpile.
After full consideration and on the recommendation of the minister of mines the government has decided that in order to help maintain employment the subvention policy now in existence will be extended so as to include among the cost audit items to be determined by the comptroller of the treasury the amount of the insurance stockpile and interest charges of the excess coal stockpiled this year and the government of Nova Scotia has agreed to share in these additional costs with the federal government. I am glad to report that this action will result in the company being enabled to maintain at a high level employment in the coal mines it operates.


Herbert Wilfred Herridge: Mr. Speaker, we were very glad to hear of this move to provide continuous employment for these employees. Would the Prime Minister (Mr. Diefenbaker) consider some action along the same lines in co-operation with the government of British Columbia to assist the idle coal miners in that province?


John George Diefenbaker: I would point out, Mr. Speaker, that in this case there is a very large stockpile far in excess of the normal carryover and it was on that basis that this action was taken. In the case mentioned by the hon. gentleman I can only say that naturally consideration would have to be given on the basis of existent economic conditions within the company and the degree to which there is an excess. These would necessarily be matters to be considered in determining what course should be followed in the case of the mines to which he has made reference.



BUSINESS OF THE HOUSE

Lionel Chevrier: Mr. Speaker, may I inquire from the leader of the house what the business will be on Monday? Will he tell us what items of government business will be called on Tuesday?


Howard Charles Green: Mr. Speaker, on Monday we intend to move to go into supply. There has been no agreement reached that that motion will be dealt with within one day. Should we get into supply on Monday we would take the estimates of the Department of Public Works, a few of which remain to be dealt with, and then those of the Department of Agriculture.
In the event that we do get into supply on Monday we would take on Tuesday, first, item No. 15 on today's order paper, which provides for setting up a sessional committee to deal with government-owned railways and shipping; then item No. 5, the second reading of the act to incorporate the lakehead harbour commissioners; then item No. 4, the second reading of the act to amend the Lake of the Woods Control Board Act; then item No. 12, the resolution concerning the Yukon Act, and item 11, the resolution concerning the Cape Breton Highlands national park. By the way, the departments which it is proposed to call are defence production, fisheries and mines and technical surveys.


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

Questions

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

Mr. McWilliam: 1.	What was the amount of the tender award for the federal public building now under construction at Newcastle, New Brunswick?
2.	What is the estimated additional cost over the tender price resulting from a change in plans?
3.	What is the target date for completion of this building?
4.	What party is responsible for the inspection duties?
5.	Was preference given to local persons and veterans preference followed when the selection of an inspector was made?
Answer by: Hon. Howard C. Green (Minister of Public Works):
1.	$342,000.
2.	Additional expenditure of $20,831 for revised foundation work to meet site conditions.
3.	By end of December, 1958.
4.	Ross, Patterson, Townsend and Fish, architects, of Montreal, P.Q., who also prepared the plans and specifications for this project, and district architect.
5.	The terms and conditions of appointment of these architects require them to assign, at their own expense, a clerk of works (inspector) who is to provide constant supervision. The selection of this employee is the responsibility of the architects.


BANKRUPTCIES
Mr. Denis: How many bankruptcies have there been in Canada, each year since 1950, by provinces?
Answer by: Hon. E. D. Fulion (Minister of
Justice):


NUMBER OF BANKRUPTCIES IN CANADA
[Stage Direction]
Provinces	1950	1951	1952	1953	1954	1955	1956	1957	TotalNewfoundland... .	.... 3	6	9	5	4	9	12	17	65Nova Scotia	.... 14	10	16	9	18	10	8	21	106New Brunswick..	
17	22	13	14	20	16	18	16	136Pr. Ed. Island	. .. . 6	3	-	1	3	3	2	2	20Quebec	.... 972	1,011	1,102	1,186	1,665	1,791	2,149	2,554	12,430Ontario	.... 170	198	216	256	397	414	505	684	2,840Manitoba	.... 14	15	13	28	19	26	24	29	168Saskatchewan	
9	13	8	17	28	35	30	35	175Alberta	.... 14	14	10	34	42	42	43	62	261British Columbia	
56	57	47	67	69	68	58	66	488Total	.... 1,275	1,349	1,434	1,617	2,265	2,414	2,849	3,486	16,689TRANS-CANADA	HIGHWAY,	MARITIME	PROVINCES	: 1.	(a) 71;	(b) 311;	(c) 390.
Mr. Michaud: 1.	How many miles of trans-Canada highway will there be in (a) Prince Edward Island; (b) Nova Scotia; (c) New Brunswick?
2.	How many miles of this highway have been completed in each of these provinces?
3.	How many miles are presently under construction in each of these provinces?
Answer by: Hon. Howard C. Green (Minister of Public Works):
2.	Completed under the trans-Canada highway agreement: Prince Edward Island, grading 70 miles, paving 67 miles; Nova Scotia, grading 95 miles, paving nil; New Brunswick, grading 118 miles, paving 81 miles.
3.	Presently under construction: Prince Edward Island, 4 miles; Nova Scotia, 30 miles; New Brunswick, 57 miles.
57071-3-110J

Monday, June 30, 1358